global shop 2010 destination + impulse
DESCRIPTION
In this period of increasing commoditization, organizations are under enormous pressure to do more with less. As customer expectations continue to raise and budgets are squeezed, the quality of the customer experience has emerged as one of the most important factors in a shopper\'s purchasing decision. This session will explore powerful tactics and tools to strengthen your brand proposition in a way that is relevant and meaningful to your shoppers.TRANSCRIPT
Destination + Impulse
How to Influence and Guide Shopper Behavior
Patrick RodmellPresident + CEO
www.wattintl.com
Patrick RodmellPresident + CEOWatt [email protected]
Thanks for letting me share some ideas with you about “Destination + Impulse” at GlobalShop 2010. The following is a condensed version of the presentation that I hope will inspire you to a “Big Idea”.
Please feel free to drop me a note if you want to discus the presentation further. And good luck in your quest to develop more compelling brands and retail experiences. Let me know if we can help in any way.
Sincerely,
Building Brands. Building Business.
Research + InsightsResearch + Insights
Consulting + StrategyConsulting + Strategy
Brand Strategy + PositioningBrand Strategy + Positioning
Design + MarketingDesign + Marketing
Research +Research +Consulting practicesConsulting practices Creative AgenciesCreative Agencies
From insight to integrated, creative execution
“(watt international is) a unique group of talent people, encouraged to think beyond their specialty”…
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THEIDEA
…and lots of examples for inspiration!
What NOT to do!
“I’d rather die of pneumonia than deal with the headache of choosing the right medicine!”
What NOT to do!
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Is it Destination or Impulse?
Whatever the case, the package still rules!
Some fresh thinking to consider…
1. The changing world of Insight Development at Retail
2. A look at strategies that drive Destination and Impulse Behavior
3. Integration is the key to doing more with less- Integration of input sources - Integration of output strategies
Source: 2008 GMA/Deloitte Shopper Marketing Survey
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Insight Development is radically changing at retail
- Significant growth in internal resources – hiring their own CPGs!
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Launched in June 2009, the Supermercado de Walmart is already exceeding expectations.(Source: Wal-Mart press release)
Insight Development is radically changing at retail
- Depth of insights into Hispanic consumer and shopper insights were profound
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And they’re getting more more innovative about how they apply insights to marketing strategies
Insight Development is radically changing at retail
- Significant growth in internal resources – hiring their own CPGs!- Tapping into the value of loyalty data
www.wattintl.com
Insight Development is radically changing at retail
- Significant growth in internal resources – hiring their own CPGs!- Tapping into the value of loyalty data- Scrutinizing their data to optimize category mix, with a focus on private brands
Walmart’s Project Impact:15% less skus (optimal sku selection)
What will happen with the extra shelf space?
Fewer skus = smaller stores
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Walmart is planning to reduce the square footage of its stores by 8% or the equivalent of 260 Supercenters
vs.
What can you do that will enhance the experience and build loyalty with your
customers?
Merchandise($/sq. foot)
Experience(Customer satisfaction)
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Insight Development is radically changing at retail
- Significant growth in internal resources – hiring their own CPGs!- Tapping into the value of loyalty data- Scrutinizing their data to optimize category mix
What does this mean for CPGs?
- More pressure to deliver meaningful insights for the category (not just your brand)- More pressure to demonstrate the value of your brand to the retailer
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This just isn’t going to cut it anymore
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Marketing + Advertising
Store Planning + Design
Merchandising(PB + CPG)
Operations
InsightsInsights
StrategyStrategy
InsightsInsights InsightsInsights InsightsInsights
StrategyStrategy StrategyStrategy StrategyStrategy
A place that sells products
The old retail model...
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Marketing + Advertising
Store Planning + Design
Merchandising(PB + CPG)
Operations
Insights
Customer loyalty
An integrated, well-oiled, branded customer experience
Where retailers are heading
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StrategyStrategy
Some fresh thinking to consider…
1. The changing world of Insight Development at Retail
2. A look at strategies that drive Destination and Impulse Behavior
3. Integration is the key to doing more with less- Integration of input sources - Integration of output strategies
Destination + Impulse
What drives a “Destination”? What motivates “Impulse”?
Most importantly, how are they connected in our new Mobile World?
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Imagine:An application that sources the best overall price for anything you want to buy…in your local market
How does a retail environment remain relevant?
What can a retail experience deliver that can’t be realized virtually?
Sensory engagement (touch and try)
For CPGs, it’s about generating the need/want, then getting on the shopping list
For Retailers, it’s about getting customers to drive past the competition
Primarily driven by understanding the
“needs” behind the Needs States
Destination
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Creating destination through consumer insights
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7. Packaging that works in the store, and looks great at home!
Creating destination through consumer insights
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Swivel Saucer Tray for meals on the go Juice box holder to allow for mess-free sippingFrench Fries holder with ketchup container
Consumer insights that have the potential to ‘drive’ destination behavior
Nike - Pioneers in Need State Merchandising (“Don’t just Do It; Look Great while you’re doing it!”)
Gatorade running shoes?
Nike sports drink?Understanding “the need behind the need” creates broader brand appeal
Understanding the needs states behind fashion
Creating destination through consumer insights
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What type of store is this?
Creating destination through a unique value proposition - “Value Gurus”
Whole Foods offers recipes and lists for shoppers’ smart phones
The company has teamed up with Apple to provide the applications for the phones
The Store as a Media:What is your “Refresh Frequency”?
9. …but Clorets perfected it!
For CPGs, it’s about creating interest in the category, then being first for consideration
For Retailers, it’s about a clear offering and a compelling retail experience
Driven by shopper insights and in-store activities
Impulse
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Digital signage strategies that drive impulse
Digital signage strategies that drive impulse
Because for most people, it’s not the grape, it’s the taste!Tesco understands Needs States and delivers packaging and communications solutions that drive behavior
Driving impulse through strategic cross promotion
45%
32%
23%
38%
28%
34%
Insight:
The flavor combination changed the participants ranking of the CSD beverage, suggesting that a consumer’s enjoyment of a CSD beverage is effected by the food it’s paired with.
Question:
Which beverage do you prefer?
Question:
Which combination of beverage and chip do you prefer?
The Shopper-centric reality
Intuitive shopping at Piggly Wiggly Branded merchandising that helps get more out of meals
The ultimate ‘Solution Sell’!
Some fresh thinking to consider…
1. The changing world of Insight Development at Retail
2. A look at strategies that drive Destination and Impulse Behavior
3. Integration is the key to doing more with less- Integration of input sources - Integration of output strategies
9. …but Clorets perfected it!
Integrating Insights: Integrating Execution
For CPGs, it’s about generating the need/want, then getting on the shopping list
For Retailers, it’s about getting customers to drive past the competition
Consumer Insights and Media
For CPGs, it’s about creating interest in the category, then being the preferred choice
For Retailers, it’s about a clear offering and a compelling retail experience
Shopper Insights and In-store Activities
Destination + Impulse
The Mobile Connection is driving the need for greater integration
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Integrated Solution
Set the Strategy
brand strategymerchandise strategy
experience mapcreative brief
ActionPlanTM
Define the opportunity
increase share
grow category
improve margin
accelerate frequency
enhance brand perception
new concept/ product
grow footfall
reposition
Analyze
synthesize inputsdistil conclusions
insights
Establish the inputs
current state review
stakeholder interviews
shopper/consumer behavior
consumer attitudes
financial analysis
industry research
competitive audit
best practices
trends
Execute
brand identity
packaging
communications
retail environment
advertising
web
social media
promotions
events/p.r.
Measure
share
revenue
customer
attitudes
customer
behavior
margin
profit
traffic
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Define the opportunity
Integrated Solution
increase share
grow category
improve margin
accelerate frequency
enhance brand perception
new concept/ product
grow footfall
reposition
Establish the inputs
current state review
stakeholder interviews
shopper/consumer behavior
consumer attitudes
financial analysis
industry research
competitive audit
best practices
trends
ROI (Return on Inputs):What combination will deliver optimal insights?
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Circular Study
Proprietary Customer Perception Study
Perception vs. Reality
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1. Quality – perimeter products2. Quality – private brand products3. Price – CPG basket – perception vs. actual 4. Price – PB Basket – perception vs. actual5. Out of Stock – perceived # items/trip6. Out of Stock – which brands
(price parody) 100
Q1 Q2
Q3 Q4 Q1 Q2
Customer Perception Index: Pricing
105
110
95
90
85
Competitor Actual Price
Competitor Perceived Price
Opportunity Gap
Experience Mapping: the RIGHT message, in the RIGHT place, delivered in the RIGHT way
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Experience Mapping: the RIGHT message, in the RIGHT place, delivered in the RIGHT way
Define the opportunity
Integrated Solution
increase share
grow category
improve margin
accelerate frequency
enhance brand perception
new concept/ product
grow footfall
reposition
Establish the inputs
current state review
stakeholder interviews
shopper/consumer behavior
consumer attitudes
financial analysis
industry research
competitive audit
best practices
trends
ROI (Return on Inputs):What combination will deliver optimal insights?
Integrate insightsRationalize conflicting inputs
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The Key: Consolidation of Inputs
360 Retail Insight ManagementTM
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Integrated Solution
Set the StrategyDefine the opportunity
increase share
grow category
improve margin
accelerate frequency
enhance brand perception
new concept/ product
grow footfall
reposition
AnalyzeEstablish the inputs
current state review
stakeholder interviews
shopper/consumer behavior
consumer attitudes
financial analysis
industry research
competitive audit
best practices
trends
Execute
brand identity
packaging
communications
retail environment
advertising
web
social media
promotions
events/p.r.
How do you integrate execution?
Measure
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Creative Strategy
Tactical Strategies
Our Philosophy: Brand Council to ensure Synergy of Activities
BusinessObjectives
Marketing Advertising / Website / Brochures / Catalogues / Flyers / In-store signage
HRRecruitment/Retention Training Incentives & Rewards
Business PlanningStore FormatsStore OperationsPrice ProgramsSupply Chain Strategic Partnerships
OfferingNational brands Private label Services
BrandNameIdentityColors, FontsInternal Communications
Public RelationsSponsorships EventsLaunches
EnvironmentArchitecture Décor Layout
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Integration of Destination and Impulse
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Apple: A business that gets it right
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Apple: A business that gets it right
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The end of the “Abundance Era”; the beginning of
• Born +- 1990: The coming consumer generation• Don’t know life without the internet• Short attention spans• Don’t trust advertising – look to their social network• Mobile technology is a commodity• Sensitive to our environment• Developing their consumer DNA during the global recession.
Generation M
“Authenticity is the benchmark against which all brands are now judged…” John Grant in The New Marketing Manifesto
AuthenticityToday’s consumer is skeptical about marketing messages, looking for products and experiences that have a closer connection with a true human element.
Juan Valdez has been used to promote Colombian coffee since 1959.
“humble but uncompromising, dedicated to the hard work of raising coffee by hand.”
Authenticity: Juan Valdez
General Mills offered limited time retro packaging from the 1960s and 80s in February 2010
The company was responding in part to the trend on Facebook of members sharing pictures of their favorite retro brands
Authenticity: General Mills Nostalgia
Nike assembled a Skateboarding team that “lives and breathes” skate. It worked with hard-core skaters to develop a shoe customized for skateboarding, and signed hot young skaters to represent the new Nike SB division.
Nike is also building “street cred” with their “Support Your Local” campaign – building authenticity by paying tribute to skateboard retailers who are pioneers in the industry.
Authenticity: Nike
• Sensory engagement is key – demos, sampling, motion, touching, etc. will all support destination AND impulse behavior
• Treat the Store as a Media – responsive, effective integration of external messaging with in-store communications and activities will help you do more with less
• When looking at consumer need states, explore “the need behind the need” and where it makes sense, develop Need State Merchandising (vs. product categories)
• Experience Mapping will help you understand shopper behavior and lead to more impactful, cost-effective in-store solutions
• “Authenticity” is a core brand value of the M-Powered Generation.
Winning at Retail
