As 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.”
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!
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 capabilities. While 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 suites. In 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 thesead 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.)
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.
In our continuous quest to find out what makes the supermarket shopper tick, we often rely on the go-to folks on this topic: consumer affairs directors (or CADs, as we call them).
These are often the unheralded, way-back-in-the-corner office, female (mostly nutritionists or dietitians) at most major supermarket chains. While category managers and buyers are great for telling you about what’s good for their chain, CADs will tell you what’s good for their customers.
We find CADs are like the school nurse: she knows her patients well and can spot an epidemic before anyone else. She can also tell when you’re faking it.
That’s because shoppers, like schoolchildren, lie. Our experience has shown us that shoppers tend to tell researchers what they think they want to hear, such as: “Yes, we’re eating much healthier now!” But the scanner data reveals a different picture…until now.
One CAD at a regional chain has seen scanner data that shows the tide has shifted. Shoppers today are really into “good-for-me” items, she explains:
“We believe it’s the cumulative affect of the new healthcare initiative, more active lifestyles, concerns about the environment, and the phenomenal growth of natural and organic foods. They’re leaning so much more on social media now, and are just more aware of these issues.”
This viewpoint is echoed by the explosive growth of chains such as Whole Foods, Sprouts, etc., with new banners (i.e. Mariano’s) popping up, joining long-time purveyors like Stew Leonard’s and others that serve up retailtainment alongside the kale.
Even mass-marketers like WalMart see the sea change. CEO Bill Simon noted in a recent report by PlanetRetail: “Customers needs and expectations are changing…and we are transforming our business to meet their expectations.”
And transforming they are. Along withTarget, and Dollar General chains, Walmart is leading the march toward new, smaller-format stores featuring trendier, healthier SKUs. Drugstores chains like CVS are also revamping, creating health-hubs where shoppers can consult with care and nutrition experts.
The question our clients are asking now is: “Is good for them good for me, too?” Several seem convinced, and are now focused on launching products and marketing communications that reflect goodness.
While corporate sustainability and social responsibility initiatives are almost old hat by now, there are some cornerstones for building a “good-for-you” campaign worth remembering:
Tell a story. The magic of corporate story-telling is not to be underestimated, even if the narrative doesn’t directly relate to health and wellness. Find compelling and heartwarming info about your family and/or company’s history to tout: “rags to riches” anecdotes, key challenges surmounted, etc., and watch the “halo” effect take hold.
Stand for something. Ideally, the storytelling should include a unique positioning, ideology, philosophy that sets you apart from those without a mission. Everyone knows you’re in business to make money: there ought to be something more.
Put your money where your mouth is. Even a humble effort toward some form of social conscience, such as Fair Trade certification, a corporate foundation, or community-giving program allows you to say you’re involved.
Beware of “natural”. It’s become a cliché, in fact, has lost its meaning. We’ve also blogged about that type of labeling coming under fire by the regulators. Surely there are other, more creative terms for identifying your product attributes…
Remember: “good for me” is a fairly open concept. It doesn’t have to an actual product attribute but can merely be a corporate attitude that’s communicated passionately and creatively.
We marketers are often faced with a quandary. The client hires us to overhaul the company’s brand, then warn us, “But you can’t touch that!”
“That” can mean anything. In some cases it’s the logo colors (unchanged since 1945), or where, exactly, the photo of the mascot dog goes on the label, or what we can say about Grandpa, the company’s founder. In short, we call these “sacred cows”. Like those fabled beasts of India, they walk along with impunity, daring anyone to run over them.
Yet as marketing consultants, our job should involve doing just that. In fact, marketing firms should be veritable slaughterhouses.
We don’t do it to exert power over frightened clients: to show them who’s the real boss. It’s not about gratuitous change. Change for change’s sake is rarely a good strategy.
We do it because sacred cows come with a lot of baggage: stuff that can weigh down a brand in today’s fickle market, rendering it unmovable, a victim of irrelevance. The key is leaning the difference between luggage and wings. One holds you hostage while the other lets you fly.
In fact, Trendwatching tells us in a recent report how established brands are coming back from irrelevance with…irreverence. That’s the ability to laugh at oneself and to let others in on the “joke”; to place that sacred brand somewhere no one expected; in short: to do the unthinkable.
There’s an acid test for identifying sacred cows. Complete the following sentences, and then think about what might happen if you did exactly the opposite of each statement.
“Our brand must ALWAYS ____________________”
“Our brand must NEVER _____________________”
In fact, consider what’s the worse that can happen… That may just be the best thing for your brand!
One example of aggressive slaughtering is the venerable French Champagne brand Moët. Previously, it was only available at tony bars and high-end liquor stores. Recently, though, they introduced it in tiny bottles in (gasp!) self-serving coolers…at department stores.
This is an example of “massification”, or making an elite brand mainstream. They didn’t just change the product format, they changed the entire distribution channel. Quelle courage!
Another example came from FlyDubai, an all-economy-class carrier representing a country where the roads are paved with gold, or at least good imitations thereof. Problem was, the brand didn’t quite appeal to the Arab princes. It lacked the cachet to match their exploding, luxury-image country.
So they did the opposite of Moët: they upgraded the brand by creating a business class with attendant top-tier services, positioning the airlines as classy and elite. Sales took off.
Another example involved a gentle repositioning with powerful ramifications involved giant sacred cow Marriott (at least we all know that one!) The recession and downtrend in sales prompted them to take a new, hard look at the business they were in.
They saw the writing in the wall about cut corporate travel budgets and mobile workforces. They saw the competition was a “sea of sameness”.
The company was then motivated to root down to the basics, and realized they were really in the business of…(drumroll)…selling space. So they started doing just that: selling desk spaces by the day for business people to work from, whether or not they were actually sleeping there, repositioning this “brand extension” as Great Workplaces at Marriott.
We have three good examples of companies who dared to rebrand using mainstreaming, upgrading and differentiation strategies, all slaughtering their sacred cows .
In closing, a caveat: not all brands should be sent to the slaughterhouse. There are indeed those with a heritage that has stood the test of time. You can tell if the brand should be left alone (for now) if sales are steady or rising.
But then again, consider physics: what goes up, must come down.
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.
Could it be 25 years already that the TV ad spot “This is Not Your Father’s Oldsmobile” (see video below, starring the still-slender William Shatner) became an instant classic?! The catchy phrase was quickly adopted in any context (“This is not your father’s whatever”) reflecting the gestalt of the era. In other words: things had changed…
Yet perhaps the change mantra has never been so applicable as in marketing today. The game has changed, and for many reasons. To commemorate the New year, below are some of the key ones we see: the trends we see coming at us less like an Olds and more like a Corvette:
CONSUMER AS CREATOR. God forbid you asked the customer to help develop your product! You only dared came out with it after exhaustive research, branding and budgeting. In today’s era of crowd funding and social signals (“Like”, “Follow”, etc), consumers want to share in the creative process.
CALLS TO ACTION VS. CAMPAIGNS. Used to be you planned a nice and orderly campaign months in advance and ran it on the media schedule you chose. Today, you need to communicate with your customer all the time: they pick the time they want to receive your (timely and relevant) message.
MOBILE MATTERS. It’s all about the smartphone now. If you don’t have a mobile app you lose cred with consumers, period.
SOCIAL STRATEGY SMARTS. Before, getting your company name or product up on Google was enough. Now, with tighter content controls, search engine optimization (SEO) has become quite a science. With SE recognition of complete questions instead of just keywords, this provides more opportunity for capturing them (the good news), but you have to keep working at it.
INBOUND ABOUNDS. It’s not about pushing your product out the door any more. Attracting customers by the online content you create and the value your company provides is the all-important pull strategy that builds long-term loyalty.
OMNICHANNEL SURFING. Back in the day, it was solely the bricks & mortar that counted. Today, you may still want to get them in the store but the outreach now involves additional platforms, all working together to achieve “omnichannel”, or seamless shopping experience for the customer. (We’ve posted about this trend a few times, so please check out the topics on right)
B2B SPECIALTY. More than at any other time, business-to-business marketing is becoming a recognized and respected specialization. Helping businesses do business better is critical in these times of reduced resources, higher costs, aggressive competitors and demanding consumers.
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:
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.
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.
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.
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.)
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.
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.
Some pals not involved in the retail world have asked me why they call the Friday after Thanksgiving Black Friday. Our esteemed (and smart) readers all know the answer. (For those still in the dark, check out Wikipedia.)
Let’s clarify one thing: we LOVE a hot sale! We are all about selling; it’s our reason for being. In the food business, this is the most profitable time of the year. Bring’em on!
What we are not so hot about is this new trend of shopping for stuff on Thanksgiving Day. So many seem to be doing it now (in the states with no Blue Laws, of course). Many, except for our revered Nordstrom.
Our love affair with the chain began when we first blogged about them years ago. We highlighted a personal experience involving the delivery of an evening gown, expertly altered, to our very doorstep by their department manager a couple of hours before a special event.
The other custom that sometimes backfired on them but made you love them even more was their no-questions-asked return policy. We understand they even took back a few car batteries…
In short, “Nordys” gets retail, espousing the “ABCs” of customer service. According to Boston Retail Partners, these are:
Anticipate customers’ questions before they ask.
Be ready to offer suggestions for upsells and cross-sells.
Create an interactive experience throughout the store.
Deliver personalized offers and promotions.
Execute a seamless checkout experience.
Their strong understanding of what they do and why they do it is why you won’t see any Christmas decorations or hear any carols sung in Nordstrom stores until Friday. “We just like the idea of celebrating one holiday at a time,” their signs and ads say.
Their web site also explains why they believe their employees should spend holidays with family. Judging from the positive comments about this on their and other news sites, consumers are on their side.
The idea they espouse of “celebrating one holiday at a time” is sound, especially when you consider that Christmas decorations as early as Halloween (even in August, in some cases!) are really an affront to our senses. As a business strategy, it also reflects a lack of imagination, and we know that to succeed at retail you need lots of imagination.
There was a time, not long ago, when only a few retailers would open at Thanksgiving. Not a great idea, but at least they were different; they stood out. Now, everyone seems to be doing it.
We all know that swimming in a sea of sameness is the death knell for retail. In fact, there is already a segmentation between customers of the lower-end, price-strategy chains (who are open on Thursday) and the service-strategy ones who don’t, and that the twain shall never meet.
Today we applaud those retailers who know how to take a stand but also how to stand out in the marketplace.