Robert Rubin, research director for Netquity, a recently formed joint venture between Forrester Research and Information Resources Inc., said brand managers' interest in online sampling is growing.
"They think the Internet is going to be a fabulous vehicle for samples to distribute and capture behavior," said Mr. Rubin, who is preparing a report on the emerging online sampling business.
A VENUE WITH FEEDBACK
FreeSamples.com and StartSampling, two companies that let consumers select from a variety of free products, provide marketers with customer feedback in addition to a venue to offer the new products.
At FreeSamples' site (freesamples.com), consumers respond to a handful of manufacturer questions when they request a sample.
Dana Plotkin, exec VP-marketing, sales and business development at the San Francisco company, said getting information from consumers before and after they sample a product lets package-goods manufacturers, such as Procter & Gamble Co. and Unilever, test consumer reaction.
"While we're a sampling site and an effective marketing vehicle, we're at our heart really an information company," Mr. Plotkin said. "We're learning about consumers and offering the brand users more than just sampling."
StartSampling, which works with companies such as S.C. Johnson & Son and SmithKline Beecham, is talking to brand marketers about 2001 marketing plans.
"What's happening now is we've got a lot of moderate- to small-sized tests," said Larry Burns, CEO of the Carol Stream, Ill., company. "Let's carve out a percentage [of the sample run] and show you the power of the model."
TO WAIT OR NOT TO WAIT
StartSampling gathers feedback after consumers receive samples. StartSampling, which offers loyalty points for responses, has an average consumer response rate of 70% from its 400,000 members. FreeSamples is testing whether offer response incentives.
But Mr. Burns said StartSampling asks no questions of customers before they request a sample.
"We don't want to potentially lose that opportunity," Mr. Burns said.
Netquity's Mr. Rubin said that might be a mistake. FreeSamples' ability to offer customer research in return for samples could be key in convincing manufacturers to use a site that might not have high-volume traffic, he said.
"I just don't see where they are going to get the traffic," Mr. Rubin said. "There's a limited number of people on the Internet who are willing to spend so much time to get free stuff."
Ultimately, Mr. Rubin said, online grocers and grocery replenishment companies will serve as the best venue for online sampling.
"Online grocers can develop a strategy around the acquisition of new customers. They can also track, so if you have a new type of dog food on the market and know someone is buying dog food from Webvan, you can put a sample in the shipment."
Webvan Group, which said its system lets package-goods marketers watch consumers shop in real time (AA, April 17), also allows manufacturers to test products by sending free samples to likely users. Package-goods partners include Clorox Co., General Mills and Kimberly-Clark Corp.
"We know what types of [product] [consumers] buy," said Maigread Martinez, VP-marketing and strategic alliances, "We can tell [manufacturers] if they bought it and more importantly whether it made the (repurchase) list."
In Netquity's inaugural report, "A new channel for old brands," Mr. Rubin predicted that $27.1 billion will be spent in 2004 in the online replenishment market including online grocers and box-and-ship retailers (AA, May 8). The report estimated 20% of the 107 million U.S. households in 2004 will purchase replenishable products online.
SAMPLES DRIVE TRAFFIC
E-commerce sites such as beautyjungle.com and teen sites such as Kibu already use samples as a way to attract traffic.
Kibu uses a cooperative sample box with a variety of free products and discount offers to target teen girls. The site has a forum that allows recipients to discuss the wares.
While the cost of mailing an online sample is similar to a solo direct mail piece, delivery is reduced to a matter of days. Traditional direct-mail companies are also eyeing the potential of online sampling.
In July, Cox Sampling will launch a program called Introz with the distribution of 250,000 cooperative sample packages via AutoTrader.com, a site owned in part by Cox Enterprises. The sample box will contain approximately seven auto-care and accessory samples as well as discount offers.
John Hamerlinck, VP at Cox Sampling, Largo, Fla., said it is important to reach a targeted audience.
"Consumer panels liked the idea of [Introz] and the upscale, premium type of package," Mr. Hamerlinck said. "It's important to get a niche. Their complaint (with past mass-sample programs) is they get stuff that they don't need."