The Digital Shopper Marketing REVOLUTION

JIM HOLBROOK FEBRUARY 17 DALLAS RetailNet Group

Are you a revolutionary?

Are you a revolutionary? Should you be?

↑  Retail design

↑  Retail learning labs

↑  Shopper marketing

↑  In-store media

↑  Selling in and executing

↑  Shopper insights

↑  Retailer intelligence

↑  ROI/analytics

↑  Digital apps

↑  Geo-locating

↑  Augmented reality

We know that all of

this is GOING UP UP UP

CPG companies spent about $38 billion on Shopper Marketing in 2010 (In-Store Marketing Institute)

Between 15% and 20% of CPG marketing dollars are earmarked for Shopper Marketing

83% of CPG companies will increase shopper marketing budgets

55% will boost spending 15% or more by 2013 (Booz & Co.)

↑  Smart phones

↑  Tablets

↑  Apps

↑  Connectivity

↑  Access to data

↑  New services

↑  New media

↑  New measures

And all of this is

GOING UP UP UP

7 

WE ARE IN THE MIDST

OF A RETAIL REVOLUTION

Here’s Why: The 10 Ways

Digital Changes Everything

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There is no more ‘IMPULSE’…

every purchase is considered

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1

Jim Lecinski of Google, refers to a "zero moment of truth" when consumers do research and make decisions before shopping

10 

P&G CMO Marc

Pritchard calls for thinking “store back”, meaning that if it does not work at the store, it’s a miss (FMOT)

BUT

of shoppers conduct research before they shop, typically for an hour or more.

Source: GMA, Booz & Company, and SheSpeaks Shopper Marketing 3.0 Survey; n = 3,600 respondents

Source: Google ‘Path to Purchase Presentation’

More Purchase Decisions Being Influenced Pre-Store

Source: Longitudinal Economic Study Series, IRI Attitude Link, n = 1,000+ shoppers. CPG Purchase Decisions. IRI, 2009.

60%75%

83%

25%

40%

17%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009

In-Store Before Entering Store

Where Purchase Decisions Are Made, % of Shoppers

Source: Google ‘Path to Purchase Presentation’

“Kraft recognized that shoppers were going online prior to their trip to the store to find information and that we needed to leverage The digital space as part of a robust 360 degree marketing plan.”

-  Microsites -  Online coupons -  Recipes -  Online promotions -  Shopping lists -  QR codes

As the prevalence of smartphones grows, more tools will become available to connect with the shopper in the pre-trip, in-store and post-purchase phases. The future opportunities to market in the moment through digital will be transformational.

13 emarketer

There is no more ‘pushing’ products at shoppers: “I’ll get what I need when I need it”

14 

2

15 

of touchpoints during active consideration

are consumer initiated - McKinsey

2/3

16 

new ways to get a second opinion

Brand ‘image’ doesn’t count anymore:

‘Just the Facts’

18 

3

19 

90% 70% 84% of consumers

trust recommendations from people they

know

completely or somewhat trust the

recommendations of consumer opinions

posted online 

claim that online customer

evaluations influence their purchase

decisions 

20

Online Research has Changed the Game

+188% Reviews

Source: Google ‘Path to Purchase Presentation’

Any Category can be Reviewed – even Cream Cheese

24 

Shoppers are more LOYAL

to deals and offers

4

The elasticity for existing brands of sales to ad spend averages 0.10

100% increase in ad spend generates 10% increase in sales - ARF

25 

Online Deals:

- search for deals up +288%

- over $1B via coupons.com

288% COUPONS

Source: Google ‘Path to Purchase Presentation’

CPG’s Leveraging Paid Search to Drive to Key Accounts

‘I don’t care about your features & benefits’ 28 

Brand-centric marketing doesn’t

resonate anymore…

Marketer-Retailer collaboration is

29 

HARDER

5

Retailer Practices = Problematic for Brands

 Clean store  Proprietary programs  Contracted end aisle

display space  Private label  No sharing of loyalty

card data

31 

Retailer Mobile Apps

32 

… so P&G goes direct

34 

National doesn’t work:

It’s all about LOCAL

35 35 

6

This UK service lets you upload and compare the cost of your weekly shopping list at four grocery stores, ultimately delivering which retailer offers the best deals overall.

Starbucks: Find Your Place

Hyper Location, Hyper Location, Hyper Location

There is no more captive audience:

Communities & Conversations 

41 

7

42 

43 

44 

Merchandising is irrelevant:

It’s all about The Experience 

45 

8

Experiences are Inspiring

46 

“Shared” Experiences are Compelling

47 

Shopping Experiences are Enabled

48 

CATEGORIES: Retailer specific: amazon, Best Buy Media partners: Elle, Mens Health Local: Vancouver, malls Social: facebook, myshopanion Offers: couponsherpa Scanners: redlaser, barcode hero Search: shopsavvy, google shopper Geo: aisle411, fastmall Lists: groceryIQ Reward: shopkick

Campaigns don’t work with an

Always-On Community 

49 

9

“The Purchase Funnel has been replace by the Decision Ecosystem, a cloud of information from all sources, available anytime”

(McKinsey, “The Consumer Decision Journey,” 2009)

51 

new ways to get a second opinion

Her Mindset – over time, in many places – shapes her shopping trip

“While most grocery shoppers shop for their food items around once a week, consumers decide what to eat, drink, or serve many times a day. It’s these daily activities, and the needs behind them, that drive their purchase decisions.”

– Ann Hanson, NPD Group

eBay sold over $2B via smartphones in 2010, triple 2009

54 

It’s Not About The Store Anymore

Get On The Shopping List! 

55 

10

56

of U.S. households prepare a written or digital grocery shopping list prior to shopping

Source: Survey of 3,600 shoppers for Shopper Marketing 3.0 study conducted Fall 2009 by Booz & Company In collaboration with Grocery Manufacturers Association

Source: Google ‘Path to Purchase Presentation’

57

Source: Google ‘Path to Purchase Presentation’

58 

IT’S A REVOLUTION!

It’s a whole new way of doing things

BENEFITS of the revolution: digital shopping tools–

•  Reach shoppers who don’t consume traditional media

•  Tailor/target offers – more relevance, less waste

•  Real-time research and feedback •  More helpful, less disruptive •  Easier to measure •  Increase engagement •  Facilitate follow-up - - real loyalty •  Influence decisions upstream

(before the store)

59 

60 

REVOLUTION?

NOT SO

FAST

Been here… Done this 10 Reasons to Not Freak Out

61 

Remember?

62 

1

In the end, it’s just more couponing

63 

2

Online Coupons

64 

82% of consumers use coupons (up from

63% in 2007)

25% of those are using

online coupons (over 36 million shoppers)

65 

evolution-insights.com

We’re just extending our media

reach/frequency

66 

3

It’s just another screen

Digital shopping, digitally enabled shopping? Way, way too complex

68 

4

70 

huh?

TOOLS • SMS and MMS • Downloadable Apps • Mobile Websites • Check-in Features • Barcode Scanners • Augmented Reality • Digital Out of Home • Payment Peripherals

71 

Digital or analog, the ‘journey’ is the same

72 

5

73 

Most of this digital stuff is just ‘novelty’

74 

6

75 

Popular iPhone Apps

Never going to get past the significant privacy issues

76 

7

77 

•  “Harm” beyond just economic •  Compliance •  Liability •  Transparency •  Security •  Data retention limited •  Affirmative consent •  Profiling •  Disclosures •  Children protections •  ‘Do not track’ •  Accuracy

Most of it is direct marketing without the postage

78 

8

79 

90%+

of total email volume is junk

“Deep shopper insights”? It has ALWAYS been about insights!

80 

9

81 

“The consumer is not a moron, she is your wife”

- David Ogilvy, 1960’s

Mass still works – hello, Super Bowl ads

82 

10

83 

84 

So…

85 

WE ARE IN THE MIDST

OF A RETAIL REVOLUTION

86 

The Top 10 Reasons for a Digitally-Enabled Shopper Marketing Revolution 

1= strongly diasagree 5= strongly agree 

1. No more impulse: Every decision is informed

2. No more push: “I’ll get it when I need it”

3. No more image: “Just the facts”

4. No more loyalty: Heightened ‘deal’ sensitivity

5. No more collaboration: Brands and retailers chasing consumers

6. No more ‘national’: It’s all about local interests

7. No more audience : It’s all about the community/conversation

8. No more merchandising: It’s all about navigating

9. No more campaigns: I’m “always on”

10. No more in-store: Get on the shopping list

87 

REVOLUTION?

NOT SO

FAST

88 

The Top 10 Reasons Why It’s Not Really a Revolution  1= strongly diasagree 5= strongly agree 

1. Already been tried: webvan, pets.com etc etc

2. Just a better way to distribute coupons

3. Just another media channel

4. Way too complex for the casual user

5. The journey is the same: Awareness, intention, consideration etc etc

6. It’s mostly “novelty” (Angry Birds)

7. Faces HUGE privacy issues

8. Just direct marketing

9. It’s always been about “insights” and still is

10. Mass still works

#1: Is This A Revolution?

89 

TOTAL from the Yes/Revolution =

TOTAL from the No/Not = minus

=

Systemic Change (50 pts)

Evolve/Adapt (-50 pts)

#2: What Is Your Position?

90 

Store/Retailer-Dependent: -  Not necessarily ‘hostage’ -  Merchandising does drive sales -  Cannot go direct

Less Dependent: - More brand strength -  Pull works -  Able to go direct

#3: What Is Your Approach?

91 

DIFFERENTIATING: - Investing - Discriminating - Experimenting - Aligning - Messaging -  Equity-building -  Insights/solutions

OPTIMIZING: -  Spending -  In-store performance -  Measurable ROI -  Category mgmt -  Transactions -  Data arms race -  Channel mgmt -  Trade relations

92 

lands

cape

company

OPTIMIZE DIFFERENTIATE

EVOLUTIONARY

SYSTEMIC CHANGE

What Is Your Action Plan?

93 

1.  Disrupter: changing the game, reinventing the rules, creating the future 2.  Leader: knowledgeable about all of the changes, embarking on many, a clear strategy of

experimentation, skill-building, tool-building, investing 3.  Focused: fast follower, jumping on the proven tactics, tactics form the strategies, responding to

outside requests 4.  Planning/preparing: getting organized, allocating budget, beginning new work

What Is Your Action Plan?

94 

Rate of Change:

Retail(er) Dependency:

Position: 1.  Disrupter 2.  Leader 3.  Focused 4.  Planning/preparing

Possible Ac5on Area  Op5mize/Differen5ate? 

Push/pull 

Transparency 

Value added offers 

Consumer direct 

Customize/localize 

Community‐building 

Conversa=onal 

List management influence 

ecommerce 

Deal/offer distribu=on 

Shopper‐scripted messaging 

Journey refinement 

AEen=on to privacy 

Insights 

Other…. 

95 

Thank You jim.holbrook@

emak.com

slideshare.net jimholbrook