Category Archives: Shopping behavior

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.
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Is “Grey Thursday” here to stay?

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.)

English: Nordstrom at Washington Square (Orego...
No Grey Thursday for them…

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:

  1. Anticipate customers’ questions before they ask.
  2. Be ready to offer suggestions for upsells and cross-sells.
  3. Create an interactive experience throughout the store.
  4. Deliver personalized offers and promotions.
  5. 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.

A VERY HAPPY THANKSGIVING TO YOU AND YOURS!

Pretail: the new shopping trend

A new trend is poised to change shopping as we know it:  pretailing.   This emerging practice could really throw a wrench on our beloved “path to purchase.  According to agency JWT, pretailing is not just a fad but a “top ten” consumer trend.

English: Leonardo da Vinci in Amboise Русский:...
With crowd-funding, you can make like Leonardo (Photo credit: Wikipedia)

What may be game-changing about this is it’s not about giving consumers a sneak-peek at your new creation, as at an auto show.  Instead, it’s about people creating the product they want to buy.  In fact, they want it to so much they are willing to pay you to make it.  It’s like being commissioned for a great work, Leonardo da Vinci-style.

Success can quickly go to your head in the new world of pretailing because you actually see the money pot being raised.  Yet the idea of shopper-as-mad-scientist — co-creator of your grand idea —  may not actually thrill because you could lose all control.

Pretailing is brought to you via the new darlings of the “internether”:  crowd-funding.  Sites such as  KickStarter, Christie Street, Outgrow.me, the winsomely-named Tiny Light Bulbs, and others are where they have you at: “Hello…what the heck is THIS?”  And every new “this” means money.

The “pretailing marketplace” grew 85% to USD 1.4 billion during 2012.   Trendwatching reported that in one year, Kickstarter recorded 2.2 million people in 177 countries putting down  $275M to see their favorite products produced.

With all this warm & fuzzy acceptance pre-prototype, marketers may fear the R&D, focus groups, ideation sessions, channel analyses etc.  they excel in will all go pffft…   Do we need to destroy the smoke machines and wrap the mirrors in black?

Before we panic,  let’s remember that this is all about getting a product made.  But how about its survival?  Only time will tell if pretailing will decrease the high rate of new products that fail on the shelf.  In a fragmented distribution world, the right product is a good thing but the right channel is the secret of life.

That’s why we don’t see any decreased demand in expert marketing research and roll-out strategies for new products.  In fact, in a crowd-funded world, the challenge may be to stand apart from it.

In fact, we predict the demand for comprehensive market and trends research to ensure staying power will be even greater with pretail, especially since there is OPM (or, “other people’s money”) involved.   As every public company executive knows too well:  where there is OPM, there are rules.

The Retail Games

Black Friday line
Let the Games begin!

For the sake of your health and safety, not to mention sanity,  we trust you came away unscathed from the recent shopping madness this past weekend that concluded with Cyber Monday.

What’s next:  “Techie Tuesday”?, “Wacky Wednesday?”  (Don’t laugh, and remember:  you saw it here first).

You’d hardly know there was a recession going on for the crowds that made this Black Friday allegedly the best on record (final sales figures still to be tallied), sending retail chain stocks soaring 5%+.  The Occupy Wall Street folks who organized to boycott “big chains” during the Holiday didn’t seem to have made a dent.

For marketers this urge to splurge is a rather thrilling, if unsettling, phenom.  After all, it was only a few years ago that the term “Black Friday” even became part of the American lexicon.  An elderly family member still thinks it’s some newfangled  religious holiday…

With stores now open during the sacrosant Thanksgiving Day, retail is now a new ball game:  one where nice guys finish last.

The protests of the pious about spending this time with family makes a good point, but the harsh truth is that retailers would not be opening their doors if there wasn’t demand.  And consumer demand has apparently reached a fever pitch as shoppers with pepper sprays and push strategies win the day.

As marketers, here are some key questions to ask ourselves about this trend:

  • If everyone’s already shopped out by Black Friday, what becomes of other Fridays…or any other day before Christmas?
  • What happens to manufacturers when inventories are already depleted for the Holidays and no new orders come in?
  • What do retailers do when their gross margins are dented by these deep discounts?  Do they dive even deeper?
  • If consumers only crave deep discounts, how will we wean them back into EDLP?

You may recall the halcyon days when many chains employed  Hi/Low pricing strategies, where discounts were something to be savored, special promotions were creative hallmarks, and blowouts only occurred post-Holiday. 

With Everyday Low Pricing the norm and “extreme couponing” the end game, it’s a challenge to make a case for brand-building.  Or is it?

We’ve blogged about the complex human character that hungers to shop.  There are elements at work in our subconscious that take pleasure in these animalistic rituals taking place in the retail jungles.  In short, the Thanksgiving spending spree is just one big game hunt.

Yet, once the thrill of the chase, the stampede of the crowd, and all that glitters disappears and shoppers finally view their prize quietly at home, do they hear the little voice asking:  “What is this garbage you just spent your last dollar on?!”

Stuff shoppers may not tell us

Soldiers and Family members participated in th...
Even the Armed Forces uses focus groups

At the same time marketing pundits are proclaiming that focus groups are dead, they’re trying to unearth what makes consumers tick. 

Used to be if you were a manufacturer and wanted to get some real qualitative (as opposed to quantitative) info on your new product, you’d put a focus group together. 

Get a small group of women together in a room all day, feed them well and pay them something, and they’ll tell you anything…Fact is, focus groups, when done well and includes multi markets and profiles, can give you information you can’t get anywhere else. 

Qualitative info(the hard numbers) you can get from scanner data.  Intimate stuff, such as what truly turns a shopper on:  things she would never tell anyone outside that room, that’s what makes focus groups useful.

But it seems this practice has gone the way of the Dodo bird, as “mystery shopper” clubs, chat rooms, on-line surveys and mobile apps appear to provide marketers with enough fodder from consumers.  Although these arguably much lower-cost tactics have their proponents (on-site focus groups can be very pricey), they still can’t be compared with being able to gauge the immediate reaction on the face of a group participant.

Now it seems this psychographic profiling and what it reveals is making a comeback.  It’s interesting that marketers claim they now want to get inside the consumer’s head when what they’ve been doing is mainly blitzing coupons at her…

In any case, Kraft just announced they’re developing a sophisticated new science of  “emotional profiling to provide actionable answers”  both for them and their retailer partners, according to trade pub CPG Matters.  Apparently, they are splitting hairs about whether shoppers “like” or simply “prefer” something, and how that spells the difference at check-out.

We’ ve always tried to look at the “need to have” vs. “nice to have” component of any marketing outreach.  Especially in today’s economy, folks are going to look carefully at what they buy, and probably prefer the former.  Do we really need the “green” detergent that costs so much more?

Yet food is a different animal.  There exists strong triggers — look, aroma, taste, and emotional ties — that make the food decision for us, regardless of logic.  How else can you explain the Australian expats’ continuing love of  Marmite

One of the key challenges facing manufacturers like Kraft is that this emotional reaction to food means, as they put it:  “that two identical-looking products could achieve the same score in acceptability tests, but perform wildly differently in the marketplace.”

That we shop with emotion is nothing new, and psychographics have been part of the marketer toolbox way before we knew what to call it.  Importantly, though, the increasingly ethno and income segmentation of the population adds complex levels to marketing plans.

We used to rely on reports from AC Nielsen and others that provided snappy, “canned” profiles we loved, such as “Bluehairs in Sun Country”, which neatly encapsulated all residents of, say, Vero Beach, FL.  Sure was easy to do specific-store marketing then…

 Today, with ethnic groups making up almost half of some metro markets, things are different.  Importantly, the cultural diversity means traditional tools like focus groups don’t work as well. 

For example, Latinos will typically say things that may not be true just to please the researcher.  Also, the acculturated/assimilated Hispanic may shop more like an Anglo…except when she’s with her mother.  You get the changing picture.

Trying to make this emotional connection to the consumer is nothing new.  It’s just so much harder today.  That’s why if the Big Guns are seeing the need to reinvent segmenting strategies to hold onto their brand dominance, we smaller guns should also.

Location, location, location…

Image representing iPhone as depicted in Crunc...
Staring at this instead of the shelf?

We’ve posted often about the importance of segmentation, that one size no longer fits all, etc.  But all that’s old hat now because there’s new stuff afoot.

What still holds true, however, is that around 70% of all purchasing decisions are made in store.  In fact, the new apps we discuss below help support that impulse adage.  Long the mantra for buying real estate, “Location, location, location”  has now also become a marketing buzzword.  

Recently, we’ve watched the popularity of in-store radio grow:  a very old medium that has been revitalized by innovative systems like VOXPOP (see 2/11 post) that not only time the message to the moment (and specific store), but also provide lift data post-promo. 

As they’ve long said about advertising:  50% of it is wasted…but which 50%?  Now, we’re closer to knowing.

We also know that with shopping/social mobile apps such as Foursquare, GroupOn, and others,  the ability to pinpoint exactly where customers are at any given time is going to become a key strategy. 

 There is an acronym for this:  LBS (location-based service) and you’re going to be hearing a lot more about it.  According to Applied Predictive Technology, LBS or mobile marketing is being  quickly adopted by major restaurant and retail chains.  

As an example, General Mills offers a two-for-one coupon for its cereals to the iPhone of a consumer standing in the middle of the aisle.  Another example is for drink deals broadcast to anyone walking within a block of a 7-Eleven.

The venture capital crowd has allegedly invested heavily in these LBS companies in expectation that these services will displace more traditional couponing channels, such as newspaper inserts.   The Mobile Marketing Association (MMA) also claims that consumer interest in mobile coupons continues to grow (but then, they have a vested interest here…)

Lest we abandon all oldies-but-goodies to climb onto this new bandwagon, let’s not forget that no single element a program makes.  The key to effective marketing is applying integrated tactics that work together to achieve maximum impact.

Just like with social media, all this input can quickly reach a saturation point with consumers.  They’ll just turn off their phones or simply ignore the texts.  On top of that, dealing with all this actionable stuff simply adds more time to to the shopping experience, and evidence points to the fact folks want to spend less — not more — time inside stores.

The benefit of  “old-fashioned” in-store audio, of course, is that shoppers can’t turn it off but they can tune it out if they wish.  It’s not an invasive technology but more of a subconscious influence.  Also, it doesn’t take time away from shelf surfing, which is something retailers need to look at.  More time staring at your iPhone = less time spending!

Importantly, LBS enthusiasts need to remember that whatever the hot new technology used to deliver the message is, they still need a compelling USP.  In fact, it needs to be even better than before because customers need to be driven to take immediate action. 

Manufacturers seem to want to control this new marketing technology themselves namely because they claim they can do it all in-house, with no need for agencies.  They’re wrong, of course, because there are few corporate suits (read:  brand managers) with the zany mind to do this well.  This means that the creative strategy part of the marketing plan has never been more important.

In summary: the message is the medium and, despite all the latest gizmos, will always be.

Rewriting retail rules

Apple Computer
Temptation greater than Adam & Eve's fruit

Lately, we’ve been focusing on some of the new things that are making us look at marketing in a different way.  We’ve discussed social media, shopping apps, on-line gaming and auctions, plus the myriad ways marketers make money by using badly-disguised “tricks”.

Yet one thing missing here lately has been report of innovative bricks-and-mortar retailing.  Not surprising, as we read about the consistent quarterly downturn of majors such as Walmart, The Gap and so many others.

While savvy chains like Target, Tiffany, Costco, Publix — plus our frivolous favorite, Gumps — are doing well or just holding their own,  let’s admit it, many chains haven’t added any real “Oomph!” to their operations in a while.

But there is one company you really never thought of as a retailer which  is now making the corporate suits at the chains tremble, and that’s Apple.  From all trade reports, not since Adam and Eve has there been such excitement over an opening.

Ten years after its first Apple Store opened its door, the company has grown “faster than any retailer in history”, fawns a recent feature on USA Today, heralding the opening of their latest New York emporium.  With sales last quarter topping $ 3.2B — an increase of over 90% YTD — Apple is said to be rewriting the rules of retail. (Darn, and we were just learning them!)

What’s amazing is that this growth comes when the entire category (computer retailing) appears to be dying.  Witness the list of chains that have already shuttered all or some stores, or plan to:  Gateway, Circuit City, CompUSA, and Best Buy.  In contrast, Apple plans to add 40 new stores to their current total of 330, all expected to create the camp-outside-night-before-opening fervor they inspire in their fans.

To us, the Apple Store mystique is not entirely new.  We were already onto them way back on 8/24 when we posted about how fun they were.  After parting with beaucoup bucks for an iPad at one last year, well, we simply became groupies like the others…  

Not that we actually hang for hours at these stores, sitting at different terminals, writing a book (as apparently one customer did) or flirting with the quirky Genius Baristas (their “geek” sales team).  After all, we do have a business to run!

But we sure like to visit them.  The stores exude excitement and coolness, like a hot, stylin’ nightclub where you’re a VIP and from where you’ll never be bounced, and finally emerge, hours later, drunk on new tech.

Then, one day, not long ago, the iPad developed a serious problem:  the on/off switch stuck.  So we bundled the baby up and rushed it to the nearest Apple Store.  Like an efficient paramedic, a Genius Barista immediately came by, looked at it grimly and rushed it back-stage.  We feared the worst…

But it was just minutes later that the young Genius emerged with a brand, new iPad.  No muss, no fuss, no questions, and certainly no request for more money.  Could retail be any sweeter?!  

(Did we even bother to ask why the thing stuck in the first place?  The answer is an equivocal “No”.  We simply took the new unit and ran…)

The person responsible for this retailing nirvana is none other than former Target merchandiser-in-chief,  Ron Johnson.  Focusing on the the customer experience and sound assortment strategies that made Target a great place to shop, Johnson did what many said was impossible:  he turned a great computer-maker into a great retailer.

Marketers like to say:  “Well, we focus on our core competency, nothing else. ”  Heck, we’re guilty of that same sentiment.   But we admit we may be wrong here, as many apparently were about Apple. 

It’s not that they even had to go into retail.  Or, as though they weren’t already on top of their game with their numerous “iProducts” and now, the brand new, barrier-breaking iCloud.   And it’s not like Steve Jobs isn’t already a guru, if not a god, becoming more so with each re-appearance of his ravaged body at new product launches.  

It’s just that this is a company that decided to take total control of their brand.

That’s why Advertising Age just named Apple “Marketer of the Year”.   If they’re also named “Retailer of the Year”, well, then the rules really have to be rewritten.