Handle With Care- Do what's right for today's digital shopper (The Hub Magazine)

Do what's right for today's digital shopper -- not just what's on-trend.

Any marketer would be excited about the overarching potential benefits that emerging media provide. We can’t help but be enthusiastic as we contemplate the what-ifs.

What if we could target communications to a brand’s most valuable shoppers? What if we could personalize each communication? What if we could deliver the communication based on the shopper’s location? In real time? All the while measuring to understand the tangible business impact and acquiring data to optimize future initiatives?

On top of that, add the benefits of being both green and cost-efficient.

There are, however, some alarm bells reminiscent of the irrational exuberance of the dot-com years when we hear people speak of “the digital path-to-purchase” — implying that this is a strategic foundation. Particularly disconcerting are statements like the recent declaration in an IPG MediaLab trend report that “2011 is the year that our traditional media and consumer tools begin to disappear — 2011 is the year loyalty cards, cable boxes and feature phones jump the shark; at the same time, mobile, gaming, and digital behaviors are now majority activities across all demographics.”

While we embrace the opportunities digital affords for communicating with shoppers, statements like these may actually impede successful integration into the shopper’s path. First, they tend to silo emerging media. Second, while we appreciate the enthusiasm, it is important to integrate emerging media in a manner that reflects the pace of the consumer’s ability to absorb them— digital is not a “one size fits all” proposition.

Lastly — and most important — the hyperbole tends to divert attention away from focus on the shopper and onto the media we use to communicate with that shopper. This is exactly the opposite of what should be happening. The shopper is the hero.

The best approach is to start with a thorough understanding of our consumer as a shopper and work back along the path to understand the best combination of online and offline ways to engage with them. Put simply, if it doesn’t work for the shopper, it doesn’t work. In this process, the focus is always on doing what’s right versus what’s on-trend.

Consumers as Shoppers. How do we define what’s right? One of the most important reasons for the development of shopper marketing is to understand how one’s core target consumers behave as they morph into a shopper mindset — i.e., the “need states” or “shopping modes” that determine what they buy, where they buy it and why. As most know, the most common need states are driven by time, money, care for family and care for self. Understanding shoppers based on their needs provides a convenient way to segment them that cuts across demographic lines and enables marketers to communicate in much more compelling and relevant ways.

For example, let’s look at two home-improvement segmentation case studies. One illustrates the demographic approach while the other demonstrates the needs-based approach.

What do we learn from the demographic approach? The following are quotes from the findings:

• “Seniors have higher purchasing rates than other generational segments and boomers remain a key segment in the home improvement sector.”

• “Boomers and seniors are significantly more likely than younger generations to have purchased at least one item on their last visit.”

• “Affluent shoppers are also more likely to have purchased something compared with lower income households.”

• “Until Gen Y emerges as a buying force in the coming years, the older generational cohorts will remain the key drivers of growth in the next five years.”

• “Most are in the store to buy but many buy on impulse.”

• “Eight percent of all shoppers will walk out empty-handed during a given store visit despite the fact that they came with the intention to buy something.”

What do we learn from the needs-based approach? There are two types of home improvement shoppers: “planners” and “taskers.”

• “Planners” typically take on relatively big home-improvement jobs. They have an emotional connection with their work and a sense of pride and confidence when they are successful. They plan and price projects down to the last bolt. They know exactly what they are doing before they start. They value expert advice. They prefer a highly interactive, high-touch and responsive shopping experience. For this segment, most learning takes place with human interaction from a trusted source.

• “Taskers” want to get a specific job done — often in an emergency. They are task-oriented, with a goal to repair or maintain. They are not deeply engaged and just want to complete the job as fast as possible to get back to the television set.

• At times they will not even read instructions or take direction. They want to find what they need and get in and out quickly.

Based on these descriptions, what is the best way to market to each segment? For example, if all you knew were the demographics, would you develop an app for tracking progress on the project to meet the “planner’s” needs? Would you develop an in-store finder app for the “tasker”? What is the balance between leading shoppers by providing a digital tool they understand and can use versus leap-frogging their digital capabilities?

The best approach is to do an in-depth analysis of how “planners” and “taskers” think in each key phase on their respective paths-to-purchase and structure media and messaging accordingly. However, the “demographics only” approach is problematic because of its limited scope and lack of meaningful insights. Normally, when confronted with this situation, it is advisable to add the needs-based dimension in order to be as relevant as possible.

Path-to-Purchase. There are only three objectives for path-to-purchase marketing: on the list; in the cart and in the heart. The brand’s objective for the pre-shop phase is to get on the shopper’s list. How this is accomplished will vary by brand but may include creating awareness, why your product is right for a particular shopper segment or where it can be purchased. It may include education on product benefits or an incentive to purchase.

Traditionally, these types of needs have been addressed through advertising, participation in retailer circulars or free-standing inserts. The digital versions of these tools ramp up the convenience factor with searchability, auto-downloading of coupons, mobile retail apps, pricing comparisons and geo-aggregation of retailer websites based on shopper zip codes.

However, the most significant and influential factor in the pre-shop phase is word-of-mouth affirmation empowered by social networking. For example Advertising Age reported that 68 percent of Millennials (80 million people!) check with friends before making any major decision.

Similarly, a Baby Boomer confirmed that, despite the pre-launch millions spent on movie advertising, a friend’s opinion of the movie was usually the deciding factor in whether he would go or not. A misstep by a brand or retailer is immediately chronicled on Yelp for all to see. The lesson: your target shoppers’ friends and communities can instantly wipe out millions of dollars in marketing efforts if your brand (or service) is not responsible and responsive.

The “shop” section of the path has a simple brand objective — get your product in the shopper’s cart. Price and promotion are the traditional standards and — particularly in a price-sensitive economy — play an obviously critical role. Both retailers and marketers are beginning to embrace some in-store digital initiatives — from handhelds to touch screens — but smartphone-enabled tactics have the strongest growth trajectory.

Presently, these mobile initiatives are focused primarily in three areas: a) improving the shopping experience by helping shoppers find the right product (e.g., Meijer’s “Find It” app or Robitussin’s “Relief Finder”); b) providing information to help shoppers validate a purchase; and c) promotion — in real time. Smart marketers view the in-store direct-to-consumer brand connection that mobile provides as a necessary hedge against retailer decisions that could disadvantage a brand in-store. According to the Hub magazine “Shopper Marketing Update,” (Ready at Retail, July/August 2011) 86 percent of shopper marketers expect that most of their digital efforts over the next three years will be in mobile.

A word of caution on the mobile connection: This is an area where irrational exuberance reigns. Statistics vary wildly as to actual US smartphone penetration and growth projections. The best numbers we have heard (from eMarketer) peg current smartphone penetration at 31 percent of total US mobile users and project this to grow to 43 percent by the end of 2015. In other words, barring a significant price drop in smartphone plans, expect growth to be modest, especially with unemployment over nine percent.

The objective of the post-shop section of the path is to get one’s brand in the shopper’s heart — to earn that shopper’s personal loyalty and his or her advocacy for one’s brand. The post-shop is the area where combining digital media and social networking has the power to be transformative for marketers and brands. The ideal scenario is not only to generate satisfied users but to exceed expectations so that these users will become your advocates on social networks — which now total 150 million users in the US — 63.7 percent of the online population.

The post-shop component of the path completes the loop and feeds the pre-shop for repeat purchases and increased loyalty. To do this successfully, there must be a return-on-investment for the shopper beyond the value of the brand. This could be emotional or financial, depending on the shopper’s needs.

For example, best-in-class cosmetic companies do everything they can to make their shoppers feel beautiful, not just sell them product. The value shopper appreciates coupons or freebies while the status shopper wants to be in an exclusive group. The technophile wants to be first on the block with the newest technology. Costco is one of the best in the business at providing value-added to its members, while Amazon has the ability to anticipate needs and ensure the highest possible degree of personalization.

Context matters: Your shopper has a marketing spam filter. In fact, most are now resistant to intrusive or interruptive advertising. Of 300 million registered phone users in the US, 200 million are on the Federal “Do Not Call” list. Eighty-six percent say they bought DVRs specifically to skip ads. Another 44 percent does not open direct mail.

In other words, people don’t want to be sledge hammered; they want to be engaged and guided via relevant conversations. Messages that help a shopper with a problem or meet a need at the time it is needed are actually welcomed and sometimes even shared. Digital marketing is especially appropriate because it’s easily personalized, localized and real-time.

Closing the opportunity gap. Despite the hype, everyone is not totally into digital. There are still large segments of consumers that have yet to maximize the opportunity. This is why best-in-class marketers must carefully blend both online and offline to communicate effectively on the path-to-purchase.

When doing so, we would encourage you to understand and monitor the evolution of your target shoppers in the digital realm. Where are they now? Are there early adopters who can direct you on which technologies will take hold with your targets? In addition, understand the role of digital on the path-to-purchase for your brands and categories. Where on the path are critical decisions made? What is the most relevant context for the brand and shopper to engage? Which digital executions provide a real or perceived benefit to your shoppers?

Commit to data acquisition and analytics. Do you use every touchpoint as a chance to capture data and learn more about your shopper? Have you established key performance indicators? Are you scorecarding results? Have you selected the most meaningful metrics?

Most important, have some fun. Add digital components to more traditional executions. Work with your retailers. Experiment. Have conversations. Play games. Let your brand’s personality out of the box. Then learn from it.

KEN BARNETT is global CEO of Mars Advertising, a leading agency that for 35 years has offered brand-building strategies through key account knowledge, from shopper insights through program activation.

Read more from The Hub Magazine: http://www.hubmagazine.com/2011/09/handle-with-care/.

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