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“We started realizing that DTC was the fastest way to get our products in front of consumers and get real-life feedback.”
— Carter Jensen, Senior Manager of Global Ecommerce, General Mills
In recent years, we’ve seen upstart and digitally native brands launch their own direct-to-consumer (DTC) experiences, but General Mills is proving legacy brands and big consumer packaged goods (CPG) brands can innovate in this area too.
Over the past three years, General Mills has evolved from viewing DTC as a threat to its business to fully embracing this channel and launching more than 35 DTC sites.
Carter Jensen, senior manager of global ecommerce at General Mills, shared his insights during a Digital Shelf Institute (DSI) session, “How to Think About DTC in Your Digital Strategy.” Jensen broke down how General Mills is creating engaging DTC experiences — and collecting valuable first-party data in the process.
Here are Jensen’s insights on General Mills’ DTC journey and best practices for how other brands can build their own DTC capability.
When Jensen first joined General Mills in June of 2020, he says there were several questions, and (honestly) skepticism around DTC within the company.
A lot of it had to do with the inherent complexities of developing and maintaining this channel and the traditional reliance on retailers for distribution within the CPG industry.
Jensen says the questions focused on one critical area: “How would we start actually selling products ourselves without interrupting or interfering with business and customer relationships or retail relationships that we've spent 150 years lining up and ensuring are solid? So, why would we even take this risk?”
At the time, General Mills also lacked the tools and capabilities to create its own DTC experiences effectively. The value of DTC for the company also wasn’t entirely clear, Jensen says. Despite all of this pushback, Jensen and his team forged ahead.
Though General Mills didn’t have a DTC center of excellence or a dedicated DTC team, DTC activations already were happening in silos throughout the company, especially among its newer brands.
The company found that DTC was often the fastest route to market for these brands and was a great testing ground for new flavors and assortments. General Mills also acquired a few large DTC businesses, such as Epic Provisions.
“We had DTC hotbeds happening around the organization, but as you can imagine, they weren't scaled and they weren't compliant,” Jensen says. “We were looking at unique ways to do one-off type activations. So, we knew that even though there was pushback, we saw a ton of energy in the organization. We knew that there was something happening and we needed to find a way around it.”
To scale DTC activations across the organization, Jensen’s team developed its “3X strategy.”
This strategy identified the three main reasons General Mills should enter the DTC space: learning and experimentation, brand experiences, and sales and marketing.
General Mills realized it could use DTC to learn more about its audience, marketing, and products across both its established and incubator brands. The channel also offered the fastest route to market to test product variations; flavors; marketing taglines and logos; and get real customer feedback.
Whether it’s Lucky Charms or Cocoa Puffs, many of General Mills’ products evoke a sense of nostalgia. Jensen’s team knew there were fanatics for many of the company’s products, so it decided to use DTC as a way to involve these customers in some of the company’s digital experiences and promotions.
“We wanted to make sure there was a way to actually fulfill these items and provide those fanatics the actual products that they demanded in an interesting way,” Jensen says.
General Mills sought to build a better infrastructure to support its DTC-native brands like Epic Provisions and other brands in its portfolio that would benefit from selling on this channel. Jensen says the company focused on creating a strategic sales and marketing objective for DTC.
For each of these areas, General Mills also set specific key performance indicators (KPIs). For sales and marketing, the company focused on creating a friction-free path to purchase using social media and other promotions to drive DTC customer interactions.
The KPIs for learning and experimentation included gathering first-party data to validate new product variations, marketing tactics, and other things the company was piloting.
Jensen says the company found DTC was a much more efficient and scalable route to involve customers in the research and development process compared to traditional product market research.
“With DTC, we found interesting ways to use agile tools to get this in front of thousands of consumers and actually get real-time feedback on what they thought of the product. I think that's really, really interesting for this category,” he says.
With brand experiences, General Mills set KPIs around how its social and in-market campaigns translated to an actual physical product arriving at a consumer’s doorstep.
“We think our DTC tools allow that perfect bridge to create that friction-free path to actually holding a product in your hands from a remarkable digital experience,” Jensen says.
Ironically, profitability — though important — isn’t the primary way General Mills measures the success of its DTC activations. Instead, the company looks at how DTC holistically serves the business and its overall digital strategy, whether it’s delivering first-party insights that are valuable across General Mills’ brands or creating connected ecommerce experiences that drive greater customer loyalty.
So far, General Mills has launched more than 35 DTC sites globally using its 3X strategy.
During the webinar, Jensen shares several examples of how General Mills has implemented each pillar of its three-pronged strategy.
Good Measure, a General Mills incubator brand that manufactures a healthy snack bar, used DTC to drive product validation and to understand what product lines it should invest in.
“Though they can do hundreds of hours of research and invest in all these consumer case studies, the whole point is the sales numbers don't lie,” Jensen says. “So, they tested everything from marketing tactics to product variations, to logos, to colors, ultimately to figure out what's going to work for them. Today, Good Measure continues to be successful, not only on DTC but also with retail partners as they continue to expand.”
Business Wire highlights Reese’s Puff's partnership with Kaws, an artist and designer who has a cult following. Kaws created an augmented reality (AR)-driven brand experience and a $50 special edition blue cereal box. Each box was outfitted with a QR code that directed customers to the AR experience.
“It's a really interesting testament to how we're morphing and connecting digital promotions into actual physical experiences for our consumer,” Jensen says.
On the sales and marketing side, General Mills has leaned into and scaled Epic Provisions’ DTC capabilities to drive customer acquisition and engagement.
“We find DTC is a really surgical way to acquire consumers that's different than some of our mainstream methods.” — Carter Jensen, Senior Manager of Global Ecommerce, General Mills
All of these DTC experiences have allowed General Mills to prove the value of this channel to its business, especially for its leadership team. So much so, that DTC is no longer viewed as a threat, but as an integral part of the company’s ecommerce strategy.
General Mills' 3X strategy has made it more nimble, especially for a large CPG enterprise. It can launch DTC programs in less than 30 days, on average, at a cost of just under $50,000, Jensen says.
Jensen’s four-person team is small but mighty, so it collaborates with agency partners to launch DTC activations and accelerate its time to market. Jensen says having a clearly defined strategy and direction, building an agile technology stack, and garnering leadership support and buy-in all have been critical to his team’s success.
General Mills has used tools such as Shopify and Klaviyo to support its DTC experiences, integrating these solutions with its central systems to scale its DTC capabilities.
The company has even capitalized on the first-party data it has collected through its DTC activations to create an entirely new product, PDP+, that bridges the gap between its DTC and traditional retail experiences.
The solution features shoppable website pages and connected product feeds that create a frictionless path to purchase for consumers, whether they buy directly from the brand or its retail partners.
General Mills is proving that DTC can be valuable in a category like CPG. Though it took three years for the company to evolve its thinking around DTC, its 3X strategy likely will help General Mills deepen its relationship with consumers, better understand them, and build its competitive advantage on the digital shelf for years to come.
To hear more of Jensen’s insights on DTC at General Mills and within CPG, listen to the full episode.
