2010 Holiday Retail Sales End the Year with a Bang

What comes next?

It was a happy New Year, indeed, for U.S. retailers. After a stagnant 2009 holiday season, there was a great deal to celebrate. The latest report from MasterCard Advisors’ SpendingPulse™ shows a much better than expected holiday season for retailers with overall season-over-season growth of 5.5 percent.  Wonderful news for an industry that was holding its breath.

As retailers and shoppers recuperate from the frenzy, a little lull is to be expected. But savvy marketers are looking for innovative ways to get consumers back into stores. Post-Christmas clearance sales combined with gift returns and gift cards received are solid motivation for return traffic. In fact, with total holiday gift card spending estimated at $24.78 billion, there’s money burning a hole in the pockets of millions of Americans, and opportunities abound for retailers to increase sales beyond that initial gift card amount.

While TV and newspaper ads are logical channels to promote post-holiday deals, consumers are simply tired of the onslaught. To reach them where they live with offers they can’t resist, front door marketing can seal the deal. The tactic has been around for awhile but has recently been elevated to a science and a viable subcategory of the direct response discipline.  Previously considered less strategic, almost “untargeted” for a broad audience, today’s front door is ripe for the same precision targeting used in other marketing methods. Data research, analysis and application have significantly increased effectiveness, dramatically shifting industry perceptions of the channel. By using high-level data, major brands are placing the most relevant offer directly with the right customer to deliver a tangible competitive advantage. This decidedly updated and strategic approach bypasses a crowded field of messages and motivates consumers to respond. 

In the aftermath of a stellar holiday shopping season, what are you doing to get shoppers back to your store?

The Path to Purchase Starts at Home, During the Holidays and Year-Round

The Search for Value is Not a Linear Process, with Consumers Making Shopping Decisions Every Day in Every Way

Consumers consider brands as they move through a variety of daily events such as walking through a store, or even non-events such as opening the pantry door.  With major retailers referring to the path as a circle, a pool or even a puddle, it’s dramatically clear that it is neither linear nor defined by a particular channel.  The path to purchase is a big picture opportunity for retailers, fueled by mobile, digital, social, radio, television and print media – and advantage goes to markets using multi-channel strategies to layer messaging and offer consumer value all along the path.

A recent survey by retail industry analyst E-tailing Group confirms the consumer’s focus on value, indicating that merchants must get creative as almost half of shoppers will refuse to pay full price this holiday season.  Further customer service and promotions are heavily favored, and 39 percent of shoppers plan to complete most of their holiday shopping by early December (an increase over last year’s 34 percent.) Savvy marketers have recognized these factors as advantages for offering relevant information to the shopper early in the process, meeting expectations of brand value, keeping them informed and becoming part of the research and ritual of making shopping decisions.

Further, news from IDC Retail Insights points out that ‘sequential use of multiple channels’ by consumers will shift to ‘concurrent omnichannel behavior’ – meaning that new options such as mobile price research weakens the retailer’s immediate influence on purchase decision made right at the product shelf.  Brands that answer back with “three-dimensional selling,” working to solve a customer problem rather than sell a product, are on the right track by offering high value to reinforce greater brand appreciation earlier in the shopping chain.  The consumer may not necessarily care about which entertainment provider they use, rather they are more interested in the cost, availability and convenience enabled by their various options.

The path literally encompasses all aspects of shopping, from considering needs, evaluating brands, comparing prices, researching options and listening to recommendations from trusted friends.  For marketers, influencing customer choices involves strengthening the connection that comes to mind in each of these instances.   Reaching consumers early on the path maximizes the opportunities for shopper connections – whether it’s planning dinner, making a shopping list or just realizing the kids need new shoes.

Does your marketing strategy recognize the limitations of a linear view of the path to purchase? And are you doing enough to reach your customer early in the cycle, offering value and resonant messages that can linger for extended consideration and response?

Retailers are Getting Their Piece of the Holiday Pie with Deep Discounts

Black Friday Encourages Retailers to Keep Those Deals Coming

Disappointing retail results for the past several holiday seasons have led to sales and specials that go well beyond the hype that is ‘Black Friday.’ The lines have definitely been blurred with prices slashed throughout the months leading up to Christmas.  This aggressive effort seems to be paying off this year with retail traffic up significantly. 

In fact, recent survey results from the National Retail Federation show that 212 million shoppers visited stores and websites over the four day-long Black Friday weekend, up from 195 million last year. In addition, people spent more, with the average shopper shelling out $365.34, up from last year’s $343.31. And total weekend spending reached an estimated $45.0 billion.  These figures don’t even take into account the 37.2 percent of Americans who planned to begin holiday shopping before Halloween.

To get the attention of today’s consumer, retailers are taking advantage of the myriad channels available to them.  Print, online, television, direct mail – ads are coming at us from every direction.  It’s all good but it can get confusing and many times it’s in one ear, out the other. One under-utilized marketing channel is rising above the noise though, demonstrating significant success for major brands across the country.  These retailers have committed to reaching the right customers with ‘too good to miss’ offers delivered right to the front door. 

The front door is an ideal meeting place – uncluttered, highly visible and primed for action. And today’s front door marketing brings value to a precisely defined audience, with measurable results enabled by technology-based processes.  Certainly, the right message combined with a compelling offer receives more consideration in the comfort of the home where consumers are relaxed, more responsive and making their shopping plans.  It’s a channel that’s working for major retailers around the country. Are you doing all you can to reach your customers to drive holiday traffic with special discounts meant just for them?

Customers Seek Value Now More Than Ever, and Brands Must Get on Board

Consumer behavior has changed dramatically and smart marketers are paying attention.  Seeking value as a priority, paying cash for necessities, foregoing credit cards, searching for discounts and putting money in the bank have become the norm thanks to the recent recession. Spending is more cautious, with consumers looking for deals, using coupons and actively focused on getting the most for their money.  And while the recession may officially be over, some economists say many of these changes in spending habits, initially seen as temporary, have taken hold for the long haul.  The 2010 Nielsen Economic Current states “value remains the mantra and the new normal is characterized by restraint.” The report also indicates that shoppers across the U.S. and Canada are cutting back on trips to the store, seeking value and balancing their purchases with a mix of branded and store brand items. This economic trend represents a significant opportunity for marketers, going beyond the sole purpose of grabbing someone’s attention, and instead delivering usefulness and value. 

Further, internet research firm Burst Media recently surveyed more than 4,500 women, age 18 and older, concluding that coupon use, in both the online and offline world, is growing.  In fact, nearly one-third (32.4%) of respondents consider themselves ‘frequent’ coupon users and one-third (34.0%) are using coupons more frequently today than they were six months ago.

High value offers characteristic of front door marketing strategies may fill a gap here – demonstrating a brand’s understanding of customer needs, while meeting a customer’s expectations of value. If it’s all about the getting the right offer on the right door, today’s creative front door media can make a high value offer stand out.  Gift cards, sweepstakes, tear-off offers, and sensory marketing with sound, scent or taste are available media options and represent a dramatically personal approach suited for major brands seeking to offer special treatment to their best customers.

If customers have high expectations of value from their favorite brands, what are you doing to deliver VIP treatment to their front door? Is your offer high value enough to walk through your customer’s front door as a welcome visitor?

For Retailers, Black Friday is Not a Shopping Day but a Shopping Season

Over the past several holiday seasons retailers may have rung in less-than impressive sales but this year they are determined to turn things around.  In fact, the National Retail Federation projects that 138 million shoppers are expected to hit stores Black Friday weekend, representing an increase over 2009 estimates. Further, retailers are making the most of this as a ‘shopping event,’ asking themselves why just a single day of Black Friday deals, when a full season of ‘Black November’ offers may be just what this economy needs…

With most consumers still feeling the crunch of the recent economic downturn, many of us really are eager for a bargain, or two, or many, many more.  People are using credit less, paying cash and looking for discounts wherever possible; many retailers are smart to up the ante with earlier sales and many more deals that are expected to extend right up to Christmas day.  This elongated shopping cycle gives consumers the means to make responsible purchases, with the added bonus of boosting retail profits for Q4.  

Some marketers have initially reasoned that this could dilute the power of the day itself; others see it an opportunity to capitalize on shoppers’ ability to making decisions, shopping lists and even purchases in a much more relaxed, comfortable atmosphere than a single frantic Friday or long pre-holiday weekend.  NRF stats from last year prove that 40 percent of shoppers started holiday shopping before Halloween, much less November.  The trick for retailers is to capture a shopper’s attention early in their holiday gift planning phase, and capitalize on their extended decision-making process.

Front door marketing strategies are uniquely applicable in this environment, delivering a highly targeted brand offer in the uncluttered, private environment of the front door. Brands are reaching their best customers early on the path to purchase and making the most of their ability to evaluate and respond to competitive brand offers.  Offers made here are typically very high-value, with brands recognizing this as a requirement to be invited into a consumer’s home.

If Black Friday is now Black November, don’t you want your best – and perhaps most elusive – customers to have the chance to see, touch and share your offer around the house before the big shopping day arrives?

Shopper Marketing at Home: Front-Door Access to Influencing Consumers

A study released today by Booz & Co. for the Grocery Manufacturers of America projects shopper marketing as the fastest-growing area of marketing investment for packaged-goods marketers over the next three years. Findings indicate an overall increase in awareness and sophistication of shopper marketing strategies—illustrating a primary industry focus on creating incremental consumption and loyalty by delivering the right messages at the right time and place to the right customer. Reaching consumers at home is at the core of this effort, with emphasis on accessing a highly targeted audience in a location where recipients interact with the media and have a high percentage of response.

Front-door shopper marketing can stimulate a retail visit and influence shopping behavior by avoiding the clutter of direct mail that appears in the mailbox and bypassing the steady noise of ongoing marketing channels. Digital strategies are proving to tie into shopper marketing, with a strong percentage of consumers researching online prior to making shopping decisions. And as indicated by the graph below from the study, evolving consumer behaviors coupled with emerging technologies have given birth to a variety of new shopper marketing vehicles and consumer points-of-contact.

Chart-for-Shopper-Marketing

Front door marketing benefits from this convergence as well since shopping decisions and lists are made in the home, and nearby phones and computers support the consumer’s ability to act on the message or offer.  

Booz & Co.’s current report, Shopper Marketing 4.0, indicates shopper marketing is not just an effective means of driving action by creating trial and purchase, but also a way to increase awareness and loyalty, all of which are critical to long-term brand health. Marketers should assume consumers are looking for value, pricing differentiation and personal relevance in their brand choices, and work to deliver the right message of value through the right channel.

Data-driven front door strategies support this thinking, reaching targeted customers early on the path to purchase and maximizing their opportunity to consider and respond to brand messages. As the report notes, one of the most important prerequisites for future shopper marketers will be the ability to generate shopper insights to create a lasting emotional connection with frugal consumers in a deal-driven environment. Some of the other crucial abilities include:

  • Collaborating with retailers and creating a scalable calendar of events that support drive periods
  • Evaluating, using, and integrating of new vehicles, especially in the digital frontier
  • Coordinating across shopper marketing, brand advertising, promotions, merchandising, and events to support more integrated marketing efforts
  • Accurately measuring shopper marketing effectiveness in a way that includes both brand health and ROI

Shopper marketers, where will your emphasis be on the path to purchase as 2011 rolls around?

Growing Population of Baby Boomers Dominate Generation Y

Via AdAge.com:

Nielsen is out to disprove one of the industry’s oldest beliefs: that consumers over 50 aren’t worth targeting.

Its research indicate that the 78 million baby boomers are a more attractive segment for marketers than the often touted Generation Y (also known as “Millenials”). Nielsen’s research suggests that the trend towards fewer children will result in smaller households and thus fewer younger consumers, and the recovering economy will lead to young families spending less and lower salaries for the younger generation.

Doug Anderson, Nielsen’s senior VP-research and thought leadership, states that America is likely to be a nation of a large older population and slower-growing younger one.

In 2010 so far, baby boomers account for almost 39% of all dollars spent on consumer packaged goods, 40% of total wireless services customers, and 41% of paying customers for Apple personal computers. And changing technology has unleashed new devices and gadgets that are new to all consumers, allowing brands to market to the often forgotten age 50+ consumer. Yes, contrary to popular belief, baby boomers don’t just need life insurance and dentures; they want cell phones and iPads just like the rest of us.

At PowerDirect, we’ve developed thousands of targeting plans for clients, but I’ve rarely seen marketing plans directed at baby boomers. If Nielsen’s study proves true, new front-door marketing opportunities may be available for brands to reposition themselves with one of the largest US demographic segments, especially since this is a medium they’re familiar with.

Marketing Opportunities in Hispanic & Latin American Segments

Via Portada Online

A recent Portada survey of media executives in the Hispanic and Latin American sectors indicate that there are optimistic feelings of opportunities in these sectors.

More interesting than the survey results are the opportunities and challenges that the executives outline in their answers. Answers range from online marketing to event-specific promotions (i.e. the World Cup, etc.). And don’t miss the answer given by PowerDirect’s CEO:

“Opportunities: The most opportunities for our business for the remainder of the year likely will be with our retailer clients, as there has been a noted upturn in retail consumer spending. The recession has turned the corner and there is greater consumer confidence. As a result, consumers (including Hispanic ones) are expected to spend more discretionary income on various retail purchases including consumer electronics (think “IPad”). This will create an opportunity for us as our retail clients may spend more money on advertising in general and (hopefully) in our media in particular, since we are very targeted and can reach customers around their stores’ immediate trading areas.”

“Challenges: “The most challenging part of our business during the rest of the year (and beyond) will be to roll out our new brand positioning. “The Science of Front-Door Marketing”. We define this as “Tightly integrated blend of proven direct-response methodologies, leading edge monitoring and campaign metrics.” …Our challenge is to communicate our industry’s benefits to marketing and advertising clients and raise the overall Front-Door Marketing & Media industry’s profile.”

Read the rest of the responses here.

Issue 3.1 of The CheckOut: Coupons & Shopper Marketing Trends

Last month, the Integer Group released Issue 3.1 of The Checkout, a monthly national survey of shopper-marketing trends. The issue focused primarily on the role of coupons and how coupons are affecting shoppers and their decisions.

Some interesting facts and implications from the report:

  • Shoppers are using coupons to drive their brand decisions before entering a store
  • Women look for coupons in traditional media, while men become more involved when using technology (brand websites, mobile marketing, etc.)
  • Coupons are perceived by shoppers as an incentive to try new brands and as a loyalty reward
  • Shoppers want coupons that are easy to use and simple to find
  • 75% of shoppers favor instant discount coupons
  • Check out the list of top brands and retailers who are deemed as having the “best” coupons

Read the rest of the report here.