Tag Archives: influencing consumer action

Retailers Ride Holiday Growth Wave into 2011

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Retail momentum continues, as consumers’ desire for discounts is fueling promotions and shopper incentives

Retailers were generally pleased with the 2010 holiday season, seeing 5.7 percent growth over 2009 and handily beating initial projections by the National Retail Federation.  In fact, the NRF further says that January marks seven straight months of retail gains, demonstrating that many consumers are ready to spend after a long and difficult economic slump. It’s a winning situation for consumers – retailers are anxious to maximize this upswing and are upping their game with continued promotions and discounts. 

Good news for shoppers who have come to expect some level of competition for their spending power. Their expectation of value is rock solid and increasing the pressure on retailers to deliver.  For retailers it is a bit trickier though, and marketing efforts must break through the barrage of promotional activity to really get the consumers’ attention as they travel the path to purchase. Shoppers have become savvier about sifting through their options – comparing prices and demanding value as they prioritize their spendable income.

In turn, marketers are layering additional tactics onto established and successful retail marketing strategies.  Capitalizing on what they already do well – such as developing incentives that demonstrate real customer understanding – marketers are raising the bar by adding underused channels such as front door marketing into the mix.  Bypassing a crowded field of messages, retail marketers are in some cases exceeding a 20 percent response rate.

Are your retail marketing initiatives generating the results you need, especially as Americans seem to be stepping out of their years-long spending slump? And if not, what are you doing to expand on your campaign strategies?

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

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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?

Out of the Mailbox: Alternatives to Reaching Consumers At Home

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Direct mail is a multimillion dollar business in the US and a usual fixture in most direct marketing programs. However, according to DMNews, the changing nature of the USPS and emerging customer communications technology have forced marketers to consider new alternatives for reaching consumers at home.

Despite the Postal Regulatory Commission denying the Postal Service’s request for a rate increase, marketers are still planning for higher postal rates in the future (the USPS reported last month that it is looking to appeal Commission’s decision), the cutting of Saturday home delivery, fewer Post Office branches, and the possibility that the USPS will be out of money in 2011.

What this means for marketers is that not only will direct mail access to consumers homes be more expensive, but marketers will miss out on the chance to influence consumers at home on Saturday, one of the biggest retail shopping days.

In an effort to diversify their media mix and decrease their reliance on US mail, some marketers are moving towards an online solution, which has been propelled by recent mobile commerce innovations such as mobile payments. However, Paul Vogel, president of mailing and shipping services at the USPS, warns that inboxes and social media messages are becoming increasingly cluttered.

Making the move from out of the mailbox and into the inbox doesn’t solve for the age-old problem of increasing advertising clutter. If marketers are looking for a true alternative, front-door marketing gives consumers the touch and feel of a direct mail piece, but without the clutter of the mailbox or inbox.

Change is inevitable for the USPS, and marketers should consider how these changes will affect their future marketing plans and place renewed emphasis on finding alternative options to reaching consumers at home.

High Q2 Coupon Redemption Reflects Price-Conscious Consumer Trend

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Via CPGMatters:

CPGMatters’ August 2010 issue contains coupon redemption information for the second quarter of 2010. So far, Q2 marks the seventh consecutive quarter of growing coupon redemption.

Key findings include:

  • Overall, redemption has increased 6% during the first half of 2010
  • Average coupon value hovers around $1.59 during the first half of the year
  • Marketers have offered 18 billion CPG coupons so far this year, up 11.4% from 2009
  • Among retailers, the largest increase in redemption value has been in convenience stores, warehouse clubs, and discount variety stores (as a whole, 36.6% increase)

The high coupon redemption trend echoes consumer sentiments from a July study published in Brandweek.  81 percent of the surveyed agree that “It’s fun to see how much money I can save by using coupons or my shopper loyalty card.”  And based on the chart at right, 61% are more price conscious now than they were a year ago.

“People who share such sentiments likely aren’t longing to return to freer-spending ways once an economic recovery signals that it’s safe to do so. That’s surely true of the 44 percent who agreed that “I can’t believe how wasteful I used to be when I shopped.” The chart indicates some shifts in consumers’ approach to purchasing.”

These new behaviors are determining what will be the new “normal” in consumer purchasing.  With the end of the back-to-school shopping season drawing near, and the winter and holiday shopping season approaching, are your marketing campaigns addressing the shift in consumer purchasing behavior?

Issue 3.1 of The CheckOut: Coupons & Shopper Marketing Trends

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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.