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A p u b l i c a t i o n o f R e v e r i e s . c o m a n d C o o l N e w s o f t h e D a y

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3 words you won’t have to say next time.At Upshot, we not only help you develop innovative ideas,we help you get them to market fi rst. So next time, it’s the other guy saying, “I wish I had done that.” Not you.

For more information, visit upshot.net.

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Positively SafewaySafeway chief marketing officer Diane Dietz gets inspiration from innovation. An exclusive Q&A interview by Tim Manners.

8R O U N D T A B L E

Better ThingsInnovation just isn’t what it used to be. A discussion featuring Claudia Poccia of Avon mark, Jevin Eagle of Staples, Randy Carlson of Diageo, and Jim Porçarelli of Active International.

16W H I T E PA P E R

Map the GapWinning at retail requires innovation across bundles of brand benefits. By Vinit Doshi.

PIVOT POINT

Almost 15 years ago, I started asking the best and

brightest in marketing questions about the future of

this business, first on Reveries.com and now in the Hub.

That probably translates into thousands of questions

asked. But, in fact, I’ve really only posed variations of

one, pivotal probe: Where’s it all headed?

Some of the answers have been more memorable

than others, obviously. If there’s one I recall best, it was

the response from Geoffrey

Frost, a former chief marketing

officer of Motorola, during late

summer, 2005.

It’s memorable partly

because, tragically, Geoffrey passed away within weeks

of our conversation. But it’s more because he was so

damn clear about what he saw coming.

He was remarkably prescient when he referred to

his product as “the device formerly known as the cell

phone.” He also suggested we should think about our

business as “the industry formerly known as advertising.”

But my favorite part of the interview was when

Geoffrey talked about the famous William Gibson

quote: “The future has already arrived; it’s just not

evenly distributed.”

As Geoffrey explained, “What he’s saying is that

there are people of the future, already here, walking

among us. If you can figure out who they are and

co-create with them, you’re actually doing a rather

amazing job of not only anticipating, but also shaping

where the world can go.”

It’s a new year, and a new decade. What’s new, for

you, in the industry formerly known as advertising?

Where’s it all headed?

Tim Manners

[email protected]

Remembering the late, great Geoffrey Frost.

Razor Sharp

Editor-in-ChiefTim Manners

Senior EditorsPeter F. Eder Jane Harris

Managing PublisherJoseph McMahon

Art DirectorJulie Manners

Design ConceptAlexander Isley Inc.

IllustratorJohn S. Dykes

Circulation DirectorBertha Rosenberg

Brain TrustActive InternationalArc WorldwideCatapult MarketingEURO RSCG DiscoveryHenry Rak Consulting PartnersHoyt & CompanyInsight Out of ChaosLandor AssociatesMcGuinn.comMarketing DriveMars AdvertisingTriad Digital MediaTracyLockeWomanWise

Hub ClubPMARPM ConnectUpshot

The HubDavid X. Manners Co.107 Post Road EastWestport, CT 06880203-227-7060 ext. [email protected]

n Brought to you by the editors of Reveries.com and Cool News of the Day, The Hub magazine is dedicated to exploring insights, ideas and innovation as the ultimate drivers of business success.

n Published bi-monthly since July 2004, The Hub’s circulation is exclusive to Reveries’ proprietary database of approximately 3,500 senior-level, client-side executives in Fortune 1000 marketing departments and major ad agencies.

n Advertising: For more information on The Hub’s collaborative sponsorship and advertising opportunities, please contact Joseph McMahon ([email protected]) or 845-238-3516.

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C O OL N E W S

Consumer Intelligence, Twittovation, Keds Collective, Little Nike,Here/Nau/NYC and Full Yield.

R E S E A R C H R E P OR T

The New Super | What makes a supermarket innovative? An executive summary of a Reveries.com survey.

S U R V E Y A N A LY S I S

Supermarket Savvy | Innovative supermarkets tap into emotional and functional desires. By Randi Moore.

E S S AY

Popping for Shoppers | The “pop-up” trend is driving retail innovation. By Beth Ann Kaminkow.

W H I T E PA P E R

The Shopper Aperture | Let’s put a new lens on the future of shopper marketing. By Anne Howe.

W H I T E PA P E R

The “We” Decade | Creating community and higher purpose will elevate our brands in the 2010s. By Dori Molitor.

W H I T E PA P E R

Smooth Selling | Integrated Selling drives bottom-line sales and better brand performance. By Paul Kramer.

R E S E A R C H R E P OR T

The Socialized Shopper | New research shows how social media is changing shopping behavior. By Mark Renshaw.

E S S AY

Beauty in Virtue | Luxury brands can make us look (and feel) truly good. By Cable Daniel-Dreyfus.

C O OL B O O K S

Makers, Think Twice and Start-Up Nation.

A L S O

Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com


Twittovation“Twitter’s smart enough, or lucky enough, to say, ‘Gee, let’s not try to compete with our users ... let’s outsource design to them,’” says Eric von Hippel, author of Democratizing Innovation.

Twitter CEO Evan Williams agrees: “Most companies or services on the web

start with wrong assumptions about what they are and what they’re for,” he says. “Twitter struck an interesting balance of flexibility and malleability that allowed users to invent uses for it that weren’t anticipated.”

Among other things, Twitter users invented the idea of putting the @ symbol before their user names (e.g., @cool_news). They also picked up the idea of using the # symbol to categorize topics — another innovation Twitter initially resisted.

The # idea came from open-source advocate, @chrismessina, who says Twitter thought the # concept was too nerdy for mass appeal. Well, now Twitter “hyperlinks the hash tags so readers can click and see all the other posts on a topic.”

Evan Williams says Twitter’s plan is to keep following its followers. “You get a bunch of users interacting and it’s hard to predict what they’re going to do,” he says. “We say, ‘Why are people using this and how could we make that better?’”

[Source: Claire Cain Miller, The New York Times, 10/26/09]

Keds CollectiveKeds is engaged in a “wholesale business-model change” in which its consumers not only design footwear, but can also sell it. “Marketing has evolved into a conversation with the consumers,” says Kristin Kohler Burrows, president of Keds.

To keep that conversation going, Keds has launched a site, called Keds Collective, where consumers can choose from a palette or upload their own design elements.

If Keds likes a design, it makes a deal with the consumer, who receives a 10 percent cut on any sales. The shoes can either be ordered online by consumers or stocked by retailers for sale in stores.

So far, this hasn’t exactly made anyone rich, but that’s not the point. “I’m totally thrilled,” says Jeriana San Juan, who has “sold six pairs of Keds with her designs.”

For Keds, its all about turning “custom sneakers into an advertising juggernaut when the designers ... proudly holler about them from the rooftops of the internet.” Jeriana, for instance, “has posted her Keds designs on Facebook and is adding a Keds link to her website.”

Similarly, Nike not only publishes a “gallery” of consumer designs on NikeiD, but also provides “convenient icons to click to ‘share’ them on Twitter, Facebook and MySpace.”

Champion, meanwhile, asked its “consumers to design hoodies and submit them for votes.” Darren Paul of Night Agency, the social-media consultancy that helped create the Keds Collective, comments: “People feel much more connected to the brand because they’re part of the advertising, in reality.”

[So ur c e : Christina Binkley, The Wall Street Journal, 12/10/09]

Consumer IntelligenceThe defense industry has a long history of feeding innovations to consumer markets — the internet, satellite navigation systems and the computer itself originated as military projects, for instance.

Now, the consumer-electronics industry is returning the favor. For example, the U.S. Air Force just ordered some 2,200 Sony PlayStation 3 videogame consoles, which it will use as “building-blocks of a supercomputer.”

Meanwhile, in Iraq and Afghanistan, soldiers “are using Apple iPods and iPhones to run translation software and calculate bullet trajectories. Xbox videogame controllers have been modified to control reconnaissance robots and drone aircraft.”

This is occurring because the military spends “only a small fraction” of its $1.5 trillion budget on electronics, leaving it outspent on R&D by the consumer-electronics industry.

Electronics firms are also able to “move much faster than the slow, multi-year grind of military procurement programs ... And the emergence of open-standards and open-source software make it easier to re-purpose off-the-shelf technologies or combine them in novel ways.” Leaving such innovations to the private sector meanwhile enables the military to “focus their spending on the development of new technologies, rather than reinventing the wheel.”

[So ur c e : The Economist, 12/12/09]

COOL NEWS


COOL NEWS

Here/Nau/NYCJean-Pierre Veillet is creating a pop-up boutique “using materials ... almost entirely rooted in New York City’s waste stream.”

This includes “fallen tree limbs found on the street, timber and metal pipes from derelict Brooklyn factories and piles of discarded cardboard boxes — so that when the store closes, at least the garbage won’t be new.”

The boutique is called Here/Nau/NYC and naturally “will carry products from several environmentally minded companies, including shoes from Timberland and Toms, organic dresses and sweaters from Stewart + Brown, bags made of recycled truck tarps from Freitag and the sleek, athletic designs of Nau.”

And so Jean-Pierre is busy fashioning displays out of cardboard and trying to turn bubble-wrap into lampshades. He’s got clothes “hanging from a rolling rack made of old pipes, timber and mismatched wagon wheels.” His main worry, he says, “is that it could end up looking clunky and cheap.”

Gordon Seabury, who owns Nau, refers to Jean-Pierre’s approach as “dumpster-diving” but is “confident that the resulting decor would ultimately reflect the company’s approach to considered design.”

[So ur c e :Eric Wilson, The New York Times, 11/5/09]

Full Yield“We need to put food back in the heart of health care,” says Zoe Finch Totten, chief executive of Full Yield. “It’s the cheapest way to deal with health and the simplest, and definitely the most pleasurable,” she adds.

Zoe’s focus is on the way people eat in the workplace. Her solution is a branded “12-month nutritional program” that’s designed to “take the guesswork out of what constitutes a healthy diet” and help reduce health-care costs.

The Full Yield menu features “fresh items made with natural, whole ingredients” and “will be sold in corporate cafeterias and in the prepared-foods section of local supermarkets” in the Boston area. John Hancock, the insurance company, is among Zoe’s first customers, with some 300 of its employees adopting Full Yield next year.

Meals are priced at $6 to $7 a meal, and employees will receive “$100 worth of coupons that can be used in John Hancock’s cafeteria and at 18 local Roche Brothers grocery stores.”

Full Yield plans to take various biometric measurements of Hancock participants throughout the year, and then “analyze the data against insurance claims to gauge improvements in health.”

[So ur c e : Melanie Warner, The New York Times, 11/29/09]

Little NikeMark Parker thinks acting smaller will help Nike grow bigger. It’s not as though Nike, now 37 years old, is having any problems growing; its “stock is up 50 percent over the past five years while the S&P 500 is down 7.7 percent.”

According to Interbrand, Nike’s brand value “has jumped from 31st to 26th” in the four years since Mark assumed leadership at the company. Despite this, Mark sees the Nike brand as something of a liability, particularly among younger consumers in action-sports categories.

Jeanne Jackson, president of Nike’s retail division agrees: “Kids think it’s cool not to have a big, hairy name over the store,” she says. And so Nike’s latest retail venture not only doesn’t carry the Nike name, it has no name at all.

Instead, the action-sports store, dedicated to skateboarding and snowboarding, simply displays the logos of “its three key brands at the entrance: Hurley, Converse and 6.0 (an action sports line that does have a Swoosh on it).”

“The hardest thing for a company to do is to change when it doesn’t seem like change is necessary,” says Mark. One thing that hasn’t changed is Nike’s connections with celebrity athletes.

“We always want to be connected with the world’s top athletes,” says Mark, himself a distance runner. “Our relationships with athletes fuel the innovations,” he says.

And, of course, there’s China, where Nike invested some $1.5 billion in 2009, and may invest even more in the year ahead. “No matter how much you’re investing there, it’s not enough,” says Mark.

[So ur c e : Bruce Horovitz, USA Today, 12/7/09]

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THE HUB JANUARY/FEBRUARY 2010

always been that it’s not innovative if it’s a solution in search of a problem. The goal of innovation is really to ferret out a keen insight, to deliver something that is needed, wanted or lacking.

The word “innovation” clearly is overused. So many people use it as “give me something different to save me for six months” or “something different for the sake of being different,” so that I can say that I have fostered innovation.

What are you trying to accomplish with

innovation?

Claudia Poccia: With new products, we constantly challenge ourselves to look outside of the cosmetic industry into the broader landscape of change. We try to leverage inspiration across the convergence of media, technology and other product forms.

We also engage with our customer or representative because, for the most part, she is one and the same. That’s why bringing our product to her, where she lives, and where she’s most receptive to receiving our message, is so important.

We bring direct selling into the digital age through social media and other nascent technologies. We’re going to her in a place where she’s open to receiving our message and engaging with our brand.

Jevin Eagle: At Staples, the goalof innovation is to provide customers with value, product or an experience that solves a problem or helps make their lives easier. That’s the link between the customer, the innova-tion, Staples and its shareholders.

For example, we offer free delivery that, in almost all cases, arrives the next day. That would be an experience innovation. A service innovation is our free PC tune-

up. Every single Staples store in the United States has easy-tech technicians who can provide a free tune-up of your PC.

A product innovation is our Mailmate Shredder. Our customers were opening their mail in their kitchens but their shredders were in their offices. So, we made a shredder that’s just perfect for the kitchen. There are many more examples of solving problems for customers embedded in our culture.

A RoundtAble FeAtuRing

Claudia PocciaAvon mark

Jevin EagleStaples

Randy CarlsonDiageo

Jim PorçarelliActive International

ROUNDTABLE

We try to leverage inspiration across the convergence of media, technology

and other product forms. CL Au DI A PoCCI A

Randy Carlson: The goal of innovation should be to bring new ways to delight consumers that are relevant for them. For Diageo, and a lot of mature businesses, maybe that’s more “renovation” than “innovation,” but it’s really about breathing new life into our brands.

Some people look at innovation as inventing the un-invented. But our obligation, as companies, is to deliver business results. Inventing the un-invented is a nice, long-term aspiration, but innovation had better create revenues and profits.

Jim Porçarelli: My mantra has

Better Things

But innovation really is about paying attention and looking for sometimes the simplest things that solve the issue in a way that no one else has done before.

How do you create a culture of innovation?

Poccia: Talent is the key ingredient to creating a culture of innovation. If you have a team of forward-thinking individuals who can look at things with a fresh, new lens, it creates an environment that fosters innovation throughout

Innovation just isn’t what it used to be.

JANUARY/FEBRUARY 2010 THE HUB

9

Proven results are what get the organization gelled around innovation.

R A N Dy C A R L SoN

the company. High emotional intelligence is also paramount.

You need people with great, cutting-edge ideas, but equally important is a team that has the ability to initiate and execute those ideas in a strategic manner. It’s important to build a team of creative thinkers who reach for the stars, but also keep one foot firmly planted on the ground so that everything aligns with the business objective.

Eagle: We not only have a market research department at Staples, but also groups of people who are not exactly in “market research,” but are constantly doing, testing and trying new things. For example, we have what we call our “usability group.” Their job is to observe how customers use things, either online or in person.

At any given time, we have dozens of tests going on of either new products, new ways to display products or to develop offers. The culture when we go out into the field is the culture of listening, whereas in traditional retail it’s a culture of telling. We have tremendous respect and awe for our store managers, and when they give us ideas we take voracious notes.

Carlson: Innovation really starts at the top. There may be a heretic who’s trying to push innovations uphill, but heretics have a very low probability of getting anything done without leadership support.

Second, you need people who believe in possibilities and are willing to beat their heads against the wall. With innovation, you are going to hear “no” a lot. You have to have people who are willing to work in that kind of environment and aren’t brought down by it.

You also need an element of pragmatism. Rather than just thinking about an idea, you need to go and do it and focus on results. Otherwise, your innovation is not going to have a long life. Proven results are what get the organization gelled around innovation.

Porçarelli: You have to give people honest-to-goodness permission to fail. If people aren’t afraid of making mistakes, they are going to come up with more and more creative and interesting ideas.

You need people who say things that you hadn’t thought of yourself. If people are just repeating everything I already know, they are not right for my team. Leaders need to allow themselves to be challenged by their teams.

Managers have a responsibility whenever someone comes to them with an idea — no matter how big or how small — to sit with them and help tweak the idea until it works. It’s imperative to continue the conversation because it can foster other ideas in other arenas that will solve bigger problems.

How should consumers be involved in the

innovation process?

Poccia: Bonding over beauty and fashion fosters community and brings young women together. Because direct selling is inherently participatory, it’s really natural for us to engage with our customers and representatives to create a co-branding experience.

In fact, she demands it. She inspires us. She co-creates with us because we’re both a brand and a channel. So, whenever we ideate a product, our favorite expression here is, “let’s take it to the Girl Lab.” That means going to our consumer and our representative and engaging her in the ideation and decision-making process up front.

This co-creation partnership enables us to bring forth products that allow for our consumers’ and representatives’ self-expression. So, she’s got a more immersive brand experience at a higher level of emotional engagement with us.

Eagle: I have a strong point-of-view on this. We used to run a contest at Staples called Invention Quest, where we asked customers and employees to create new product ideas. I’m so glad we did this — I was one of the judges — but I don’t think it was the most effective way to get insights because customers are not product developers.

A better way to get customers engaged is for us to listen to them. How do you live your life? How do you work? How do you play? How do you use products today? That’s where the much bigger ideas come from. We listen, observe, and take it from there.

Carlson: For us, the involvement is three-tier, including consumers, customers and distributors. If you have a brokered sales organization, you should include them, as well. It’s critical.

I personally find that the trade — including distributors and sales

10


taking any money you make and applying it to lower prices, and then focusing everything in your culture on leveraging scale to get lower prices. I think Starbucks was the first to not require a signature at the register when you use your credit card. That was brilliant.

I do think that Staples’ ink recycling program is breathtaking. We give three dollars back for every cartridge you bring back to recycle. This meets the customer’s need for doing something good for the environment, while also giving them money for it. We’re going to recycle more than 50 million ink jet cartridges this year.

Carlson: My favorite innovator right now is Tesla Motors. What Tesla has done is make a completely electric car using cell-phone battery technology. It’s the same kind of battery you have in your Blackberry, just stacked up.

They make a sports car that’s super light, looks a lot like the Lotus, and can go from zero to 60 mph in 3.9 seconds, with a 250-mile range. It costs $100,000, but it is twice as efficient as a Prius. They are also making a 4-door sedan for 2011 delivery.

What Tesla has done is turn the efficiency issue on its ear. They’re taking this notion of a car you want to be in and the right thing to be doing for the world, and put them together. And they’ve actually executed it. It’s brilliant!

Porçarelli: There’s a product called New Energy Solutions — it’s this pad that you can put on your dresser, and it charges all of your electronic devices without having to plug them in. That really adds to your quality-of-life because they’ve solved an everyday problem.

The culture when we go out into the field is the culture of listening, whereas in traditional

retail it’s a culture of telling. J Ev I N E AgLE

organizations — has a kind of “fingertip feel” for what’s right or wrong with your product offerings. It’s a great thing to get that kind of feedback sooner than later.

On the other hand, your customers, your consumers or the trade are not going to come to you with the next, big breakthrough idea. That’s just not going to happen. So, hopefully that’s where the innovator’s thinking comes in. It’s really up to the innovator to identify the problem being solved, and how to solve it.

Porçarelli: First of all, their involvement is about the due diligence of the marketer. There’s so much information and data available to us today, but you need to understand the attitudes, concerns and buying behaviors that are intrinsic to your consumers. So, don’t be afraid to preview ideas with your audience.

Procter & Gamble had a wonderful formula where every single brand

What is the most innovative idea

you’ve seen?

Poccia: True innovators create products or services that customers can personalize to meet their needs. I find TiVo fascinating. For decades, all of us were happy to view pre-determined and scheduled programming and then out of the blue comes TiVo.

Now we have the power to decide when we want to watch this programming. This TV-by-appointment culture has created a seismic shift in consumers.

Something that we’ve done at mark is a franchise called Hook Ups. Hook Ups are dual ended, customizable makeup products for eyes, lips and cheeks. We provide a wide assortment of textures, tones and product forms. The consumer can put together over 2,000 combinations and make it their own. That has

had to set aside a little bit of its budget every year for testing — even though they knew that 80 percent of the results may not give them an insight worth acting on. But the other 20 percent was invaluable. As a result, they had the greatest insight into the package-goods consumer.

While consumers generally don’t really know what they do want, they pretty much know what they don’t want. By knowing what to eliminate, it’s often a lot easier to figure out what to offer.

really gotten the industry’s attention because it puts creativity in the hands of the consumer.

Eagle: With Amazon, one innovation was giving away shipping and tying that to extremely low prices. Most business people would have said “no” to that. Another innovation was buying back used books and then reselling them, which GameStop does with games.

At Walmart, the innovation was Sam Walton’s concept of


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for us — if not at the moment, then over the life of customer.

There are plenty of things we do where we’re not maximizing profits on a transaction basis, but we are on a customer basis. That’s the key.

For example, during back-to-school season, we offered free backpacks — 100 percent back in Staples rewards on any backpack.

Why did we do that? Not because we thought we were going to make money that day. The innovation is in how we create value for customers. It all comes back to our customer economics.

Carlson: At Diageo, we have business performance metrics that are attributed to innovation. In fact, in our annual report, half of our growth last year came from innovation. It’s a real number. There’s real bookkeeping and accounting associated with innovation that’s done both in aggregate and individually.

If people aren’t afraid of making mistakes, they are going to come up with more and more

creative and interesting ideas. J I M PoRç A R ELLI

In a very different realm, there’s a technology in radiology called micro-bubbles that are injected into the bloodstream to take better “pictures” of a specific organ. The idea is that if you inject the bubbles with chemotherapy, you might be able to treat cancer more effectively. It’s still being tested, but could have a huge impact.

How do you measure the return

on innovation?

Poccia: R.O.I., at mark, means “Return On Innovation.” It’s a metric for success that has never been more critical to the bottom line. We measure it through our most important asset, and that’s the mark representative. That’s because not only is she our consumer, but she’s also our retailer.

So, for us, the innovation imperative is to deliver an entrepreneurial platform to this representative

THOUGHT LEADERS

-

CLAUDIA POCCIA is global president of mark, Avon’s trend beauty and fashion boutique brand, where she is reinventing the direct selling business model for the next generation by tapping into the world of social media.

JEVIN EAGLE is executive vice president of merchandising and marketing for Staples. Jevin was a principal architect in developing the Staples brand promise to make buying office products easy.

RANDY CARLSON is global innovation director for Diageo. Previously with Ralston Purina, Tropicana and PepsiCo, Randy has a diverse perspective on common success factors for innovations across marketplaces.

JIM PORÇARELLI is chief strategy officer at Active International, a global marketing and business solutions firm. He can be reached at [email protected].

In a broader context, your return on innovation requires short-term metrics in addition to the long-term investments, and you have to roll them up together. If you start doing activity-based costing on each individual innovation, there will be more things you kill than you launch. When that happens, then somebody else invents the future.

Porçarelli: Without innovation, a company will begin to die. Great companies falter because they didn’t put enough emphasis

that reinvents direct selling for them, and allows them to play in a digital space through their social networking platform. As her engagement and connection through these platforms rises, so does her sales productivity. So, it generates organic growth.

Eagle: Innovation is all about the notion that if we do things for our customers that meet their needs, they will reward us. Our underlying assumption is that doing good things for customers is also good

on innovation and reinventing themselves. Is there a return on innovation? You bet your life there is, because innovation is the lifeblood of every business.

There’s a huge return because innovation fosters innovation. When someone comes up with an innovative idea it becomes almost addictive because as you begin to have success with innovation you want to have more success, and more innovations follow. Innovation is its own impetus for greater innovation. n

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,

What makes a supermarket innovative?

Where would shoppers most like to see

innovation? Which supermarkets are

most innovative?

Conventional wisdom has it that many — if not most — supermarkets haven’t changed much for about 50 years. True, there’s more in the way of prepared meals. And the number of products offered has grown. Store brands may have improved in quality, too.

But has the basic construct of aisles of ingredients really budged all that much? We put this question to Reveries.com readers and the answer came back somewhere down the middle: A majority of 55 percent said the supermarket they shop most frequently is only “somewhat” innovative.

As one respondent put it: “It seems grocery retailers perceive innovation as being creative with inventory and don’t give enough consideration to environment and space.”

The only area a majority deemed innovative was “product selection” (54 percent), followed by “prepared foods” (47 percent) and “private labels” (39 percent).

However, in nine out of ten areas, survey respondents suggested they would like to see more in the way of innovation: product selection; format/store layout; checkout; customer service; promotions; new services; online tools; and displays. The only area shoppers indicated they are satisfied is “private labels.”

Online shopping tools appear to be especially ripe for innovation, as an overwhelming majority of respondents (74 percent) said they do not use retailer websites. An even larger majority of 80 percent said they do not use “any other online planning tools for grocery shopping.”

Some remarked that they weren’t aware that such tools exist, while others confirmed that this may well be the case: “I wish I could get ads via my phone and use mobile coupons. I would also love to be able to upload coupons to my loyalty card and not have to deal with paper coupons.”

Frustrations were many, with crowded stores and slow checkouts being the most frequently cited complaints. Others aimed their ire at stores that rearrange aisles for no apparent reason: “Shuffling where categories are found,

RESEARCH REPORT

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How innovative is the supermarket you shop most often?

Somewhat 55.0%

Very 21.7%

Not at all 17.1%

Extremely 6.3%

In which ways is your supermarket innovative? (pick as many as apply)

Product Selection 54.3%

Prepared Foods 46.6%

Private Labels 38.9%

Store Layout 31.7%

Checkout 31.7%

Customer Service 29.8%

Promotions 17.3%

Displays 17.3%

Online Tools 13.5%

New Services 12.0%

How important is a supermarket’s prices versus its innovations to you?

Somewhat 39.6%

Very 37.1%

Extremely 18.3%

Not at all 5.0%

The New Super


13

,

sometimes just from the right to the left are annoyances, not innovations.”

Self-checkouts also received mixed reviews. Some said they liked the convenience while others said they only benefit retailers. One respondent had a similar complaint about store formats: “I’m tired of grocery stores being laid out to help the grocer and the vendors.”

Overall, there was no shortage of suggestions on where supermarkets could improve in ways both big and small:

“ Why can’t grocery bakeries make good, healthful, preservative-free breads?”

“ This business of forcing me up and down aisles and across the store to find the things I need is tiresome and makes me tired and angry.”

“ I wish I didn’t have to go to three different stores in order to supply our home.”

“ So many carts with wheels that don’t work right!”

Despite such grievances, a perhaps surprisingly large majority of 70 percent said they generally enjoy grocery shopping, especially discovering new items. And even though most do not consider their supermarkets to be innovative, a plurality of 43 percent felt their grocers were up-to-date.

But as one respondent observed, the innovations of the future may well be rooted in the past: “I shop at a small, family-owned supermarket that prides itself on personal service. Its innovation is old-fashioned customer service.”

Another hinted that maybe it isn’t up to supermarkets to be innovative at all: “Since I purchase groceries from three stores and one farmer’s market each month, maybe I’m the innovator.”

And this comment may provide the greatest insight of all: “Here’s the deal, when money is in short supply and entertainment dollars are small or non-existent, grocery shopping becomes entertainment … When money is flowing and we can eat out more often and I’m cooking less, then grocery shopping goes back to being a chore.”

The supermarket picked at the number-one most innovative? Whole Foods, followed by Trader Joe’s and Wegmans. Curiously, nowhere near as many respondents selected these same stores as the supermarkets they shop most frequently. n

Complete survey results can be found at: www.hubmagazine.com/survey/supermarkets


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Where would you most like to see innovation at your supermarket? (pick as many as apply)

Product Selection 51.5%

Store Layout 50.6%

Checkout 41.6%

Prepared Foods 35.5%

Customer Service 33.3%

Promotions 31.6%

New Services 31.6%

Online Tools 29.9%

Displays 25.5%

Private Labels 15.2%

In general, do you enjoy grocery shopping?

Yes 70.3%

No 29.7%

Overall, which era does the supermarket at which you usually shop most resemble?

2000s 42.7%

1990s 21.4%

1980s 11.5%

2010s & beyond 10.7%

1970s 7.7%

1950s 3.8%

1960s 2.1%

The New Super

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The latest Reveries.com survey asked a savvy shopping crowd whether today’s supermarkets are innovative. What we heard back was how shoppers want us to innovate today’s shopping experience.

What do they want? Well, as one respondent succinctly said, “I want it all.” And today, to get it all, shoppers go everywhere.

When asked, our shoppers reported that they patronize an average of three different supermarkets, making one or two trips per week. But that’s not the whole story. When we dig into where they are shopping, we unearth an eclectic, channel-blurring

SURVEY ANALYSIS

ImplIcatIons: Improve navigation — beginning in the parking lot and continuing through the store and checkout. Create a shopper-centric store layout with intuitive assortments and adjacencies in an uncluttered environment.

Fix the broken carts. Smooth the checkout experience — if not with technology with good, old fashioned, helpful, happy, engaged employees.

Relevant Rewards. This means delivering more than price incentives in a format that is relevant to today’s shoppers. It is about innovating both in terms of content and delivery. It is about informing and motivating shoppers along their paths-to-purchase.

ImplIcatIons: Provide relevant, convenient rewards and tools that are customized to shoppers’ needs and localized to their markets. It is about consistently reinforcing that membership in retail reward programs has privileges.

To do this, retailers need to build in additional value and convenience. To help communicate, augment outbound retail email campaigns with innovative product information, planning tools, recipes and a link to coupons. Consider extending to mobile applications.

From an emotional perspective, shoppers connect with retailers and brands that:

Understand them by having the right assortment, right offers and then something extra. Strive to understand the cooking-shopping-nurturing connection that drives both the function and emotion around many shopping trips. Don’t underestimate shopper commitment to more sustainable and green solutions, even in a down economy.

ImplIcatIons: Understand your shoppers and their preferences. Become a resource for more than merchandise, and become a partner that helps provide innovative solutions that entertain and nurture their families.

Engage them personally with communications that inform and educate — before and during the

SupermarketSavvy

Innovative supermarkets tap into emotional and functional desires.

list that includes traditional supermarkets, specialty stores, club, mass and drug.

What drives them? From a functional perspective, shoppers want:

Product selection. Provide affordable, one-stop shopping without sacrifices. This starts with providing quality produce — including both local and organic choices. It extends to value-added product options, with shoppers looking for specialty, gourmet and prepared-foods offerings.

ImplIcatIons: Provide an array of quality products that meet their needs and their wants to build baskets. Be consistent in your product offerings and eliminate the critical out-of-stocks that drive shoppers out of your store.

Convenience. It’s not all about location, location, location. It is about time: Get shoppers in, get them out — fast, with everything on their list. Provide them with helpful and happy personal service.


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Supermarket

RANDI MOORE is vice-president and account director with Marketing Drive. She leads the agency’s shopper-marketing practice. Randi can be reached at [email protected].

shopping trip. Shoppers are looking for information that provides ideas and inspiration. Ask them their opinions!

ImplIcatIons: Understand your shoppers’ paths-to-purchase and engage them along the way. Don’t undervalue the role of personal service. Create simple, relevant planning tools that integrate with how they plan today. Engage them visually in-store with attractive displays and signage — remembering that value is much more than price.

Entertain them. Take the mundane out of the shopping experience — make shopping an event. You have a live audience. Make it fun for them and for family members in tow.

ImplIcatIons: Add music, demonstrations, sampling, wine tastings, product specialists and good, old-fashioned customer service to add a personal element. Introduce them to new products and invite them to explore.

Success requires solutions that drive the mutual goals of both the retailer and the manufacturer. This means listening to the shopper and delivering against multiple shopper needs.

Manufacturers need to find connecting points between their brands and the retailer. If your product benefit is about convenience or speed, partner with retailers to deliver convenient solutions and services. For example: This checkout or checker brought to you by Brand X.

If your product makes folks smile, sponsor an employee recognition program that delivers improved customer service that engages shoppers and improves convenience. If your brand entertains, find a way to bring that into store in a way that builds on both the brand and retail platform.

Listen to the voice of the shopper and understand the impact of changing shopper behavior. Irrespective of any shortcomings, 70 percent of our survey respondents say they like shopping and discovering new things.

So, create events that encourage shoppers to go on a “treasure hunt.” Purposefully drive consumers throughout the store to fulfill their missions to discover something new — it both engages and entertains.

Shoppers are pre-planning as never before, but according to this survey 60 percent of them are not using retail circulars and 74 percent are not leveraging retail websites.

Engage consumers where they plan by integrating into relevant online activities like popular cooking (Epicurious, Food Network) and couponing sites to build on planning behavior.

Build programs to deliver against shoppers’ multiple needs. For example, when we create programs that inform and educate (e.g., recipes, meal plans, activities, in home entertaining tips, healthy living guides, etc.) We show that we understand that our shoppers are looking for ideas and solutions.

When these ideas include complimentary (and potentially private-label) products, we are building baskets in a way that leverages the retailer’s product selection. When we overlay incentives in a tips booklet, or through shopper targeting, we are providing relevant rewards.

By collaborating with retailers to develop in store “solution centers” with attractive fixtures and informative signage, we maximize convenience while engaging shoppers. Add an educated, animated demonstrator, and we entertain the shopper, as well. When we bring these elements together, we are on the road to true super marketing. n

Truly Super MarketsIn survey respondents’ own words, here’s what makes supermarkets super:

Whole Foods: Product Selection; Convenience (Store Layout and Service); Engagement (Communications and Causes).

Trader Joes: Product Selection; Convenience (Checkout and Service); Entertainment (Sampling and Surprises).

Wegmans: Shopping Experience; Product Selection; Convenience (Layout and Signage); Engagement (Communications, Causes, Recipes and Service); Entertainment (Sampling).

Tesco Fresh & Easy: Product Selection; Convenience (Checkout Options and Layout); Engagement (Social Media).

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WHITE PAPER

B y V i n i t D o S h i

he nr y r ak co n Sult in g Pa r t ner S

The real story behind the growth of store brands is less often about price gaps

than the shrinking value gap between national and store brands. This narrowing

value gap is real, and marketers anticipating an economic recovery to lift their

sales in a “rising tide” effect are bound to be disappointed.

consumer behavior that holds as true today as ever: National brand manufacturers need to innovate across the entire value bundle that comprises the brand — positioning, product, packaging, pricing, etc. — in order to deliver relevant benefits to the right targets in a superior way and align with consumers’ needs and desired benefits.

Mature markets demonstrate these principles of consumer preferences all the time. In the last five years, for example, marketers have successfully tapped into consumers’ health and wellness needs with a variety of innovatively-positioned and precisely-targeted beverage products that promise to deliver specific functional benefits such as quick and lasting energy, meal replacement, or vegetable nutrition — often to selected targets during specific parts of the day.

These consumer preferences lead to consistent behaviors that collectively create markets organized around bundles of relevant benefits. This results in product groupings that deliver primarily against one of those benefit areas and compete closely with other products in the same group.

Regardless of the market, price-value invariably manifests itself somewhere in the structure, although the role of price-value relative to the role of brand varies considerably across different markets. The price-value dynamic depends on the importance and

Consumers are fundamentally changing their attitudes towards more conscientious consumption on matters of environment, health and value. The heightened importance of value-for-money is leading them to rethink their attitudes and behaviors concerning the value of branded products and the price premiums they are willing to pay for frequently consumed necessities.

Map the

Winning at retail requires innovation

across bundles of brand benefits.

The trend is further reinforced by better consumer perception of store brands, backed by improvements in the quality and range of these products (according to a recent study, 70 percent of millennial women perceive the quality of store brands to be “excellent”). This portends the potential continuation of store brand sales and share growth, and a steep challenge to the growth of branded products.

To look for answers, we turn to a key principle of

Gap


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types of consumer needs, nature of product usage, role of trust and imagery in the category, the presence and strength of dominant brands and levels of marketing and innovation.

Ultimately, however, the price-value relationship depends on how well marketers have managed to define and deliver relevant benefits. In some cases, marketers have created benefit-structured markets based on years of advertising, innovation, and effective positioning against relevant functional and emotional benefits.

In these situations, brands or brand groups play a significant higher-order role in which they effectively stand for and own key benefits to the exclusion of other brands. Store brands may play a smaller role — existing but interacting in an undifferentiated way — or in a limited way that does not preclude the growth of branded players. The example of soy milk demonstrates how branded products used precise positioning, marketing, and innovation to establish and own a value-added position as a tasty, healthy, nutritious, dairy-free alternative to conventional milk, leaving behind the commodity dynamics of the dairy milk category.

At the other extreme, markets that lack meaningful differentiation of relevant benefits to consumers, significant marketing, and effective innovation, predictably degrade into attribute-driven markets in which form, flavor, price-tiers, or easily replicable factors become the primary organizing principle of the market (for example, conventional dairy milk).

In such cases, national brands often play a weakened role in the structure, and store brands do well as consumers reward the brands that deliver the only differentiating benefit of relevance — price-value.

Most markets fall into a continuum between these extremes in which many national brands are fighting a losing battle, struggling to stem losses or eke out small gains. Some are dealing with the added burden of budget cuts and cost reductions that affect product quality. All the while, store brands are racking up growth.

Fortunately, the picture is not all gloom-and-doom for marketers of national brands. If they are committed to understanding and leveraging the principles of consumer preferences and benefit-structured markets, they have good reason for optimism. In a previous issue of The Hub, my colleague Eric Greifenberger introduced the concept of a market map (see: Map the Market, July/August, 2009).

A market map provides a precise understanding of how consumers are behaving, for what reasons, and with what trade-offs. It is a proven platform for evaluating and predicting the impact of different marketing strategies. As such, it is an essential foundation for managing a brand to a better outcome.

Unfortunately, many organizations do not fully appreciate or understand the power of a correct, precise, and behaviorally-based understanding of their market. Too often, a brand’s competitive frame is based on category definitions, consumers’ opinions, or a less-than-rigorous evaluation of consumer behavior.

As a result, the hierarchy of benefits may be out of order, or the spheres of influence through which consumers make choices and trade-offs may be misrepresented. Managing a brand with a flawed understanding of the market is bound to inhibit or even derail growth.

So, the first challenge is to understand how the market is organized, what your brands really compete with, and on what basis. After developing a precise, behavior-based understanding of the market, you are ready to understand how to guide your brands to more advantageous positions of sustainable and profitable growth. You can also identify and prioritize the most viable innovation opportunities among many seemingly reasonable options.

F i n d i n g g r o w t h o p p o r t u n i t i e s

The logical first place to look for growth is among your established brands in their current, competitive frames-of-reference. In some cases, a brand may have significant upside potential in terms of consumer behavior that can be accessed. Well-differentiated brands often find that their strong loyalty puts them in the enviable position of being able to bring in new buyers or increase usage simply by increasing media spending.

More often than not, however, brands have not fully optimized their potential from a positioning standpoint. Many brands may be competing in an undifferentiated way with other brands, representing the same benefits to the same consumers in more or less similar ways.

Insights based on the market map can provide a breakthrough understanding of how to deliver the functional and emotional benefits of a market in a

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more compelling, effective or different way. Or, it can show how to expand the benefit appeal to more consumers, or across more occasions.

In recent years, some brands have leveraged consumer trends by emphasizing the simplicity and freshness of their ingredients to consumers who are most motivated by health and wellness. One particular brand of lunch and dinner products has done well by elevating its appeal from basic product attributes to a sharper connection with old-world Italian sentiments. In other cases, positioning a brand to bridge multiple benefits has proven effective in improving relative value perceptions versus store brands.

A market map represents “concentric spheres of consumer interaction,” in which each sphere represents gradually broader sets of needs being met by a wider array of competitors (see chart). In this sense, a brand can look for growth by extending its positioning to stand for something bigger and broader.

Taken to its logical conclusion, such brands can begin to own a “benefit platform” to a sufficiently distinct degree that they command greater loyalty and source volume from brands in other segments of a market. This is known as “partitioning the market.”

A brand that has partitioned the market is characterized not only by strong market-share, but also by strong loyalty and a price premium. Tide has

differentiated itself as a high-quality, more effective laundry care product. Chanel owns a certain mystique in perfumes and luxury accessories. Victoria’s Secret and Starbucks have come to stand for distinct benefits to selected consumers that allow each to transcend the products themselves to own an experience.

An integrated view of the market with consumer needs and usage behaviors can also help identify emerging opportunities to meet unaddressed or unknown needs. The bigger and further out the idea, the more likely it is to require significant product innovation. The process begins by examining the different needs that people experience across occasions and their satisfaction with the current solutions, all of which helps identify problem areas and gaps.

For example, the basic “hydration” benefit of beverages has been redefined and segmented to meet different nuances of the basic need, including portable hydration for everyone/everywhere/anytime (bottled water), hydration with replenishment (isotonics), hydration with nutritional benefits (vitamin and enhanced waters), and so forth.

Exploiting the sufficiently large and viable white-spaces can sometimes provide more significant and sustainable growth opportunities than battling for share within crowded areas of the market. Effective innovation requires brands to extend their positioning

Concentric spheres of competitive interaction illustrate the range of competition from close-in to furthest-out

Fruit-flavor Ice Cream

All flavors of Ice Cream

Desserts/ Sweet treats

Desserts in other situations

So u r c e : Henry Rak Consulting Partners


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platforms and equities to reach further out (or develop new brands), secure larger marketing budgets, and manage to a longer-term investment horizon.

An effective portfolio plan that balances risks and rewards by optimizing the shorter-term and longer-term opportunities of established brands and innovation simultaneously, can enjoy significant competitive advantages and drive sustainable growth.

A v o i d Q u i c k F i x e s

Having examined some examples of how to use the market map to one’s advantage, it is equally important to note some principles of what not to do, or what to avoid as singular quick-fixes.

Fight Fire with Fire. The temptation to fight store brand growth by “right-pricing” the brand, or increasing price promotion, may yield short-term relief. However, unless the brand aspires to become just like a store brand, this is unlikely to drive profitable, long-term growth. It may even focus the brand on fighting an unwinnable battle in the wrong part of the competitive frame.

That said, pricing and promotion clearly play critical roles in the overall marketing mix. Our recommendation is to simulate and test pricing and promotion strategies. This should be done as part of a comprehensive growth strategy in which these levers play a precise supporting role to the main storyline of a consumer benefit-centered strategy.

Undermine Product Effectiveness. Every promising strategy is ultimately predicated on the assumption that the product must deliver on consumer expectations. Reducing costs to improve margin can be risky. For some brands, years of small, seemingly innocuous cost reductions affecting ingredients, packaging, amount, and quality have compounded themselves into noticeable changes in overall product appeal. It is clear that the growth of store brands in several categories is due to years of gradual cost reductions by the branded products.

Without meaningful product differentiation versus store brands, justifying a price advantage becomes difficult for a branded product. For this reason, we recommend testing for relative product preference in the context of a brand’s full competitive frame-of-reference.

For example, if a frozen sandwich brand’s true

competitive frame includes Subway and Quiznos, then product testing on that brand should include the sandwich chains’ products. Following that, simulating the trade-offs between different levels of product positioning, quality, pricing, and margins can provide management a quantitative range of options to factually determine what size business is most viable from a total perspective of volume, revenue and margin.

Drive ROI at the Expense of Growth. Optimizing the marketing mix is a powerful way to understand the drivers of the business, to quantify what works and what doesn’t, and to evaluate the mix of tactics and campaigns. However, when used in an isolated fashion to reduce costs or improve ROI without effective growth strategies to guide the decisions, such “optimization” does nothing more than facilitate a more efficient deterioration of the brand (using proven tactics to do it!).

Of course, continuous improvement in execution is important, but effective marketers seldom use the efficiencies only to cut costs, reduce risk, or make minor corrections to the mix. Effective marketers use it primarily to fund their most promising top-line growth strategies — and to do it smarter along the way.

• • •

Marketers need a precise, fact-based understanding of the market to determine the linkage between consumer needs, benefits and behaviors. Knowing the basis of competition is critical, not only against store brands, but against the entire relevant frame of reference.

A market map is a dynamic reflection of the ever-changing ways that consumers prioritize needs and organize behavior. With this knowledge, the marketer will understand the benefits a brand should reasonably strive to own through positioning and innovation.

Markets can be changed by the actions or inactions of marketers — to the benefit of some brands and the detriment of others. Only the fittest will survive. n

VINIT DOSHI is a principal with Henry Rak Consulting Partners, a growth-strategy consulting firm. Vinit can be reached at [email protected] or (203) 540-5524. To learn more about HRCP, visit www.hrcpinsights.com.

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It’s the virtual opposite of Amazon and eBay, but “pop-up retail” has become a pop-culture shopping phenomenon as immediate, innovative and provocative as anything online.

Pop-up retail fits perfectly with the Entertainment Economy, the Experience Economy, the Surprise Economy, and other trendsetting labels defining 21st century shopping.

Nothing quite captures the fun of bargain hunting at Filene’s Basement or treasure hunting at Costco the way the recent pop-up stores do. Surprising consumers — creatively and pleasantly — with temporary brand “performances” and exclusivity has made “pop-ups” a terrific platform for gutsy brands and adventuresome merchants.

ESSAY

They did it by adding experiential areas and services: Make-up counters began to offer more makeovers and demonstrations, and brow-bars sprang up, as well as celebrity-branded product areas complete with videos to aid the imagination. The lifespan of such stores-within-the-store varied from temporary, to brief, to permanent fixture.

VH1’s Pop-up Video is an important — and successful — metaphor here. The show cleverly drew new attention to the already familiar MTV music video. The visuals took the form of “bubbles” that popped up during a music video containing trivia and wry witticisms.

The format later inspired viewer input, with comments from the television audience, and truly made watching music videos an interactive, engaging experience. You couldn’t look at music videos again without thinking of their “pop-up-ability.” The combined sense of surprise, of inviting you to become a participant and seeing the familiar in a new way is at the heart of this powerful pop-up trend.

We have seen pop-up promotions show-up in city centers, train stations and parking lots of traditional stores. Essentially, they appear in any potentially high-traffic area with the hopes of disrupting normal routines with captivating offers, demonstrations or limited-time-only distribution.

Pop-ups may be one of the best ways to target a niche audience — college campuses or bringing urban brands to a rural area. These promotions are particularly useful to educate consumers and drive trial (e.g., the Alli pop-up); to hear from consumers before an idea solidifies into a brand (1969 Gap Jeans); and to cause a spectacle to drive buzz or publicity (Charmin’s “Enjoy the Go”).

When applied as part of the marketing mix, the

The “pop-up” trend is driving retail innovation.

The essential ingredients of pop-up stores have been around since the soukh. International bazaars and urban markets filled to the brim with stalls selling or bartering assortments make even the poorest areas feel rich with goods. Farmer’s markets or pop-up farm stands make roadside stops a must for the freshest tomatoes, corn and jams.

As if megamalls didn’t offer enough choice, specialty carts lining the corridors with items truly differentiated from the big, retail chains surrounding them became a new norm. A generation ago, supermarkets “popped” into fuller service environments with flower shops, coffee shops and wine sellers. Desperate department stores refreshed their floors to draw a new generation of shoppers.

Popping Shoppers

for


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Shopperspop-up concept forces you to think through what creates an innovative, worthwhile investment. While there is potential to generate sales, the real value in this type of retail that occupies a location for a short duration (1-30 days) is promotional and creates hype, coolness factor and a sense of urgency or intrigue.

This delights consumers who are increasingly used to “massclusivity” and “planned spontaneity” behind so many viral and buzz campaigns. Brands from Gucci to Kidrobot — and even retailers like Target and Uniqlo — have used pop-up stores to launch new lines as well as generate buzz.

They’ve used pop-ups to integrate and align brand positioning and shopper-marketing efforts. Even Walmart — the global retailer that defines economy of branding scale — adopted this concept when it offered a two-day-only exposure of its new fashion line, Metro 7, in a Fashion Cabana in Miami’s South Beach district.

Like iPhones and Blackberries, pop-up retail can also have the power of mobility. In May and June 2009, Gap kicked off a ’60s style tour, using a school bus as a traveling pop-up store. Instead of seats, the bus sported shelves filled with T-shirts, flip-flops, and beach hats that people bought and paid for at a cash register near the driver’s seat. The Gap’s pop-up tour helped rejuvenate a tired brand with energetic outreach.

Seasonal pop-up stores have become a cliché in many malls. But how about brands “owning” a season in an unseasonable way? Altoids’s “Curious and Original Chocolate Shop” opened for six days in February, 2007. The pop-up was promoted as an “anti-Valentine’s day shop” for those exhausted by the unrestrained sentimentality of Valentine’s Day. The tremendous online traffic compensated for the limited physical foot-traffic.

Seasonal pop-ups also keep traditional retailers competitively alert to how they will continuously innovate their holiday merchandise and merchandising. Pop-ups are as important to retailers as competitive threats as they are opportunities for merchandising innovation.

My favorite pop-up innovation practice is rooted in the bursting of the real-estate bubble. Many store fronts on popular streets and off-the-beaten trail neighborhoods are empty. Mayors across the country have jumped on the “when you’ve got a lemon, make lemonade” bandwagon by inviting artists, designers and entrepreneurs to inhabit these spaces. The overarching problem isn’t solved, of course, but giving life and economic dynamism to empty spaces during difficult times is significant.

The quintessentially British store — Liberty — refreshingly incorporated a pop-up Hermes shop, selling a collaborative range of traditional and updated designs. The space went beyond the merchandise to offer education: hosting workshops to show people how to loop, tie and knot the signature scarf in novel ways.

The vibrant environment emphasized an apparent strategy for making Liberty once more the chosen resort of the artistic shopper. This pop-up experience gave two old, established brands a chance to reinvent. It kept the customer’s curiosity alive and enticed new ones in a cost-effective collaboration for brand and retailer alike.

Personally, I’ve always been one to search for special items in small runs or one-of-a-kind pieces. For me, pop-ups feed that same desire for discovering things not everybody knows about. The idea of little surprises inserted into the shopping monoculture is exciting and important. Successful little surprises can translate into surprisingly large margins. Brands, retailers and their consumers can all win.

Make no mistake: Pulling together a successful pop-up is hard work. The payoffs are worth it, however. From individual designers teaming up, to real-estate agents making better use of vacant properties, to big brands looking to add a bit of agile ‘cool’ to their otherwise fixed locations and massive flagship stores: Pop-up retail can be platforms, not just one-off techniques.

Don’t ignore the dozens of online pure-plays dying to get a bit of offline visibility. Why not an Amazon.com or Zappos pop-up store? Even iTunes could pull off an interesting pop-up experience. Should that be in an Apple Store? A Best Buy? A Walmart? A 7-11? Or a college campus, airport, subway station…?

“Here today gone tomorrow” doesn’t have to be a term of derision. It can — and should — announce “innovation” and “profit” whether you are a retailer, a manufacturer or an agency. And, by the way, pop-ups also build brands. n

BETH ANN KAMINKOW is president and chief operating officer of TracyLocke. A strong advocate of insights-inspired marketing programs, she is a pioneer in strategic-planning research methodolo-gies. Contact: [email protected] or (203) 857-7616.

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COVER STORY

Positively

For nineteen years, Diane Dietz was all smiles, but now she’s all aisles.

A little over a year ago, having refreshed the Crest brand and revived Procter &

Gamble’s oral-care business, Diane joined Safeway with an eye toward reinvention

of the grocery business.

It was an auspicious move, given Safeway’s long history of innovation. Back in the

1930s, Safeway pioneered selling produce by the pound, the use of expiration

dates and nutritional labels. It actually was one of the first supermarkets to

have its own parking lots.

More recently, in 2003, Safeway embarked on a multi-billion dollar overhaul of

its shopping experience with the launch of its now-famous Lifestyle stores. The

lights became softer, the colors warmer, the feeling friendlier and the message

crystal-clear: Shopping at Safeway is about living a healthier and happier life.

As far as Diane is concerned, it’s all very simple: “It really goes back to understanding

what your shoppers are looking for,” she says. “We can be as efficient as possible,

but that’s not what that shopper wants.”

What the shopper wants, says Diane, are “simple meal ingredients, a great shopping

environment, great service, excellent quality products and innovative solutions.”

All of that, and an emotional connection, too: “We’re in the food business and that

involves family, friends, holidays and special times,” she explains. “So, we’re focused on

how to make grocery shopping an inspirational part of daily life.”

For Diane, who majored in economics and marketing, retail seems the perfect place to

discover what’s next. As she points out, “Marketing and retail are a combination of

analytics and creative, using both the left and right brain. You have the creative aspect,

but then you also have so much data to support your decision-making.”

Safeway


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What is the most innovative thing happening right now at Safeway?

There are so many different innovative things, but I’ll take one innovation that came out in the last year or so: Bright Green. That’s a line of products that goes across multiple categories and is much better for the environment. But we have such a wide array of consumer targets we try to please that there are many innovative things happening.

Is there a typical Safeway shopper?There is not one typical shopper; it varies quite

a bit by store. We definitely have profiles based on the store and we do a lot of research in this area, but there’s really not one Safeway shopper.

What’s the best way to get at shopper insights?

What I prefer to do is be in the store asking shoppers questions, shopping along with them and gaining insight straight from them. They’ll tell you how they feel and whether it’s good or bad.

How directly should shoppers be involved in the innovation process?

Very, very, very involved. From an experience standpoint, I can only walk in the shoes of Diane. So, it’s very hard for me to know what it’s like to be walking down the aisle and having two kids pulling at me to go down different aisles. But I’ll find this out soon since I’m expecting my first child!

Congratulations!Thank you! But I have to try to walk in the shoes

of that consumer to understand how to make the experience better for her. The only way to do that is to stay close every step of the way with the shopper and the consumer.

What do you love most about grocery shopping?

I just like to see all the different new items that we have in our stores. I like to cook, so I always find

the creative aspects of being in the store and putting things together and experimenting to be fun.

There are all so many great departments in our store — from the bakery to the deli to our meal solutions. So, every time I shop, there are new things that I’m excited to bring home.

Is there anything you hate about grocery shopping?

It’s not a problem at Safeway, but the only thing I don’t like is if I can’t find what I want. Any shopper will tell you that if they make a special trip and you don’t have what they want — that’s not good.

You can be a really innovative company, but it’s the simple things that make the biggest difference. If the shelves aren’t stocked, or you don’t have the right product — or someone in the chain-of-command decided to eliminate something that’s very important to our shoppers — that’s a problem.

How would you like shoppers to feel while they’re shopping at Safeway?

There are two words that come to mind when I think about what we want consumers to feel when they’re in our stores: one is “understood” and the other is “smart.”

If you understand your consumers, you understand what’s happening in their lives and what they need. The “smart” aspect is that we really focus on high-quality products, world-class innovation and a great shopping experience.

What roles do Safeway’s store brands play in that?

Private label has changed dramatically. Safeway’s private labels are not just about low-cost versions of national brands. They go to things that we think are most important.

For example, our O Organics brand is about health, wellness and high quality. And that’s not a low-cost version of a national brand. It was created before I was here, but O Organics is a truly inspiring private-label business.

Safeway chief marketing officer Diane Dietz gets inspiration from innovation.

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In light of that, are national brands as relevant as they used to be?

Yes, because there’s a role for both. National brands are very relevant. But the days of launching new products that don’t work and that retailers take the time to put on our shelves and market — are gone. Packaged-goods companies have to be very cognizant of their mix of brands, their pricing and staying relevant to the consumer.

What is your best advice for a packaged-goods marketer today?

It’s in a few areas. One — and this comes from 19 years at Procter & Gamble and a Safeway culture that reinforces it — the consumer and the shopper usually have the answer. So, the packaged-goods companies I’m most impressed with have a very deep knowledge and understanding of their shoppers.

So, when those packaged-goods companies present innovations, we’re excited because we know they have that depth of knowledge and we know that it’s a consumer-based idea. Many innovations fail because you’re not close enough to what the consumer really wants. It might be science-based innovation, but it is not consumer-based innovation.

The second thing is, we look to our packaged-goods vendors as partners. And the companies where we have the best relationship are those that are truly trying to do what’s best for us. When they are truly approaching it from the standpoint that we’re in this together, with common objectives and measures, that’s a great scenario.

What gets in the way of that?When it comes to product innovation, one

problem is that retail might be the last thing that packaged-goods companies consider. There is still much more focus on the 30-second TV commercial, on the naming of the product and product design.

But often there’s not a ton of time or energy spent on the in-store marketing, and the ability of that package at the retail shelf to sell itself without a 30-second ad.

Retail must not be the last element of the marketing plan; it’s got to be a critical element of the marketing plan. So, marketing, sales and R&D folks at the packaged-goods companies need to understand retail.

They need to understand the difference between the channels and each different retail banner, because

we each have a different target consumer and need different things.

Is “shopper marketing” here to stay?I think it is very real and it is here to stay. I’ve

read statistics that say that shopper-marketing spending has increased faster than internet advertising spending. It makes sense to me that this should be a huge focus for retailers and packaged-goods companies because the old model of “big TV” is changing.

We know that many purchase decisions are made right at the store shelf. The best packaged-goods companies and retailers will figure out how to market messaging and educate consumers on products. That’s a huge area of focus for us.

How do things look different from the retailer’s side?

When I was at Procter & Gamble, I worked a mile deep in a few categories; my focus was on the mouth and the smile. I was definitely a mile deep on our innovation, manufacturing and product design. It was all around our promise of healthy, beautiful smiles for life. So, I was always looking at how to get to that perfect smile for our consumers.

At Safeway, I’m working across many, many different categories. I might be in a meeting today on wine and there might be a discussion in two hours about pharmacy. So, I’ve had to learn a lot more about a lot of different categories — many categories that I didn’t work in before.

I now also have the ability to get with our consumers or shoppers at any time. My ability to be very close to our shoppers is a great part of the retail experience because when you ask shoppers in the store what they like and don’t like, you’re going to hear about it. I find that to be very refreshing.

We also have the ability to test and learn very quickly. When you’re working on the packaged-goods side, you often have very long-term horizons to make new products and test things. But at Safeway, you can have an idea in the morning and test it in the store that afternoon. The ability to get real-time data is also very refreshing.

How is technology changing the shopping experience?

In two areas: information and speed. Technology changes the ability for shoppers to have a lot more

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He a l t h y M e a s u r e s

At Safeway, we are building a culture of health and fitness, writes Safeway’s chief executive, Steve Burd, in the Wall Street

Journal (6/12/09). In 2005, he explains, Safeway introduced its own version of health-care reform that capitalized on “two key insights.”

One insight “is that 70 percent of all health-care costs are the direct result of behavior.” The other “is that 74 percent of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity).”

The thing is that “80 percent of cardiovascular disease and diabetes is preventable, 60 percent of cancers are preventable and more than 90 percent of obesity is preventable.”

So, Safeway’s “Healthy Measures” insurance program for its employees simply offers financial incentives

information on products and pricing. The speed at which people can make decisions has changed quite a bit as well because you can get so much information at your fingertips.

There are a lot of different technologies today at the shelf level, and on the carts. What you have to figure out is which ultimately enhances the consumer experience without being invasive.

Technology has also changed the shopping experience for us because we have a lot more information on our shoppers. We measure almost every aspect of the shopping experience and get metrics that help us to understand what consumers like and what they don’t like.

The ultimate goal is to improve that shopping experience. You have to do that in a non-invasive way that helps give the retailer data and information, but also does not bother the shopper.

Can anything be done to improve the checkout experience?

The checkout is a critical part of the process because that’s your last interaction with your shopper. We love it when our checkout person knows the name

of the shopper, talks to them about their shopping experience, or asks if they need help getting their groceries out to the car.

It’s those simple things that wrap up a shopping experience on a very positive note. We also track a lot of metrics just to make sure that we are delivering against things like line lengths and wait times to keep it a positive experience.

How do you ensure great customer service?Our employees pride themselves on going above

and beyond when it comes to customer service. We coined the term “legendary service” to create a legendary experience.

That includes providing information and help in the store, as well as help out of the store. We look at every aspect of the shopping experience and try to make it ideal for our shoppers.

Where do Twitter and Facebook fit in?They have the potential to be very, very powerful as

shoppers are more informed. For us, the positive thing is that the more Safeway fans and loyalists we create, the greater the opportunity to build our brand message.

for healthier living: Employees are tested for “tobacco use, healthy weight, blood pressure and cholesterol levels.”

Those who pass all four tests earn a “$780 discount on their insurance premiums for individuals and $1,560 for families.” The program is voluntary, but over the past four years, it has held Safeway’s health-care costs flat, “while most American companies’ costs have increased 38 percent.”

Even more important, Safeway’s “obesity and smoking rates are roughly 70 percent of the national average.”

Steve concludes: “By our calculation, if the nation had adopted our approach in 2005, the nation’s direct health-care bill would be $550 billion less than it is today … The implication is that we can achieve health-care reform with universal coverage and declining per capita heath-care costs.”


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DIANE DIETZ is evp and chief marketing officer of Safeway Inc., the nation’s third-largest supermarket chain. Previously, she spent 19 years at Procter & Gamble, where she led the turnaround of the oral-care business and earned a reputation as a motivator and innovator.

With social media, the things you do well will get out there and the things you don’t do well get out there too. So, it’s a call-to-action for our employees to raise our game continually, and constantly be looking for ways to improve our experience.

What are the greatest opportunities for innovation in the store format?

Safeway’s Lifestyle store definitely took a huge step in that direction. It’s thinking about the whole store experience, not just parts of the store, but that holistic store experience.

Shop-a-longs with consumers have told me that it’s confusing to shop categories. It’s hard to find what they want, and hard to find new items. That hasn’t changed in years.

You look at a picture of a retail shelf in the 1950s and you look today and it’s still more about stocking shelves versus selling benefits. Innovation today is about making shoppers aware of healthy choices and fresh alternatives.

Safeway is all about health, wellness and food quality. My boss, Steve Burd, with his focus on healthcare and the linkage of behavior to healthcare, is one of the most innovative thinkers in healthcare today. Safeway is one of the only companies that has actually flat-lined or reduced healthcare costs. We did it by looking at the linkage between behavior and outcomes (see sidebar).

Does that philosophy translate to your shoppers as well?

We’re looking at a lot of different ways that we can do this through education and inspiration with our product assortment and information in the store. Some of it is not yet out, but we do romance our perishables and focus on healthy options and offerings. If you walk a Safeway store, you’ll notice that our cantaloupes, grapes and apples are lit like a jewelry case.

How do you see the shopping experience evolving?

Well, obviously, social media and technology will play a huge role in terms of the information that’s available to the shopper. Technology can make things a lot easier and more convenient for shoppers, too. None of us has enough time today.

We’re all working harder, we’re all time-constrained and the more complexities that are added to our

lives, the more time-constrained we are. The big opportunity is to take technology and make time more efficient for the shopper and the consumer.

Which other retailers are leading the way?I really admire the way Disney has inspired its

employees to focus on the guest to create excitement from the minute you enter the park to the experience you have in their hotels. It truly is magical.

Nordstrom has always created a great experience due to their service. They provide service without making shoppers feel pressured, and that’s very positive. I also find the Apple stores to be highly innovative and very focused on making the experience very simple.

Have you applied any of those innovations at Safeway?

We look at a lot of different retailers to benchmark whether we can improve our experience. Disney truly creates a legendary experience. Every person on the Disney team feels they are there to create a fun environment for every child and family that walks through its doors.

So, we can take that simple philosophy and apply it to create a legendary experience for every shopper who walks in our door. We definitely look at aspects of service, experience and innovation from companies like Disney, Nordstrom and Apple.

What keeps you up at night ... other than expecting a baby?

Well, we’d need another hour to talk about that! Ultimately, the most important thing for me is to stay in touch with our consumer and our shopper and stay close to what they’re going through in these times. That also means staying close to our employees.

It is a tough economic time. People are working harder than ever and it’s tough for our shoppers. So, staying close, staying in touch — that’s the biggest challenge to me — and that’s true in both bad times and good. n

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B y a n n e h o w e

Ma r S aDVer t i S in g

In marketing, we tend to rely on symbols and diagrams to help us define our business. In theory, our diagrams help explain what “it is” and “how we think about it,” but diagrams should really help us define actions we should

take, as well. Given the complexity of — and rapid innovation in

— shopper marketing, we need more actionable diagrams. Here’s a way to simplify a few of the newer practices in shopper marketing via pictures with a bias for action.

Picture an actionable definition. Close your eyes. Picture the ubiquitous three intersecting circles. You’ve seen this visual in countless shopper marketing decks: Brand, Retailer, Consumer. New versions might have “Shopper” in place of “Consumer.” While an iconic symbol of shopper marketing, it’s outdated.

We propose a new diagram as a better way to depict the current landscape of shopper marketing relative to reality only a few short years ago (see chart one). We can use the right column as a checklist of things that require action in today’s version of shopper marketing; full engagement in the discipline means actually delivering something against each item.

The practice of shopper marketing is evolving rapidly, with sophisticated retailers expecting manufacturers to bring solutions that drive trips, leverage the potential of the total store and grow basket size. Use this diagram to help make the transition from yesterday’s way of thinking to tomorrow’s action plan simpler and more effective.

Picture the problem. Back in the early days of shopper marketing — which for me means 1992 — our objective was to deliver binders full of account-specific promotion options to sales teams to support communication of offers and trade deals.

By the mid-1990s, we were working with brand teams to develop national programs and platforms

ApertureShopper

WHITE PAPER

The

Let’s put a new lens on the future of shopper marketing.

Char t One The new shopper-marketing landscape

TodayYesrerday Today

YesterdayConsumer

Top Down

Brand Management

Category Share

Transactional Data

How They Shop

Talk To

Media Silos

Creative Isolation

Isolated Innovation

TodayShopper

Bottom Up

Shopper Solutions

Shopper Share

Shopper Insights

Why They Buy

Talk With

Everywhere Messages

Integrated Campaign

Collaborative Innovation

So u r c e : Mars Advertising

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Char t Two Today’s reality of retailer execution of a national marketing platform


to take to retailers. Shopper marketing success was measured by how many retailers executed a brand’s national consumer promotion in their stores. Frankly, that model worked pretty well for a number of years.

Given the evolution of retailer sophistication, we need a new diagram to depict today’s reality of retailer execution of a national marketing platform (see chart two). A top-down focus, driven by classic “push marketing,” now results in only spotty effectiveness with retail partners.

Snapshot of a solution. Collaboration is the root of innovation in shopper marketing. But to get there, the focal point must switch from the consumer to the shopper. To win where the shopper’s decision is really made, marketers should move beyond home-based demand/consumption thinking to full path-to-purchase understanding and messaging.

Assess your organization honestly: Does marketing understand the consumer in the shopping mode? Does the shopper play a role in the development of the overall brand-marketing plans? When these lenses are on, planning can be more collaborative internally, as well as externally.

We’ve coined the progressive path to planning all marketing activity as “shopper-designed” planning. This planning rigor has been in place for years within many progressive agencies and manufacturing companies, and

may well be the defining principle of a retailer-specific view on shopper marketing processes for the future.

When the initiative works as a solution for the shopper and builds traffic/basket size for the retailer, and grows a brand without undermining the category, it makes the cut. When an approach or concept supports a strategy that both the manufacturer and multiple retailers have in common, it should ladder up to be considered by the manufacturer as an integrated national program that marketing dollars can support across a range of timeframes that make sense for multiple retailers.

Geoff Jackson, the director of shopper and event marketing for Campbell Soup Company, understands the value of this thinking, and now leads the organization’s team that recently combined national consumer events and shopper-marketing staff into one cohesive unit.

“Our planning focus is changing to consider both shopper perspective and retailer strategies at the front-end of the planning cycles,” says Geoff. “We are also working on solution-focused partnerships and expanded activation windows on key Campbell initiatives such as Labels for Education and healthy meal solutions,” he adds.

Planning with a “pull” focus assures that the marketing spend is focused on those who are

National Marketing & Promotion Campaigns

Retailer ARetailer A

push

push

push

pull

Retailer B Retailer C Retailer D

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Consumer Segment

Consumer Segment

Consumer Segment

Consumer Segment

Consumer Segment

Consumer Segment

Consumer Segment

Consumer Segment


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shopping at each of the core retailers in which every brand must rely on to make its growth target for the year (see chart three). This can help deliver differentiated approaches that retailers require and allow marketers to ladder those initiatives back up to effective and fully integrated national strategies.

When marketing dollars are mapped to support the programs along every stage of the shopper’s journey, it’s easy to correlate more of the marketing spend to specific results. This keeps shoppers happier, and results in growth for both brand and retailer, fueling a shopper-centric focus on more effective collaboration and future innovation in shopper marketing.

Transforming an annual planning process takes time and commitment to fundamental change within the organization. Once changes begin, it can take up to two years to fully realize the benefits, based on the long lead times between when a program is sold in and actually activated with shoppers. But there is no time like the present to begin, given the continued evolution of shopper marketing, especially within retail organizations.

Even relative newcomers into shopper marketing can realize benefits from shopper-designed planning. Tangible increases in both the sell-in rate and the level of retailer collaboration to ensure programs and initiatives are shopper-centric are just a few of the

early benefits that nascent shopper-marketing teams have realized by launching their shopper-marketing efforts against this process.

Frame the shopper. For true collaboration and innovation to be effective, the shopper must start and remain the “hero,” and be a core cog in the ways of working process for each and every effort. A cycle of continuous improvement is a clear benefit to be sure, but moreover, the shopper can take both subjectivity and guess-work off the table.

Presenting a boomer-centric concept for approval to a GenY buyer can be tricky, as can presenting a new-mom platform to a solid, yet old-school marketing veteran! All kidding aside, shopper-vetted insights, concepts and even results takes bias off the table. It puts objectivity front and center, increasing the program’s propensity to succeed, as well as providing rationale for improved ROI estimates. n

Char t ThreePlanning with a “pull” focus assures that the marketing spend is focused on core retailers


ANNE HOWE is senior vice president, market intelligence for Mars Advertising, where she focuses on strategic development projects for the agency and its shopper-marketing clients. Anne can be reached at [email protected].

National Consumer Promotion A

Retailer ARetailer A Retailer B Retailer C Retailer D

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Shopper Segment

Allow consistencies

to surface

Engage in shopper

solutions

Differentiated Shopper Marketing Programs

National Consumer Promotion B

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B y D o r i M o l i t o r

woM a nwi Se llc

The first decade of the new millennium is over, but no one seems to have found the words to

capture the essence of these past ten years. The Eighties, for all its self-indulgent excess, was

known as the “me” decade, and the Nineties, with its exuberant growth, was often called

the “roaring ‘90s.” But after all the turmoil of the 2000 election, the trauma of September

11th and the avarice that led to economic catastrophe, the decade just past apparently shall remain

nameless. That’s kind of sad, but not entirely, because I believe the last ten years created the perfect

climate for what is coming in the 2010s: The “we” decade.

WHITE PAPER

It’s going to be an amazing ten years, a time when we put our personal interests in perspective, band together with our friends, family and neighbors and take aim at achieving a higher purpose.

When we look back on it, ten years from now, historians might trace the start of the “we” decade to the 2008 presidential election, and the winning campaign slogan, “Yes We Can.”

Regardless of how anyone feels about President Obama’s policies, or how his presidency turns out, there is no denying that his election was made possible by an unprecedented groundswell of “one-ness,” of community and shared purpose.

Those with a lighter touch might suggest it has its roots in the phenomenal launch of the Nintendo Wii, a technology that broke down the barriers of gender and age, bringing people together to play videogames that sometimes doubled as both mental and physical exercise.

Decade WeThe

Many will certainly point to the rise of online social-networks and the advent of open-source innovation as a driving force of the power of “we,” as well.

I’d like to suggest that when the story of this decade is written, many of us will point to the tiny town of Albert Lea, Minnesota. As of now, most people have never heard of Albert Lea, even though it was featured on the Oprah Winfrey show.

t h e A l b e r t l e A s t o r y

Exactly one year ago, the AARP, in partnership with a health-and-wellness group called Blue Zones, selected Albert Lea as a test case for the idea that a community commitment to health and longevity could add a collective 10,000 years of life expectancy to its citizenry.

What makes this so interesting is that the project does not center on a diet-and-exercise program, which


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Creating community and higher purpose will elevate our brands in the 2010s.

is the way individuals typically try to improve their health and well-being.

Instead, the AARP/Blue Zones City Health Makeover, as it is called, encourages changes in behavior that emulate the lifestyles of some remote communities around the world where people live to be 100-years-old ten times more often than in the United States.

The elements of such lifestyles are based on a global research project by Dan Buettner, and documented in his 2008 book, The Blue Zones. Did you know, for instance, that people who eat a handful of nuts four times a week live two to three years longer than those who don’t? According to Dan, it’s a fact.

Most of Dan’s suggestions are simple behavioral shifts, such as storing snack foods in out-of-the-way places, keeping a bowl of fresh fruit handy, and serving food on smaller plates — studies show people eat 25 percent fewer calories when plates are reduced from 14 to 10 inches in diameter.

They extend to plating food at the counter instead of serving it family-style, and even include dropping friends who smoke, don’t exercise and spend too much time snacking while watching television.

In Albert Lea, the goal was to build personal changes in behavior by engaging the community as a whole. A total of 18 initiatives were implemented — involving local restaurants that added longevity-promoting foods to their menus, and educational cooking classes at the town’s Hy-Vee grocery store, for example.

Albert Lea’s mayor, Mike Murtaugh, pushed through a walking and biking trail, added new sidewalks and hundreds of kids got together to walk to school instead of taking the bus.

Volunteerism is an especially important part of the Albert Lea project. Participants are encouraged to make a list of their interests and then figure out how to activate those interests to help other people. This notion of giving back not only enhances the “we” but studies also show that people who volunteer have lower rates of cardiovascular disease.

While the program was originally planned as a 10-month project, town officials are so pleased with the results that they say they plan to continue it. The project’s greatest achievement, says city manager Victoria Simonsen, is “a new sense of connection in

our town, a mutual support system that we didn’t have before.”

What I found so astounding was that this project moved a whole town into action over an extended period of time. That it became a movement within the town is simply amazing. It happened for one reason above all others: It created camaraderie that changed behavior around something people had tried and failed to do on their own.

It unleashed the power of “we” and changed people’s lives for the better.

Dan Buettner now plans to replicate Albert Lea’s success in communities across America, and I wish him all the best in that endeavor. At the same time, he’s building a brand — Blue Zone — that not only includes his book but also CDs and a product line sold via a website, bluezones.com.

As marketers, we can learn a lot from Dan’s example. His approach certainly aligns with the guiding principles I’ve been writing about in the Hub for more than the past three years.

M e , w e , h i g h e r p u r p o s e

For me, it’s all about how to create a deep soul connection with women and fundamentally change how they feel about our brands. It comes down to three things: “me, we, and higher purpose.”

Taken together, these three ideas point to the future of marketing and endless opportunities for innovation and business success.

Me. First, we need to re-think the intensity of the relationship our brands have with women. Brands sometimes aren’t thinking big enough about the role that they can have within women’s lives. They focus on insight and what women want, but there are different levels of depth of what that connection can be.

So, the “me” is about getting to a deep, aspirational desire or need. It means transcending a rational, functional or even an emotional benefit, and requires digging for those subconscious drivers of behavior.

The goal is to find the one thing that’s the trigger to an aspiration. That trigger needs to be relevant in her world in the context of her life, but also relevant to our brands. We must be able to own that, and it has to relate to our brands’ core values and existing promises.

The magic of “me” can be found in a deep dig

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with the consumer, while also understanding where our brands fit in that world. I call this the emotional truth — that one, single, subconscious, emotional trigger that’s most relevant to our brands in her life.

The more relevant the emotional trigger is, the more intense the response is. When you find that trigger, you’re going to enrich her life in ways she probably hasn’t even articulated, but that will impact her in a very big, positive way.

Most important, we convey to her that she matters. So much branding activity is one-way, which is a huge mistake. We know from our research (“Stand By Me,” The Hub, Nov/Dec 2009) how desperate she is for recognition in today’s world of disappointment, uncertainty, and mistrust.

She’s really in a place where she needs to know she matters. That is a huge opportunity for any brand. She’s our consumer: What are we doing to make her feel like she matters? When we connect with women at “me,” we’re letting her know she’s appreciated.

We. The “we” is about fulfilling her sense of belonging. She wants to have a feeling of one-ness, a feeling that she’s part of something larger than herself — both with other people as well as with a brand. We can accomplish this by joining together in shared values and shared ideals.

This is a big shift for marketers because it moves the relationship beyond “us” (the brand) and “them” (the consumer) to become “we.” Most marketers think in terms of doing something to the consumer. It’s more about doing something with her.

But if we want her to join us, we have to begin to see ourselves as equals. We need to evaporate the gap between “us” and “them.” We need to get to a place where we are at one with her, working toward the same goals, and sharing a sense of being part of something we — and others like us — care about.

This means making sure that we’re including our advocates in everything we do. If we first find this place where we are connecting with her at an aspirational level, and we also stand for bringing that sense of fulfillment to her, then we can let her drive the movement and be active within it.

As the brand we become the enabler of the conversation, not the center of the conversation. That is a real leap for marketers because we have always believed we control the conversation. But now we need to blend into the background because that’s a key part of this sense of belonging.

Me, We, Higher Purpose!

ME: Fulfills a deep, aspirational desire

◆ Rethink the intensity of the relationship you have with your “citizens”

◆ Enrich her life

◆ Show her how she matters

◆ Create a relationship with her that transcends rational and functional benefits

WE: Fulfills her sense of belonging

◆ Provide the emotional intensity to create a movement

◆ Create a sense of oneness with other stakeholders

◆ Join together in shared ideals and values

◆ Move the relationship beyond “us” and “them” to become “we”

• For brands to do this we’ll need to get ourselves into a “we” mentality

◆ Include advocates in everything we do

• Let the consumer drive the movement

• Be the enabler, not the center of the conversation

HIGHER PURPOSE: Fulfills her desire to leave a legacy by making the world a better place

◆ Move beyond a sterile transaction to achieve higher purpose and meaning in her life

◆ Look for people, ideas, brands that she can intimately trust

◆ Transform her community, society and the world at-large


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DORI MOLITOR is founder and CEO of WomanWise LLC (womanwise.com) a WatersMolitor Company, a hybrid consultancy-agency specializing in marketing brands to women. Dori can be reached at [email protected] or (952) 797-5000.

in some fashion, but usually this manifests itself as a short-term promotion based on one kind of cause or another. Often, it’s not aligned with the brand or company or mission.

Even when the cause is directly linked to the brand, the effect is weak because it is not linked to “me,” much less “we.” As a result, it is not sustainable, which is what made the Albert Lea example so compelling.

It was the sense of “we” that ignited the human connections within the town as a whole. It created engagement, interaction and support.

The Albert Lea experiment worked because so many people became invested not only in the quality of their own lives, but in the lives of everyone else around them. The higher purpose was about increasing the quality of life in the town, all centered on a common interest in longevity, health, vitality, happiness and connectivity.

The lesson is that, as marketers, we can’t stop at “me” and we can’t just skip to “higher purpose.” We need to do the hard work of “we.” Only then will we truly align with the hearts and minds of our partners, our consumers.

It all comes down to what I like to call cultural value. This works on an individual level — enriching her life by bringing intangible benefits that are derived from relationships with people, ideas and things that bring higher purpose and meaning to her as an individual. It feeds her sense of identity, which is the “me.”

This, in turn, feeds her relationships, which is the “we.” And it feeds her values, which is the “higher purpose.” When our brands bring cultural value, they have the potential to transform communities, society and the world at-large.

That’s exactly what happened in Albert Lea, and we can make it happen with our brands, too — not only during the “we decade” but for many decades to come. n

In fact, the consumer is not in the middle of the conversation, either. It is the idea — the sense of fulfillment — that’s in the middle of the conversation and we are all equal in moving that forward.

Doing so requires patience. We have to give up control, stop thinking about ordinary business issues and think about the benefits we’re bringing.

In the end, this creates the strongest kind of loyalty because we are standing for something she wants to belong to and be a part of.

Higher Purpose. Having a higher purpose fulfills her desire to leave a legacy by making the world a better place. This is a fundamental desire and it’s only grown in recent years. Women today are desperately seeking ways to find greater meaning in their lives.

Part of this comes from the many disappointments of the last decade and uncertainty in her financial future. She is looking for people, ideas and brands that she can trust, intimately. She is open to joining with brands that are transforming communities, society and the world. Brands that care.

When I explore these emotions with women, I ask them what they dream about, what they care about, what they worry about, and what they stand for. When I ask these questions, the age or demographic profile doesn’t matter — the importance of the world we live in and making it a better place comes up over and over and over again.

She wants to feel that she’s left a legacy that says she made a difference in the world. And she’s looking for places she can do that.

If we can help her fulfill that desire, she will want to be part of it. She will reach a higher purpose and fulfill a deep need for meaning in her life.

The deeper the “me” is and the stronger the “we” is, the more powerful is our ability to achieve higher purpose. They’re linked and it’s all based on an emotional truth. In Albert Lea, the emotional truth is “vitality.” So, ask yourself, what is the emotional truth for your brand?

c r e A t i n g c u l t u r A l vA l u e

Few brands are asking the most important question, and even fewer have begun to answer it. Many are solely focused on “me” — in fact, most invest heavily in gaining insights into how their consumers think or behave.

A good number try to capture “higher purpose”

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Given the fragile state of our economy,

the marketing industry and our

brands, this is an ideal time for

marketers to take stock. Rather than

define ourselves as Integrated Marketers, I think

a more suitable characterization is to say that

we’re in the business of Integrated Selling.

What’s the difference? Integrated Marketing is the antiquated practice of targeting consumers exclusively and aligning messaging behind television commercials and print ads. It fixates on traditional consumer measures such as advertising recall scores, aided and unaided brand awareness. It is focused on top two-box acceptance scores and the latest tally of advertising awards.

However, very little is said about how shoppers are addressed, sales are being driven or bottom-line business results are being enhanced. By comparison, Integrated Selling recognizes that people have both a consumer and shopper mindset, and that it is never too early to engage a consumer as a shopper.

Integrated Selling expands on Integrated Marketing by incorporating a strong sales message into the planning process. This includes in-store product visibility and availability, packaging design, retail communication, merchandising performance, inventory management, pricing and channel migration. The result is a 3600 planning process.

A n e w d i s c u s s i o n

I was recently talking with a manufacturer’s research and marketing team when the conversation turned to the amount of time shoppers spend interacting with their products at retail. We discussed the difference in time spent for planned-purchase items versus impulse items.

Smooth Selling

WHITE PAPER

We evaluated the importance of mass communication and retail communication for brand (emotional/imagery) messaging versus sell (product attribute and benefit) messaging. We discussed the best communication vehicles, shelf placement, channels-of-distribution and pricing. We conducted a complete 3600 dialogue of how best to sell more.

This is what an Integrated Selling Organization (ISO) is discussing today. This particular manufacturer is investing in shopper studies, engaging shopper insights agencies, and considering both supply- and demand-side initiatives in its annual communication planning process.

Studies show that shoppers invest more time interacting with impulse items at retail than they do planned-purchase items. This then drove consideration of where to place brand (imagery) messaging versus sell (benefit) messaging for impulse versus planned-purchase items.

To get on the shopping list, planned-purchase items would communicate brand attributes and consumer benefits early in the path-to-purchase, for both in-home and on-the-go touchpoints. Meanwhile, impulse items would communicate brand attributes and consumer benefits strongly at retail through packaging and in-store communication.

This is the so-called “store back” model that Procter & Gamble is promoting: First understand where and what triggers the shopper to buy the brand, and then ladder back to consumer involvement. An ISO recognizes that people have both a consumer and shopper mindset, depending on where they are in the path-to-purchase.

When in a consumer mindset, people tend to be more emotional and have higher aspirations. They are looking to bond with the brand, feel good about it and what it stands for. In a shopper mindset, people are generally more pragmatic, looking for solutions, conscious of the price/value relationship and the tangible, functional reasons to buy.

Integrated Selling drives bottom-line sales and better brand performance.


35

To bridge these two mindsets and complete the path-to-purchase, an ISO invites the marketing and sales teams to the integrated planning table on an equal footing: The marketing team manages the brand and consumer messaging while the sales team manages the shopper and shopping experience. The ISO follows a simple three-step process to assure a balanced consumer and shopper planning orientation.

t h e s u b w A y s u c c e s s

The first step is to understand the brand, consumer/shopper and the retailer motivators.

For example, Tony Pace, chief marketing officer of Subway Restaurants, says that Subway has both emotional and tangible brand benefits to communicate. Subway’s emotional value as a “healthy and active life-style” brand is balanced by the price/value relationship of “made fresh” and “made for you” for five dollars.

The emotional benefit of visiting Subway reinforces that its customers are health-conscious and that they lead an active lifestyle, which allows Subway to enhance the consumer’s self-image. From a functional standpoint, Subway delivers a healthy, made-for-you sandwich that is delicious at a great price point. Subway, as the retailer, is motivated to drive greater foot traffic, higher loyalty and higher cash register ring.

Next, determine the appropriate balance of time and location of communication priorities between emotional/brand and rational/sell messaging. As Tony explains, “Subway communicates our ‘healthy’ and ‘active’ brand values by spotlighting Jared and famous fans of Subway (Ryan Howard, Michael Strahan, etc.). We also use these fans to communicate “$5 Footlong” selling messages that reinforce a positive price/value relationship.”

Through ongoing tracking studies designed to gauge consumer perceptions, attitudes and values for Subway versus competition, Subway balances the dual messaging through traditional vehicles such as television, print, radio, and so forth.

However, in-restaurant is where the price/value relationship is strongly reinforced. It is in the retail environment where Subway recognizes the mindset change from a consumer to a shopper.

Finally, an ISO recognizes and audits all the available communication platforms and vehicles. This places equal emphasis on in-store communication and traditional media. While many manufacturers grasp the shift from traditional media to in-store communications and are allocating more marketing dollars to retail media, measures still frequently smack of traditional marketing. For instance, marketers are scrambling to

determine advertising recall scores for in-store formats.Taking traditional measures, such as recall

scores, and force-fitting them into a new selling environment is a bad idea. Walmart has already come to this conclusion by engaging DS-IQ, a digital shopper-media analytics firm, to provide real-time sales evaluation, measure shopper marketing ROI, gain insights and optimize messaging from a selling perspective based on in-store communications.

Here are several recommendations to help capitalize on the emerging value of in-store media and realize integrated-selling solutions:

• Determine the sales value of your targeted messages to leverage fully the value of in-store media.

• Ensure that all marketing and sales efforts are driving shelf velocity and corresponding return-on-investment.

• Configure retail messaging around shopper propensity to buy brands, retailer merchandising and inventory initiatives, not traditional reach/frequency measures.

• Closely align integrated media buying with sales values and inventory measures.

• Be wary of traditional agencies that may not offer the best route to generate in-store communication or foster an integrated selling environment.

This last point is especially important. After all, retail by its very definition is a selling environment, not a place to win a Clio. In-store messaging demands appropriate sales communication — whether that is price-off and temporary price reductions, promotional offers and selling solutions, or image messaging and emotional connections. It is a venue that is designed to drive a shopper to pick up our brands.

The time is indeed ripe to evolve into an Integrated Selling Organization. We can then work to identify optimal brand and sales communication opportunities and target communications more effectively to consumers and shoppers to drive purchase, build sales and enhance business performance. n

PAUL KRAMER is CEO of Catapult Action-Biased Marketing, a full-service agency that combines expertise in brand strategy, shopper marketing, national consumer promotions, and integrated communications. Email: [email protected].

36


B y M a r k r e n S h a w

arc worl Dw iDe

It’s no secret that social media is one of the hottest topics on marketers’ radars. What isn’t widely known is how to use social-media contacts to drive sales directly.

People of all ages are using social-networking sites and other user-generated content platforms at astonishing rates, and brands are scrambling to create social-media strategies both as part of their overall marketing and in isolation.

In fact, Forrester Research estimates that social-media marketing budgets will grow 34 percent per year from 2009 to 2014 — faster than any other form of online advertising. Moreover, within five years,

The SocializedShopper

New research shows how social media is changing

shopping behavior.

shopping experiences across 10 product categories. Then, 500 respondents who had experienced social

media brand contact during a shopping experience (called “Social-Media Shoppers”) and 500 respondents who had not (“Non-Social Media Shoppers”) completed a follow-up interview that delved more deeply into shopping behaviors and attitudes. This provided the opportunity to identify the differences and similarities between these two groups of people.

It’s big and growing: There are 95 million social-media shoppers in the United States. More than 40 percent of U.S. adults are using social media in their shopping experiences, and this trend appears likely to continue. When asked how often social media is used in shopping versus a year ago, almost 30 percent said they are using it more, while three percent said they are using it less.

Currently, social-media contacts are made in a variety of forums. For 35 percent of shoppers, the process includes — or starts with — online search. What’s surprising is that 30 percent read user reviews on retailer websites as a part of the shopping process.

So, who are these social-media shoppers? They come from all walks of life, but the study uncovered a heightened relationship between age, education level and the use of social media in shopping. As expected, because they’ve grown up using technology, people under 35 and those holding college degrees are most likely to be social-media shoppers.

Interestingly, the study also revealed that social-media shoppers are not necessarily very “actively social.” Only about one in four social-media shoppers contributes anything to a conversation about a brand or product; the rest view content posted by others. So, a very small group influences a very large group.

Social-media shoppers are more engaged with media and spend more time shopping. Importantly, shoppers who access social media in their shopping

RESEARCH REPORT

social media budgets will be larger than those for both mobile and email marketing activities.

Despite all of this increased attention and spending, we actually know very little about what is perhaps the most critical factor in achieving positive ROI through social-media marketing: How people’s behavior in shopping for and buying products is impacted by social media.

Leo Burnett and Arc Worldwide recently fielded a research study that uncovers this connection. More than 3,500 online U.S. respondents completed interviews about media contacts that they may have in their


37

Shopperprocess still use historically prevalent contact channels such as television, radio, magazine, newspaper ads and direct mail, as well. In fact, they tend to engage even more with these channels (see chart one).

Social-media shoppers see more value in the opinions of other everyday people as useful input in their shopping decisions. For example, 39 percent of social-media shoppers strongly agree that they can learn a lot more about a brand by seeing what everyday people are saying about it online versus only 22 percent of non-social media shoppers.

Social-media shoppers have broadened the set of sources they use for validation and are seeking additional information beyond what marketers, manufacturers, and retailers provide.

Incorporating all of these additional social-media sources into shopping takes time. In fact, social-media shoppers are spending a significantly greater amount of time shopping. Their greater time investment does not, however, automatically lead to a similarly significant difference in what they spend.

While other research shows that shoppers gaining

information from retailer and manufacturer websites are likely to buy more expensive featured products, we find that social-media shoppers are only a bit more likely to spend more (see chart two).

Social media impacts behavior throughout the shopping process. Television, print, magazine, direct mail and online research brand contacts are most likely to take place at the beginning, and in-store contacts

tend to spike at the end of the shopping process, but social media holds steady throughout (see chart three). This suggests social media needs to play multiple roles in shopping as they are tapped at many stages during the path-to-purchase.

Social brand-contacts are a communal activity. To reveal why different types of media are accessed by shoppers, respondents were asked to rate a series of motivations for using media in their shopping. Creating a perceptual map of findings validated two obvious, but unproven, benefits of using social media in shopping.

Specifically, social media enables shoppers to gather the impressions and analysis of others while channels such as

Source: Arc Worldwide Social-Media Study

Char t OneSocial-media shoppers incorporate more media channels into their shopping process

Non-social media

shoppers

Social media

shoppers

0 2 4 6 8 10 12

Char t TwoSocial-media shoppers spend more time shopping, and to a lesser degree, more money


Time spent shopping

Purchase amount

150

100

50

132

72

116

84

n Social-media shoppers

n Non-social media shoppers

4.3

7.5 3.0

n Social-media channels

n TV, Radio, Print, Direct, In-store, Website

Index: Social-Media Shopper Group / Total Online Adults

38



Char t ThreeSocial-media contacts run throughout,

while other contacts occur early in the shopping process

40

30

20

10

Very beginning of shopping

process

Relatively early

Middle Relatively late

Very end of shopping

process

television, print and radio allow them to form their own impressions and analysis (see chart four). This introduces a significant point regarding the “wisdom of the crowd.”

With so few people actually contributing to the conversation, the early adopters and posters have a heavily weighted influence on the message. Their impact is the greatest and can become self-perpetuating.

Social media’s impact on shopping varies widely by category. Nearly 50 percent of people shopping for computer hardware/software and books are likely to incorporate social media into the shopping process. With greater purchase risk and reward, greater value is given to the opinions and advice of others.

In contrast, only nine percent of people shopping for laundry detergent and soft drinks are likely to use social media. Conventional wisdom might suggest this is because people don’t seek peer reinforcement when buying lower-involvement, commodity-type products.

However, an argument could be made that engagement with social media contacts in such categories is low simply because those contacts aren’t as readily accessible or heavily promoted. If true, this presents a ripe opportunity for both brands and retailers.

w h A t t h i s M e A n s

It’s clear that it’s not enough for brands simply to have a social-media presence — a Facebook fan page, Twitter account or corporate blog, for example. If brands truly want to connect with shoppers and impact their ultimate purchase decisions using social contacts, they must develop strategies that continually engage with shoppers throughout the process.

Although the “right” approach will undoubtedly vary from brand to brand, here are a few guiding principles that marketers can refer to when devising their social-media plans:

• Monitor constantly, listen early and respond regularly. People are constantly talking about brands (on social-networking sites, blogs or ratings/reviews sites, etc.), to the tune of hundreds of thousands of conversations per day.

As a result, much like Best Buy with its @Twelpforce Twitter account, brands should: Monitor social media chatter with regularity; listen in real time to consumer comments (both positive and negative); incorporate that feedback into their marketing activities; provide answers and advice; and, when appropriate, engage people in further conversation.

Shar

e of

med

ia c

onta

cts

thro

ugho

ut p

roce

ss

In Store/Word of Mouth

Social Media

Online Research

TV, Radio, Print


39

MARK RENSHAW is EVP, Digital Practice Lead at Arc Worldwide and Leo Burnett. Arc Worldwide, the marketing services arm of Leo Burnett Group, specializes in shopper, digital, promotion and direct marketing. Email: [email protected].

• Facilitate conversation, don’t force it. Contrary to the practices of many marketers, blasting brand announcements and promotions to people via Facebook and Twitter does not constitute a viable social-media plan. As the research suggests, shoppers rely on social-media contacts to seek out the opinions of others.

To that end, brands need to provide tools — both on and off their sites — that facilitate conversations amongst shoppers and allow them to share information with each other in as turnkey a way as possible. Jansport’s integration of Facebook Connect into its onsite shopping experience is just one best-in-class example.

• Assess your competition. Brands can monitor social channels to determine how their competitors are using social media and the size/impact of their presence. Consider how their brand is being perceived versus yours, and why.

• Integrate social media into the broader communication strategy. The fact that social-media shoppers are supplementing, not replacing, other media contacts during the shopping process reinforces the importance of developing fully-

integrated communication strategies. Brands must ensure that their social-media

messages are consistent with what people are exposed to on television, in print, in stores and elsewhere online, and that they’re encouraging cross-channel behavior.

Walgreens, for example, created a Facebook application that allows users to print and pick up their Facebook photos at local stores, and promotes that application through various print and online media.

Don’t think of social media as a campaign. Social media lives and breathes.

Engaging advocates to drive word-of-mouth to increase brand loyalty requires constant fuel, participation and management. n


Char t FourSocial media and other brand contacts

play a variety of roles in the shopping process

Obtaining the

impressions

of others

Accessing

the analysis

conducted by

others

Forming your

own general

impressions

Conducting

your own

analysis

n Facebook, InternetForums, Blogs, Twitter

n Sent email / IM / text

n Talked with family / friends

n Product in a movie / TV show

n Radio ads

n TV ads

n Infomercials

n Magazine or newspaper ads

n Direct mail piece

n Product info in storen Retail store n Product display in store

n Manufacturer websites

Read blogs n

Read net forums or boards nRead product review websites n n Received email / IM/ text

n Retailer websites

n Search engine tofind information

User reviews on retailer websites n

Professional reviews in magazines or websites n

Digg, Delicious, post on review websites n

n Social media n TV, radio, print, direct, in-store/word-of-mouth, website

40


Luxury brands can make us look (and feel) truly good.

The hideous debt hangover of the gimme-gimme credit recession was a sobering wake-up call to many. Goodbye luxury, hello H&M. But the truly wealthy responded differently. Afflicted by

survivor’s guilt, they paused momentarily, looked to their favorite luxury brands for guidance, and kept purchasing.

While the world was in a state of shock, smart CEOs of luxury brands busily augmented the purchasing experience by adding a dimension of social good, simultaneously removing buyers’ guilt and building brand equity.

Luxury brands and their celebrity muses started embracing their inner goodness by investing time and money in philanthropic causes and charity work. Whether it is the Grey Goose Character & Cocktails bar for Elton John’s AIDS Foundation, the Rolex Institute or Cartier’s LOVE Charity (see sidebar), these A-list brands would have us believe that giving is the new receiving.

The luxury brands that can best tie their products and heritage to a philanthropic cause that allows customers to express their “goodness” publicly are the ones that will be rewarded with loyalty.

As Milton Pedraza, chief executive officer of The Luxury Institute, a U.S. think-tank, told Qantas Magazine, “If wealthy consumers know a luxury brand is socially responsible, they will give that brand greater purchase consideration over a brand with similar quality and service.”

Celebrities and wealthy consumers are spreading the belief that it is their personal duty to give time and money to causes. It is an updating of old social orders, as traditional buyers of luxury were the upper classes. Upper-class women did not work; they donated time to causes.

The old money believed that it was noblesse oblige to donate both time and money. Giving was not a choice; it was a duty. Today’s “upper classes” are considered by many to be luxury brands and celebrities, and are treated as such.

In this way there is a return to duty. Jane Shepherdson, the former principal designer for Topshop, responsible for turning it into the multi-million dollar business it is today, departed to become the head creative for Oxfam.

Both Bill Gates and Warren Buffett are giving their billions away via charitable foundations. Bono has been busy innovating the giving model by helping to creating Product (Red) to raise money for AIDS medications in Africa.

These brands and celebrities are setting the standards and they’re demonstrating this behaviour in a public forum.

This group wants their luxury brands to donate as well, and so they should. Luxury status is not given or demanded; it is earned through expertise, craftsmanship, design-led leadership and heritage that money cannot buy.

Louis Vuitton was once a trunk maker to royalty, and would have no doubt seen and understood the concept of noblesse oblige. Today, the company links its heritage of making bags and trunks for travel with

ESSAY

Beauty

Wealthy non-celebrities have taken note, as have the aspirational masses. Western luxury shoppers are now demanding more than a beautiful design and a non-disposable, fast-fashion item.

Their desire is for feeling virtuous as well as for looking good. Luxury consumers expect their brands to fulfil more than the temporary happiness of retail therapy, or the self-expressive benefit of keeping up.

c o n s c i e n t i o u s c o n s u M p t i o n

This trend has wider implications than just making people feel good about spending money. We’ve moved from conspicuous consumption to conscientious consumption and we want to be associated with beauty — of both object and behavior.

in virtue


41

advertising stories featuring astronauts Buzz Aldrin and Sally Ride.

Louis Vuitton is now a multi-million dollar company and it is only appropriate that it donate time and money to worthy causes that are in line with its modern customers’ expectations and tastes.

The old notion that companies are in business for their stakeholders is still accurate, but to continue to be competitive they must be in business for their human interests as well as their financial interests.

A N e w D u t y

However, a paradox remains: Due to the very nature of charity and sustainability, the opposite of consumption is required. The tricky part is that abstinence tends to be harder than consumption.

Similarly, it is hard to give up the habit of

purchasing beautiful, yet superfluous, objects of desire when you are used to getting high from the experience.

Luxury brands need to be mindful of balancing the individual’s need for recognition with the needs of the world collective. The screamingly obvious line of “you deserve it now!” is on its way out. Subtly, grace and taste are making a comeback.

Combine that with a refreshed and modern definition of “duty,” and luxury brands can help customers publicly express virtue by simply letting them purchase their wares, knowing that the foundation, money or time that the brand is aligned with will reflect on the buyer.

Many luxury brands and the media vehicles that promote them already care deeply.

Brendan Monaghan, executive director of International Fashion for Condé Nast’s GQ states, “Green is a global concern and GQ takes brands very seriously that are taking steps in helping the environment…It’s the most modern approach to looking at their future as a worldwide business, and world issues. This is how fashion translates trends into global causes. Being responsible is chic.”

Ironically, despite the economic slowdown, this could be the best time for luxury brands. An educational campaign targeting those who are not millionaires should explain why buying one luxury item is better than buying five cheapish things.

The benefits are cutting down on unsustainable, disposable fashion and re-educating consumers as to the joyful anticipation of waiting and saving for the truly exquisite.

To create this kind of desire, artisan and luxury brands need to create beautiful, design-led creations and philanthropic collaborations that allow consumers to badge their goodness credentials.

They must be captivating and extraordinary, not just a retrofit of a previously released model. They must be something bold and audacious that invites and seduces consumers to make the leap. n

CABLE DANIEL-DREYFUS is a brand consultant in the London office of Landor Associates, working with corporate clients and specializing in analysis, positioning, naming, and internal brand engagement. Email: [email protected].

C a r t i e r ’ s L OV E C ha r i t y

Customers can purchase a Cartier bracelet and choose a corresponding silk cord

aligned with a specific charity.

H Ashanti with Boys & Girls Clubs of America, blue bracelet

H Common with Common Ground Foundation, khaki bracelet

H Hilary Duff with Blessings in a Backpack, purple bracelet

H Eve with Women in Transition, peach bracelet

H Fergie with The Peapod Foundation, orange bracelet

H Good Charlotte with The Richie-Madden Children’s Foundation, green bracelet

H Janet Jackson with Ovarian Cancer National Alliance, grey bracelet

H Emmy Rossum with Susan G. Komen for the Cure, pink bracelet

42


COOL BOOKS

Makers

Cory Doctorow’s latest novel is about a future where “technological change has created an economy so efficient ... that traditional companies can hardly stay in business,” writes L. Gordon Crovitz in the Wall Street Journal (11/23/09).

The premise of Makers is a world in which inventors “figure out a way to use three-dimensional printers to produce copies of machines and most anything else at close to no cost” and approach a “pure and perfect state ... with competition and invention ... producing a kind of superabundance.”

The only competitive hope is to “have a really innovative idea, which can’t stay innovative for long, so you need continuous invention and reinvention, too.” Venture capitalists, recognizing that product innovation is passé, decide that “the next big thing in technology is financing litigation over copyright and other intellectual property.”

Cory, meanwhile, makes the book itself a medium for its message, selling it in hardcover but also making chapters “available for free downloads — a reminder that the convenience of the printed book is worth the $24.99 purchase price.” And he comments that “science-fiction writers don’t predict the future (except accidentally) but if they’re very good, they manage to predict the present.”

Think Twice

In Think Twice, Michael J. Mauboussin offers a gentle rebuke to Malcolm Gladwell’s Blink, reports Susan Berfield in BusinessWeek (12/21/09). Where Malcolm endorsed “decisions made in the blink of an eye,” Michael says this is advisable only if you practice “blinking” in a disciplined way.

He also cautions that making decisions based on intuition works only in “stable environments, where conditions remain largely unchanged, where feedback is clear, and where cause-and-effect relationships are linear.”

Citing psychologist Daniel Kahneman, Michael identifies two kinds of decision-making: One is “fast, automatic and difficult to control,” while the other is “slower, serial and takes effort.” So, while Michael believes it’s possible to “train our gut to produce

more reliable results,” he also thinks “it’s better ... simply to recognize the limits of intuition.”

He writes: “To make good decisions, you frequently must think twice — and that’s something our minds would rather not do.” He also believes we tend to underestimate the role of the workplace itself in our decision-making, arguing that we often to give too much credit to talent and not enough to circumstances.

As Michael puts it: “We tend to observe financially successful companies and attach attributes ... to that success, and recommend that others embrace” the same attributes. But we’re only deluding ourselves.

Start-Up Nation

Through “war, strife and rising animosity from other nations,” Israel has become “the world’s techno-nation,” reports James K. Glassman in a Wall Street Journal review of Start-Up Nation by Dan Senor and Saul Singer (11/24/09).

“Civilian research-and-development expenditures run 4.5 percent of the gross domestic product — half again the level of the U.S., Germany or South Korea — and venture-capital investment per capita is two-and-a-half times that of the U.S. and six times that of the United Kingdom.”

Incredibly, over the half-dozen years after the tech bubble burst in 2000, “Israel suffered one of its worst periods of terrorist attacks and fought a second Lebanese war; and yet, as the authors note, its ‘share of the global venture capital market ... doubled, from 15 percent to 31 percent.’”

Some suggest this is because Israel “concentrates the genius of the Jews.” But the book’s authors see a combination of factors that essentially center on Israel’s “unique entrepreneurial culture that combines individualism, egalitarianism ... and nurturing.”

It’s a culture, they say, that comes from the Israeli military, writing: “You have minimal guidance from the top ... and are expected to improvise, even if this means breaking some rules.”

The authors further note that Israel imposes mandatory military service, and think other countries should consider a similar policy to achieve “something like the leadership, teamwork, and mission-oriented skills and experience Israelis receive.”


43

Are you one of them? Do you know how to stay one of them?

What makes a manufacturer trusted by a retailer? Insight, collaboration, and the ability to nurture the relationship.

Success isn’t being the biggest partner—it’s being the most valuable one. At RPM Connect, we have the right tools to help you be her first call:

Storehouse ConnectSM: images and analysis you can’t find anywhere else. Know their competition, who’s best-in-class and what actually happens in their stores.

Concept ConnectSM: our ideation process for creating solutions that enhance the shopper’s experience and benefit your brands as well as your customer’s brand.

Retail ConnectSM: experts that understand what matters most to your customer and how your brands are vital to their business and their shoppers.

It’s that approach that helped us be #2 on the HUB Top 12 for 2009.

Get the right help…Call Joe Robinson—612.397.5623

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10 South Fifth Street, Suite 330, Minneapolis, MN 55402 | 612.204.9790 | rpmconnect.com

check out our blog: connect.rpmconnect.com

RPM Connect, Inc. is a wholly owned subsidiary of D.L. Ryan Companies Ltd.

The retailer’s VP is calling onher trusted vendors.

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