The Business Case for Microtargeting

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THE BUSINESS CASE FOR MICROTARGETING

KANTAR RETAIL OMNISHOPPER FORUMMarch, 2016

• Microtargeting Defined• Microtargeting Justified• Shopper Microtargeting Today • Shopper Microtargeting Tomorrow • Putting It All Together

AGENDA

MICROTARGETING DEFINED

Microtargeting DefinedMicrotargeting is a marketing strategy that uses consumer data and demographics to identify the interests of specific individuals or very small groups of like-minded individuals and influence their thoughts or actions. An important goal of a microtargeting initiative is to know the target audience so well that messages get delivered through the target's preferred communication channel.

MICROTARGETING JUSTIFIED

Microtargeting Justified

• “Fully 85% of respondents ages 18 to 34 and 35 and older say they would be more likely to make a purchase if they saw something personalized to their interests. Across age groups, males were more interested in this technology than females.” - eMarketer

• “Personalization can deliver five to eight times the ROI on marketing spend, and can lift sales by 10% or more” - McKinsey

• Caveat: don’t be creepy. Disclose what and how to your audience

SHOPPER MICROTARGETING TODAY

Traditional Segmentation

Maturing sources of channels and data

Maturing sources of channels and data (continued)

TURNKEY RETAIL MEDIA

SHOPPER MICROTARGETING TOMORROW

Emerging Shopper Segments

Emerging In-Home experiences and data

Emerging In-Home experiences and data (continued)

Emerging On-The-Go experiences and data

Emerging In-Store experiences and data

New Sources of Context

SENSORS AND RECOGNITION

Geo-location Ambient LightTemperature Humidity Barometric Pressure Blood Contents

Sweat Contents

Skin Conditions Movement WeightHeart Rate Breathing Rate

Image Recognition Facial Recognition Bacteria/VirusDetection

CharacterRecognition

Ocular Recognition

Chemicals in Air

PUTTING IT ALL TOGETHER

New Context• Personality• Current Emotion• Physical state / health• Recently New Habits /

Behaviors

Emerging Channels – In-Home• In-home devices / IoT: Echo/Dash/New Sensors

(Light, Temperature, Chemicals, Movement)• Delivery / retail commerce• Subscriptions / Auto-replenishment• Top Home Web Properties (Search / Weather /

Entertainment / Utilities)

Maturing Digital Shopper Channels• Email• Social placements and platforms• Influencer campaigns• Display• Paid search• Promotional microsites and brand pages• Third-party deal and coupon sites• Retail media networks

Emerging Channels – In-Store• IR / smart cameras• Kiosk• Smart shelves• Self check-out / smart POS• Click-and-collect• In-store Mode

Emerging Channels – On-the-Go• Shopping List • Application In-store mode• M-wallet / M-payments• M-loyalty• Scanning / Identity Recognition• Micro-Geolocation• Product/Category Mobile Search• App Category Navigation• Wearables

• Hyper-Local• Shoppertainment• Ultra Cost-Conscious• In-store/Pickup Hybrid• Gen Z

Traditional Segments• Shopper Category• Lifestyle• Lifestage• Occupation• Affinity

HOW SHOULD WE CREATE NEW EXPERIENCES?

New Context• Detail-Oriented• Stressed Out• Physical state / health• Trying to Stop

Smoking

Emerging Channels – In-Home• In-home devices / IoT: Echo/Dash/New Sensors

(Light, Temperature, Chemicals, Movement)• Delivery / retail commerce• BirchBox Subscriber• Top Home Web Properties (Search / Weather /

Entertainment / Utilities)

Maturing Digital Shopper Channels• Email• Social placements and platforms• Influencer campaigns• Display• Paid search• Promotional microsites and brand pages• Third-party deal and coupon sites• Kroger Plus Loyalty Member

Emerging Channels – In-Store• IR / smart cameras• Kiosk• Smart shelves• Self check-out / smart POS• Click-and-collect customer• In-store Mode

Emerging Channels – On-the-Go• Uses Kroger App Mobile List• Application In-store mode• Loves Apple Wallet and Apple Pay• M-loyalty• Scanning / Identity Recognition• Micro-Geolocation• Product/Category Mobile Search• App Category Navigation• Apple Health: Recently Increased Exercise

and Healthy Eating

• Hyper-Local• Shoppertainment• Ultra Cost-Conscious• In-store/Pickup

Hybrid• Gen Z

Traditional Segments• Shopper Category • Lifestyle• Gen X• Photographer• Loves Fine Cheese

THANK YOU!