shopping occasion segmentation

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Jeffrey Maloy Senior Vice President Copernicus Marketing Consulting and Research Wednesday, May 23, 2012 Mission Possible: Profiling Shopping Occasions for Retail and Channel Partners

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Page 2: Shopping Occasion Segmentation

Who Am I?

Jeffrey Maloy Senior Vice President Copernicus Marketing Consulting & Research

Leading our CPG practice Former Director of Marketing, with multiple brand and shopper marketing assignments. Developing relationships with clients such as Kraft, P&G, Nestlé, and Hershey’s. Helping my clients develop and execute transformational shopper marketing strategies

Page 3: Shopping Occasion Segmentation

JEFFREY MALOY, SVP

(203) 831-2375

[email protected]

Page 4: Shopping Occasion Segmentation

Why focus on occasions?

People are busier than ever

Pre-trip planning is up

Of shopping trips are occasions-based

(buying with occasion in mind)

57%

4

Page 5: Shopping Occasion Segmentation

Consumers and Shoppers are often different groups, requiring different marketing

strategies.

Consumers Shoppers

Focus:

How, when, where, why

consumers use/consume the

category

How, when, where, why shoppers

shop/buy the category

Primary End

User:

Consumer Insights

Brand Marketing

R&D

Shopper Insights

Shopper Marketing

Account Teams

Key

End Uses:

Marcomm

Innovation

In-store,

Path-to-Purchase

influencers/tactics 5

Page 6: Shopping Occasion Segmentation

The key variables in defining a shopping occasion:

Mission

Location

Navigation

Why they shop?

Where they shop?

How they shop?

6

Page 7: Shopping Occasion Segmentation

A shopping occasion segmentation will identify the types of shopping occasions that

exist—and their relative sizes

Collect data on several

recent shopping occasions

via diary (or mobile app) X 2,000 respondents = 6,000 shopping occasions

Occasion 3

Who? What? When? Etc…

Occasion 2

Who? What? When? Etc…

Occasion 1

Who? What? When? Etc…

Segment into 5-10 shopping ―typologies‖ based on

trip mission, location, and navigation.

7

Page 8: Shopping Occasion Segmentation

When probing on occasions, be very thorough in your line-of-inquiry

When:

Day of week?

Time of day?

Who:

Who were you with?

Why:

What attributes and benefits

are you looking for from the

store and/or specific products?

Where:

Channels, Retailers, Websites

Pre-tail:

What ―drivers‖ started the

shopping process?

What sources did you

consult?

Did you make a list?

Did you talk to friends,

family, colleagues, about

it?

Retail:

Where did you go first,

second, third, etc.?

What did you consider

buying, at each stop?

How long did you spend in

each section?

Key in-store influencers

during trip?

What was the ―market

structure?

When/where did ―brand‖

play in the decision-making

process?

Post-tail:

Did you register any

products?

Did you tell anyone (face-

to-face and/or via social

networks)?

Did/will you review the

product?

8

Page 9: Shopping Occasion Segmentation

Shoppers experience many types of shopping occasions

It is imperative for Shopper Marketing to understand these occasions, in order to build

actionable programs:

9

Bunker

Mentality

Weekly

Replenishment

Just In

Time

Dash for

Deals

Treasure

Hunt

Different on: Sizing (opportunity) Trip mission (needs/drivers) Location (channels) Navigation (shopping behaviors along P2P)

Frequent Infrequent

Page 10: Shopping Occasion Segmentation

The occasion will be different in terms of sizing and opportunity

It is imperative for Shopper Marketing to understand these occasions:

10

Bunker

Mentality

Weekly

Replenishment

Just In

Time

Dash for

Deals

Treasure

Hunt

Frequent Infrequent

% of Trips 31% 24% 23% 11% 11%

% Spent 18% 36% 18% 17% 11%

High Frequency

Low Spending

High Frequency

High Spending

High Frequency

Moderate Spending

Low Frequency

High Spending

Low Frequency

Moderate Spending

Page 11: Shopping Occasion Segmentation

When: Last Minute Weekly Weekly Monthly

No Set Pattern

(rainy day)

Why: • Immediate

need due to

out-of-stock

• Fill cupboard

for week, get

items on list

• Take

advantage of

hot deals

• Stock-Up on

key staples

• Browsing for

entertainment

value

Needs: • Store located

close to home

• Easy-to-find

item(s)

• Get in/out

quickly

• Product variety

• Reasonable

prices

• One-stop

shopping

• Convenient

store layout

• Special

promotions

• Accepts

manufacturers

coupons

• Staple goods

• Bulk sizes

• Low prices

• Enjoyable

• Shopping

experience/

environment

• Unique, hard-

to-find items

The different types of occasions will cater to different shopper missions

Just In

Time

Dash for

Deals

Bunker

Mentality

Treasure

Hunt

Weekly

Replenishment

M I S S I O N

11

Page 12: Shopping Occasion Segmentation

The different types of occasions will occur in different channels

Bunker

Mentality

Just In

Time

Dash for

Deals

Treasure

Hunt

Club Store Grocery

Supercenter

Drugstore

C-Store

Grocery

Dollar Store

Club Store

Online

Weekly

Replenishment

L O C A T I O N

12

Page 13: Shopping Occasion Segmentation

It is important to understand the shopper journey during each type of occasion and

the key influencers and touch points for each

Just In

Time

Pre-tail

(Before shopping)

Retail

(In-store)

Post-tail

(After shopping)

Make List

Review circulars

Online research (product

specs, prices, etc.)

Perimeter and in-aisle

Coupons

Features, displays, TPRs,

sampling

Shopper card

Loyalty programs

Whew!

N A V I G A T I O N

Weekly

Replenishment

13

In and Out Oh shit!

Page 14: Shopping Occasion Segmentation

Specifically, it is important to understand the shopper marketing tactics and/or

programs that are influential during each step of the path-to purchase.

Pre-tail:

Advertising

Word-of-Mouth

Circulars

Digital

Direct Mail

Retail:

Displays

Signage

Sampling

Manufacturers Coupons

Packaging

Promotions

Retail-tainment

Shopper Card

On-Pack Offers

Post-tail:

Check-Out/Bounce-Back Coupons

Rebate Programs

Product Registration

Loyalty Programs

Customer Reviews

In-Pack Offers

14

Page 15: Shopping Occasion Segmentation

Mobile devices have changed the shopper journey and path-to-purchase

Have used a smart phone

while shopping in store:

77% at beginning of trip

61% in the middle of trip

43% at the end of trip

70%

15

Page 16: Shopping Occasion Segmentation

As a result, nowadays, mobile devices are being utilized throughout the path to purchase

Pre-tail Retail Post-tail

Mobile Advertising Mobile Coupons Entertainment

Search QR Codes Registration and

Loyalty

Price Comparison Shopkick Social Media

Store Locator Foursquare

Deals and Offers

16

Page 17: Shopping Occasion Segmentation

It is important to understand the linkage between shopping occasions and consumption

occasions

Trip Missions

(why they shop)

Consumption Occasions

(why they use)

Need to understand the

intersection

17

Page 18: Shopping Occasion Segmentation

You should try to connect the consumption occasion and trip mission

Size the ―cells‖ in grid below, and identify key products purchased/consumed

Consumption Occasions

Breakfast Lunch Snack Dinner Winddown

Trip

Mis

sio

n

Imm

edia

te

Nee

d

$ $ $$ $$$$

Reg

ular

Rep

leni

shm

ent

$$ $$ $ $$$ $

Lo

ng

-ter

m

Sto

ck-u

p

$ $$$ $ $

Immediate Need Dinner = Easy Meal Solution:

Mom shopping for products for tonight’s family dinner.

Low/no preparation required.

Meal whole family enjoys.

18

Page 19: Shopping Occasion Segmentation

By understanding the underlying need and ―market basket‖ during these occasions,

retailers and manufacturers can develop powerful shopper marketing tactics and

programs (e.g., cross-promotions)

Identify Need: Conduct Market Basket

Analysis:

Deliver Shopper-Centric

Solution

Easy meal solution Buy DiGiorno,

Get Free 2-Liter Soda

19

Sources:

Retail POS

Homescan Panel Data

Shopper Card Data

Survey Data

Page 20: Shopping Occasion Segmentation

The shopping occasions differed in terms of trip mission… and sizing…

In the Spirit Passout Buy Liquidation

When: Late Sept., early Oct. Week of Halloween After Halloween

Why: Get in holiday spirit

Kids’ ―Nag factor‖

Trick-or-Treat passout

Don’t want house to get egged

Self-consumption (candy)

Stockup for next year

(decorations, costumes)

Needs:

Wide variety of merchandise

Fun, seasonal set

New/novel products

no one else has

Fun shopping experience

Good selection of candy

Convenient location

Low prices

My favorite brands

Reusable merchandise

Great deals

% of Occasions: 31% 47% 22%

% Merchandise

Spending: 49% 39% 12%

Pre-Season Post-Season In Season

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Business Objective: To maximize sales of Halloween merchandise throughout the season (roughly Sept 25 – Nov 5)

Research Objective: Understand how/when/where/why shoppers shop for Halloween merchandise

Page 21: Shopping Occasion Segmentation

… and in terms of location shopped... and in terms of merchandise purchased.

In the Spirit Passout Buy Liquidation

Where:

Halloween Superstores

Mass Merchant Seasonal Aisle

Supermarket

Drug

Dollar

Supermarket

Drug

What:

Costumes

Decorations

Party Supplies

Greeting Cards

CDs/DVSs

Pumpkins/

Carving Kits

Candy (novelty)

Candy (fun size)

Trick-or-treat supplies

Candy (leftover)

Decorations, costumes (for

next year)

Pre-Season Post-Season In Season

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Page 22: Shopping Occasion Segmentation

…Importantly, the occasions also were distinct in terms of the key influencers, thereby

informing future shopper marketing strategies and tactics – by account.

In the Spirit Passout Buy Liquidation

What:

PRE-TAIL

TV Advertising

Radio Advertising

Online Advertising

Circulars

Cooperative radio

advertising

Coupons

RETAIL

Seasonal Set

In-store Signage

Halloween Packaging

Feature and Display

Cross-merchandising (buy

costume, get DVD)

Feature and Display

Coupons

Liquidation Displays

Bargain bins

POST-TAIL

Social Networks

Blogs Online sweepstakes Rebates

22

Pre-Season Post-Season In Season

Page 23: Shopping Occasion Segmentation

Conclusions

Offer a relevant

solution

At key

engagement points

along P2P

Increased traffic

and market

baskets

+

=

The Key to Success

23

Understand the

shopping

occasions

(mission, location,

navigation)

+

Page 24: Shopping Occasion Segmentation

Understanding shopper occasions benefits all key stakeholders: a win-win-win

Shopper

Retailer Manufacturer/

Brand

Better shopping

experience

Increased foot traffic

and market baskets

Increased brand

purchase and loyalty

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Page 25: Shopping Occasion Segmentation

Speaker TBD

Copernicus Marketing Consulting and Research

Register Now: copernicusmarketing.com/webcasts

June 20, 2012

Charting the Shopper Journey

Mark Your Calendars!

Wednesday, June 20, 2012

Page 26: Shopping Occasion Segmentation

JEFFREY MALOY, SVP

(203) 831-2375

[email protected]