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Charting A New Path To Purchase: Shopper Communication In A Digital Age A markedly less than 3 hour tour…. Bryan Gildenberg Chief Knowledge Officer 1 OR….
Charting A New Path To Purchase:
Shopper Communication InA Digital Age
A markedly less than 3 hour tour….
Bryan GildenbergChief Knowledge Officer
1
OR….
KEY TO SUCCESS IN THIS WORLD?
– Conversations are voluntary – biggest mistake you can make is trying to force people to talk about what you want them to
– Brands compete with EVERYTHING today for share of mind and engagement
Have an idea worth talking about…
© Copyright 2010 Kantar Retail Slide 2
http://www.sethgodin.com/purple/moo.html
Name # of Fans 10 Starbucks 16,222,51215 Coca-Cola 15,562,24018 Victoria's Secret 14,806,29722 Converse 13,924,39726 Oreo 12,423,87728 Skittles 11,751,09535 Red Bull 10,452,69843 Disney 8,866,20461 iTunes 7,294,50384 ZARA 6,171,05985 Pringles 5,977,43095 iPod 5,721,758101 Starburst 5,535,141109 Nutella 5,363,911110 Dr Pepper 5,348,538121 Monster Energy 5,139,716122 Harry Potter 5,120,497133 Adidas Originals 4,946,309150 H&M 4,616,948152 Reese's 4,586,376153 Ferrero Rocher 4,579,902189 McDonald's 3,962,718194 PlayStation 3,896,381220 Xbox 3,600,651221 God 3,580,345222 Walt Disney World 3,579,409
Everyone should spend an hour looking at this whole list…fascinating! But, top cpg/retail brands in terms of fb fan #s
© Copyright 2010 Kantar Retail Slide 4
6 WORDS TO KEEP IN MIND WHEN WE THINK ABOUT THE NEW WORLD…– Portable
– Personalized
– Social
– Accurate
– Real-time
– Free
© Copyright 2010 Kantar Retail 5
5 Old Objectives That Information Changes
6
“Market Evolution And Conditions”
“Post-Desktop Information”
Information
Retailer/ Landscape
Shopper
“Post-Recession Digital Shopper”
Share Of DecisionsShare of Solutions
Share of WalletShare of Real Growth Share of Engagement
5 KEY CONSUMER/SHOPPER INSIGHTS
– Boomers lost half of their net worth in 5 years in the USA
– Gen Y is growing up digital, broke and on your couch
– Price sensitivity won’t be time constrained• Busy people can be sharp price shoppers
– Shoppers can increasingly find exactly what they are looking for
– Price is becoming increasingly personal and non-public
7
Channel CAGR'05-'10E
CAGR'10E-'15E
Clubs 4.8% 6.1%
Category Specialist 0.4% 4.1%
Convenience 2.6% 3.3%
Department -3.1% 2.6%
Discounter 7.7% 7.3%
Drug 5.6% 4.8%
Supercenter 7.5% 4.4%
Mass Merch (no SC) -2.6% -1.2%
Non-Store Retail 8.9% 11.3%
Supermarket 2.3% 3.7%
MVI Channel Totals 2.7% 4.5%
US Sales by Format: Fragmenting Growth :
9115699
122160
20283
94
107
42
48
56
394
401
491117
157
420312 349
60119
105
319
256179
40
58110
92
0
300
600
900
1,200
1,500
1,800
2,100
2005 2010E 2015E
Clubs
Category Specialist
Convenience
Department
Discounter
Drug
Supercenter
Mass Merch (no SC)
Non-Store Retail
Supermarket
Source: MVI-Insights.com
$1,470$1,680
$2,088USD Billions
8
75% of growth from WMT, Supermarket, Drug
New Growth Equation:Club + Discount + Online > Sctr, Smkt, Drug (exRX)
BEST WAY TO MANAGE SHARE OF REAL GROWTH? PROACTIVE CHANGE
“It’s much easier to change when you plan to, rather than when you have to. It costs less. You have more time”
-Paul Otellini, CEO Intel
9
“It Takes A Village” To Earn New Growth…
10
– Core areas of stress-testing• Does our company kill low performing SKUs BEFORE our
customers?
• Can we understand what happens if we DON’T do something, not just if we do?
• Are we really prepared for a world where Walmart is 10% of US retail and 8% of US retail growth?– And where 50% of the growth is coming from formats that make us
uncomfortable?
• Key words – cross-functional, pro-active, risk-embracing
Source: KR analysis
5 Objectives Where The Tools Change
11
“Market Evolution And Conditions”
“Post-Desktop Information”
Information
Retailer/ Landscape
Shopper
“Post-Recession Digital Shopper”
Share Of DecisionsShare of Solutions
Share of WalletShare of Real Growth Share of Engagement
Insights continue to be a major gap
1. % of Retailers Rating Very/ Extremely Important2. % of Manufacturers ProvidingSource: Kantar Retail Trade Promotion Study 2010
Insights Needed from Manufacturers
NeedNeed11
DeliveryDelivery22
© Kantar Retail 2010
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Longer Term
Shopper Behavior
Who Buys
Category Response
Brand Response
Best Practices
88% 88% 87% 86% 76% 78%
11% 18% 21% 29% 46% 18%
Share of Wallet: Kantar Retail Key CompetencyAnalytics 3.0– Shopper insights
• Justifying cost of the retailer data sets and making it pay off• What will companies do to develop the capability to get great insights?• Ensuring these insights turn into something – the physical manifestation of great ideas• Bigger, whole-store oriented solutions
– Trade spend and promotions – “mutually assured destruction”• Defensible• ROI focused• The blurring of the line between brand and trade – it’s all marketing
– Activating great ATL campaigns in-store/online
• Gap between shelf price and average selling price• MFR funding greater share of promotions in EUR• EUR retailers looking to develop non-promo centric formats• Clearer visuals on promotion
– The increasingly customized and private conversation between retailer and shopper
• More intense public domain/statement pricing• Targeted and more intense promotions – CFR showing 60% off LC promos in Portugal
6-13
Setting Standard for Online MerchandisingPersonalization, Recommendations, 1-Click, Sort Your Way
14
Source: Company website, Kantar Retail analysis
• #1 retailer & #25 company on Inc magazines list of 500 fastest growing companies
• Key traffic driver is free shipping & next day delivery (70% of US)– 2005-2007 built backend
infrastructure, 3 warehouses…marketing 2008+
– Diapers key to every-day relationship with shopper, margin on other items
• Soap.com launched with over 25,000 items– Plans for 40,000 SKUs by end 2010– 100,000 by end 2011
Diapers.com: A Big Success for QuidsiLeverage Distribution Infrastructure for Soap
15
Founded
Source: Kantar Retail analysis, Company websites
Soap.com: Founders of Diapers.com Go After the Broader Replenishment Trip
16
Source: Kantar Retail analysis, Company websites
Once It’s On a List, How Do You Break Thru and Change the Replenishment Purchase?
• Supplier challenge: – Today: how do I get on the list
NOW– Tomorrow: Once shopper makes
the list, how do I break-in and stimulate trial?
• Retailer challenge: – What is the impact on the store if
my core trip drivers move online? – What is the new category role?
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• As more categories move online, easily becomes replenishment purchase – driven by shopper convenience & retailers aggressively driving these new business models
Source: Kantar Retail analysis, Company websites
War for wallet share: implications
– Core areas of stress-testing• If our customers don’t care
about market share, how will we?
• Can we have a conversation with our best customers about how they will sell more to their most profitable shoppers?
• What tools/vehicles work?
– Core alignment changes• Category growth will
change to category conversion
• Growth stories will need to detail “how” we are going to grow – who is going to buy more? Why?
• 100% ACV becomes an interesting objective here…
© Kantar Retail 201018
5 Objectives Where Tools Change
19
“Market Evolution And Conditions”
“Post-Desktop Information”
Information
Retailer/ Landscape
Shopper
“Post-Recession Digital Shopper”
Share Of DecisionsShare of Solutions
Share of WalletShare of Real Growth Share of Engagement
20
An amalgamated Path to Purchase reflects decisions and action before, during and after the visit to the shopping venue*
Pre-venue In-venue Post-venue
* The term “venue” is used to incorporate all potential purchase locations, both physical and virtual/digital
Recognition of Need/ Desire
Planning Venue Selection
Venue Navigation
Product Selection
Product Purchase
Product Usage
Reflect/ Respond
Social Media Loops This In Real Time
What Happens to Price-Oriented Retailers When They Don’t Own Price Anymore?
21Source: mysupermarket.co.uk
www.mysupermarket.co.uk
– Moments of Truth - July 1, 2010 – CMO Summit, Chicago
– Jim LecinskiManaging Director of U.S. SalesGoogle, Inc.
– From delivering substantial sales margins to earning market share, marketers can drive success for their organizations by understanding where and when purchase decisions are actually made. But knowing is not enough—marketers need to define, adopt, and act on a set of operating principles to make the most of these insights. In his session, Jim Lecinski will propose an actionable framework for connecting with consumers at the "Zero Moment of Truth" and making the most of these highly-profitable engagements.
Companies Preparing For The Zero Moment… Are You?
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Emotion
Interaction
Web Advertising
TV
Source: dmg world media, http://www.youtube.com/watch?v=3wLuA9tPFfE&feature=related
Digital Shopper ROIAll 3 Key Variables Fundamentally Impacted
$ * F * Ex*
1+Exceed
1-(3,000*Miss) C
ROI From An Individual “Trip”
Expectations –Exceeding and
Missing
Quality of the Conversation
Source: Kantar Retail analysis
Share of Decision: Kantar Retail Key CompetenciesMapping and Blazing The New Path To Purchase
– Gen Y and how they will shop• Replacing the boomers with something very, very different• Blurring backwards of the path to purchase • There will in the long term be an increasing separation between
the engagement, inspiration and persuasion of the consumer and inventory
• Efforts to understand the digital impact on the path to purchase• IMPRESSION-ENGAGEMENT-ACTION steps and • Zero moment of truth conversation
– How does a wired world enable different strategies?• Branding and strategy while giving up control• Disruptive competitive models in commerce and information
6-24
– Core areas of stress-testing• Is our biggest issue
irrelevance, not competition?
• How do our customers remain vital parts of the conversation? How do we help them (and yes, we want to help them!)?
• What does a joint conversation look like?
– Core alignment changes• Customer marketing will
become more digital and buzz-oriented
• Brand attributes are more important than brand executions
• How do we reliably measure decision influence? Do we want our brands to be loved or trusted?
War for Decision Share: Implications:“If You Don’t Like Change, You’re Going To Like Irrelevance Even Less”
-General Eric Shinseki
25Source: KR analysis
5 Objectives Where Tools Change
26
“Market Evolution And Conditions”
“Post-Desktop Information”
Information
Retailer/ Landscape
Shopper
“Post-Recession Digital Shopper”
Share Of DecisionsShare of Solutions
Share of WalletShare of Real Growth Share of Engagement
TAKING SHOPPERS THROUGH A JOURNEY OF ‘WELL-BEING’INFORM THEM EDUCATE THEM HELP THEM CHOOSE & BUY
Source: Kantar Retail Photos
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This Is Solution Share....
Source: MVI photo Tesco Hompelus and Dobbies website
War for solution share: implications
– Core areas of stress-testing• Our customers will become
less concerned with our products – what does this mean to us?
• How do we partner with customers tackling these “bigger issues”?
• What does a multi-channel supply chain look like?
– Core alignment changes• Supply chain flexibility will be
as important as efficiency and cost
• Senior sales leaders will be having really different conversations with customer senior management• Someone has to make
sure the top to top isn’t just about saving the world!
• Realization that fewer, bigger ideas may be required to get noticed
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5 Objectives Where Tools Change
30
“Market Evolution And Conditions”
“Post-Desktop Information”
Information
Retailer/ Landscape
Shopper
“Post-Recession Digital Shopper”
Share Of DecisionsShare of Solutions
Share of WalletShare of Real Growth Share of Engagement
Would You Have Guessed These Would Be Top Search Items for Walgreens?
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4 TIPS FROM AN EXCELLENT PRACTITIONER
We don't have a logo," says Dmitri Siegel, executive director ofmarketing for Urban Outfitters. "We don't have a style guide. We
have a spirit.“
– Know who you want to be your friends.– Be a good listener. This point goes hand-in-hand with another point
Dmitri often makes - stop talking about yourself so much. – Ask good questions. Part of being a good listener is asking good
questions, and your customers' answers can inspire your brand long after the question is forgotten.
– Focus on connections, not on numbers. The more connected your customer base is with each other, he says, the better the experience and stronger the community.
Slide 32© Copyright 2010 Kantar Retail
Key Words
– Real Growth: This may look expensive and/or uncertain, but real growth will increasingly come from uncomfortable places
– Wallet Share: Focus energy on how my communication can convert occasionals to loyalists
– Decisions: When in doubt, frame the strategy around a decision you need to influence or want to change
– Solutions: Expand your communication to be a more holistic solution – how can you “improve lives” better?
– Engagement: Fun, humor, offbeat – remember, Skittles has more fans than God does
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Bryan GildenbergChief Knowledge [email protected]: b bryang_kr
245 First StreetFloor 10Cambridge, MA02142
T +1 617 588 4124C +1 617 512 2866F +1 617 499 2723www.mvi-insights.com
Slide 34© Copyright 2010 Kantar Retail
