Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Digitally Empowered Shopper


Published on

An awesome presentation from Rita Wheat, Group Director- Strategy, G2 USA on the factors influencing the digital shopper. Awesome read.

Published in: Business
  • Be the first to comment

Digitally Empowered Shopper

  1. 1. The Digitally Empowered Shopper 0 70 How Digital Technologies Are ·3 37 ·5 Impacting Consumers Along 12 ,2 72 33 the Purchase Decision Journey 0- 01 10 Y N October 2009 , rk Yo ew N e, e nu Av fth Fi 0 20 ts igh ins
  2. 2. 2
  3. 3. “The shift in consumer decision making means that marketers need to adjust their spending and to view the change not as a loss of power over consumers but as an opportunity to be in the right place at the right time, giving them the information and support they need to make the right decisions.” —“The Consumer Decision Journey” McKinsey Quarterly, June 2009 3
  4. 4. D igital technologies have had a dramatic impact on the relationships consumers have with brands and on the way they shop for them. Consumers are empowered like never before. They are using these technologies to plan their shopping trips—researching products, getting usage ideas, seeking out deals and reviewing the opinions of peers and experts— and are entering the store with many of their brand decisions already made. While much of this behavior is being driven by newfound, on-demand access to information anytime, anywhere, both at home online and on the go on mobile devices, the economic downturn 4
  5. 5. has heightened it. Consumers are taking a more disciplined approach to shopping; tighter budgets mean that shoppers want to avoid any mistakes. The conventional wisdom has always been that most brand purchase decisions are made in the store. But with the new, digitally empowered consumer entering the store better prepared than ever before, is the new reality that most purchase decisions are made at home or on the way to the store? The truth most likely lies somewhere in between. So how can manufacturers ensure that their brands are included in the consideration set and make the final cut? They must identify shopper needs and behaviors at every phase during the purchase decision journey and deliver relevant experiences that shape purchase decisions, from pre-purchase to point of purchase, from consumption experience to post- experience reflection. 5
  6. 6. Table of Contents 1: The Rise of the Digitally Empowered Shopper p. 8 2: The Purchase Decision Journey and the Four Phases of Brand Commitment p. 12 6
  7. 7. 3: The Digital Toolbox p. 14 4: Five Principles for Developing an Effective Digital Shopper Marketing Plan p. 33 7
  8. 8. 1: The Rise of the Digitally Empowered Shopper W ebsites. Search engines. Rich media ads. Blogs. Facebook. Twitter. Flickr. YouTube. Wikis. Widgets. SMS/MMS/WAP. QR codes. Mobile apps. and on the way they shop for them—how they plan, de- termine and complete their purchases. Until recently, the conventional wisdom was that 70% of brand pur- chase decisions were made in the store.1 Now technol- These advances in technology have resulted in a funda- ogy, coupled with consumer concerns about the state mental shift in the way people consume media—from of the U.S. economy, may be creating a new reality, one passive engagement to active participation. Consum- where more decisions are made outside the store. ers are evolving into content creators, distributors, pro- Some research indicates that as many as 76% of pur- grammers and critics. They demand information when, chase decisions these days are being made at home.2 where and how they want it, filtered by their peers, backed by expert opinions and shared with friends. Three trends, enabled by technology, have given rise to They have, in effect, wrested control away from publish- the new digital shopper: the Google mindset, social ers and advertisers. media and 24/7 connectivity. This newfound control is also having a major impact on the nature of the relationships people have with brands 8
  9. 9. I. ThE GooGlE MInDSET: grown by 50% between 2005 and 2008, to 36 million.5 RESEaRCh anD MoRE RESEaRCh The shift in attitudes and behaviors may be permanent: 70% of consumers claim that they will maintain some or C onsumers are using technology to gather large amounts of information about the products they buy. And that research isn’t necessarily limited to most of the behaviors they have adopted during the re- cession well after it ends.6 products that will be purchased online or that are high- With the Internet playing such a crucial role in how con- involvement decisions: 70% of consumers indicate sumers shop, it is not surprising that 48% of consumers that they are researching everyday grocery products indicate that the Internet has increased in importance in online.3 their lives compared with the previous year.7 The economic downturn has heightened product re- search by consumers, driving them to adopt new strate- gies as they consider every dollar spent and attempt to avoid making mistakes they’ll regret. Two-thirds are preparing shopping lists prior to store visits.4 More and 93% of consumers research more consumers are checking store circulars before or products online before at the store (71%, up from 64% in 2007) and are bring- ing along coupons (82%, up from 63% in 2007).2 About purchasing them in a store.8 a quarter of these coupon clippers are finding coupons online; the number of people using online coupons has s ght si in 9
  10. 10. 1: The Rise of the Digitally Empowered Shopper “The explosion in Consumer Generated Media over the last couple of years means consumers’ reliance on word of mouth in the decision-making process, either from people they know or online consumers they don’t, has increased significantly.” —Jonathan Carson, President of Online, International, Nielsen II. SoCIal MEDIa: ers’ reliance on word of mouth in the decision-making EMpowERInG woRD of MouTh process, either from people they know or online con- sumers they don’t, has increased significantly.”10 And O nly one in four consumers believes that advertis- ing is a credible source of product information.9 But what many do find to be credible are the opinions studies back this up. While 90% of consumers trust recommendations from people they know, an eye- opening 70% completely or somewhat trust the rec- and recommendations of friends and family. A host ommendations of consumer opinions posted online.11 of social media platforms, such as message boards, What’s more, 84% claim that online customer evalua- blogs, and user ratings and reviews, have enabled tions influence their purchase decisions.12 consumers to easily share opinions, and social net- works have expanded the reach of this content and III. 24/7 ConnECTIvITy: the very definition of “friends and family.” Jonathan MobIlE aS an ExTEnSIon of ThE CoMpuTER Carson, President of Online, International, at Nielsen, posits that the “explosion in Consumer Generated Media over the last couple of years means consum- W ith broadband access at 82%, consumers are increasingly reliant on the Internet to organize, 10
  11. 11. simplify and add new capabilities to their lives.13 The growth in mobile phone penetration, currently at 81%, means that consumers are always connected, with readily available information at their fingertips, both at home and on the go.13 In fact, on a typical day, half of mobile users go online with a mobile device, checking email, accessing the Internet, texting, watching videos 10% have used a or getting maps or directions.14 While most people con- sider mobile access important for staying in touch with mobile device others, they equally value it as a way to obtain instant to text-message a friend information. or family member Smartphones, and the iPhone in particular, are game changers, with their computer-like functionality driving about a product the growth of the mobile Web. Their nearly 19% share will increase dramatically over the next few years as while shopping.17 people replace their older mobile devices.15 Smart- phone users are heavily invested in their phones and tend to use other functions, beyond voice and texting, while on the go: 80% surf the Web,16 while about 16% search the Internet for products and services.15 s ght si in 11
  12. 12. 2: The purchase Decision Journey and the four phases of brand Commitment D igitally empowered shoppers are using technology to find and research products, to determine how much to pay for them and where to buy them, to un- gaining confidence are key as consumers evaluate the options, plan for the shopping trip and commit to purchase decisions. cover deals and special offers, and to consult with peers and experts. The 24/7 connectivity that mobile devices • Point of Purchase: During this phase, consumers offer means that not only do consumers have access to survey the store, search for a product and select a par- information while on the go and at the store, but retail- ticular brand. They are able to physically compare prod- ers and manufacturers have expanded opportunities to ucts and select or deselect specific ones. They may also reach and influence them at key points along the pur- find inspiration in the form of product usage ideas, pro- chase decision journey. motional offers, or other products or brands that they had not considered earlier. A positive shopping experi- More importantly, access to digital content doesn’t end ence will reinforce the consumer’s commitment to both at purchase. Consumers also go online for information the brand and the retailer. on how to use a product they have bought, then return online after they’ve experienced their purchase to re- • Experience: After purchase, the consumer experi- flect on the experience and to share their opinions with ences the product, interacting with the packaging and others. ultimately using the product. At this point, consumers will seek advice on stocking, preparation and usage. These shopper behaviors are captured in the follow- Positive usage experiences will provide validation that ing four phases of brand commitment that occur once a they made the right choice and reinforce brand commit- purchase journey has been triggered. ment, which can influence future purchases. • Pre-Purchase: During this phase, consumers ac- • Reflection: During this phase, consumers assess tively seek out information that will influence pur- the entire experience, from Pre-Purchase to Point of chase. They research products, look for offers, review Purchase to Experience. A positive experience at each the opinions of peers and experts, prepare shop- phase will reinforce brand commitment, while a nega- ping lists and select stores. Acquiring knowledge and tive one will lead to brand rejection. During this phase, 12
  13. 13. Trigger PR N E- IO P U CT RC E FL HA RE S Assessing Evaluating E Accepting/rejecting Planning Sharing Coordinating Stocking Retail impression Consuming Getting inspired E Qualifying AS Selecting H Purchasing EX RC PE IE PU R NC F E T O P OIN consumers will share their experiences with their peers phase. Maximizing brand commitment requires first and, in the process, review the opinions of others. Those understanding shopper needs and behaviors at each opinions have the potential to influence their own evalu- phase, then delivering against those needs as part of a ations positively or negatively. comprehensive marketing plan that may include both digital and traditional initiatives. Our focus here is on Each of these phases can either reinforce or weaken digital initiatives. connections made with the brand in the previous s ght si in 13
  14. 14. 3: The Digital Toolbox: Pre-Purchase Phase M arketers have an overwhelming number of digital tools and technologies in their arsenal, but which will cre- ate the most relevant, engaging interactive experiences and activate consumers? Brand commitment at each phase of the purchase decision journey, and thereby higher sales, can be achieved by matching appropriate digital solutions to the goals and needs of three key players—the shopper, the manufacturer and the retailer—as reviewed on the pages that follow. Manufacturer Goals Retailer Goals Shopper Goals BRAND ENGAGEMENT STORE COMMITMENT KNOWLEDGE AND CONFIDENCE AND COMMITMENT Activate the purchase decision journey Product research Activate the purchase decision journey • • • Assist and influence product research Offer research Assist and influence product research • • • Address barriers to purchase Brand selection Address barriers to purchase • • • Assist shoppers in preparing List creation Assist shoppers in preparing for their shopping trips • for their shopping trips Store selection ONLINE MOBILE IN-STORE Websites (manufacturer, retailer, social media) WAP N/A Advertising Mobile apps Utilities Bluetooth User ratings/reviews QR codes E-circulars GPS E-coupons SMS/MMS Widgets Coupons Message boards SEM/SEO Influencer programs Email PRE-PURChASE PhASE TOOlBOx. 14
  15. 15. I. ThE PRE-PuRchasE PhasE DIgITal Toolbox PlACECAST’S MOBIlE AD NETWORk DElIvERS DYNAMIC I MESSAGING BASED ON CONSUMER n the Pre-Purchase Phase, a purchase journey has BEhAvIOR AND lOCATION. been triggered and consumers are focused on gather- ing the information they need for their shopping trip. Manufacturers seek to drive brand engagement and commitment, while retailers want to drive consumers to their store to complete the purchase. A variety of online and mobile tools can be deployed to address the goals of all three players, including search, website utilities, peer-to-peer communications, digital coupons and/or mobile applications, or apps. Search: Given that most consumers begin their prod- uct research using search engines, marketers are shift- ing more of their budgets to search engine marketing (SEM) and ensuring that their websites are search en- QWIkkER hOT SPOTS DElIvER CONTENT gine optimized (SEO). Some retailers, like Target, are AND SPECIAl OFFERS AT NO COST TO USERS WITh BlUETOOTh-ENABlED taking advantage of paid search results to drive con- MOBIlE DEvICES. sumers directly to online circulars promoting special of- content and special offers at no cost to users on the fers. Reaching consumers through search can also be go, adding measurability to out-of-home advertis- extended to mobile devices, with the added bonus of ing. As part of a recent campaign for Pepsi Smash de- GPS location-based results. Placecast’s mobile ad net- signed to increase brand engagement, transit shelter work delivers dynamic messaging based on consumer ads prompted passersby to turn on Bluetooth on their behavior and location. A mobile user searching for run- phones and opt in to receive MicPass hip-hop video ning events while walking near a Niketown, for example, clips. The campaign yielded a 23% opt-in rate. Another will be alerted to running gear sold nearby. Bluetooth campaign was designed to drive mall traffic to local restaurants. Mall billboards alerted shoppers location-based Targeting: location-based target- to download $2 off Miller Beer coupons redeemable at ing can also serve to trigger purchases or to encour- specific restaurants. This location-based targeting cam- age brand engagement. Bluetooth technology delivers paign resulted in a 13% opt-in rate.18 s ght si in 15
  16. 16. website and Mobile utilities: Marketers can deploy a variety of Web and mobile utilities to overcome barri- ers to purchase and get their products on consumers’ COvERGIRl’S shopping lists. A challenge for a drugstore brand like MAkEUP MIRROR CoverGirl is the inability of shoppers to try on cosmetics lETS USERS vIRTUAllY TRY ON before purchasing them, something that they are able COSMETICS. to do in department stores with the assistance of beauty consultants. To address this barrier, CoverGirl’s website offers the CG Makeup Mirror, a virtual makeup try-on utility. A user uploads her photo and applies cosmetics to it, getting a preview of what various colors would look like. Products may be saved to a shopping list, which can iFOOD DElIvERS MEAl be printed or sent to a mobile device, bringing the user SOlUTIONS TO iPhONE USERS. one step closer to making a purchase. entire purchase journey. In the Many marketers are adapting their existing website case of the iFood Assistant, users utilities or creating new ones for mobile distribution. can plan their meals for the week kraft’s iFood Assistant iPhone app, launched in Decem- and prepare shopping lists dur- ber 2008, helps consumers with meal planning, shop- ing their commute to work. They ping and preparation. Users browse recipes, create can then access the lists while at shopping lists organized by store aisle and then locate the store and even find a recipe nearby stores via GPS. The app is also synced up with for the broccoli that happens to kraft’s website (, enabling users to ac- be on sale. At home, they can pre- cess their recipe boxes and shopping lists on the go. It is pare the recipe while watching an instructional video priced at $0.99, and although it is sprinkled with ads for on the app. later, at the time and place of their choos- kraft products, it is consistently among iPhone’s top 100 ing, they can rate and review the recipe via the app. paid apps.19 Peer-to-Peer communications: Customer reviews and The portability of mobile apps means that they can be recommendations greatly influence the buying decisions deployed by marketers to shape decisions during the of shoppers. Thus, it is not surprising that mobile apps 16
  17. 17. Dunkin’ Donuts’ Dunkin’ Run is tak- ing a social approach to shopping prepara- tion. Its Dunkin’ Run website, mobile site and iPhone app make it easy for a user to compile separate coffee orders from multiple friends and create one consolidated list that can be viewed in an email, on the mobile site or COvERGIRl UTIlIzES PEER-TO-PEER RATINGS TO on the iPhone app, or printed out to bring to ACTIvATE INTEREST AND DESIRE. the store. and websites alike are integrating ratings and reviews into their offerings to influence consumers during their purchase decision journey. Manufacturers and retailers of a wide range of products, from cereals to vacuum cleaners to automobiles, are posting user rat- ings and comments on their websites. CoverGirl takes user-generated content one step further, incorporating ratings and reviews in email newsletter communications to website subscribers, alerting them to the beauty products rated most highly by CoverGirl’s online community. Many brands are identifying and engaging with influenc- ers through social media to help shape consumer decisions during the purchase journey. Rubbermaid de- ploys a blogger outreach program to get the message out about product benefits through the voice of the consumer. It provides bloggers with product samples and encour- ages them to discuss their experiences with others. s ght si in 17
  18. 18. Content Distribution and Digital Toolkits: Since CAMPBEllkITChEN.COM CONTENT consumers rely on a variety of online resources to IS FEATURED ON AOl FOOD. research products—manufacturer sites, retailer sites, third-party review sites, blogs—it makes sense to ex- tend the content reach beyond websites via content partnerships. For example, the Campbell’s kitchen website ( is a sponsor of the Dinner Tonight section of AOl Food, which features Campbell’s recipes and reaches busy cooks seeking recipe ideas beyond the website. likewise, brands can provide online retailers with con- tent and utilities to help drive sales. These websites are playing an increasingly important role along the pur- chase decision journey as shoppers seek out deals: traffic to retailer online circulars grew 26% between November 2007 and 2008.20 The Grocery Shopper CANON’S 360 PRODUCT TOUR IS MADE AvAIlABlE ON CIRCUITCITY.COM. Network makes it easy for consumer packaged goods manufacturers to distribute content, such as recipes, rates than print coupons, because while consumers to grocer websites. Additionally, contextually relevant often forget to take their coupons to the store, they ad placements on those sites offer the ability to add will rarely leave their mobile devices behind. Mobile advertised products to shopping lists directly from coupon apps, such as Yowza!!, take advantage of the within the ads. For example, 360 product tours for iPhone’s GPS capabilities to deliver electronic cou- Canon products can be found on pons for a variety of retailers and quick-service res- taurants (QSRs) based on a user’s physical location. Digital Coupons: As consumers look for ways to stretch their budgets and as newspaper circulation declines, coupon websites, such as and, are experiencing record- Mobile coupon redemption breaking traffic, stealing share from newspaper FSIs. Mobile coupons are also becoming increasingly pop- rates average 5%–15%. ular. These coupons tend to have higher redemption 18
  19. 19. QSRs have successfully launched mobile coupon pro- grams, with cashiers either manually entering the coupon codes or merely viewing the coupons on the mobile device. high-volume, low-margin supermarkets have had a harder time with implementation, since most checkout scanners are unable to recognize coupon bar CEllFIRE USERS APPlY COUPONS TO ThEIR GROCERY lOYAlTY CARDS. codes, and cashiers can’t slow down lines to manually enter the codes. Cellfire and AOl’s Shortcuts have over- come this barrier by linking coupons to grocery loyalty cards. Users planning their shopping trips can browse coupons either online or on their mobile devices and apply the coupons to their loyalty cards. They can also browse coupon offers on their mobile devices while at the point of purchase. The savings are automatically realized when the purchase is made. Cellfire’s initial tests indicate redemption rates averaging 5%–15%, far exceeding the 1% average for paper coupons.21 lAYAR’S MOBIlE AUGMENTED REAlITY BROWSER GIvES USERS INFORMATION product Research Mobile apps: Mobile apps are be- ABOUT hOMES FOR SAlE. coming increasingly important in reaching and engag- ing consumers while they are researching purchases. For example, users of the SnapTell mobile app can pho- tograph the cover of any CD, DvD, book or video game, and the app will identify the product and provide local with their pre-purchase research. Users of Metaio’s and online retailer price information, as well as product iliving iPhone app take a photograph of the room they ratings. Android users can also take advantage of their want to furnish and then virtually place furniture in the mobile devices’ bar-code scanning capabilities as an- room to get an idea of how it would look. The mobile other means to get product information. augmented reality browser of SPRxmobile’s layar app associates and displays digital content—for example, Augmented reality apps, which blend the real world with real estate for sale, popular bars, ATMs—over the reality digital data, are being launched to assist consumers on view through the mobile camera’s lens. s ght si in 19
  20. 20. 3: The Digital Toolbox: Point of Purchase Phase II. ThE poInT of puRChaSE phaSE DIGITal Toolbox D uring the Point of Purchase Phase, consumers are focused on retrieving the research and offers they had amassed during the Pre-Purchase Phase, finding the products, making their selections and completing their purchases. They may be inspired to deviate from their planned purchases by any new information they acquire at the store. In this phase, the manufacturer is focused on increasing share of basket, whereas the retailer is focused on increasing basket size, but both want to make it as easy as possible for shoppers to find the items they are looking for. Mobile technologies, such as quick-response two-dimensional bar codes (or QR codes), WAP-enabled sites and short message service (SMS), are particularly relevant in the store environment, as are other in-store technologies, such as kiosks and handheld scanners. Manufacturer Goals Retailer Goals Shopper Goals INCREASE SHARE OF BASKET INCREASE BASKET SIZE POSITIVE SHOPPING EXPERIENCE Assist in locating products Assist in locating products Pre-store research Reassurance • • and offer retrieval • Provide relevant solutions Inspire unplanned purchases • Selection • • Product search • Ensure positive shopping experiences Provide relevant solutions • Purchase • Product discovery Ensure positive store experiences • Offer discovery ONLINE MOBILE IN-STORE Retailer website digital toolkits WAP QR codes Mobile apps Mobile image recognition search Bluetooth GPS QR codes Kiosks Mobile image recognition search Handheld scanners GPS Interactive carts SMS/MMS Smart shelves Coupons RFID Digital screens POINT OF PURChASE PhASE TOOlBOx. 20
  21. 21. Mobile product Research utilities: Mobile should be an integral part of marketers’ in-store shopper strate- gies, providing consumers with the information they ClOThING ShOPPERS CAN vIEW COMPlETE OUTFITS. need at the point of sale. QR codes extend the value of product packaging by providing shoppers with easy ac- cess to additional information on their mobile devices, helping them with their purchase decisions. For exam- ple, a shopper who takes a snapshot of a QR code on a Woollaston wine label with a mobile device is linked to wine reviews and tasting notes. QR codes are also being used to cross-sell products in-store, driving incremen- tal purchases. Although these codes are still in their in- fancy in the United States, it is predicted that within the SEvENTh GENERATION’S lABEl READING GUIDE AllOWS ShOPPERS TO lOOk UP next two years, most mobile phones will come with pre- lABEl INGREDIENTS WhIlE AT ThE STORE. installed QR code scanner apps.22 Meanwhile, market- ers can deliver similar experiences via SMS marketing. Calls to action can be placed in any media—shelf talkers, packaging, circulars—and consumers can initiate text messages to receive quick links to additional content. Mobile videos are being used to address barriers to purchase and provide a work-around for any retailer is complicated) and could also be used at home after infrastructure limitations. For example, when The home purchase as a how-to guide. Depot wanted to convey to shoppers that its Safety Quick light ceiling fans and light fixtures were easy Mobile apps are gaining more traction in-store. Seventh to install, it created mobile videos that could educate Generation’s label Reading Guide iPhone app offers a consumers at the point of purchase. Shelf displays searchable index of ingredients, allowing shoppers to prompted shoppers to send a text message to receive look up label ingredients while in the store. Users of the a link that initiated a streamed instructional video on ShopSavvy app can scan product bar codes while at the how to install a particular fan or fixture. The video over- store to review prices online and at local stores, giving came a barrier to purchase (perception that installation them the confidence to complete their purchases. s ght si in 21
  22. 22. Recognizing that consumer product reviews can play a critical role in influencing purchases when consum- ers are on the go, Walmart enables its shoppers to text canon’s WaP-enabled site focuses product UPC codes to its mobile service to retrieve primarily on ratings and reviews. The site, product reviews and additional product information. powered by the Mobilevoice product review app, enables shoppers to browse peer-to- Social Shopping Technologies: revo- peer ratings and reviews of Canon products lutionized social shopping years ago by applying col- on their mobile devices while at the store. laborative filtering algorithms, based on peer product purchases and ratings, to product recommendations. Some marketers are looking beyond peer ratings, en- abling consumers to interact with a smaller, more trusted group of people they actually know—that is, friends and family—while they shop online or offline. Social shop- ping technologies let consumers virtually connect with friends at the point of decision, bringing in the element of fun while providing the validation they may need to complete purchases. Bloomingdale’s experimented with social shopping in 2007. Its virtual Mirror enabled shoppers to connect live with friends and family members as they modeled outfits in front of a mirror. Shoppers could send pho- tos or videos of themselves to their MySpace page or to friends via email or cell phone. The friends voted “yes” or “no” on an outfit in real time and could text- message back. The mirror displayed the vote tally and messages. ShopTogether, Sesh, Fluid Social and other social shop- ping technology vendors empower shoppers to in- tegrate their friends and family into their shopping 22
  23. 23. zugara is combining the functionality of augmented reality and motion capture to take social shopping to a new level. Its Webcam Social Shopper prototype al- lows shoppers to virtually try on clothes by using their webcams and computers, seemingly holding articles of ChARlOTTERUSSE.COM clothing in front of themselves and creating the illusion ShOPPERS ShARE ShOPPING SESSIONS WITh ThEIR that they are wearing them. They can livestream their FRIENDS, GETTING ThE vAlIDATION NECESSARY TO webcams’ feeds to friends and family, and receive com- COMPlETE ThE PURChASE. ments and feedback in real time. “Inspector Gadget has taken up residence in retail zUGARA’S ONlINE ShOPPING APP COUPlES ThE FUNCTIONAlITY OF stores, with coupon-dispensing AUGMENTED REAlITY WITh MOTION CAPTURE. kiosks, Web Tv cooking programs, self-checkout scanners, smart carts picking products based on grocery sessions at online retail sites. For example, visitors to lists, text reminders of last the website of Charlotte Russe, a teen clothing and ac- cessories retailer, invite friends at different locations to minute items, and Internet shop with them virtually on the site via collaborative sites that track purchases and chat sessions. Early results from technology vendors in- dicate that shoppers who engage with these technolo- analyze nutritional content. gies spend more time on retailer sites and have larger order values as they share product ideas with their Technology is changing the friends.23 rules at retail.”24 s ght si in 23
  24. 24. In-store Technology solutions: Interactive technol- ogies are being deployed at retail to bring the store to life, to provide personalized experiences and so- UkROP’S kIOSkS lutions, and to help shoppers find the products that DISPENSE PERSONAlIzED CIRCUlARS TO lOYAlTY are right for them. ShoptoCook’s kiosks distribute PROGRAM MEMBERS. branded recipes and coupons to shoppers who seek inspiration for quick and easy meal ideas. The com- pany’s research indicates that 80% of those who get recipes in-store buy the ingredients to make them. Ukrop’s loyalty program members scan their cards at Savings Spot kiosks when they arrive at a Ukrop’s gro- cery store in order to receive personalized circulars with messaging and offers based on their purchase history. Offers may include unadvertised specials for members only. Modiv Media’s Scan It! system for supermarkets also brings personalization into the retail environment, combining shopper data (loyalty card purchase and MODIv MEDIA’S SCAN redemption history), contextual data (radio-frequency IT! SYSTEM BRINGS PERSONAlIzATION INTO ThE identification, or RFID) and behavioral data (products RETAIl ENvIRONMENT. put in the shopping cart) to deliver targeted advertis- ing and promotions. Shoppers scan their loyalty card at a Scan It! kiosk upon entering the store to access a handheld scanner device. They scan items as they function similarly and can provide additional services put them in their cart and get cross-promotions and on their screens, including product demonstrations special offers. MediaCart’s interactive shopping carts and directions for finding items within the store. 24
  25. 25. In-store Digital Networks: In-store digital screens and networks provide succinct, clear and relevant mes- sages that remind shoppers of brand associations or give compelling reasons to purchase a particular brand at the point of purchase. The Walmart Smart Network, for example, deploys message optimization technolo- gies that enable the delivery of targeted content by store, by screen location, by day and by time of day. New technologies are adding additional layers of per- sonalization to these screens. METRO’s Extra Future Store in Rheinberg, Germany, has experimented with linking in-store screens to RFID product tags to deliver more relevant messaging and promotions. When shop- pers pick up tagged Pantene products, for example, an overhead screen delivers cross-promotional prod- uct offers. YCD Multimedia is testing facial-recognition technology to enhance in-store screen messaging. A ThE WAlMART SMART NETWORk DElIvERS TARGETED CONTENT. shopper’s facial features—nose size and shape, eyes, cheekbones, jawline—are analyzed to determine the shopper’s particular demographics, resulting in highly targeted advertisements. loyalty card data and in-store locations to deliver tar- geted messages and offers to shoppers’ mobile de- Many of these stand-alone technology solutions and in- vices. Its Wi-Fi hot spots can identify and alert shoppers store digital networks may eventually be integrated into within a 3-foot radius to promotional offers while they consumers’ personal mobile devices. Acuity Mobile’s are still shopping rather than after checkout (for exam- AisleCaster, currently in development, will link grocer ple, Catalina Marketing). s ght si in 25
  26. 26. 3: The Digital Toolbox: Experience Phase III. ThE ExpERIEnCE phaSE DIGITal Toolbox D uring the Experience Phase, when consumers experience their purchases and validate their brand choices, they seek usage directions and suggestions. Their experiences will contribute to determining their brand loyalty and what they will share with others. Depending on the type of purchase, the approval of others may play a role. For example, a mom who has purchased Ragu pasta sauce for dinner will take her family’s feedback into consideration when later evaluating the experience. In this phase, both manufacturers and retailers can provide usage ideas and customer service solutions to ensure positive brand experiences. A variety of online and mobile customer service solutions, community tools and videos can address the goals of all three players. Manufacturer Goals Retailer Goals Shopper Goals PRODUCT USAGE AND SATISFACTION PRODUCT USAGE VALIDATION AND APPROVAL Provide usage ideas Provide usage ideas Usage directions • • • Ensure positive brand experiences Provide customer service solutions Preparation • • Provide customer service solutions Consumption ONLINE MOBILE IN-STORE Websites (manufacturer, retailer, social media) WAP N/A Video Mobile apps IM chat QR codes Message boards Bluetooth Email Video podcasts Mobile image recognition search SMS/MMS ExPERIENCE PhASE TOOlBOx. 26
  27. 27. product usage Guidance: Providing purchasers with guidance, advice and suggestions on how to use a product can ensure that consumers have posi- tive brand experiences. The QR codes that Springer Mountain Farms places on its chicken packaging al- lows mobile users immediate access to recipes and promotions at the company’s mobile website. Recipes on packaging are commonplace, but QR codes add an element of flexibility. The recipes associated with a SPRINGER MOUNTAIN FARMS ON-PACk QR particular QR code can change by the time of day they CODES lINk USERS TO ThE MOBIlE WEBSITE. are scanned (for example, a breakfast idea versus a dinner idea), the day they are scanned (for example, a quick weekday dinner casserole versus a slow-cooked stew on weekends) or the season (for example, a Thanksgiving recipe versus a Christmas one). Mobile and online videos are also helpful in en- hancing the brand experience and ensuring suc- cess, providing step-by-step guidance on how to use a product. Betty Crocker’s online cooking club, The Mixer, provides webcasts (live and recorded) of cooking demonstrations of various recipes by Betty Crocker experts. home cooks can follow along, preparing the recipes and having the op- portunity to ask questions during the live webcasts. CoverGirl’s step-by-step makeup application tips on its website and its YouTube channel videos advise MEMBERS OF BETTY CROCkER’S ONlINE COOkING ClUB cosmetics purchasers on how to get the desired look CAN COOk AlONG WITh ExPERTS. using the products they have purchased. s ght si in 27
  28. 28. Weber’s on the grill iPhone app, which features hundreds of recipes linked to a shopping list that users can take to the store, provides instructional videos that can be fol- lowed while grilling. It also includes grilling techniques and a built-in grill timer that en- sures that recipes are done to perfection. COvERGIRl’S lIvE ChAT BEAUTY CONSUlTANTS ARE AvAIlABlE FROM EvERY PAGE OF ThE SITE TO PROvIDE ExPERT ADvICE IN REAl TIME. Customer Service utilities: Digital tools can be used to help ensure that consumers have positive brand ex- periences. live Chat is a method of responding to cus- tomer questions directly in real time through Internet chat technology. It is useful during the Pre-Purchase Phase, when consumers are conducting product re- search on websites and are having difficulty navigat- ing the sites or determining which products are right for them. live Chat is often used during the Point of Purchase Phase by online retailers to proactively in- vite a shopper to chat when they sense that she may be about to abandon her shopping cart. During the Experience Phase, live Chat customer service repre- sentatives can address consumers’ usage questions. 28
  29. 29. visitors can access CoverGirl’s live Chat Beauty Consultants from every page of the site to get advice about how to apply the products they have purchased. These sessions present an opportu- nity to promote additional products. Social Media: “When you have a problem, your first instinct is not to call customer service because it’s going to be painful,” says senior vice president Alex Dayon.25 Rather, consumers turn to social media—message boards, blogs, social net- works—where they can resolve issues on their own by interacting with one another. Many companies are enabling these customer self-service discus- sions by creating forums on their websites. Nestlé’s community message boards fea- ture discussions on a wide range of baking topics. A purchaser of Nestlé Toll house Chocolate Morsels who is uncertain about how to prepare the on-pack cookie recipe can tap into the wisdom of other visitors vERYBESTBAkING.COM’S MESSAGE BOARDS ENABlE USERS to the message board. TO INTERACT WITh EACh OThER ABOUT ThEIR PURChASES. Marketers are also closely monitoring brand conver- social media. Now a single consumer can broadcast sations on Twitter and third-party blogs and message a problem to thousands upon thousands, potentially boards, and stepping in when appropriate to ad- damaging a brand. Companies such as Comcast, dress customer service issues. While failure to meet JetBlue and Starbucks are engaging their customers customer expectations has always been an issue, on Twitter, responding to inquiries within hours in a the risks were not as great prior to the explosion of public forum and turning customers into fans. s ght si in 29
  30. 30. 3: The Digital Toolbox: Reflection Phase Iv. ThE REflECTIon phaSE DIGITal Toolbox D uring the Reflection Phase, consumers evaluate their purchase journey, from Pre-Purchase to Point of Purchase to Experience. Their evaluation of their experiences will impact retailer and brand loyalty and what they will share with others. In this phase, both manufacturers and retailers can provide rewards for brand or store choice, encourage purchasers to share their positive experiences and trigger the purchase cycle again by providing repur- chase reminders. loyalty programs, social media tools and email and text message reminders are the goals of all three players. Manufacturer Goals Retailer Goals Shopper Goals BRAND LOYALTY AND ADVOCACY STORE LOYALTY AND ADVOCACY EMOTIONAL CONNECTION AND RECOGNITION Reward brand choice Reward store choice • • Brand evaluation Enable positive sharing Enable positive sharing • • • Retail evaluation Provide repurchase reminders Drive repeat store visits • • • Sharing and endorsement Garner insights Garner insights • Experience reinforcement ONLINE MOBILE IN-STORE Websites (manufacturer, retailer, social media) WAP N/A Message boards Mobile apps User ratings/reviews QR codes Photo/video sharing SMS/MMS Loyalty programs Loyalty programs Email REFlECTION PhASE TOOlBOx. 30
  31. 31. Social Media: While peer-to-peer and expert reviews play an important role during Pre-Purchase Phase product research, they also play a role post- purchase. After making purchases, consumers go online to voice their opinions in social media, such as message boards, blogs and social networks. In do- ing so, they may review what others have said, which could influence their final evaluations. For example, a consumer who had little success with an on-pack macaroni recipe may go online to write a review of the product and recipe, and find that others are confidently posting positive experiences. This may convince her to repurchase the product and give WIllIAMS-SONOMA ENCOURAGES BUYERS TO RETURN TO ThE SITE TO RATE AND REvIEW ThEIR PURChASES. the recipe another shot. CoverGirl’s Facebook page encourages fans to share their product experiences and engage further with the brand in social media. CoverGirl website visitors also share opinions on all products through Bazaarvoice’s ratings and review NEIMAN MARCUS software. Similarly, the Campbell’s kitchen website EMAIlS REPlENIShMENT REMINDERS FOR BEAUTY allows cooks to share their experiences with others PURChASES. through its recipe rating and review functionality. Post-Purchase communications: Online marketers use post-purchase email communications to encour- age consumers to share their experiences with oth- ers; to send them replenishment reminders; and to cross-promote products that may be of interest to them. Williams-Sonoma’s emails invite consumers to and other shoppers. Neiman Marcus sends emails to return to the site to review purchases, stressing the customers who purchased beauty products online importance of those reviews to both the company to remind them that it is time to purchase again. s ght si in 31
  32. 32. the Ride Rewards. This program lets parents earn points by registering and interacting on the website, and the points are sub- sequently redeemed for sweepstakes entries and prizes. My Coke Rewards members accumulate points for their purchases, which can then be redeemed for various prizes; members enter UPC codes and man- age their accounts online or on their mobile devices. harrah’s mobile loyalty program for Rio hotel and casino in las SCANAROO’S MOBIlE APP STORES lOYAlTY CARD INFORMATION. Vegas leverages the property’s customer database to provide real-time offers, prop- loyalty programs: Retailers, the travel and hospi- erty information and loyalty points to guests tality industry, and financial services have long used on their mobile phones. When hotel guests loyalty rewards programs to strengthen relationships check in, they are prompted to opt in to re- with their customers. U.S. households currently aver- ceive text message offers on their mobile age 14.1 program memberships, up 18% from 2007.26 devices and, in turn, receive various offers That’s a lot of cards to carry around, so mobile ven- during their stay. dors have launched apps that help consumers orga- nize all those loyalty cards. The Scanaroo iPhone app files all loyalty card information in the app; users take photos of their loyalty cards with their mobile devices, and the app converts the photos into digital format, providing on-the-go access. Brand marketers have been getting on board the loyalty program bandwagon too. huggies recently launched the online rewards program huggies Enjoy 32
  33. 33. 4: five principles for Developing an Effective Digital Shopper Marketing plan I. lEaD WITh shoPPER INsIghTs aND NEEDs, • The Manufacturer: how do shoppers approach noT wITh TEChnoloGy. the product category and evaluate brands? What is the role of technology in achieving desired brand po- It is not about technological bells and whistles to get shoppers’ attention at retail. It is about focusing on shopper insights and applying meaningful technol- sitioning? In driving brand choice? What retailer tech- nologies can be leveraged to drive brand purchase? ogy at key touchpoints during the purchase decision Once you have completed the evaluation, map the journey in order to engage and convert shoppers into right technology solutions against any barriers to pur- buyers. chase. how can you help consumers determine which products best address their needs? how can you allay Start by evaluating the objectives, motivations and any uncertainty consumers might have about brand technology capabilities of the key players: performance? how can you help them know at which stores to find the products? And when they are in a • The shopper: What are shoppers’ technographics? store, how do you help consumers navigate their way What barriers exist during the purchase decision jour- to the products? how can you guide them in using the ney? how do consumers approach digital technolo- products? Given the similarity in goals, it behooves gies in their role as shoppers? retailers and manufacturers to collaborate on some of the solutions—online, on mobile and in-store. • The Retailer: What are shoppers’ in-store need states? What existing digital technologies and infra- structures can be leveraged to activate shoppers dur- ing the purchase decision journey? 33
  34. 34. II. wEavE DIGITal ShoppER MaRkETInG SoluTIonS InTo EvERy TouChpoInT alonG ThE puRChaSE DECISIon JouRnEy. M arketers tend to focus on getting consumers to purchase their brands. But there’s a role for digital shopper marketing post-purchase as well. Provide consumers with the tools they need to ensure positive usage experi- ences, reinforcing their confidence in the purchase choices they have made. Explore tools that enable consumers to share their experiences with others, and consider rewarding them for their loyalty and advocacy. CoverGirl deploys various digital solutions to address barriers during the purchase decision journey. From its in- teractive website—where visitors can get personal makeup tips and advice from trained Beauty Consultants—to its WAP-enabled site that shoppers can access in the store to its how-to videos and live Chat functionality to its social media applications, all technologies serve to influence decisions during the purchase decision journey and trans- form purchasers into brand loyalists and advocates. 34
  35. 35. Trigger PR N E- IO P U CT RC E FL HA RE S Assessing Evaluating E Accepting/rejecting Planning Sharing Coordinating Stocking Retail impression Consuming Getting inspired E Qualifying AS Selecting H Purchasing EX RC PE IE PU R NC F E T O P OIN COvERGIRl OFFERS DIGITAl SOlUTIONS AT EvERY PURChASE DECISION JOURNEY TOUChPOINT. s ght si in 35
  36. 36. Retail Winners are Testing New Technologies27 III. TEST anD lEaRn. 82% believe that innovation in how to connect with consumers is a very valuable opportunity (versus 53% of laggards). N ow is not the time to sit back and wait. Manufactur- ers and retailers alike are experimenting with new technologies, gauging consumer reactions and amass- • ing learning that will give them competitive advantages in the future. Innovative manufacturers are focused on 32% use in-store digital media connecting with consumers in new ways, forging lasting (versus 17% of laggards). relationships. Recent research indicates that the most successful retailers are deploying new technologies • in-store to drive sales and to create more compelling and personalized in-store experiences for their custom- 14% use mobile coupons or incentives ers. They are experimenting with handheld devices, (versus 9% of laggards). digital signage and mobile coupons.27 • 14% provide handheld scanners to shoppers (versus 4% of laggards). Note: Winners are defined as those exceeding average industry growth rate, and laggards, as those below the average industry growth rate. 36
  37. 37. Iv. haRnESS ThE powER of SoCIal MEDIa v. TREaT MobIlE aS ThE ConnECTIvE TISSuE. DuRInG ThE puRChaSE DECISIon JouRnEy. W ith peer-to-peer recommendations more impor- tant than ever and easier to share through digital l ook to mobile to reach consumers at every touch- point during the purchase decision journey. It is the one channel that allows you to follow consumers in their technologies, it is critical to evaluate how, where and lives and deliver highly targeted and personalized com- when consumers are sharing opinions and recommen- munications, and it is also highly measurable. dations in order to determine how to best leverage these technologies: Mobile devices seamlessly connect what shoppers do online with what they do in the store. These devices are • Pre-Purchase: Where are shoppers conducting their always on and always present; they are no longer just pre-purchase research and which social media are they wireless online devices, but a very personal and custom- tapping into? ized medium. It is no surprise, then, that mobile is dra- matically changing the way people shop: from the way • Point of Purchase: What role does social media play they conduct product research to the way they make when shoppers are at the store? Do they need to touch selections in-store to the way they experience the pur- base with friends and family in order to have the confi- chase to the way they, finally, evaluate that purchase. dence to make purchases? Do they need to check on the ratings and reviews of peers? • Experience: how can social media be leveraged to allow consumers to help one another ensure positive product experiences? • Reflection: In what ways can social media be used to drive brand loyalty and advocacy? s ght si in 37
  38. 38. Summary Five Principles for Developing an Effective Digital Shopper Marketing Plan Lead with shopper insights and needs, not with technology. Weave digital shopper marketing solutions into every touchpoint along the purchase decision journey. Test and learn. 38
  39. 39. Harness the power of social media during the purchase decision journey. Treat mobile as the connective tissue. 39 39
  40. 40. 40
  41. 41. Conclusion Digital technologies have revolutionized the shopping landscape, empowering consumers and permanently altering the way they interact with—and shop for—brands. They research purchases before, during and after their shopping trips—on computers, on mobile devices and at kiosks. They demand information at the time and place of their choosing. These technologies present marketers and retailers with a plethora of innovative and ex- citing opportunities to reach, engage and influence consumers. Winners in this new world are navigating ways to best deploy technologies along the purchase decision journey to maximize brand commitment, delivering consumers the right mix of information, solutions, inspiration and community. At home. In-store. And on the go. Are you ready? 41 41
  42. 42. References 1. Consumer Buying habits Study, Point of Purchase Advertising International, 1995. 2. Americanism Study: IRI Economic Trend Database™, IRI Attitudelink™ Survey of 1,067 Consumers, Q4 2008, February 2009. 3. 2007 Consumer Packaged Goods Survey, Prospectiv, January 2008. 4. “Gone in 2.3 Seconds: Capturing Shoppers with Effective In-Store Triggers,” Miller zell, 2008. 5. 2008 Printable Coupon Consumer Pulse, Coupons Inc. & Simmons Market Research Bureau, April 25, 2008. 6. “The Game Changer: how the Recession has Created Permanent Changes in Consumer Behaviour,” Connections Panels Study, Initiative, May 2008. 7. The State of the U.S. Online Retail Economy Through Q1 2009,” comScore, May 14, 2009. 8. Consumer Intentions and Actions Survey, BIGresearch, March 2007. 9. Edelman Trust Barometer 2008. 10. “Global Advertising: Consumers Trust Real Friends and virtual Strangers the Most,” Nielsen Wire, July 7, 2009. 11. The Nielsen Company Global Online Consumer Survey, April 2009. 12. Opinion Research Corporation Survey, 2009. 13. “The Infinite Dial 2009: Radio’s Digital Platforms,” Arbitron Inc./Edison Research, 2009. 14. “Wireless Internet Use,” Pew Internet, July 22, 2009. 15. Mobile Market view Study, The kelsey Group/ConStat, November 3, 2008. 16. Smartphone Usage and Brand Study, Crowd Science, June 16, 2009. 17. 2006 IBM national survey, presented at the National Retail Federation 96th Annual Convention & Expo, New York, NY, January 14-27, 2007. 18. Qwikker Inc. 42
  43. 43. 19. Emily Bryson York, “kraft hits on killer App for iPhone Marketing,” Advertising Age, January 19, 2009. 20. Nielsen Online Netview. 21. Cellfire. 22. Dan Butcher, “Mobile Drives Incremental Sales From On-the-Go Consumers,” Mobile Marketer Daily, July 13, 2009. 23. Fluid Social. 24. Todd hale and George Wishart, “Wired Retailers Deploy Digital Media,” Nielsen Wire, May 4, 2009. 25. Paul Boutin, “Customer Support via Twitter? Makes It legit,” The New York Times, March 24, 2009. 26. Rick Ferguson and kelly hlavinka, “The 2009 COllOQUY loyalty Census, 2009,” COllOQUYtalk, April 2009. 27. Nikki Baird and Paula Rosenblum, “Enabling the Shopping Process: In-Store Marketing for the Empowered Consumer,” Retail Systems Research, July 2009. 43