Category Archives: retail practices

Judging a book by its cover

VIVA storeAs we near the Holidays, marketers look around to see what products are flying of the shelves, and why.  Since retailing is primarily a visual medium, the right packaging is critical.

But louder is not necessarily better.  Today, many of our clients are opting for more understated options, a more elegant, minimalized aesthetic.  Some are going all-green to make a statement to their core customers.  Others are making distinctive statements of their mission and purpose, and even where the profits go, right there on the label.

In short, packaging IS reality today,  and a make-or-break proposition whether you remain on the shelves or get delisted.

Importantly, due to Smartphone use in-store, it allows you to communicate personally with your customer in a way you never did before

Dilip Daswani, an industry expert, lends some words of wisdom:

“A few years ago a buyer in a retail setting would browse a few products on the shelf, make a quick decision to narrow down choices based on the packaging, pick it up, observe the packaging for what it was able to convey and then decide whether to finalize the purchase or not.

More recently, the scenario is somewhat different. The consumers you find in retail outlets today are armed with a smartphone. They’re talking to someone as they shop, looking up search queries, snapping and sharing photos of products with their friends, reading product reviews and running price comparisons.  They are digitally connected, have access to massive amounts of information at their fingertips and make their decisions based on the information they have access to.”

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Positive disruptors

This week, the National Retail Federation Foundation announced 25 individuals selected for honors,  “representing power players, disruptors, givers, influencers and dreamers who are changing the face of retail – many doing so behind the scenes.” (You can read about them on the link below this post)

For now we want to focus on one descriptor listed above: DISRUPTORS.  More than the others listed, this says what marketers should be all about.  Let the players manipulate, the givers hug, the dreamers doodle, and the influencers network, but if marketers are not shaking things up they are not worth their salt.

You know you were born to be a Disruptor when as a kid your parents received notes from the teacher, reporting:  “An eternal chatterbox”, or “Fidgets and flirts non-stop”, or better:  “Has an answer to everything, sometimes the right one.”  In short, a pain-in-the-ass student.

Now that we are all grown up, the NRF calls us:  “True originals who rock the boat with ideas so crazy, they just might work. These are the people who make you rethink what you thought you knew…opening you up to new worlds never imagined.”

Wow, take a look, Mom!  Aren’t you glad I didn’t drink the KoolAid??

There’s another word — its polar opposite — we use for a lot of companies :  ENTRENCHERS.  The image is of soldiers in (wet!) dugouts, poised with guns pointing, awaiting orders to jump out into a scenario that might mean certain death.

It’s not just big companies that are guilty of Entrenchment.  Small family companies are often the worst , living in their comfortable world,  digging in, believing all should be done the way it has been done for decades.  Until, one day…

Today we know that Disruptors and Entrenchers are a “match.com” (to quote a respected strategic planner colleague).  They are meant to learn from each other and work together to slaughter those sacred cows (see our post re this) that threaten to kill any business that does not innovate and differentiate.

We give special thanks to the NRF for letting us come out of the classroom closet and take a (shy) bow!

Trends forecast

 

Houdini“I see…no, wait…it’s an ad blocker!”

At the start of the year, our clients typically ask us what we see in the areas of consumer marketing and media…a glance into the crystal ball, as it were.

This past year most of us were focused on enhancing digital outreach. We have seen this area at least double in activity in our campaigns over the past two years, as clients’ desire to customize and measure the impact of their messages grow.  We see no different for the new year.

In short,  “If you ain’t doing it digital, you ain’t doing it right”, as one of our agency creative gurus quipped.  But HOW to keep doing it right is the question.

Rather than reinvent the wheel on this topic we are taking the shameless and easy path, excerpting what “alum/chum” Publicis — the world’s largest ad agency — tells us.  If they don’t know  about this, then no one does.  So, without much ado…

1. Programmatic targeting of content, not just ads.  Programmatic targeting of ads is now very common for brands and advertisers. In 2015, we’ll see a critical mass of publishers begin to leverage behavioral data to programmatically target content to optimize experiences for users on publishers’ sites.  Content will be personalized and specifically aimed at individual consumers on websites and blog pages, similar to the way ads have been targeted until now. Medium-to-large sized publishers will also invest in data management platforms and in-house programmatic resources.

2. Content marketing spend will need to deliver a more measurable ROI impact.  In 2015, we’ll start to see more sophisticated means of measuring the impact of content marketing campaigns, leveraging multi-attribution techniques to understand the downstream impact on conversion caused by these higher-funnel marketing activities. For example, a brand might spend $1 million on a native advertising campaign but not understand to what degree — if any — that investment impacted ROI.

3. A critical mass of merchants will finally optimize their mobile affiliate tracking capabilitiesWhile the browsing experience is now largely optimized for mobile devices, the same cannot be said for tracking of performance campaigns on mobile devices. [In 2015], we can expect to see retailers work continuously to improve conversion tracking and affiliate payouts in order to satisfy the demands of their increasingly mobile publishers.

4. The startup bubble will deflate slightly and result in consolidations of a fragmented adtech startup market.The last few years have seen an avalanche of entrepreneur startup companies, many focusing on the adtech space. While this has resulted in a great deal of innovation — publishers and advertisers have benefited from a wealth of choices for optimizing their ad spend — we’ll start to see this slow down as some of these companies struggle to raise successive rounds of funding.

5. Point solutions will struggle, and clients will shift their desire to want to work with more full-funnel marketing suitesIn a similar vein, some adtech companies offering point solutions will also start to struggle, as an overwhelmed publisher and advertiser community will prefer to work with fewer partners, opting for ad tech companies offering full-funnel marketing suites. This likely will result in further consolidations of the fragmented adtech market, resulting in stronger conglomerates offering their customers a number of key services combined.

6. Publishers will develop sophisticated in-house capabilities for behaviorally programmatic targeting of premium advertising. Historically, publishers have worked with ad networks and other programmatic adtech partners to outsource their programmatic ad targeting. However, in 2014, a number of larger publishers started to bring this capability in-house, and invest in infrastructure to manage their audience data, such as data management platforms.

7. Ad blockers will become as big of a problem in 2015 as “viewability” was in 2014. The increasing technical sophistication of the adtech market and the increasing demands on accountability by advertisers saw ‘viewability’ become a dominant theme in 2014. Technologies that can filter out automated bot traffic and determine if a human truthfully saw an ad are regularly used now despite it reducing impression metrics significantly. This movement will continue in 2015, with attention turned towards ad blocker software.

Ad blockers (in the form of toolbars and browser extensions) have quietly gained popularity by users wanting a faster, ad-free browsing experience. However, a little-known fact about these ad blocker companies is that they monetize by charging ad companies to let their ads bypass the blocking software. While a marginal problem in the early days, the popularity of these ad blockers means that ad revenues for publishers are impacted; on average about 20 percent, though up to 50 percent for publishers with a tech-savvy readership.

In 2015, we will see a variety of solutions emerge on the market, offering various experiences around user-driven personalization of advertising. (Credit:  Publicis Alum Group, via LinkedIn.)

 

 

Mislabeling and other misdemeanors

Not enough Wonderfulness in the product
Not enough Wonderfulness?

This week “Big Red” (Coca-Cola) took a beating in the Supreme Court from no other than “little red” or  (P♥M Wonderful) about juice that contained a lot less pomegranate than was claimed.  (You can read more about this case in the link below )

We admit we side with “David” here:  the husband-and-wife agribusiness team who took a strange fruit that was a real mess to eat and transformed it into a convenient juice favorite (becoming billionaires in the process, of course.)  “Goliath” then comes along and taps into the wonderfulness.products_pom_blueberry_product_detail

This case takes us back to that powerful feeling as young AEs on “Big Blue” (Pepsi) business whenever we got a chance to bash “Big Red.”   We even helped our clients host an annual event for this very purpose, bringing in the beefiest DSRs for a boozy (Cuba Libres, anyone?) contest with a prize for whoever could smash a Coke vending machine with a sledgehammer the fastest.  (Note this was post-Mad Men era…but obviously not too far ahead of Cro-Magnon Man.)

While the verdict is still out on how the potentially-landmark P♥M vs. Coke case will ultimately affect labeling, we marketers always look at these with great interest and no small amount of fear.

We’ve posted previously about how we can squeeze through the legal gates with what we say to help our client’s product stand apart.  On the flip side, we also mentioned how the once-magical term “natural” is now rendered limp from overuse.

Both the FDA and  USDA are touchy regarding nutritious claims, so food marketers have always avoided even nebulous statements like “…with plenty of Vitamin C!”  “Plenty” needs to correlate to a specific gram or percentage.

The P♥M folks did their homework, though, spending millions on scientific and consumer research to prove that pomegranates were really a nutritional powerhouse.  Absent this kind of support, copywriters have been forced to resort to colorful but unmeasurable terms such as “Chock-full!”.

In summary, the key marketing lesson here is that while smaller brands may fear mislabeling mistakes the most, typically it’s #1 who gets smashed with the sledgehammer.

(Read more re P♥M vs. Coke here)

 

 

 

Secret stuff

It's what's for dinner
It’s what’s for dinner

We’re lovin’ it.  McDonald’s secret menu, that is.

This week, the business media was buzzing about two major restaurant chains that have these.  Starbucks is the other.  Maybe there’s more of them we don’t know about, but surely there are more to come.

What it involves is what some of our foodie friends do at five-star establishments:  ordering off the menu.  But we’re talking  QSRs here,  and the “secret” menu is actually on the menu, it’s just that you can’t see it.  And this is where it captures the imagination.

This menu strategy involves serving items that are not printed or promoted anywhere, but apparently customers know are there.   The tactic involves using word of mouth to promote.  One satisfied diner and a text later,  the viral effect kicks in.

Let’s face it, who doesn’t want to try something “secret”?  Starbucks apparently launched  this new strategy with their Cotton Candy Frappuccino (photo above).  Yuck…for us adults, but we’re not the target market.

In fact, only kids seem to know much about this drink, and whether it even tastes good seems beside the point.  It’s all about the experience.  Junior can now share in your daily adult coffee fix, and Starbucks can count on it being Facebooked or Twittered before you can say “Machiatto”.

McDonald’s has sprung this secret menu strategy with success in key foreign markets.  In Brazil, just in time for the World’s Cup next month, you’ll be able to order a side of traditional rice and black beans with your Big Mac.  (That might be the only thing that will actually be ready in Rio in time for the Cup…but that’s a whole other story.)

Or, if your tastes are more refined or restricted, you might prefer a sautéed chicken breast with small boiled potatoes for a few cents more.  But you have to know the code to order it.  (Shhs…it’s the “prato executivo”, or executive plate.)

Lest we think this is all about expanding assortment, let’s think again.  It’s about delighting — and retaining — the customer.  It’s savvy customer segmentation, allowing the chain to be all things to all people, while making you feel like a member of a special club.

You’re probably not going to see these chains openly promote this practice, at least not in their advertising.  It goes against their core competencies and the brands they have so carefully cultivated.

This is where the marketing lesson lies:  there’s a time for transparency…and then there’s not.  When that time comes,  stealthy is the way to serve it.

Post Modern: the new architecture of retail

No longer enough to have bricks & mortar
No longer enough to have impressive bricks & mortar

We hear the description “Post Modern” increasingly in industry chats today, especially from some of our colleagues emerging from the recent National Grocers Assn. Show in Las Vegas.

We’re not talking about the lauded design styles of masters such as Philip Johnson or Michael Graves, but of the new structural elements of shopping behavior.   In short, the Post Modern approach is the new architecture of retail, and marketers need to adapt to it…or start to crumble.

Kantar Retail details this trend in their “Retailing 2020” report, an excellent overview of some of the topics we have addressed in these posts as well, such as channel blurring, segmentation,  customer profiling, and others.

The report’s premise is that the Post-Modern period (which we are entering now) decries the end of Supercenter Era.  Hypermarts and big boxes will give way to “small, urban, ―alternative retail formats, as well as reliance on multi-format portfolios to capture future growth.”

Comparisons are made to Europe, where real estate is through the roof, chains are fewer and competition fierce, forcing retailers to be efficient and effective.  Private brands, direct to consumer advertising and more robust marketing are some of their strategies for survival.

We recently caught up with busy retail-wonk, Kantar EVP David Marcotte, who launched our fascinating discourse with the revelation:  “When clients ask me to show them who’s doing the best job in retailing today, I send them to Mexico.”

He went on to explain that Mexico has embraced the latest in digital with innovative design to deliver the experience their rising-income customers want.  (This merits its separate post:  stay tuned!)  Actually, emerging markets such as all the BRICs (Brazil, Russian, India, China and now, of course, Mexico) essentially leapfrogged to digital over the last few years from their Cro Magnon-era phone services.

Our discussion evolved into some of the key buzzwords that marketers should be familiar with in today’s Post-Modern retail architecture, such as:

  • data architecture, the art of proper intel mining skills; not just collecting it, but creating a compelling and engaging story that links the data sources.  In fact, we believe that having a compelling story to tell  customers is going to be the hallmark of successful businesses.
  • footprint no longer means the spot where the store stands, but the overall influence it has.  In fact, it may mean no store at all, or comprise multi-footprints, including digital,  etc.
  • transparency.  Shoppers are gaining (and now expecting) much greater access to the entire supply chain by following products from your plant to their place.   The good news is that info can mean higher efficiencies for manufacturers, but also result in consumers clamoring for removals of things they don’t like (i.e. the recent Subway ingredient incident )
  • wall-less retailing provides seamless channel transition and thus delightful shopping experience for the customer:  it looks like one big room full of good stuff!

A final thought on this reverts back to our premise of Post Modernism in relation to architecture:  that it  stemmed from the perceived limitati0ns of the Modern Movement that preceded it.  Folks felt that  buildings had become too stark and functional, and did not meet the human need for comfort and beauty.  It’s the same with shopping.

Lost in translation: convert shopper intel into action

lesson #1:
Is your shopper intel lost in translation? (Photo: NapaneeGal)

There’s no question information is power, especially when it comes to targeting shoppers.  Companies  like Kantar and Marketing Lab, among others, specialize in providing insights to help retailers better align their shopper research, store ops, merchandising and upper-management buy-in with vendor products and programs.

The ability, or more emphatically, the willingness of chain management to translate this information into actionable sales steps for their stores is critical.  However, it seems most can’t or won’t do it.

MarketingLab’s recent retail survey reported that 85% of chains have been participating in vendor-funded shopper programs.  However, less than five percent of those feel they are successful in incorporating insights into action. This is a grim rate, indeed, especially given the effort and money involved.

Why do these marketing insights appear “lost in translation”? Did the chain not understand the information?  Was there directive from Corporate on how to best align those with sales goals?  Was the vendor at fault for not providing more guidance?

The answer is probably a combination of all three, but most likely the third:  vendor at fault.  We say that because we, ourselves, have been guilty of this in the past.

We admit we have conducted exhaustive (and pricey) studies of a client’s category or products, matched the findings nicely with a retailer’s customer profiles, then handed the whole kit & kaboodle to the chain’s marketing execs.

With a handshake and a big smile, we’re off.  But when we call on them again months later, we see the  file still sitting on their desks, gathering dust…

This situation is not only a waste of everyone’s time, but goes against the basic premise of the vendor/retail partnership, which is mutual advantage.   It’s not that the chain doesn’t want that intel;  it’s just that their personnel may not have the creativity, knowledge and even less time to review it and execute relevant programs.

It is then incumbent on the supplier to take steps to ensure their valuable support is both appreciated and executed.   We have found that these six simple steps help get action in that area:

  1. Findings are not enough.  Fascinating factoids about a chain’s customer base without relevant implications and proposed next steps is a time-waster.  Specific proposed solutions should be part of every research study.
  2. Work within strategies already in place.  Don’t propose, say, an aggressive mobile marketing campaign when the chain has never done one, or is unsure of its commitment to mobile to begin with.  The learning curve is too steep to ensure timely and successful results for both client and retailer.  Stick with the venues and strategies they are already comfortable with.
  3. Ensure upper-level buy-in.  If the Big Cheese doesn’t like it, or the intel doesn’t fit the chain’s goals, culture or capabilities, it won’t make it to store level.
  4. Taking it to the streets.  Conversely, we have found that field merchandisers — foot soldiers who visit stores frequently– are often instrumental in gaining program execution.  In many cases they are the ones in there putting up the POS, running the customer surveys, guiding department managers, etc.  In short, making sure the program is given life.   Sometimes the influence works upward:  an excited department manager tells Corporate he can’t live without the  program. (Caution:  some chains won’t allow this type of vendor interaction at store level.  Get it OKed first.)
  5. Start small, then roll out (maybe).  Don’t go in with the entire enchilada.  A big program that involves all stores in a chain is a risky proposition for all.  Start with specific stores, districts or other grouping that best align with your target consumer and program.  Test small, then increase  gradually, measuring results along the way.  It may never reach complete roll-out, but at least you’ll have a track record and case history to boast about.
  6. Address the “YIIFM?” Factor.  Competitive and job-security issues are at the top of many retail personnel concerns today.   “What’s in it for me?” is a question often asked or at least implied.  Be sure to sell in the benefits of their having the program to begin with, or otherwise appeal to the self-interests of the personnel involved.  Is it general PR they lust after?  Do they want to gain attention from their boss?  Is it all a vanity effort with no care for ROI? Go with what floats their boat, and thus avoid the sinking ship.