Winners & losers along the digital path to purchase


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Brand owners need to take the right approach to ensure that their digital strategy doesn't distract from sales.

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Winners & losers along the digital path to purchase

  1. 1. Connected worldWinners and losers along the digital path to purchase Share this Opinion Leader
  2. 2. Winners and losers along the digital path to purchaseWe know that ever-increasing numbers of consumersare going online to help their shopping, whether it’sto speed up a transaction, research best prices or seekreassurance that they are making the right choice.However, it is not the same across all categories andbrand owners need to think carefully about the rightapproach to take to ensure that their digital strategydoesn’t distract from sales. Share this Opinion Leader 2
  3. 3. Winners and losers along the digital path to purchaseDon’t believe everything you read The basic rules stay the same may or may not include some digital influences. TheThe world is changing. If you believe all you read, The answer is surprisingly simple! Although the various stages of the path to purchase remain the same:nobody makes a purchase decision nowadays without explosion of digitaltouch points has made the world there are various different models for FMCG productsgoing through an elaborate process that might involve more complex, the basic rules stay the same. As Herb but usually they include pre-trip planning and research,visiting a store to find a few options they like, using Sorensen put it in ‘Inside the Mind of the Shopper’ locating categories, searching for products, selectingtheir smartphone to check on prices and independent (2009), the relationship between the shopper and the a product, buying, and finally usage or, going on Facebook to canvass their friends’ retailer consists of three shopper inputs and two retailer The key development is that now any or all of theseopinions, and completing the purchase on-line. outputs in return. Shoppers give time, money and stages might be conducted using a variety of digitalBut what is the story for the weekly grocery shop? angst, and in return they receive items and satisfaction. touchpoints or influences. I stress the word mightShopping would truly be a full time occupation if When it comes to meeting shopper needs – any because the reality is that the vast majority of today’sdetergents, pet food and bread were all purchased application that saves time, money or angst (or even grocery shoppers continue to follow a determinedlyin this manner. The weekly shop would likely take better all three) will have a good chance of success. analogue path to purchase! A recent TNS study in theall week. Any application that does not deliver against one of US showed that approximately 90 percent of trips were these basic needs will likely fail. ‘analogue only’, with most digital activity occurringThere is a huge amount of misinformation or pre-store rather than in-store.misunderstanding concerning the ‘digital shopper’ as What is the ‘digital’ path to purchase and how is it different? 90%he or she relates to FMCG purchasing. If FMCG brandmanufacturers and retailers are to succeed, then they Before we ask how the digital path to purchase canmust dispense with these myths, and think about what deliver against these three shopper needs, let’s pausetheir shoppers actually demand from the digital path to ask what we actually mean by the ‘digital’ path toto purchase. purchase. The reality is that there are no alternative of trips were ‘analogue only’, with most digital digital and analogue routes to completing grocery activity occurring pre-store rather than in-store. shopping; there is just one path to purchase, and it Share this Opinion Leader 3
  4. 4. Winners and losers along the digital path to purchaseWhen trying to map out a successful strategy it is barrier between them and what they need or want purchasing of a favourite detergent brand is minimal.worth making a distinction between e-commerce to purchase. It’s sad that there are people in sales and So the opportunities to save shoppers time, money andand traditional bricks and mortar retail, as the path to marketing who actually think that if they can make angst can be hard to find.purchase and the various stages along it can be very the search (also known as shopping) longer and moredifferent in each case. But let’s also make a distinction pleasurable, they will sell more! Tsk, tsk! Selling is Brand manufacturers and retailers have a whole newbetween a digital influence along the path to purchase, always about the close, and the sooner the better.” armoury of weapons to try and influence shoppersand digital media. Like traditional media, digital media Good retailing is about connecting shoppers with the along the path to purchase, but making these weaponscan help build brand equity and awareness, but a products they want to buy – if this can be done quickly relevant is challenging. The danger is that brandsbrand’s Facebook page, just like a TV ad, is not part of it frees time for incremental browsing and purchasing. and retailers will ‘interrupt’ shoppers with irrelevanta shoppers’ path to purchase unless it has been used to Conversely if shoppers are delayed they become communications – either due to untargeted executions,inform that purchase. frustrated and spend less. or because they don’t properly understand shopper needs. Such interruption is unwelcome and can beThe principles of success The folly of interruption counterproductive if it delays purchases. Shoppers’The key to success in retail is providing shoppers with When we apply this logic to the path to purchase for needs are often simple – they know what items theywhat they want and closing the sale. The process is FMCG products, the question becomes: how can digital want to buy and they want help finding them. It issimple: shoppers search for products, and retailers and touchpoints and influences realistically be used to save important that brands and retailers meet the shopperbrands search for shoppers. As previously discussed, shoppers time, money and angst when buying the on their own terms, give them what they want, andshoppers are investing time, money and angst into weekly groceries? Bear in mind that our supermarkets focus on the basics of saving shoppers time, moneythis search. To quote Herb Sorensen again, “the point are already overflowing with promotional offers, and and angst. Those focused on mass interruption willhere is that when shopping, shoppers do not search the amount of angst associated with the habitual surely fail.because they like to search, but because there is a Share this Opinion Leader 4
  5. 5. Winners and losers along the digital path to purchase ShopperDigital winners and the importance It is hugely important that brands and retailers useof context versus content digital touchpoints to shorten the path to purchaseDigital winners will be those that look past technology rather than lengthen it. The focus should be onitself to focus on how it can be applied to meet shopper narrowing and straightening the path, helping shoppersneeds. Since the opportunities to save shoppers time to zoom in quickly on what they need and speeding theand money are relatively few, “smart” applications will decision-making process when it comes to buying required. These should facilitate quicker shopping TNS has developed a simple framework or checklistby recognising a shopper’s purchasing history and that maps the various stages of the path to purchasetheir location in-store, and delivering relevant, tailored against the key shopper needs. This framework can becommunications and offers. The real story is not so used to assess the value that any digital (or analogue)much about mobile, for example, but about data. The touchpoint or interruption is likely to bring.application of technology that counts most will be theability to use large quantities of information streamedinto a single set of factors in real-time: the products Touchpoints will shorten the path to purchasea shopper needs, the offers they want and the righttone and timing of communication. Traditional (mass)marketing has always been about content, but a shiftin thinking is required as real time, 1-1 communicationwith shoppers will make context far more importantthan content when it comes to the success of Digital touch pointshopper marketing. Purchase Shopper Share this Opinion Leader 5
  6. 6. Winners and losers along the digital path to purchaseA recent study in the US asked a large sample ofdigitally engaged grocery shoppers an open-ended TNS frameworkquestion “what else can your retailer do to help?”Tellingly of the six key response types, the first twowere requests to stop doing things. Save time Save money Save angst„„ Don’t send me late information„„ Don’t overdo promotional emails and texts Pre-store planning„„ Save me time & research„„ Make it quick and easy to find items in the store„„ Help me get what I want Locating in-store„„ Give me meal ideasThis example helps illustrate the point that there are Searching at shelfvery few applications that are successfully addressingthe time, money and angst factors at the moment.Targeting time, money and angst SelectingApplying digital technology productively to FMCGshopping is a new and far from developed area.However solutions are starting to emerge that show Buyinghow digital technology can be thoughtfully andcarefully applied to help address key consumer needs. Share this Opinion Leader 6
  7. 7. Winners and losers along the digital path to purchaseSaving shoppers timeSmartphones can be used to save time in-store withself-scan and self-checkout. Shoppers simply scanproducts with their smartphone and checkout instantlywithout having to wait in-line. Applications that helpshoppers make a list and then find what they want in-store can also prove to be winners, as most time in-storeis spent trying to locate and search for products.Saving shoppers moneyCurrently, the most common digital activity along thepath to purchase is the printing of on-line coupons athome – a simple money-saving tactic, occurring pre-store. Increasingly though, tailored or personalisedoffers show the ability to improve the relevance andefficiency of offers. Emerging are ‘smart’ offers that Saving shoppers angst Moving forward, augmented reality technology hascan be delivered to the shoppers’ phone, based on This is perhaps where digital, and specifically mobile, potential for retailers, particularly in easing the searchtheir historical purchases, brand preferences and loyalty, comes into its own. Shoppers need reassurance at process. By pointing a smart device’s camera at a shelf,their location in-store and what’s in the shopping cart the point of purchase and mobile can provide this – shoppers could access overlaid information highlightingas the moment. often with simple tactics such as calling out best their stated product preferences such as nutritional sellers or pointing our affinities Amazon-style (X information, environmentally friendly packaging and percent of buyers of this product also bought…). not tested on animals. Share this Opinion Leader 7
  8. 8. Winners and losers along the digital path to purchaseA war is brewing…..?There is usually a ‘healthy tension’ in the relationshipbetween brands and retailers, and it is a relationshipin which the retailer has become increasingly morepowerful over the years. Is mobile about to change thedynamics of this relationship?For retailers, mobile represents an opportunity tofacilitate real-time, location-based, 1-1 personalisedcommunication between brands and shoppers at thepoint of purchase, and charge a healthy premium forthe service. Retail as media is not a new concept, butthis capability can represent a step-change in allocationof media budgets towards retailers.For brands on the other hand, mobile representsan opportunity to bypass the retailer and talk to theshopper directly at the point of purchase. Shoppers canscan a QR code or take a picture of the pack, openinga dialogue with the brand that includes the potentialto deliver offers and make purchases via a website. Share this Opinion Leader 8
  9. 9. Winners and losers along the digital path to purchaseThe advent of the mobile wallet will mean that an instant, tailored shopper marketing. No wonder thatindividuals’ purchasing history will be stored on Hal Varian of Google predicts “the sexy job in the nexttheir mobile phone, and so brands may be able to 10 years will be statisticians.” The sheer complexityaccess item-level detail without the permission of the of the task raises the possibility that third parties withretailer, and in turn develop their own 1-1 tailored expertise in analysis and big data may trump bothcommunications. The potential is huge. Just think if retailers and brands when it comes to deliveringa brand could recognise its own loyal shoppers in-store solutions. Third parties need not be retailer-specificas well as buyers of competitor brands, and target either – think of an independent ‘shopping companionpromotional offers accordingly, ensuring maximum platform’ that allows shoppers to meet all of theirefficiency of promotional spend. needs from any number of different stores based on location, price, availability, and personal preferences.But the battle for ‘ownership’ of these capabilities is yetto begin. To harness the power and potential available, If or when brands do manage to begin to bypass thevast product databases are required linking product retailer the whole system by which brands and retailersimages with detailed attributes and cross-referencing do business will be shattered, and predicting how thatthis with individual purchasing histories to create situation might resolve itself is extremely difficult. Share this Opinion Leader 9
  10. 10. Winners and losers along the digital path to purchaseWhat next?When it comes to the future, let’s turn to experts in thebusiness of efficient digital searching and retail for aview on where we are heading. “We used to joke that But the principles of shopping willthe ideal Amazon site would not show a search box,navigation links, or lists of things you could buy,” saidGreg Linden, a former Amazon programmer, quoted in remain the same, and success forthe book One Click: Jeff Bezos and the Rise of, “Instead, it would just display a giant picture of brands and retailers along the pathone book, the next book you want to buy.” to purchase will only be achieved if they can find ways to saveWill shopper marketing ever reach such a point? In alllikelihood the advances in technology will continue tobe very rapid, astounding consumers and changing theway they shop. shoppers time, money and angst. Share this Opinion Leader 10
  11. 11. Winners and losers along the digital path to purchaseGetting smart about the digital path to purchaseThe TNS framework to help brands and retailersprioritise their investments in the digital shopping spacerequires three key steps:1. Assess the current situation ?Determine how shoppers are currently usingtechnology throughout the path to purchase.We build our understanding using both customand syndicated tools.2. Understand the “why” and key driversUnderstand the needs that are motivating shoppersto use technology – and the time, money or angstthat this is saving them.3. Apply these insights to inform strategyUsing this input, we develop a model and conceptualframework to evaluate future investment decisions andensure marketing effectiveness. Share this Opinion Leader 11
  12. 12. About Opinion LeadersOpinion Leaders is part of a regular series of articles from TNS consultants, based on their expertise gatheredthrough working on client assignments in over 80 markets globally, with additional insights gained throughTNS proprietary studies such as Digital Life, Mobile Life and the Commitment Economy.About TNS About the authorTNS advises clients on specific growth strategies around new market entry, innovation, brand switching and Barry Lemmon is the Global Head, Retail & Shopperstakeholder management, based on long-established expertise and market-leading solutions. With a presence Practice at TNS, leading a group of global expertsin over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands focused on helping clients drive growth from shopper insights.individual human behaviours and attitudes across every cultural, economic and political region of the world.TNS is part of Kantar, one of the world’s largest insight, information and consultancy groups. Barry’s career in consumer and shopper research spans more than 20 years, including Managing DirectorPlease visit for more information. of Worldpanel in the UK and Ireland and Managing Director of Fashion Trak.Get in touchIf you would like to talk to us about anything you have read in this report, please get in touchvia or via Twitter @tns_global You may be interested in... Mobile commerce reaches the tipping point > The impact of digital on growth strategies: CMO imperatives > Share this Opinion Leader 12