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Tuesday, November 30, 2010

Nokia Invents Character With Amnesia So Phone Can Fill in Lost Memories

JWT Challenges Social-Media Users in Philippines to Create and Film Story of Missing 8 Days

The campaign generated over 25,000 text messages to Pier's hotline within one month.
 
The campaign generated over 25,000 text messages to Pier's hotline within one month.

The handset maker, creative agency JWT, Manila, and Smart Communications, a local wireless services provider, invented a character named Pier Roxas who lost eight days of his memory to highlight the N8's ability to capture memories in high-definition video.

The phone deserves an "out-of-the-box marketing campaign," said Aveline Siy, Nokia's Manila-based marketing head for the Philippines.

The campaign started in late September with an unbranded 60-second teaser spot posted on Facebook and YouTube, followed by an unbranded 30-second video that later ran on TV, introducing Mr. Roxas and his challenge to viewers: Help him recover his memory by crafting stories of what could have possibly happened to him over the past eight days, with only a handful of clues to work from. Mr. Roxas had a deep bruise on his face, a missing wallet, a lipstick smudge on his collar, a parking ticket, an unfamiliar key, a Smart-branded SIM card and a Nokia N8 with no contacts in the phone's memory. The best stories would be picked to be filmed on the phone.

Branded Nokia spots by JWT soon led viewers to the campaign site, www.nokia.com.ph/pierroxas, where Filipinos are invited to submit their version of the story of the man's lost days. Carat and Wunderman both assisted with the digital marketing campaign to promote the contest.

Nokia also created a text hotline where Pier answers questions from his followers and Pier Roxas pages to promote the film-making competition on Facebook (www.facebook.com/pier.roxas), Twitter (www.twitter.com/pierroxas) and YouTube (www.youtube.com/pierroxas).

Within a month, the campaign generated more than 25,000 text messages to Pier's hotline. Nearly 1,000 stories were submitted to the competition, conspiracy videos were created and posted to YouTube, and tweets and Facebook activity continue.

"We set out to create an idea that people would want to spend more time with," said Dave Ferrer, exec creative director of JWT, Manila. "So invested were the people with Pier Roxas that they spent hours interacting with him on the internet and via mobile, plus hours more formulating stories about what happened to him. People researched his background and created blogs to talk more about him and the Nokia N8."

On Nov. 8, eight finalists were chosen to film their versions of Pier's story using the Nokia N8 phone's HD-quality video feature. The videos will be posted to www.Nokia.com.ph/PierRoxas on Dec. 1, and the grand winner will be announced on Dec. 15. The eight finalists automatically won the Nokia N8 devices, used these to shoot their short films, while the winner gets a $1,130 cash prize. The winner will be chosen by three judges -- feature film directors Paul Soriano and Pepe Diokno and Lilit Reyes, an award-winning scriptwriter. 

Monday, November 29, 2010

Soup Players Put Spotlight Back on Taste, New Products

Category Sales Depressed During Last Year's Bruising Ad War


The $4 billion canned-soup category seemed primed for growth as recently as a year ago when recession-weary customers appeared ready to embrace soup as a cheap at-home meal. Sales grew 5.3% from 2007 to 2009, according to market research company Mintel, which cited the "rediscovery" of soup.

But following a bruising ad battle last year between category leaders Campbell Soup and Progresso in which the two traded barbs over their ingredients, the category as a whole has suffered. 

Campbell's new 'It's Amazing What Soup Can Do' campaign connects soup with getting consumers to a 'happier place.'
 
Campbell's new 'It's Amazing What Soup Can Do' campaign connects soup with getting consumers to a 'happier place.'

Overall soup sales fell 5.5% in dollars during the year ended Oct. 31, according to SymphonyIRI. Sales of Campbell's condensed soup -- which accounts for 83% of the condensed category -- dropped 5%. In the ready-to-serve segment, where Campbell leads General Mills in market share by 48% to 36%, Campbell's sales slipped 12% while General Mills saw an 8% slide. "They were going head-to-head big time," said Morningstar analyst Erin Swenson of the ad battle. "It was actually turning off consumers."

With the ceasefire officially declared, this season both companies are accentuating the positive rather than the negative with new products and ways to advertise their way out of a sales rut. Each is running a feel-good ad campaign that puts as much emphasis on taste as health. At the same time, executives are promising new product lines to put the excitement back into a category that analysts say is on track for a disappointing winter.

"This is the big season now for soup sales and, quite honestly, it looks like it's going to be another lackluster period," said Jack Russo, an analyst at Edward Jones.

There's a lot at stake. Campbell, which relies on soup for roughly 35% of its U.S. sales revenue, according to one analyst estimate, recently downgraded its 2011 earnings outlook, citing category-wide price discounting that has not delivered volume gains. On an earnings call last week (Nov. 23), President-CEO Doug Conant suggested that the company neglected innovation as it focused on sodium reduction.

"We have taken care of the long term and now we have got to focus on innovation in the near term, which goes beyond just the elimination of negatives and starts to celebrate the wonderful positives we can do with soup," he said, indicating there will be new products that the company will discuss early next year.

Innovation is also a key part of the strategy at General Mills, which analysts estimate relies on soup for 6% of its U.S. sales. The company this year launched a "World Recipes" line that includes Mexican-inspired flavors such as tortilla and pollo.

"Over the past few years, category-advertising innovation and retail shelf configuration overplayed health and convenience and neglected taste and variety," Ian Friendly, General Mills exec VP-chief operating officer for U.S. Retail, said this month at the Morgan Stanley Global Consumer and Retail Conference.

Campbell's growth was fueled in part by the 2008 launch of its Select Harvest line, which emphasized natural ingredients and lower-sodium sea salt. The company went after Progresso in taste-test ads featuring a blindfolded woman who associated farm-fresh ingredients with Campbell's brands and chemicals with Progresso. Big G shot back with its own comparative print ads depicting some Campbell's soups as containing MSG.

Now both companies are running more-positive messages as they seek to win back consumers that some analysts say left for other categories, such as frozen foods.

Campbell in September launched a more than $100 million campaign that pushes all of its soups instead of singling out particular product lines or brands. "Research and consumer insights indicated that in the 'post-Warhol' period of the 1970s and 80s, the company's advertising had become too focused on the iconic can and few top-selling varieties, rather than celebrating the quality ingredients, variety and great taste of its soups," the company said in a statement.

The new "It's Amazing What Soup Can Do" campaign, by Omnicom Group's BBDO, New York and WPP's Y&R, New York, connects soup with getting consumers to a "happier place." Actor Tim Allen provides the voice-over for TV ads that feature men and women of all ages dancing, running, swimming, playing and enjoying soup. 

Progresso's 'You Gotta Taste this Soup' campaign debuted last year.
 
Progresso's 'You Gotta Taste this Soup' campaign debuted last year.

Progresso is again turning to its "You Gotta Taste this Soup" campaign that debuted last year. The ads, by Publicis Groupe's Saatchi & Saatchi, New York, feature customers using soup-can phones to make calls to a Progresso kitchen, where chefs receive glowing reviews.

The next few months will be key. Last year, 64% of total soup sales occurred from late September to late March, according to data from SymphonyIRI.

Yet try as they might, soup brands might face an uphill battle in reinvigorating the mature category. The share of at-home lunches that include soup was 11% in the first quarter, about where it's been in the past several years, and down from 14.4% in 1985, according to The NPD Group.

Soup has "found its place in our diet," said NPD food industry analyst Harry Balzer. "And it's not moving up and it's not moving down." 

Sunday, November 28, 2010

P&G Promo Causes Bomb Scare in Brazil

Abandoned Crates in Rio Were Meant to Evoke Planeload of Prizes Dropping From Sky


The suspect crates were intended to be a teaser promotion for P&G's biggest-ever sweepstakes in Brazil, called "P&G Faustão's Airplane," with multiple drawings to be held on the Sunday afternoon variety show hosted by Fausto Silva, Brazil's most popular TV host. Six lucky winners will each win the equivalent of an airplane full of more than $100,000 worth of prizes, including two cars, bars of gold, everything needed to fully outfit an entire home, and of course multiple P&G products.

The website for the promotion features a plane on a runway surrounded by cars, motorcycles, every imaginable household appliance -- and a big wooden crate emblazoned with pictures of P&G products like Head & Shoulders, Ariel detergent, Oral-B toothpaste and Gillette deodorant and razors. The wooden crates became a symbol for marketing the promotion, and the idea of placing them in unexpected spots around Rio and other cities was intended to show that Faustão's Airplane is so full of prizes that some are even falling from the sky. The stunt was executed by local promotions company NewStyle, based in Sao Paulo, with the support of a local partner in Rio called Moda Promoções e Eventos. There were also plans to install the crates in the parking lots of large retailers that sell P&G products.

Instead, Rio's bomb squad closed off surrounding streets in Ipanema, opened the two crates and found them to be empty. The police put out a statement saying no explosives had been found.
Neither promotions company would comment but P&G quickly canceled plans to distribute more mystery wooden crates and issued this brief statement: "The boxes placed in parts of Rio de Janeiro were part of a P&G promotion. We profoundly regret any discomfort caused to the population. The promotion has been immediately suspended in Rio and other cities."

That may not be good enough. Rio newspaper O Globo quoted a police official who said one of the promotions companies had applied for but not been granted a permit to place five crates in public places in Rio, but went ahead and did it anyway. The official told the newspaper that his office plans to press charges, and also look at taking action to make the company pay for the cost of the police operation.

Although the stunt with the crates proved disastrous, P&G is continuing with the Faustao's Airplane sweepstakes, which will cost the company about $1.1 million including prizes and the sponsorship and drawings on Fausto Silva's TV show. A new winner is drawn every two weeks from mid-October through late December.

The website's home page promises "One of six prize-filled planes may land at your house with gold bars, two cars, one motorcycle, three TVs, four bicycles, one home theater, two video games and much more." (In a footnote, P&G carefully explains that the airplane is not included among the prizes). To participate, consumers are asked to buy any of 19 P&G products pictured and submit the bar code along with information, including the answer to the question "Which company gives you a planeload of prizes?" Everyone who enters is offered coupons for multiple P&G brands.

The website details an exhaustive list of all the prizes, including the price and brand name of each one, from the two cars (a Chevolet Meriva and a Ford Ecosport), and an iPod shuffle and an HP netbook right down to Disney puzzles and Sesame Street stuffed animals.

In a further effort to build awareness of P&G brands, the company has created a concept store at the Market Place shopping mall in Sao Paulo offering interactive experiences with 14 of its brands. 

Wednesday, November 24, 2010

Toyota Wins Back Hispanic Drivers With 259,000 Decals

How to Order a 'Somos Muchos Mexicanos. Somos Muchos Toyotas' Sticker on Facebook


"No one would use an 'I love Toyota' sticker, but if you give them something that says Argentina or Mexico, they'll put it on their car," said Pablo Buffagni, Conill's senior VP-chief creative officer. So that's what he did. Conill crafted 99 different decals with the names of Latin American countries and major cities, and offered them for free on a Spanish-language Toyota Facebook page.

The agency also sent street teams and cameras to places such as the parking lots of soccer stadium or Home Depot, and approached Toyota owners there to offer stickers, showing them the different options on an iPad, Mr. Buffagni said. As drivers picked their stickers and recounted their personal stories, often talking spontaneously about their Toyotas, they were filmed and the footage was edited into 15 spots, of which six are running on TV and the others online. One excited Puerto Rican woman spoke so quickly that her Spanish was subtitled, in Spanish, in the spot.
Advertising Age Embedded Player

Toyota: Brand Loyalty Case Study

By the end of October, more than 259,000 stickers had been ordered, mostly through Facebook, where "Somos muchos Toyotas" has 25,000 fans. Drivers can chose a formal or more colloquial country or city name on their sticker. Someone from Mexico City, for instance, could opt for "capitalino" or the more slangy "chilango." Carlos Martinez, Conill's exec VP-managing director, picked "Somos muchos boricuas," a colloquial term for Puerto Ricans, for his car over the more formal "Somos muchos portorriqueños." (Mr. Buffagni's car sticker says "Somos muchos argentinos"; his wife's Toyota sports the slangier "argentos" instead of "argentinos.") Soccer clubs would likely have been popular too, but couldn't be used due to rights issues.

"We've had great feedback on Facebook -- one guy even made a shirt from stickers and uploaded it to Facebook," Mr. Buffagni said. More important, Toyota has been carefully watching research that indicates the brand is regaining popularity. According to Toyota's Hispanic PR Tracker, since the campaign started in July, favorable opinion of Toyota has improved by 13 percentage points and consideration for Toyota vehicles increased 8 percentage points.

The most popular decal is "Somos muchos mexicanos," reflecting the Mexican origin of about two-thirds of the U.S Hispanic population. People can ask for up to 10 free stickers (the Spanish word for sticker is "sticker"). Requests for bigger orders have come from pastors, teachers and the business community, Mr. Buffagni said. "If it's nonprofit, we give them more."

"It's up for discussion [how long the promotion will last], but I think it should be forever," he said. 

Tuesday, November 23, 2010

Best-in-Class Digital Shopper Marketing Campaigns

A look at recent programs that integrate multiple digital touchpoints with retail
According to the white paper, "Clicking Through the Path to Purchase: Best Practices in Digital Shopper Marketing,", there are 221 million Internet users in the U.S. There are 292 million television viewers, with 35% viewing some TV online, and half of consumers will have a smartphone by 2011. By 2014, more people will access the Internet via phones than desktop computers.

Suffice it to say, digital technology is ingrained in the consumer's lifestyle and marketers are reaching them on this digital path to purchase more and more. Brands and retailers are putting ads on search engines, launching brand websites, leaking viral videos on YouTube, creating Facebook pages and Twitter accounts, managing mobile phone websites and smartphone apps, employing consumer promotions online or via phone, and more.

However, the best campaigns integrate messaging on the path to purchase all the way to retail. The following are visual examples of some "best-in-class" work on the path to purchase to retail. For a complete history of digital SM, read the white paper.


For LG Electronics' test of the "LG Discovery Zone" shop-in-shop at Sears, the brand utilized (with help from agency Saatchi & Saatchi X):
  • An interactive in-store environment with informational videos, take-away brochures, real washers and dryers, and callouts to access the mobile shopping assistant.
  • A mobile app -- accessible in-store or elsewhere -- that drove users to online shopper reviews, questions to ask the sales as-sociate and comparable product specs.


Rubbermaid is using various online and in-store tools to promote its product range, including:
  • Social media content such as a photo stream on Flickr, Facebook and Twitter pages, and a YouTube channel.
  • A blog and printable e-coupons on Rubbermaid.com.
  • In-store displays like temporary endcaps and permanent fixtures in various retail channels.


Saatchi & Saatchi X, New York, created an integrated campaign for P&G's new Pantene Pro-V that included:
  • Banner ads in search results, an ad on Walmart.com and an online brand store.
  • Sending kits to in influential bloggers to generate buzz and drive followers to Walmart.com.
  • Free sample packs at Walmart checkouts -- a category first.
  • Semi-permanent endcaps -- 10 with educational audio -- and on-pack samples.
  • Co-equity print ads.


Unilever's Dove Men + Care launch hit virtually every consumer touchpoint, including:
  • A 45-second Super Bowl commercial.
  • Endcaps at Walmart, Target and Meijer, pallets at club stores, and various other in-store displays and signage.
  • The first iAd launched by a CPG company (developed by Ryan Partnership, Wilton, Conn.), which allows users to watch videos, send customized voice-mails from Andy Pettitte, and tour his and Albert Pujols' trophy rooms.
  • Print ads, promotions and digital efforts through Twitter, Facebook, etc.


J.C. Penney's back-to-school campaign integrates in-store and online promos with:
  • Videos on JCP.com of teens showing off their "hauls" (recent purchases).
  • A virtual dressing room on Seventeen.com and Kaboodle.com that leverages augmented reality from German company metaio to allow teens to "try on" clothes using their Web cams.
  • An iAd for the iPhone and iPod Touch as well as a mobile app.
  • TV and in-cinema ads, a dedicated Facebook page and action sports tour sponsorships.
  • In-store displays and messaging.


Kimberly-Clark's groundbreaking U by Kotex launch leveraged:
  • A microsite with "real" answers about periods, quotes from teens about their anxiety around men-struation, coupons, free samples, and a place to join the "Break the Cycle" campaign.
  • Paid search ads on Google for the phrase "first period."
  • Twitter, Facebook and YouTube content.
  • Black displays and packaging that stand out from the sea of pink in the "feminine hygiene" aisle, plus cross-promotions with photo, cosmetics and music.


For the Crest and Oral-B 3D White launch, Procter & Gamble tapped Arc Worldwide, Chicago, for an integrated campaign that featured:
  • Sampling offers and an online presale via e-mails from popular women's entertainment site DailyCandy.com.
  • eCommerce content on drugstore.com, Amazon.com and Yahoo!.
  • Consumer launch event in New York's Herald Square.
  • National FSI drop with coupons.
  • Pallet displays, SmartSource shelf signs, in-line displays and other merchandising made available to all national retailers.

Published: September 2010

Source: In-Store Marketing Institute

Sunday, November 21, 2010

ProGlide Launch is Gillette's Largest Ever

Next-gen razor backed by blue-lit, motion displays

Cincinnati -- The latest installment in the ongoing razor battle is also the biggest product launch in the Gillette brand's history -- and Procter & Gamble Co. is flooding stores with high-tech, interactive retail displays as well as launching a full arsenal of digital path-to-purchase initiatives, sampling, TV, print and more.

P&G rolled out the Gillette Fusion ProGlide razors and cartridges, along with the Fusion ProSeries shaving and skin products, on June 6, timed with a campaign based on the consumer insight that 65% of men have discomfort during and after shaving because of the tug and pull of blades, resulting in irritation. This finding came in part from a panel of 70 men who shaved every day at a company research center in Reading, England, says Karen Gugliotta, a P&G spokesperson.

In addition, the shopper insight driving the scope of the marketing was that men are generally skeptical about the product's ability to deliver on its promises. To convince male shoppers to trade up from Fusion -- Gillette's last major advance in razor technology, introduced in 2006 -- the company sampled hundreds of thousands of the razors and is using flashy in-store vehicles, including a test of a power wing with augmented reality technology and a blue-lit, spinning glorifier dubbed the Tiffany display (search the words "ProGlide + Tiffany" on YouTube to see it in action).
In addition, support includes TV, print, mobile marketing, experiential sponsorship, coupons, PR, and digital efforts such as search, social media, online ads and Gillette.com, according to Matthew Smith, brand manager, P&G Male Grooming.

"The objective is to communicate that Fusion ProGlide turns shaving into gliding, and skeptics into believers, and we deliver that message through thinner blades, less tug and pull, and effortless glide. That message is consistent across all of the touchpoints where our consumers prefer to consume media," Smith says.

Beyond the Tiffany rotating glorifier, displays can incorporate illumination, backed by foiling (a reference to the razor's illuminated power button), motion sensors or a pull box that enables shoppers to touch and feel the product. These are on endcaps and in-line, and customized for some retailers and channels, especially club.

Stores also received a complementary array of signage, shelf talkers, banners, balloons and other point-of-purchase materials. Although the company wouldn't go into specifics, in a few markets it tested a power wing that incorporates augmented reality (not pictured), which uses video to give shoppers the illusion that they are holding a 3-D image in their hands. Shoppers hold an object to the video camera, which reads a code or marker printed onto the object and renders the 3-D image onto a video screen on the display.

"We know in the hyper-competitive in-store environment, we need to do everything we possibly can to get the shopper's attention," Smith says. "So all of the displays were built with that in mind, to communicate new, premium, breakthrough, and to stop shoppers in their tracks."

Other in-store displays include floorstands, floorstand wings, double-sided floorstands, PDQ trays, single- and dual-sided rolling carts, and full pallets for club stores, he notes. For the club channel, Gillette created split trays with built-in info panels to ensure that not only were they stopping shoppers because of the premium positioning, the newness of the product and the ProGlide name, but also providing product education to let shoppers know why Fusion ProGlide is superior to the older Fusion product.

Gillette's partners in creating the various in-store elements were Mechtronics Corp., White Plains, N.Y., which created and built the semipermanent displays and fixturing; RockTenn Merchandising Displays, Winston-Salem, N.C., which was responsible for the corrugated temporary displays; and The Integer Group, Denver, which is the in-store agency for Gillette, as well as other P&G brands.

Published: August 2010

Source: In-Store Marketing Institute/Shopper Marketing

Expo Keynote: P&G and Shopper Marketing

By Patrycja Malinowska
Procter & Gamble's response to emerging changes in consumer habits has been to make the shopper the focal point of its brand-building activity.

"The world is dramatically changing, markets are shifting, the profiles of consumers ... [are] different even than they were 10 to 15 years ago, and technology is completely transforming how we are touching and improving consumers' lives," according to Phil Duncan, P&G's global design officer, who delivered a keynote address last month at the In-Store Marketing Institute's Shopper Marketing Expo in Chicago.

While the company's experience consists of a wide range of brand equity (from the Charmin bears to Dolce & Gabbana perfumes), retail accounts (big box stores to bodegas) and markets (developed countries to emerging nations), the priority across all product categories is the retail environment, Duncan said. Because so many purchase decisions are made within the store, "We've got to be thinking about that more proactively and more strongly in the context of how we build our brands."

That's why Duncan also heads up P&G's shopper marketing efforts, he explained. "It became apparent that there were a lot of parallels between what we were trying to do from a shopper context and how we were building our brands."

A key part of his role, then, is to make sure that P&G's design and brand-building principles -- "Intuitive," "Relative and Distinct" and "Timely, Cohesive and Flexible" -- are integrated with its shopper constructs:
  • Make it simple: "Allow me to find what this brand is and what this product has to offer," he said.
  • Guide me ... "to the right selection that is best for my hair-type needs, my cosmetics needs, the end look that I'm looking for," Duncan said.
  • Delight me: "Consumers still want great delight," he said.
P&G considers five concepts to ensure that its brand-building efforts will resonate with shoppers at the point-of-purchase:

1. Think Big In-Store

Today, the "big idea" needs to start inside the store. (P&G first began talking about this "Store Back" concept in 2008. See "P&G Pushes ..." in Related Articles.)

Marketing no longer is about first creating a main idea, and then figuring out how to execute and engage the consumer at various touch points. Instead, Duncan said, you must first ask if the idea can be well-communicated in the store.

"We recognize that the store can be one of the most challenging environments for us to capture," Duncan said. Therefore, the "big idea" and the in-store execution plan must come together at the start.
  • To capitalize on the equity of Gain laundry detergent's distinctive scent, P&G wanted to help shoppers past the "taboo" of opening containers at the shelf. The company began by asking, "How do we get them to crack the cap in-store, and what's the commercial idea that works back through the path to purchase from the big idea context?" Duncan explained. The result was "Love at first sniff," a campaign that began with endcap displays and other P-O-P materials and continued through outdoor ads and digital marketing (the latter of which asked consumers to share their "Gain moments").
  • In another example, Duncan identified Bounty as a brand that had a real challenge sustaining its relevance in a down economy. "Paper towels are something that many consumers will either say, 'I don't need the most premium one' or 'I won't use them at all,'" he said. In response, P&G emphasized value through in-store imagery demonstrating the brand's ability to be reused due to its strength. The "Get it done with one" concept was then extended to the brand's overall ad campaign, a progression that "even four or five years ago wasn't even on the table" for consideration, Duncan said.

2. Fantastic Journey

Today's consumer needs to be engaged through the entire path-to-purchase, said Duncan, who emphasized the need to think holistically about reaching consumers everywhere they may interact with the brand -- rather than focusing primarily on the 30-second TV spot.
  • When planning the launch of Crest 3D White, P&G started with a visual image, then asked: "Does it and can it resonate in-store, and what are all those interceptions that we can make along the journey [to purchase]," he said. To present the new line as part of a beauty regimen that could improve appearance, P&G developed cohesive packaging, shelf displays and endcaps that brought the proposition to life. It also reached out to consumers through PR events, celebrity endorsements and other venues.
  • For the U.S. introduction of SK-II, a popular beauty brand in Asia merchandised in elaborate, high-end boutiques, P&G staged an upscale PR event in New York City that was marketed entirely in Chinese -- thus making it immediately relevant to that city's large Chinese population. (The campaign is an example of P&G's efforts to develop communication strategies that transcend geographic boundaries, Duncan said after the presentation. "We're really trying to work through how to engage consumers on a broad platform that's not specific to a single country," he said.)
  • To introduce an extended-use Bounce dryer bar, P&G had to help consumers understand the behavioral change it entailed and the benefits it provided, Duncan said. Again, the company looked for a signature visual that would translate to the store environment. After sharing some first-phase ideas and explaining why they didn't work, Duncan presented the ultimate execution, which contained a clear claim ("Automatic freshness and static control that lasts about four months") and appealing imagery. P&G then secured an endorsement from the iconic Kenmore appliance brand and created distinctive packaging that would stand out in the category's shelf set. The launch campaign also involved sending samples to "mommy bloggers" and other outspoken consumers, who then spread the word to other influentials, Duncan said. (The product is currently beating all sales objectives, he noted.)

3. The Best of Both Worlds

Digital engagement needs to focus on driving in-store purchase. "It's not just about repeating the same images over and over and over again to drive recognition," Duncan said. "We're finding that consumers grow pretty tired of that pretty quick." Therefore, it's important to create an engaging and relevant entertainment element, particularly in the digital space, he said.
  • For Charmin, P&G sponsored "Sit or Squat," a website and smartphone app that has users evaluating public restrooms across the U.S. to help others find clean accommodations. (Approximately 97,000 sites have been rated to date, Duncan said.) The brand employs the same blue and red bears in "Sit or Squat" promotions and in-store visuals. "We're clearly finding ways of bringing relevance in the digital space and recreating some components of that in-store," Duncan said.
  • For Iams pet food, P&G capitalized on consumer respect for veterinarians when developing the marketing plan. The company let consumers ask a vet questions on the brand's website, then depicted vets on in-store materials. "That's a pretty simple construct for us to translate back into the store environment and make really relevant," Duncan said.
  • During the post-presentation Q & A, Duncan discussed P&G's new "listening programs," which have the company tracking how people are engaging with brands in social media such as Twitter and YouTube to identify marketing opportunities. For example, the company used its popular "Old Spice Man" to engage consumers via Twitter, beginning by sending live feeds to several highly networked individuals to set off a viral spread. "Within three days, 40 million people were watching and responding on Twitter and competing for Old Spice Man to send [them] a message back," Duncan said. "We're mining [the digital] space like never before in terms of ideas and socializing and building our brands."

4. Branding Balance

Creating an iconic brand is important, but shoppability must also be served. "Help the consumer navigate your proposition," Duncan said.
  • The need to merchandise a large number of SKUs in a fun, yet clear, manner makes the cosmetics category challenging, Duncan noted. Over the last two years, P&G has evolved and improved in-line displays for CoverGirl in ways that help the shopper "feel beautiful" while easily finding what she wants. The result has been improved brand share and sales, he said.
  • Conversely, early success with Pantene "went to our head," Duncan said. "We kept launching initiative after initiative ... and after about four or five years, the consumer as shopper went, 'I'm out. I can't find what I want,'" he explained. The company therefore undertook a major "reframe" to improve shoppability, relaunching the brand with new packaging and in-line displays that break down the huge portfolio's various components.
  • Remaining relevant in-store requires rapid prototyping, Duncan said. For Olay, P&G is working at the shelf to call out the different elements in the brand franchise to help shoppers navigate through all the SKUs. "Putting something out there, seeing how it works, and changing and modifying it" as necessary is a process that must happen faster, Duncan said.
  • In response to another question, Duncan explained that P&G's traditional approach to copy testing is changing dramatically due to the speed of today's marketplace. "Technology today enables you to understand quickly if something is going to resonate -- and if it doesn't, well, pull it off," he said. As an example, he used P&G's late-entry sponsorship of the U.S. Olympic Team at the 2010 Winter Olympics. (See "P&G brandSaver Solutions: January 2010.") With no time to conduct traditional ad testing, the company instead used YouTube over one weekend to gauge consumer response to its planned TV spots.

5. Brand Karma

Consumers today are much more discerning about the brands they choose to associate with, Duncan said. "They expect us -- they don't want us, but they expect us -- to be doing good," he said before offering several recent examples:
  • Tide's "Loads of Hope" is a program that delivers free laundry services to displaced consumers after major disasters.
  • "Children's Safe Drinking Water" is an effort from Pur that provides children in developing countries with the chemicals needed to make dirty water drinkable.
  • Within 20 years, P&G plans to obtain all the power for its manufacturing plants from self-generated, sustainable sources and make all products with sustainable or recyclable elements. "In that context, we've started a program called 'Future Friendly,'" Damon said, to showcase its sustainable products and spread awareness. (See video below.)
In concluding the presentation, Duncan challenged the audience to likewise think less about selling to consumers and more about enhancing their lives.


Published: November 2010

Source: In-Store Marketing Institute

Saturday, November 20, 2010

P&G Pushes 'Store Back'

The company's current mindset forces brand teams, agencies to start with the store

If it doesn't work in the store, it doesn't work. Sounds simple enough, but this idea is at the core of The Procter & Gamble Co.'s latest rallying cry known as Store Back, introduced by Marc Pritchard when he took the helm as global marketing officer in mid-2008 (his role has since expanded to global brand-building officer). 

Described by the consumer goods giant as a "mindset" (although others would argue it's much more than that), Store Back reaffirms and strengthens P&G's famous First Moment of Truth (FMOT) mentality, putting an even greater emphasis on shopper marketing and winning at the shelf.

In essence, "[Store Back] reorients our thinking as we're developing big ideas for our brands," explains global design officer Phil Duncan. "We're asking our brand teams to first really start with the store in mind as they evaluate their big ideas, because what we have found is we actually develop better big ideas if we think about the store first and work our way back."

This is a reversal of the way CPGs and their agencies have traditionally approached marketing campaigns, which meant starting with TV or print applications and then adapting them to fit the store. "In the past, [the store] would have been our third or fourth consideration," Duncan says.

However, P&G's agency partners clarify that just because campaigns are constructed with the store in mind doesn't mean the in-store execution is necessarily tackled first. "It's not about starting with the store; you still start with the idea," says Andy Murray, global CEO at Saatchi & Saatchi X, Springdale, Ark. "But what you do is make sure that idea can really work in the store environment and you can put legs on it from a shopper perspective as well as you can some of the other important touchpoints."

Schooling Agencies
In addition to ingraining the Store Back mentality internally, Procter & Gamble also has to make sure all of its agency partners are on board and understand how it affects their working relationship. "It probably is a relatively significant shift for those that were more oriented toward delivering television ideas or print ideas," says Duncan. "For others, I think it's a natural component of how they've always worked."

One significant change is how agencies are expected to present new campaign ideas. "As our agency partners are developing our big ideas, they are [expected to present] it first and foremost through the lens of the store," Duncan says. "If the communication idea does not or is difficult to translate in-store, we're asking our agency partners to go back in and enhance the idea because if it doesn't work in-store, we know it's not going to work."

As shopper marketing agencies, Saatchi & Saatchi X and New York-based G2 (both P&G partners) may have an easier time adapting to Store Back. But they agree the mindset brings more clarity and focus to their work. "When you start putting Store Back filters on the ideas, you really test an idea to see if you can get it down to its simplest form," says Saatchi's Murray.

Store Back has also allowed Saatchi X to start working on campaigns earlier in the planning process. "We're getting involved in many more upstream conversations, which is a good thing," Murray says. "[We're able] to see if it will really work from a store standpoint before we get too far down the road."

Because P&G works with a number of agencies, this mindset requires them to collaborate even more to ensure everyone is on the same page. "It entails a change in process and it entails a change in the way that the agencies work together. There needs to be more collaboration and there needs to be more focus on a medium (the store) that most agencies have little experience in," says Ann Mooney, who worked at P&G for 18 years before launching her own company, Rising Moon Consulting, based in Cincinnati.

Mooney says in her experience, there are a stable of agency partners -- as many as seven to nine -- that need to collaborate with the brand teams. "A packaging agency, an in-store agency, TV/print, online, direct marketing, etc.; it's a lot of agencies that need to be singing off the same sheet of music."

Those familiar with Store Back also believe it is beneficial for P&G's retail customers. "The emphasis on Store Back certainly should help retailers because what it's really doing is taking on board and attaching importance to their customers -- the shopper," says Jonathan Dodd, chief strategy officer at G2.

Murray says many campaigns executed under this framework have already proven to be cleaner, more compelling and clearer to the shopper. "What Store Back is doing is getting us better assets to work with at store level that talk to shoppers in ways that she understands," he says. "Without it, what you really get into is trying to force-fit a 30-second [TV] idea into a three-second space, and that really doesn't work."

Mooney agrees. "In the store environment, one of your objectives is to get them to buy now. And your objective with the TV spot is to get in their consideration set." In both mediums, you want to provide a head nod to the creative idea, she says, but in-store the idea should be about the product's core benefits.

Store Back in Action
Perhaps the best way to understand Store Back is to look at campaigns that were executed with it in mind. One often-cited example is Pampers' partnership with Unicef, in which proceeds helped provide tetanus vaccines for mothers and their newborns in third-world countries.

"If you put that in a big-picture framework, you can touch millions and millions of people by buying Pampers. But then when you start trying to tell that story at the store level, where she only has a few seconds and she's trying to decide, you have to simplify it," says Murray. The simplified message of "1 pack = 1 vaccine" was featured on Pampers packaging and displays, and was also used online and in other marketing efforts. In the end, the campaign achieved its goal of providing funding for 31 million vaccines.

To show how Store Back thinking applies to another product category, Duncan cites Gain's "Love at first sniff" campaign. Drawing on the insight that most shoppers are not comfortable opening a bottle of laundry detergent to smell it in-store, Procter & Gamble created P-O-P materials that encouraged shoppers to "crack the cap to fall in love." From there, "a whole cadre of supporting materials developed," Duncan says, including TV commercials, print ads, online executions and public relations efforts.

"It really was thinking about the [Gain] campaign in a macro sense, but thinking Store Back for the first executions around those 'crack the cap' insights that really drove consumer appeal for the brand," he says.

Although it launched before Store Back was officially announced, the CoverGirl LashBlast campaign featuring Drew Barrymore was conceived with the same core principles in mind. G2 was the digital and First Moment of Truth agency for this campaign, which had a large presence in-store.

"The execution at the retail level involved utilizing a big orange [mascara] tube, which was very visible in-store, very dramatic, and helped to attract the shopper's attention," says Dodd. "We featured in-store Drew Barrymore, which connected to the advertising, so there was a connection to the shopper and to the store from what they would have seen on TV."

The in-store pieces were tailored to fit the needs of CoverGirl's key retail customers based on an understanding of their shopper profiles and P-O-P guidelines. These marginally different executions remained consistent with the campaign's big idea of bold, beautiful lashes, resulting in a favorable share performance for the brand, Dodd says.

Beyond P&G
While the term "Store Back" belongs to Procter & Gamble, those interviewed agree the thinking behind it can apply to virtually any product category that is sold at retail. "Procter's done a great job of distilling it and aligning their organization [around Store Back], and others are doing it to similar or maybe slightly lesser degrees at the moment," Dodd says of G2's other clients.

Meanwhile, Mooney is consulting brand marketers and agencies on what she calls StoreFirst, defined as "creating marketing ideas first with the store in mind for better in-store impact and improved integrated 360-degree marketing." She agrees that this idea, which must go beyond a mindset to entail changes in process and ultimately become an operational discipline, applies to virtually any product "where in-store is really important in making their purchase decision."

Another important consideration is assessing and qualifying the in-store idea early in the process. "Don't just sit in the conference room and say, 'Yeah, I think that's pretty good.' Qualify it and test it with shoppers," Mooney says.
She stresses, though, that StoreFirst is not a formula. "It's not something that will look the same way at every company because it depends on the company's processes, their organization structure, etc. It's not one size fits all."

"It's especially important for categories that are confusing, that have a lot of SKUs, that have sort of high launch rates, where there's a lack of differentiation and there's a high risk of shopper decision failure," she adds.

Mooney also tells clients to take into account their key retailers' planning processes and calendars when they're thinking about launching new products, which Dodd agrees is one of the benefits of this mentality. "You're taking the idea more directly into the store, which arguably is going to be more powerfully communicated and more effective," he says. "You also think about the constraints of the store at the appropriate time in the process, so you can use them advantageously rather than be compromised by some of those constraints."

Although a Store Back or StoreFirst framework may look different depending on the company, Mooney asserts that this type of thinking "is just the next evolution for companies to say, 'Not only should you have expertise and know-how and processes relative to shopper marketing, but additionally you should think about the store more seminally -- more first -- and how your product comes to life in-store,' because the store really is the torture test. If it doesn't work in-store, it doesn't work."

Published: March 2010

Source: In-Store Marketing Institute/Shopper Marketing

Friday, November 19, 2010

Putting the Shopper in Your Shopper Marketing Strategy

By Matt Nitzberg, dunnhumbyUSA

Introduction:
Shopper Marketing offers great potential for retailers and manufacturers to engage their most valuable shoppers more completely and more profitably. It offers new ways to reach shoppers in ways that can make a dramatic difference in their experience and their spending. 

When done well, Shopper Marketing is ...
  1. An expression of shopper-centric thinking and a deeply rooted shopper-centric culture.
  2. Shaped by a company's commitment to earn and grow shoppers' lifetime loyalty.
  3. Informed by an intimate, household-level understanding of what shoppers buy and why they buy it.
  4. Recognized by both retailers and manufacturers as an area of strategic collaboration.
  5. Managed as a dynamic set of activities benefiting from continual measurement and improvement.
(Also critical is brilliant execution, but that aspect is out of scope for this article.)

Unfortunately for the industry and for shoppers, Shopper Marketing is rarely done well. Most Shopper Marketing programs and projects have weaknesses in at least one of the areas above. Many struggle in several areas. What goes wrong?
  • Offers are irrelevant to the shoppers who receive them.
  • Share-of-wallet opportunities among current shoppers are not seen or valued, and thus ignored.
  • The primary targeting method ignores purchase behavior.
  • There's a focus on beating the competition instead of winning over shoppers.
  • The priority is almost exclusively on short-term results.
  • Retailers and manufacturers are at odds over strategy and execution.
  • Marketing and Sales argue over "above-the-line" vs. "below-the-line" funding while failing to develop a test-and-learn approach to optimize business impact.
  • Traditional measurements are applied to non-traditional activities.
  • Creative and media choices reflect a "one-size-fits-all" strategy.
  • Consumer marketing concepts are reapplied without tailoring to the "shopper" mindset and opportunity.
  • There is no process for continual improvement.
With so many ways to get off track and lose focus, the primary element missing from most Shopper Marketing programs is the shopper. Many companies are struggling to expand their Shopper Marketing capabilities dramatically while relying on limited shopper understanding, outmoded concepts and metrics, and poorly aligned organizations.

As a result, Shopper Marketing often fails to deliver on its promise. Instead of playing a key role in helping companies earn lifetime loyalty, it becomes yet another way to rent market share from week to week. Given the growing enthusiasm and spending associated with Shopper Marketing, it is important to understand what separates effective from ineffective efforts.

This article will explore the underlying factors that make Shopper Marketing programs effective in building shopper loyalty, sales, and profits over the short and long term. The structure will follow from the five factors listed above which are associated with successful Shopper Marketing programs.

1. Successful Shopper Marketing programs are an expression of shopper-centric thinking and a deeply-rooted shopper-centric culture.

An expression of shopper-centric thinking.
Most companies believe that they put shoppers and consumers at the center of their thinking and action. But as the conversation goes deeper, a different entity often emerges at the center: the brand or the store. To be fair, it is very difficult to wake up every day with the responsibility for growing a brand (or portfolio of brands) or a store (or a chain of stores) without those brands and stores dominating your thinking throughout the day.

These normal pressures make it hard to be shopper-centric and it shows up in the way questions are asked and answered in the normal course of the day. The questions in the center column below reflect the traditional and pervasive brand- or store-centric perspective. If you're ready to move your company from brand- and store-centric thinking to shopper-centric thinking, start asking questions like those on the right side. Asking the right questions is one of the most powerful steps company leaders can take to accelerate change in their organizations.

Area Brand- or Store-Centric Thinking and Action Shopper-Centric Thinking and Action
Targeted Marketing Can we send a mailing to shoppers at the top 500 stores? Can we send individualized communications to our top 2,000,000 shoppers?
Loyalty How can I make shoppers more loyal to my brand? Am I focusing most of my efforts on the shoppers who matter most?
Growth Is our market share growing? Is our share of wallet growing?
Efficiency / Effectiveness How can I simplify and standardize to achieve efficiency and savings? How can we understand what our best shoppers want and figure out how to give it to them?
ROI What was the cost-per-thousand for the ad campaign? What was the ROI for the ad campaign?
Winning How can we beat the competition? How can we win with the shoppers who matter most?
Tracking Sales How much did we sell last week? Who bought what we were selling last week?
Promotion How well did that promotion lift sales? Did that promotion engage our best shoppers in the short term and long term?
Pricing How much will it cost to match our competitor's prices on 500 items? How can we understand who our Price Sensitive shoppers are, the items on which they are most price sensitive, and the prices at which we hold and grow their business?
Innovation How can we create a competitive new product line? How can we create a new product line that is very relevant to our high value shoppers?
Assortment Which products can we de-list when we stock 2 national brands and our store brand? Which products do our best shoppers need and want?
Shopping Experience How can we revolutionize the way this category is shopped and drive more shoppers to our brand? How can we reflect shopper behavior and put our brand where our best shoppers will naturally expect to find it?

Several of the examples in the center column above share a common theme — attempting to change shopper behavior through irrelevant brand or store-centric initiatives. This impulse must be subdued, sometimes quite directly, in order to put the shopper at the center of the action. Here's a favorite quote from a client who urged her colleagues to shift from their brand-centric view and accept a shopper-centric shelving recommendation: "This is how people really behave. We can't argue with that. We can only decide if we're going to reflect their behavior in our plans or ignore it."

Another client confessed that his company spends substantial time and resource trying to change shoppers' fundamental behaviors. When he asked for our opinion on that strategy, I remarked that my colleagues focus on changing our clients' behaviors by helping them put the shopper at the center of everything they do.

A deeply rooted shopper-centric culture.
Beyond the powerful step of asking the right shopper-centric questions, establishing a deeply-rooted shopper-centric culture transforms, aligns, and sustains a business. But how do you know if the culture is really shopper-centric? The same way you understand other business issues: Collect the right data and evaluate it objectively.

Below is an example output from a Consumer / Shopper Assessment for a CPG business. The company is scored from 1 through 5 on seven different areas of capability. A "fully capable" company would score "5s" for all seven areas.


Based on this data — which is collected from a series of in depth interviews, process reviews, and an objective evaluation of the client's ways of working — the largest opportunity gaps are around Organizational Alignment (score of 1 out of 5; "no evidence" of capability) and Shopper / Consumer Strategy (score of 2 out of 5; "limited" capability).

An assessment such as this — when completed by an objective 3rd party — provides an important call-to-action about gaps in a company's capabilities, and (sometimes) about gaps between a too-rosy self assessment and a more challenging reality.

Two actions are essential to move ahead from the Assessment: (1) Executive (C-level) endorsement and enforcement of the transition to a more shopper-centric culture, and (2) a specific action plan which creates clear accountabilities across the enterprise.

2. Effective Shopper Marketing programs are shaped by a company's commitment to earn and grow shoppers' lifetime loyalty.

Focusing on growing the number of loyal shoppers, and on growing the spending by loyal shoppers, is a potent and sustainable strategy to drive sales and profit. For years, financial analysis has pointed to the relative benefits of growing with current shoppers vs. acquiring new shoppers. However, these benefits remained largely theoretical until two kinds of capabilities emerged: (1) Powerful data analysis techniques that can tear apart billions of transactions, and (2) the development of new communication capabilities which can deliver fully individualized messages at the household level based on each household's unique shopping behavior.

However, the value of these exciting capabilities is undermined unless and until a company prioritizes growing with its current shoppers instead of on acquiring new shoppers.

Tesco is the leading grocery retailer in the UK, but it hasn't always been that way. While they earn around 32% of all grocery dollars today, Tesco's market share was less than 10% in the early 90s. Tesco has achieved a steady rise in same-store-sales driven by an equally steady focus on earning and growing the lifetime loyalty of their best shoppers. This greater-than-decade-long commitment is well documented in Scoring Points (Humby, Hunt and Phillips; Kogan Page, 2nd Edition, 2007).

Perhaps the most famous of Tesco's Shopper Marketing initiatives is the Tesco Quarterly Statement. This communication, which is customized for each household, provides two benefits to the shopper: A financial reward, which can be used at the store, plus offers for highly relevant products based on past purchase behavior. The Statement is so anticipated and so highly-valued by shoppers that it's become known as "Four Christmases a Year." The mailing has an open rate of nearly 100% and is a major contributor to Tesco sales and profits because it keeps bringing shoppers back to the store to spend their "dividend" on the products they want and need.

In the US, The Kroger Co. dramatically changed its focus several years ago. Per Simon Hay, CEO of dunnhumbyUSA: "Kroger recognized that continuing to focus on attracting new customers meant a lot of money from existing customers was being left on the table." Virtually everything about their approach to the marketplace has changed as a result of their "Customer 1st" strategy which strongly emphasizes the value of loyal shoppers and the potential which remains in these shoppers. Their actions related to Shopper Marketing have seen some of the most dramatic changes. Here are three ways Kroger's Shopper Marketing efforts have changed since beginning their Customer 1st journey.

Area Before Customer 1st After Customer 1st
Contact strategy Allowing unmanaged direct mail contact of virtually any shoppers with known addresses Developing contact principles which put loyal shoppers at the top and creating clear communication guidelines
Investing in Loyal Shoppers Not recognizing or thanking loyal shoppers Recognizing and regularly thanking loyal shoppers
Relevant offers Placing products on the front page of its circular based on sales history and gross margins Evaluating every item in its circular based on the purchase behavior of loyal shoppers

Kroger's focus on loyal shoppers is well-known within their organization and among their trading partners, and it's becoming increasingly clear to the financial markets as well. Here's part of the Q&A from a recent earnings call:

Financial analyst: In this environment, you really seem to be widening the gap with the competition. Do you think that you're gaining sales from new customers or gaining a greater share of Walmart from existing customers?

Dave Dillon, Kroger CEO: I don't think we try to pinpoint who it's coming from [in terms of which retailer] as much as it's coming from our customers. And, as you know, we target our existing customer base because of the opportunity we see, that in even our very best customers, there are still a lot of purchases they make outside of Kroger and, by targeting them, we have had very good results.

In other words, Kroger is "loyal" to its loyal shoppers by focusing the lion's share of resources on these valuable customers. These loyal shoppers respond to Kroger's initiatives with even more of their spending. And there's an additional benefit, per Simon Hay: "Getting the shopping experience right for your best shoppers attracts profitable new customers too." Importantly, the reverse does not hold true: Focusing on acquiring new shoppers rarely leads to greater loyalty among current shoppers.

To date, a handful of leading retailers, including Kroger and Tesco, have made an enterprise-wide commitment to focus on, understand, and engage their best shoppers. Other retailers are beginning to follow this path, as well. For example, The Home Depot is realigning its marketing efforts (including Shopper Marketing) to differentiate its approach to Professionals (contractors, builders, etc.) after uncovering that 2% of its shoppers (the Pros) drive almost 30% of their sales.

To be blunt, manufacturers are lagging these leading retailers in their efforts to know their loyal shoppers and treat them well. They are paying the price for this lack of commitment with high levels of shopper churn and an increasing need to subsidize volume. Below is a revealing and alarming loyalty-based analysis for one Candy Bar brand. The results and conclusions have been reinforced by similar studies of many other brands across a range of categories.
The charts below show four shopper segments with decreasing brand loyalty from left to right.

The most valuable shopper segment (Champions) includes 6,910 households who average 76 buying trips per year in the candy category and for whom spending on this brand represents 15.4% of their candy category spending (share of wallet). 


Champions Valuables Potentials Uncommitteds
# of Shoppers 6,910 125,755 314,501 176,797
Category Buying Trips / Shopper (annual) 76.1 32.6 33.7 27.4
Brand's Share of Wallet 15.4% 7.0% 2.1% 0.8%

The Champions spend nearly $25 per year on the brand — about 4 times the amount spent by Valuables and more than 12 and 35 times the amount of Potentials and Uncommitteds, respectively. 


Champions Valuables Potentials Uncommitteds
Brand $s $171,834 $718,381 $612,061 $123,516
Brand $s/HH $24.87 $5.71 $1.95 $0.70

The Champions contribute roughly 10x their fair share of sales based on their size.


Champions Valuables Potentials Uncommitteds
% of $s 10.6% 44.2% 37.6% 7.6%
% of Shoppers 1.1% 20.2% 50.4% 28.3%
$ / Shopper Index (954) (219) (75) (27)

When you know these facts, the "opportunity math" is powerful and appealing: By focusing on growing loyalty among Champions and Valuables (22% of shoppers in this example), the brand could grow total sales by 7% through increasing its share of wallet among Champions from 15.4% to 18.0% and among Valuables from 7.0% to 7.7%. No growth is required among Potentials and Uncommitteds and no new shoppers are required to achieve 7% sales growth!

That's a great opportunity to focus spending where it will do the most good. But, despite today's tight spending climate, almost no brand is taking advantage of this opportunity. Most brands' strategies overemphasize acquisition of new shoppers ("grow household penetration") instead of cultivating growth among current loyal shoppers. As a result, the sad story depicted in the following graphic is a common situation experienced by brands today. This chart reflects the year-over-year behavior of the same candy bar brand shoppers in each of the loyalty tiers. 


The headlines are that among the Champions — the candy bar brand's most valuable shoppers — 10% of last year's households have left the brand, and another 60% have reduced their purchase levels of the brand. No new Champions were cultivated. Close to 45% of the Valuables have left the brand and roughly 30% of the remaining shoppers are buying less than they did last year. The largest growth segment? Uncommitted shoppers are growing in response to the increased promotion dealing meant to stem the losses. (By the way, we controlled the analysis to include only households which continued to buy candy in Year 2 so that there is no unintended impact from category departures.)

Here's a financial view of the issue:
  1. The loss of 10% of the Champions costs the brand 1% of its annual sales.
  2. The loss of roughly 50% of the sales among 60% of Champions costs the brand 3% of annual sales.
  3. Net, whatever growth the brand was able to achieve, it could have grown 4% faster if it had focused on retaining sales among its best shoppers.
For those who might still argue there is no upside from marketing to current shoppers, here is one last item on this topic. It shows the return-on-investment for every dollar spent in a well-established targeted marketing vehicle. The measurement was made with a control group in place to ensure the return was truly incremental.

ROI from Brand-Level Offers to Different Shopper Loyalty Tiers
Shopper Segment Label Segment Definition Return for Every Dollar Spent (Indexed to Average for Total)
"A" Buys Brand and Brand represents more than 50% share of requirements (share of wallet) (234)
"B" Buys Brand and Brand represents less than 50% share of category requirements (share of wallet) (135)
"C" Buys category but not Brand; Brand has 0% share of requirements (share of wallet) (24)
"D" Does not buy category (6)

These results clearly demonstrate that targeting current, loyal shoppers offers a superior return. The ROI from targeting Segment "A" (brand loyals) is almost 10 times greater than the ROI from targeting Segment "C" (category buyers/brand non-buyers).

3. Effective Shopper Marketing programs are informed by an intimate, household-level understanding of shopper behavior and its influences.
 
Companies involved in Shopper Marketing need to know:
  1. Which shoppers matter most?
  2. What do they buy?
  3. How do they buy?
  4. Why do they buy?
  5. Now that I know the answers to 1 - 4, how can I use Shopper Marketing to grow loyalty, sales, and profit?
You may be among the large proportion of people who see these questions and say, "That makes sense." But, you may be surprised by the gap that exists between agreeing that these ideas make sense and actually living by these ideas.

One of the first issues to address is the data your company currently uses to support Shopper Marketing efforts. If you don't start with the right data, Shopper Marketing (and other) initiatives will always be less effective and efficient than they should be. Here's a quick round-up of some commonly-used data sources and the gap between them and the "real" shopper who is your ultimate target.

Segmentation Model Also Known As Used By The "Real" Shopper Says Can Support Superior Shopper Marketing
You are what you earn Demographics / Social class Mass market Media Buyers and their clients "I spend very differently from my 'social peers'" No - Demographics are a proxy for how people might behave; not actual behavior
You are where you live Geo-demographics "Targeted" marketing industry and their clients "I can't eat at our neighbor's house - they don't buy organics!" No - Same as above; not actual behavior and not predictive of actual behavior
You are what you say you are Surveys Many research firms and their clients "I try to tell the truth as best I remember it" No - Surveys are helpful on "why" but not on "what"
You are what a small sample buys Traditional household panel Many retailers and manufacturers "I don't see myself in here" No - Sample is small, not directly addressable, and not projectable based on behavior
You are what average shoppers buy Point-of-Sale data Many retailers and manufacturers "I'm not an average, I'm me" No - marketing to averages drives irrelevance
You are what you buy Behavior-based insights Some leading retailers and manufacturers "OK, now you've got the real me" Yes - Behavioral data from individual HHs

As an example of the power of behavior-based targeting, let's look at a real-world "niche" soft drink brand (masked here to preserve confidentiality). In traditional segmentation language, consumption of this brand "skews" toward households with incomes of less than $35,000. Compared to other income groups, the < $35,000 group consumes 1.3 times its fair share of the brand, based on its share of the population. This is the highest level of development among the income groups. Based on this data, many brand leaders would market this brand toward the < $35,000 demographic via media choices and mailing list purchases. There are two problems with this approach:
  1. It's enormously wasteful: The brand's actual level of household penetration among the < $35,000 group is only 3%. in economic terms, investments made in this group are likely to be irrelevant to 97% of its members.
  2. It misses many important shoppers and consumers: While the < $35,000 group is "overdeveloped" it still represents only 30% of the brand's sales. The other 70% is purchased by other demographic segments.
The solution is behavior-based targeting. By starting with 1) regular shoppers at a retailer, and then 2) segmenting the highest volume shoppers of the brand, a relatively small group of shoppers who represent 60% of brand sales can be identified and targeted. There is no waste as non-buyers are excluded from the targeting model. And there is plenty of upside: The brand's share-of-wallet among these households is only 30%, leaving room for substantial growth.

Behavior-based targeting is useful and effective beyond brand-specific issues. The world's largest and most sophisticated program built on the principle that "You Are What You Buy" is the Loyal Customer Mailer, sent to 9,000,000 Kroger shoppers every quarter. Each mailer has a different composition of offers and messages based on the prior 52 weeks of household-level purchase behavior. While each shopper receives 16 offers (12 from manufacturers and 4 from Kroger), no two shoppers receive the same set of offers: 9,000,000 mailers = 9,000,000 versions. The recipients are the combined set of consistent Kroger shoppers and consistent manufacturer shoppers. 

Thus they are being recognized for their mutual value to the retailer and the manufacturer. In turn, they are rewarding the retailer and manufacturer with incremental sales.

To get to the "why" (purchase influences), some leading clients are pioneering the practice of linking household-level stimulus data to household-level behavioral data. Below is a partial list of factors measured at the household level. The resulting insights have led to stronger Shopper Marketing programs and other improvements:

Household-Level Influences Under Measurement Example Key Questions Addressed
Affinity group memberships NASCAR promotion responders Does my sponsorship reach my target shoppers? Does it pay out?
Mailed vehicles (coupons, samples, magazines) Recipes plus coupons Does my vehicle engage the right households? Does it earn greater loyalty over time? Do I really need to include coupons?
In-store demos and samples Food sample plus coupon in-store Does sampling pay for itself via high levels of repeat purchase vs. "naked" coupons?
Attitudinal data (from a 200k+ panel) Needs-based segmentation How do different needs-based segments buy? Are my segment-targeted efforts working?
Media inputs TV campaign Did our advertising appeal to our target shoppers? Did it drive incremental sales?
Brand-owned loyalty programs Points-based program Do shoppers become more valuable once they join? Are we attracting the right shoppers to the program?

As media become increasingly targetable to households and shoppers, the insights used to drive marketing plans must keep pace. The only way to do that is through deep household- and shopper-level understanding.

An insight from Edwina Dunn, CEO of dunnhumby ltd., connects the dots between relevance, efficiency, and effectiveness: "The more targeted the offer, the fewer gimmicks you need to sell it. It will sell itself because it's what people want."

4. Successful Shopper Marketing programs are recognized by both retailers and manufacturers as an area of strategic collaboration.

Strategic collaboration between retailers and manufacturers is a powerful concept because it redefines "what great looks like" from the perspective of high-value shoppers and delivers on this new vision. It's also very rare. That's because many trading partners are ill-equipped and inadequately motivated to put aside their traditional "zero-sum game" approach to growing their own businesses. How are some retailers and manufacturers getting past this limiting model?

A small group of trading partners is achieving breakthrough collaboration by combining a new level of shopper understanding with an unwavering commitment to keep the shopper at the center of decision-making. The question they tenaciously ask and answer is, "How will this benefit our mutual high-value shoppers?"

When you start asking different questions, you start getting different answers and seeing new opportunities. Here are some questions which illustrate the "traditional" versus "shopper-centric" approaches to collaboration. The shopper-centric approach is changing the dialogue and results for companies who can set aside yesterday's model:

Area Traditional Collaboration Shopper-Centric Collaboration
Shoppers How can we drive more shoppers into the store? How can we understand who are our best mutual shoppers and grow their basket size?
Shopper Marketing communications We want you to buy space in our coupon booklet. We want to invest in our mutual best shoppers.
Category growth Can we grow 7% this year? Can we grow 12% by improving share of wallet by 20% among our best mutual shoppers?
Engaging shoppers We need to lower our prices in the [HBC, etc.] section. We need to improve the shopping experience in the [HBC, etc.] section.
Assortment We are removing 15% of all items. Let's work together to remove the 15% of items that are least relevant to our best shoppers.
Trends Let's do an analysis of this trend using household panel data and a demographically-representative survey sample. Let's do an analysis of this trend using your shopper data with an overlay of attitudinal surveys within your shopper base.
Budgeting We need 10% more promotion support than last year. We need to know which promotions worked with our best shoppers last year, and what didn't, so we can budget and plan effectively.
Merchandising We will trade off End Caps between your brand and our brand. We can maximize sales by sharing the end cap because your brand and our brand attract different shoppers.

While most of these examples reflect the operational or category level, it's critical to establish a practice of collaboration at the top-most levels of the trading partners. The most successful top-to-tops are those where the company leadership of the retailer and the manufacturer each lay out a clear vision of what they are trying to achieve, play back their understanding of what the other party is aiming for, and propose concrete ideas for working together to advance each other's strategic aims ... all grounded upon a focus on shoppers and how to win with them. 

Top-to-top collaboration is also important because it creates an example for other levels in organizations where collaboration has not been a core way of working.

The net impact of collaboration must be that each participant accomplishes more by working together than by working separately or without alignment. Strategic collaboration which includes asking the right questions, aligning at the top, and focusing on shoppers will deliver this result.

5. Successful Shopper Marketing programs are managed as a dynamic set of activities benefiting from continual measurement and improvement.

A dynamic set of activities.
Nothing about a good Shopper Marketing program involves standing still or repeating activities just because "they worked last year." In a good Shopper Marketing program, plans are executed, shoppers react, strategies are sharpened, capabilities are improved, and new ideas come forward. When used in this way, Shopper Marketing offers a high-speed, closed-loop learning environment that can improve your confidence and speed your decision-making.

To make full use of the many learning opportunities, you'll need to be both bold and humble. Living comfortably with that paradox makes great companies even better the next year.

Be bold: Imagine the possibilities that exist when you're not being held back by precedent, habit, or past limitations. Take "we've never tried that" as an encouragement instead of a rejection. Keep your focus on how to do a better job for your best shoppers and you can overcome almost any argument that stands in your way. A reliance on data and insights — rather than making you cautious — should empower you and your organization to try well-grounded, game-changing ideas. Example: A retailer recognized that, in a category with a growth rate of close to 5%, sales could be doubled if they could convince a subset of existing loyal shoppers to revisit the aisle. The question changed from the typical "how do we grow 6% or 7%" to the bold "how could we double the size of the category?"

Be humble: Recognize that learning to be shopper-centric is a journey, not an event. Mistakes will be made, unintended consequences will occur, and confusion will appear again and again. Learning to win at Shopper Marketing is essentially a knowledge competition and practitioners who are most ready to say "I have a lot to learn and I am ready" are going to be ahead of the pack.

A few years ago, I witnessed a great example of humility and its link to learning and winning. It was at a top-to-top meeting when the manufacturer's CEO asked how the retailer's learning journey was going. The retailer's COO responded: "We're learning a lot every day about our customers and we're working hard to put it all to use. I feel good about that ... about the fact that we're relying on data. But sometimes someone will ask me a question with some connection to shoppers. I'll answer it and later wonder if I was right. The problem is that since I've been in the business for decades and have had a pretty successful career, I have some confidence in my knowledge and so does the rest of the organization. But we're learning so much that challenges what we have believed, we may find out later that what I thought was true was never true, or was once true but is no longer true, or is only true under certain circumstances. So I need to make sure that I don't try to answer questions that can best be answered by the data we have from our customers. I have to remember that my job is to participate in figuring out what to do with our customer insight, not to replace it based on my personal experience."

Measure strategically for impact.
Measuring strategically means measuring what is most important to the business. It also means highlighting what is important to the business through better measurement and reporting.

All commercial organizations have "outcome" goals like sales, profit, and volume. Companies commit to shopper- and consumer-centric strategies in order to increase the magnitude and certainty of achieving these outcomes. If you have a point of view on how outcomes are to be achieved (for example "grow same-store-sales by growing shopper loyalty"), you better measure whether those choices are being translated into successful execution.

The old adage "what gets measured gets done" is not just an encouragement; it's also a warning: If you don't measure what you say is important, you're unlikely to achieve your goals. If this happens over a meaningful time horizon, you will also undermine your organization's commitment to achieving the goals.

Strategic measurement doesn't just change things within your company. It also changes your dialogue with trading partners. One client at a manufacturer reported that his dialogue with a key retailer changed when he started bringing in new kinds of measurement: "We used to bring in 20 pages of 'what.' Now we bring 2 pages of 'what' and 18 pages of 'who' and 'why,' and we have a much more productive discussion."

Here are some examples which link a strategy to strategic measurement.

Strategy Strategic Measurement
Grow brand loyalty # of Loyal shoppers (trended); % of brand purchased by loyal shoppers; % of marketing budget allocated to loyal shoppers
Contribute to shopper loyalty growth at XYZ retailer % of brand growth at the retailer from loyal vs. non-loyal shoppers; compare to retailer's overall growth % from loyal vs. non-loyal shoppers
Create more value for current store shoppers Basket size; categories shopped; visit frequency
Create a more relevant assortment Share of requirements by SKU among key shopper segments; sales rate by store type (based on shopper composition)
Launch a premium line extension to extend brand reach and margins % of line extension sales from non-price sensitive shoppers
Broaden the appeal of our organic products Penetration of dedicated organics shoppers vs. general market; sales contribution from dedicated organics shoppers vs. general market
Leverage communications to drive loyalty and sales Impact on loyalty and sales from communications to targeted HHs vs. same measures among a matched control group
Drive quality trial via brand-equity (advertising, samples, in-store demos) vs. price incentives (coupons, discounts) Trial & repeat rates for equity "triers" vs. price "triers"; year 1 sales comparisons for shoppers who tried on equity vs. price incentives

Measure relentlessly for improvement.
Becoming shopper-centric creates sustainable growth because it isn't a one-time event. But, to drive steady growth, you must have an active learning plan. So the right measurements are in place, measure and review constantly to drive improvements over time. Below is an example showing how relentless measurement can lead to accelerating improvements. The activity being measured is the redemption rate for a targeted quarterly mailing, indexed to the industry average of 11.8% for response rates for house-owned lists (Penton Media 2007, as reported in the 2008 Direct Marketing Association Statistical Fact Book).

  • In Phase 1 (events 1 - 5), we focused on getting marketplace experience, building a knowledge base, and uncovering early opportunities for improvement. All of the analyses in this and subsequent phases are conducted through a shopper lens.
  • Phase 2 (events 6 - 10) saw the first wave of improvements to the targeting routines to tighten up coupon allocation logic and provide increasingly relevant offers based on past purchase behavior. There was also learning from a defined set of test-and-learn programs. Phase 2 redemption results indexed at (178) vs. the industry average.
  • Phase 3 (events 11 - 14), we have further tuned the offer allocation model to ensure that each household is receiving the most relevant offers out of the universe of possible relevant offers. Redemption results are more than 2.5 times greater than our Phase 1 starting point. Encouragingly, the rate of improvement is accelerating rather than flattening.
  • Midway through Phase 4 (events 15 - 16), the rate of improvement continues to accelerate. Redemption results are nearly 4x the industry average.
  • Although redemption rates now exceed all relevant benchmarks, we are confident about achieving further improvements. Learnings are already in hand which can step-change today's already strong results.

In closing, an encouragement.
Becoming a shopper-centric organization is tremendously challenging and enormously rewarding. It won't be easy at first, but over time confusion and disruption will give way to new levels of clarity and momentum. Benefits will emerge in every part of your business, including your relationships with colleagues and trading partners and, of course, in your results. I encourage you to start — or accelerate — your shopper-centric journey.

Appreciation
The Author would to thank Matt Stewart, Martin Hayward, and Diana Jones of dunnhumby and Kelly Camm and Ann Keeling of Cristofoli-Keeling, Inc. for their contributions to this article.

About the Author
Matt Nitzberg leads the Global Manufacturer Practice at dunnhumby ltd. In this role, Matt is responsible for defining the global practice strategy and creating robust and sustaining relationships with clients by working with senior levels within client companies. Prior to his current role, Matt established and led dunnhumbyUSA's Manufacturer Practice. Before joining dunnhumbyUSA, Nitzberg held Marketing roles of increasing responsibility at Procter & Gamble and Borden Foods. Nitzberg also held a variety of senior roles at Information Resources including the leadership of IRI's National Accounts client group.

About dunnhumby ltd.
dunnhumby helps brands and organizations engage more completely and profitably with their customers by analyzing billions of customer purchase records to determine customer purchase behaviors and patterns and converting insights into actionable strategies. Through joint ventures and long term client relationships, dunnhumby has established a global presence with offices in the Americas, Europe, and Asia/Pacific.


Published: June 2009

Source: dunnhumby ltd.