Beyond Redemption: Digital Shopper Marketing 2.0

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By Dan Frechtling. Generations of digital innovation reveal a pattern. The first generation re-creates a physical example, the second generation creates something new. The presentation begins with examples drawn from gaming, animation, publishing, and mobile. The balance of the slides show how this pattern is recurring in digital shopper marketing and how practitioners can benefit.

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Beyond Redemption: Digital Shopper Marketing 2.0

  1. 1. Beyond Redemption: Digital Shopper Marketing 2.0 April 13, 2011Blog: smartretailmedia.com Twitter: ShopperMedia 1
  2. 2. Intro to Speakers •Dan Frechtling VP Client Solutions •Joe Battoe VP Shopper Marketing Blog: smartretailmedia.com Twitter: ShopperMedia www.smartretailmedia.com DRAFT More: 1/26/10 2
  3. 3. What do these 4 images have in common? Blog: smartretailmedia.com Twitter: ShopperMedia 3
  4. 4. Digital + Gaming? First Digital Video Game 1952Blog: smartretailmedia.com Twitter: ShopperMedia 4
  5. 5. Digital + Gaming!Blog: smartretailmedia.com Twitter: ShopperMedia 5
  6. 6. Digital + Film? First CGI Animal 1986Blog: smartretailmedia.com Twitter: ShopperMedia 6
  7. 7. Digital + Film!Blog: smartretailmedia.com Twitter: ShopperMedia 7
  8. 8. Digital + Publishing? First New York Times homepage 1996Blog: smartretailmedia.com Twitter: ShopperMedia 8
  9. 9. Digital + Publishing!Blog: smartretailmedia.com Twitter: ShopperMedia 9
  10. 10. Digital + Mobile? First mobile phone 1983Blog: smartretailmedia.com Twitter: ShopperMedia 10
  11. 11. Digital + Mobile!Blog: smartretailmedia.com Twitter: ShopperMedia 11
  12. 12. First Generation (1G) Simulate a paper Make animals look game with pixels photo-real Re-creates Provide desktop Enable a phone to news content travel Blog: smartretailmedia.com Twitter: ShopperMedia DRAFT More: www.smartretailmedia.com 1/26/10 12
  13. 13. Second Generation (2G) Let players become Merge fantasy the controllers and reality Creates Add new Complete any e-task experiences to news with one handheld Blog: smartretailmedia.com Twitter: ShopperMedia www.smartretailmedia.com DRAFT More: 1/26/10 13
  14. 14. What does this have to do with digital shopper marketing?Blog: smartretailmedia.com Twitter: ShopperMedia www.smartretailmedia.com DRAFT More: 1/26/10 14
  15. 15. Digital Shopper Marketing is Starting a 2G Transition 2G On this trajectory: • E-Circulars • Digital Coupons Adoption • Social media • In-store media • Targeted display 1G • Mobile vehicles • … Time Blog: smartretailmedia.com Twitter: ShopperMedia 15
  16. 16. Examples today Today (approx) 2G On this trajectory: • E-Circulars • Digital Coupons Adoption • Social media • In-store media • Targeted display 1G • Mobile vehicles • … Time Blog: smartretailmedia.com Twitter: ShopperMedia 16
  17. 17. Objectives1. Understand 2G digital shopper marketing2. Know how to use it more effectively Media reviewed • E-Circulars • Digital Coupons • Social media Blog: smartretailmedia.com Twitter: ShopperMedia www.smartretailmedia.com DRAFT DRAFT More: 1/26/10 1/26/10 17 17
  18. 18. 2G Principles Blog: smartretailmedia.com Twitter: ShopperMedia 18
  19. 19. 2G Principles right offers to the right behaviors Blog: smartretailmedia.com Twitter: ShopperMedia 19
  20. 20. 2G Principles auto-adjusting campaigns Blog: smartretailmedia.com Twitter: ShopperMedia 20
  21. 21. 2G Principles helpful product/ service suggestions Blog: smartretailmedia.com Twitter: ShopperMedia 21
  22. 22. 2G Principles value realized in fewer steps Blog: smartretailmedia.com Twitter: ShopperMedia 22
  23. 23. 2G Principles right offers to the right behaviors Blog: smartretailmedia.com Twitter: ShopperMedia 23
  24. 24. Different Interpretations (Anagram Example) DORMITORY DIRTY ROOM College student Parent THE MORSE CODE HERE COME DOTS Naval communicator Layman ELECTION RESULTS LIES – LET’S RECOUNT Winning candidate Losing candidate Blog: smartretailmedia.com Twitter: ShopperMedia 24
  25. 25. 1G E-circulars Prompt people into the store to buy more. • Feature weekly or seasonally promoted products • Promote launched or re-launched items • Localize product presentations based on store traits • Accentuate underperforming departments • Organize content for pre-trip searching and list making Blog: smartretailmedia.com Twitter: ShopperMedia 25
  26. 26. 2G E-circulars Use targeting to more naturally stimulate purchases • Expand purchases of popular products • Cross-sell complementary products • Re-activate lapsed product buyers • Align with individuals’ purchase cycles Blog: smartretailmedia.com Twitter: ShopperMedia 26
  27. 27. 2G E-circular Case Example Post Email vs. Pre Email Sales Impact Example: 10 recent categories 6.0 Self Care 5.0 Average lift from personalization: 4.0 Pet Food Cereal Bars 2.4XSales lift 3.0 Chicken 2.0 Eggs Soda Cheese Ice Cream 1.0 Canned Soup 0.0 0% 20% 40% 60% 80% Offers Penetration (%) Blog: smartretailmedia.com Twitter: ShopperMedia Source: DS-IQ 27
  28. 28. 1G Digital CouponsTurn around the mass-coupon paradigmPros:• Flip the model from push to pull, as shoppers log in or opt in to offers• Provide basic targeting e.g., past activations, clickstream, and banner/geoCons:• Don’t distinguish individual buyers• Don’t personalize by product or increment Blog: smartretailmedia.com Twitter: ShopperMedia 28
  29. 29. 2G Digital Coupons Occasionally Stopped Buys novelties buys buying (but not pints)Serve the right offers to the right shopper behaviors. Examples:• Attract new buyers by selecting and targeting those most likely to try• Expand current buyer consumption by increasing frequency and units• Re-activate lapsed buyers such as brand switchers or category defectors Blog: smartretailmedia.com Twitter: ShopperMedia Source: DS-IQ 29
  30. 30. 2G Digital Coupon Case Example 1 Identifying shoppers most likely to try 47% Frozen dinner 17% 9% Campaign redemption rate Frozen entrée Brand buyers category buyer from other categories DRAFT DRAFT 1/26/10 1/26/10 Source: DS-IQ More: www.smartretailmedia.com 30 30
  31. 31. 2G Digital Coupon Case Example 2 Increasing loyal shoppers’ buying rate Purchase frequency (mos) Every 2 Single serving meal Every 6 Before During >1 units per purchase 100% 36% Before During (avg 1.8) (avg 4.1) Blog: smartretailmedia.com Twitter: ShopperMedia Source: DS-IQ 31
  32. 32. 2G Digital Coupon Case Example 3An email and mobile coupon program for amajor grocer increased trips per week 12% Test 1.59 During campaign Pre-campaign 1.47 Pre-campaign Pre-campaign Control 1.42 During campaign Pre-campaign Blog: smartretailmedia.com Twitter: ShopperMedia Source: Catalina Marketing DRAFT 1/26/10 32
  33. 33. 1G Social Media Self-expression, instantly broadcast • Express affiliation with brands more broadly • Automate word of mouth immediately • Opt-in to news from preferred brands • Join groups with shared affinity Blog: smartretailmedia.com Twitter: ShopperMedia 33
  34. 34. 2G Social Media Use targeting to engage passions • Reach emotional loyalists • Engage them in an event they care about • Enable them to share and self-express • Add special insiders-only perks Blog: smartretailmedia.com Twitter: ShopperMedia Source: YOU Technology 34
  35. 35. 2G Principles auto-adjusting campaigns 1.Optimizing segments 2.Optimizing offers Blog: smartretailmedia.com Twitter: ShopperMedia 35
  36. 36. Differing Outcomes (Optical Illusion Example) Blog: smartretailmedia.com Twitter: ShopperMedia 36
  37. 37. 2G Optimizing Segments 27.3% 18.1% 14.3% 13.5% 13.4% 9.5% 8.7% avg $1 off 2 $.50 $.60 $.60 $.75 $.75 Heavy buyers Light buyers Lapsed brand Brand adj Category Affinity (2 units) category category buyers category Segments buyers buyers buyers Expand brand Convert Generate buyer category non-category consumption buyers buyer trial Source: smartretailmedia.com Twitter: ShopperMedia Blog: DS-IQ 37
  38. 38. 2G Optimizing Offer Values Web coupon program for ConAgra and national retailer Test Values Result Save $2.00 Loser New Buyers 12% cost/unit Save $1.75 Winner improvement Source: smartretailmedia.com Twitter: ShopperMedia Blog: DS-IQ 38
  39. 39. What Kind of Personalization? 3 approaches 1. Let shoppers select the kinds of offers they wish to receive 2. Apply collaborative filtering or similar techniques to suggest what similar shoppers have chosen 3. Use individual purchase history to recommend the most relevant offers Blog: smartretailmedia.com Twitter: ShopperMedia 39
  40. 40. Enough Talking About Marketers Blog: smartretailmedia.com Twitter: ShopperMedia 40
  41. 41. 2G Principles helpful product/ service suggestions value realized in fewer steps 1. E-circulars 2. Digital coupons Blog: smartretailmedia.com Twitter: ShopperMedia 41
  42. 42. Offer Relevance Loyal Mach 3 user Timing and brand elements enable relevance Right time Wrong brand Schick Hydro Current brand Right time Right brand (upsell) Gillette Fusion Blog: smartretailmedia.com Twitter: ShopperMedia 42
  43. 43. Relevance Surveyed % of shoppers participating in a 2G program who said the offers made them: 42% 36% 30% 10% Switch Try Purchase Stock Up Brands Something More of on Offers New Specific Received Product “It made me buy the product about a week sooner than I would have…and I’m not sure I would have otherwise bought the two, but I did, because it was relevant to my life.” Blog: smartretailmedia.com Twitter: ShopperMedia Source: Catalina Marketing DRAFT 1/26/10 43
  44. 44. Simplicity of E-circulars 1G 2G Principle Availability Pre-selection Delivery Browse hundreds of images View relevant offers pre- or search by category selected and ranked Blog: smartretailmedia.com Twitter: ShopperMedia 44
  45. 45. Simplicity of Digital Coupons 1G 2G Principle Pull, not push Saving steps Delivery Find offers, print out, and Load-to-card and set up bring to store mobile reminders Blog: smartretailmedia.com Twitter: ShopperMedia 45
  46. 46. Examples today Targeted right offers to right behaviors Dynamic auto-adjusting of campaigns 2G RelevantAdoption helpful product suggestions Simple realizing value in fewer steps 1G Time Blog: smartretailmedia.com Twitter: ShopperMedia 46
  47. 47. Further Guidelines Principle 1: Go beyond redemption. Principle 2: Don’t jail shoppers in static segments or zones. Principle 3: Look for ways to bet after the race has started. Blog: smartretailmedia.com Twitter: ShopperMedia 47
  48. 48. More about digital shopper media: Blog: smartretailmedia.com Twitter: ShopperMedia Corporate: ds-iq.comJoe Battoe Dan Frechtlingjoe.battoe@ds-iq.com dan.frechtling@ds-iq.com DRAFT More: www.smartretailmedia.com 1/26/10 48

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