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With already established brands, Nabisco faces the more formidable challenge of turning those brands into cash on the Web.
Wayne Shurts looks far too youthful to be a 19-year veteran with Nabisco. But the vice president of the company's e-business unit quickly points out that he was hired right out of college. In fact, almost everyone in Nabisco's one-year-old global e-business arm counts tenure with the company in decades, not months.
This isn't your only tip-off that the Parsippany and East Hanover, New Jersey-based company is an old- economy enterprise. Is bricks-and-mortar a drawback? Hardly. Shurts explains: "If [Nabisco] wasn't bricks-and-mortar, my job would be a lot harder." As things stand, "I don't have to create a new name."
In fact, the company's branding is the envy of the industry. Nabisco counts in its product stable LifeSavers candies, Planters nuts, Grey Poupon mustard, Ritz Crackers, Barnum's Animals Crackers, Chips Ahoy cookies, and, of course, Oreos. Generations have grown up on the packager's snacks. It is this branding that "puts us in play on the Internet," Shurts says. "And there's tons of learning to do."
He's right. While hundreds of companies hope to use the Web to build brand recognition, Nabisco faces the enviable challenge of translating its already formidable brands into cash. Sharon Fordham, president of Nabisco's global e-business unit, all but sighs in relief at this advantage.
"In areas like e-commerce and e-productivity, the financial returns are quite clear," she explains. "However, in areas like Web site communications, e-CRM [customer relationship management], and online media, there is not a direct link between online exposure and a purchase at retail. Until the industry develops a test for this, arguments for greater investment spending will always be difficult."
Fordham should know. Nabisco's Candystand.com and NabiscoWorld Web sites were early players on the Web. Together they attract more than 3 million visitors a month. What's more, surfers hang around these sites for more than an hour at a time, thanks to the free games and other content they find.
Legions of Internet startups would view the volume and stickiness of Nabisco's Web traffic as a magic elixir for profitability. After all, as late as 1999 the conventional wisdom in Silicon Valley was that if you attract eyeballs, profits will follow. At the time Nabisco's sites were already well established. But they weren't designed to turn a profit.
You can't order a box of Oreos through any of Nabisco's Web sites. And chances are, you never will be able to. For all the care and nurturing of its brands, the company is even more protective of its extensive retail distribution channel. Nabisco retailers who suddenly found themselves competing with the food giant for sales on the Web would not stand for it. Shurts is quick to point out that packaged goods is a cutthroat business. Big retailers everywhere, including heavy hitter Home Depot, have put the screws to suppliers who try to sell anything on the Web.
So what's a food packager to do if it can't sell product directly to customers? Fordham and Shurts immediately focused on its gift division. The catalog business the company had been running since 1995 sold baskets and boxes filled with Nabisco goodies, uniquely packaged and unavailable in retail outlets. From the start, the food packager decided to outsource the fulfillment part of the business.
And in 1998 it sent the catalog front end out-of-house as well. Long before the term was coined, Nabisco's gift operation was on its way to becoming a new-economy business
