Powering up digital with the classic battery brand

About the client

Duracell is the world’s leading manufacturer of high-performance alkaline batteries, specialty cells, and rechargeables with an iconic personal power brand, trusted for compact and longer-lasting batteries.

Opportunity

Like all CPG companies, the battery industry has increasingly limited strategic choices. In the past, big brands could invest in building brand recognition and recall with consumers. The thinking : Consumers would show brand preference  in retailers’ aisles. In our digital world, however, online reviews have shifted the dynamic. Now, an Amazon.com purchaser will see reviews of AmazonBasics batteries that are as positive as the reviews for both Duracell and Energizer — at a significantly lower cost. Consumers increasingly ignore advertising and increasingly rely on reviews from other consumers. This new marketing reality gives generics like AmazonBasics a huge opportunity to invalidate Duracell and Energizer’s investment in their brands and, worst of all, commoditize the industry.

In 2017, Amazon controlled 94% of online battery sales and already owned 31% of all online battery sales with their private label battery, AmazonBasics. While online sales are only 4% of the market today, they increased 75% from 2015 to 2016, even prior to the stay-at-home pandemic requirements. Online sales of Amazon’s private-label battery from September 2015 to August 2016 were $113 million — more than double the 13.1% share that private label batteries had in offline stores for the 52-week period ending October 2016.

The implications for companies like Duracell are clear. Non-traditional competitors are stealing market share in digital channels, and these channels are growing exponentially. Amazon’s size, scale, and capabilities are scary for any business. They have no fear of entrenched competitors. In today’s market, retailers and CPG companies face a tough choice. They are getting squeezed by a fight between traditional competitors and disruptors. If they try to fight a battle on every front, the probability of losing goes up significantly.

Unfortunately, retailers and CPG companies haven’t invested in the capabilities necessary to compete with Amazon — and in many cases, it is too late to even try. As Amazon takes their market share and margins continue to shrink, they had fewer and fewer resources to invest in innovation. Even if they had the margins they formerly enjoyed, it would have taken them years of investment to catch up with Amazon.

Solution

We partnered with Duracell to transform them from a company that sells commoditized batteries to a digitally driven company that monetizes data insights on energy consumption. To give Duracell a new way to compete, our Transform Thinking workshop identified a new business model that differentiated Duracell by focusing on managed battery replenishment, consumer insights, and risk management.

To deliver on this refreshed vision, we designed and built a custom mobile application for both iOS and Android that absorbed power data from the custom sensor to help consumers understand the needs of their battery-powered devices.

The custom sensor and power management algorithm tracks battery energy levels and energy consumption. By putting this sensor on the battery of a smoke detector, the sensor can validate device power, assess whether the alarm is active, and even verify the sensor is in the smoke detector.

To bring it full circle, we helped to build and optimize the manufacturing process with Duracell’s Chinese manufacturing partners who build the machines that support the build of the sensor.

Disruptive Digital Build

Innovation is truly great when it becomes a platform for future innovation. Today, by adding Bluetooth capability into the sensor, we can triangulate the sensor’s last known location via the mobile app. This is opening new opportunities in the consumer market to help consumers find lost remote controls, game controllers, and keys!