Getting a packaged-goods brand into Walmart or other national distribution may never quite be the same, as demonstrated by how a bootstrap marketer of tongue cleaners worked its way onto Walmart's shelves using social media.
Orabrush, which for the first two years of its existence was a lot better at generating YouTube views and publicity than actual sales, has landed the biggest of national accounts -- Walmart -- thanks to its deft and low-cost use of social media. Specifically, the brand leveraged more than 39 million views of its funny YouTube videos and a $28 campaign of Facebook ads directed mainly at a Walmart buyer to land distribution in 3,500 Walmart stores this month.
While the same exact tactics probably won't work for another brand, the success of Orabrush is an indicator of how much social media can change the game in a seemingly staid industry dominated by giants, according to Andrew Whitman, managing partner of 2X Growth Partners, a Chicago-based private-equity firm that invests in startup packaged-goods companies, including Orabrush. "The game has totally changed," he said, adding that low-cost social-media strategies "have leveled the playing field dramatically." In the same way music acts now launch themselves without mediation by major record labels, he said startup packaged-goods brands can bypass the usual channels and overcome some -- but not all -- of the big marketing and distribution advantages of established behemoths.
In the case of Orabrush, the brand won national distribution at Walmart with little conventional marketing or its executives ever meeting a buyer face to face. Founded in 2009 in Salt Lake City, Orabrush last year was contacted by a Walmart store manager in Utah who wanted to give the product a try in his store. Under a policy revived under Walmart U.S. CEO Bill Simon, the manager had the authority to do so. He in turn convinced about 20 others in Utah after a store tour to try Orabrush, which used the data from those sales to sway executives at Walmart headquarters.
But it was still hard to get an audience with the buyer. So Orabrush Chief Marketing Officer Jeffrey Harmon earlier this year bought $28 worth of Facebook ads targeted at Walmart employees in Northwest Arkansas reading: "Walmart employees have bad breath. Walmart needs to carry Orabrush. It will sell better than anything in your store." The Facebook campaign proved a lot more effective than $20,000 in print ads in retail trade magazines, which only generated calls from other trade magazine sales reps, Mr. Harmon said.
Within 48 hours of launching the Facebook ad, Mr. Harmon got an email from the buyer, who said her VP also had seen it and believed it was being directed at Walmart employees nationwide. The buyer, after also seeing a DVD and sales kit on the Orabrush story, placed an order for 735,000 tongue cleaners shipped last month.
A Walmart spokeswoman confirmed the distribution in 3,500 stores, but said she couldn't immediately confirm details of the negotiations or how the deal came about.
In part, the strategy harks to a bygone era in packaged-goods marketing -- the 1950s -- when marketers would force distribution by first turning on advertising and getting consumers to pressure retailers. Inquiries from consumers who saw the exploits of Orabrush's "Morgan the Tongue" on YouTube, for example, led U.K. retailer Boots to place an order, Mr. Harmon said. National distribution with CVS begins next month, he said, and Orabrush already has distribution in the U.K., Japan and Canada, thanks largely to its YouTube following.
"We have a reverse marketing model," he said. "Normally you get distribution and your supply chain in order, all your packaging and everything perfected, and then launch an ad campaign and start branding it. We started branding, even changing our logo as we went along and getting everything right messaging-wise, and then two years later we're in national retail launching to enough demand that the sales are blowing a lot of retailers away."
That has led to such oddities as nearly 40 million YouTube views, 300,000 Facebook fans for a brand that has sold only about 2 million units, mainly online. Orabrush also has generated about 30 million media impressions through coverage in such outlets as The Wall Street Journal, The New York Times and ABC's "Nightline."
Mr. Harmon acknowledged that the tongue-cleaner business has been small and mostly unsuccessful for retailers up to now, leading to some retailer skepticism. But he said YouTube has worked to get Orabrush distribution, and he'll stick with it to move product off the shelf, too. All the YouTube (and other) advertising has been done in-house, mainly with student filmmakers from Mr. Harmon's alma mater, Brigham Young University.
Walmart's local-vendor and "store of the community" policies, while not as wide-open as in the days of Sam Walton, still can be a powerful tool for a startup brand, said one sales rep familiar with the retailer. To the extent social media can inspire people to contact Walmart store managers or buyers to carry an item, it also can help build a case for distribution in a store or nationally.
While in the past Walmart had printed forms customers could fill out requesting an item be carried, today emails directed to the retailer get routed to buyers. That can help influence decisions at the national level. But individual store managers can often be swayed to take on or bring back local items, he said, which in turn can lead to larger regional buys.
Anand Rajaraman, senior VP global e-commerce for Walmart, said at the Advertising Age Digital West conference Sept. 20 that social media will be a key determinant of what local stores carry in the future.
"We're analyzing social information from the neighborhood area of each store to figure out how the interests of that community should dictate what we carry in that store," he said. "We might find the Walmart store in Mountain View, Calif., should have a bigger bike section because lots of people bike in that area, while the store in Bentonville, Ark., should have a bigger fishing section."
Sales data can tell Walmart about the past and products it already carries, he said, but "they don't give us information about new products, and they aren't a demand predictor."
Walmart is clearly emphasizing product innovation, said another sales rep, but last year's effort to reverse assortment cutbacks is largely finished in many areas, such as grocery. Any kind of grassroots effort to build social-media support for a new product, he said, will only work in categories where it isn't already well stoked, which is hard. And marketers need to be prepared, like Orabrush, to produce large quantities quickly, he said, because the retailer is working with far less lead time than it once did.
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