They say that having no presence on mobile devices in 2010 is like not having a website circa 1999. So true! The digital age is in hyper-drive. 3G access continues to increase, and 4G is already here! Some stats say that up to 99 percent of the population will have some sort of data capability on their mobile phones by 2011.

So what does this mean for retailers? It means the need for a whole new view to their digital strategies. When a shopper can enter a store, scan a barcode, see that the same product is cheaper at a nearby competitor and click a link for directions to take them straight there, the game has suddenly been changed, so to speak. There is an ever-expanding catalog of apps out there to enable this type of shopping behavior (in the store, in the car or on the run), and manufacturers like Apple are training customers via commercials and advertisements about how to use all these apps to simplify their lives.

It might be easy to dismiss this trend given the relatively small percentage of people with iPhones or Droids today, but now is the time to start investigating and investing in individual strategies. Almost one third of Americans are already shopping via their mobile devices, and the number grows when you talk about Millenials and their mobile shopping habits.

So what’s the next move? Gain advantage and protect sales by offering shoppers what they want in the modes they desire. Not every retailer will need a full-blown program, but each must understand the needs of its customers, what information and access they are looking for and where or how they want to access it. Once these insights are known, the appropriate level of investment and how to spend it will become much clearer.

Two examples of retailers getting it right

Two brands getting it right are Best Buy and Target, which both have useful apps. Best Buy’s app not only lets you browse its extended online product assortment, but allows you to actually purchase via your mobile device (not many retailers are doing this yet).

It also lets the user locate stores and provides a map that leads you right there (the icon actually moves while you’re moving so you can see where you are in relation to the store). Finally, it makes it easy to navigate, providing a “deals” page, as well as “ideas” and “gifting” pages, not to mention access to your “Rewards Zone” account.

While Target’s app is very similar, it doesn’t let you purchase via mobile, it provides a barcode scanning option that can be used in and out of the store to allow shoppers to find out more information about a product. Beyond price, it offers product information, customer reviews, and availability in your local store.

Both brands understand the needs of their customers and are creating opportunities to enhance the customer journey.

A: When I’m shopping at my local Kroger.

No, not the “Post” as in Raisin Bran; I’m referring to the physical post, or column, that is in the cereal aisle at my store.

The scene is this: my wife asks me to go get the Multi-Grain Cheerios so she can shop in peace for 10 minutes. She says, “Get the big box, unless the smaller box is on sale,” adding, “The Cheerios are close to the post about half-way down the aisle.”

If she wouldn’t have given me that navigational pointer, she probably would have bought herself 15 minutes of peace. The merchandise presentation in the cereal aisle is such a mess, so lacking in organization, I could easily have squandered more time, forced to scan every package, not finding what I was looking for. But since she gave me the post as my pole star, I managed to navigate past the lions and tigers and bears to the Cheerios. After a moment of anxiety while I scan the shelf for validation—Ta-dah!—I find the Mutli-Grain big box not on sale! 

Contrast this with my second mission, during which my wife gets only a few minutes of peace. I go to get a 12 pack of Pepsi. No need for her directional advice in the beverage aisle. I masterfully scan the 40 feet of shelf as I walk. “Nope, nope, nope… bingo!” I find the big blue block of Pepsi products.

The folks at Pepsi understand that the central color brand block draws shoppers down the aisle, and makes de-selection faster and easier; quantity comparisons are simpler to make. If only the breakfast aisle followed this example. There’s got to be a way to orchestrate the shelves that allows shoppers to navigate and deselect with greater ease. I can’t imagine the flakes-makers are driving much trial and category growth with shelf principles like these, or the lack of them.

Yes, a better aisle experience would cause me to return to my wife and the shopping cart in record time. But she can always send me over to wait in line behind the elderly persons at the deli counter.

While I spend my days understanding shopper behavior and applying rigorous research and analysis methods to help companies “grow categories,” I spend my weekends shopping like crazy.  With my bank account being the victim of all of these great growth strategies! As you know, retailers and manufacturers are always finding new ways to create incremental growth or, simply put, make shoppers spend more.

One of my favorite places to shop is Target. Before I even make it into the store I have generally blown $20 on the dollar spot. After piling my cart with a bunch of stuff I really have no use for, my second stop is always the shampoo aisle. Regardless of need, I always stop. Something about the colors and the arrangement of the shampoo aisle just makes me feel so clean and orderly and I generally end up picking up something guaranteed to fix frizzy hair or give me more volume.

Well, much to my surprise, my venture into the shampoo aisle a few weeks ago yielded a fantastic new surprise! The new Pantene display! Aisle violators grabbed my attention as they organized the offering by color and hair solution. That’s right, hair solutions–easily found! And not only did the aisle violators frame up the offering, but the bottle packaging was new and perfectly coordinated with the signs. You can image my excitement as I quickly zeroed in on the “fine” solutions area. I left the aisle with a whole new system of hair care.

And as if that weren’t enough, over the past two weeks I have seen TV ads, magazine ads and even a billboard all showing the same solutions-oriented campaign. This prompted me to go to the Pantene website which just confirmed the greatness of this initiative; because it, of course, had the same message.

As a shopper scientist and self-proclaimed expert shopper (at least, that’s what I tell my husband) I just want to highlight this entire initiative to all of the CPG companies out there. It has all of the key elements needed to truly bring growth to a category. First, there was obviously research conducted to understand the category needs. Clearly, the brand understands that women have very specific concerns. Second, shopper research must have been done to understand that women come into the aisle looking for a solution, and that behavior needed to be addressed. Translating those shopper insights into action is critical! Third, the in-store execution is simple, easy to understand and gives the shopper just enough information to get where she needs before closing in on her specific product. Finally, Pantene brings it all together with a consistent campaign across every touchpoint of the brand from TV to website to billboards.

This, my CPG friends, is how it’s done! 

As I was finishing up payment at the pharmacy, a young male employee strolled into the area and struck up a conversation with the staff by saying, “That new Kotex packaging is sharp!”  Silence.  Then, apparently mistaking the silence as a request for clarification, he continued, “You know, the black packages?  They are really cool looking!”  More silence.  Based on a quick survey of their expressions, everyone seemed to be thinking the same thing, What is an 18 year old guy doing talking about feminine hygiene products?!  

Even as I grabbed my purchase and escaped the awkwardness, I began to contemplate what transpired.  Given that I spend my days knee-deep in shopper sciences, I found the situation quite compelling.  Good packaging should be, in part, disruptive, and the new U by Kotex packaging is definitely that.  The sub-brand is unique in the category, both in shelf presentation and in the “get real” tone of the advertising.  A+ on disruption. 

But…packaging should also be appropriate for the category, and I’m not convinced that U delivers on that part just yet—or that they are justified in bypassing that rule.  The new package grabbed the attention of the young male employee and made it seem accessible to him, but what does that mean for the brand intended exclusively for a female audience?  (For sure, some men do purchase these items for the women in their lives, but they are not stakeholders.  I highly doubt most women ask their male partners to “bring me something new” in the category when passing off the shopping list.)  I am interested to see how women shoppers will respond to this new offering.  Will women view the disruption as a welcome change in category fraught with pastels and euphemisms?  Will it become a signpost—a game-changing brand that other brands will be forced to emulate or accommodate?  Or, will women view it as a garish statement in a category where they are looking for discretion, security, and reliability?

Companies under pressure to stem margin erosion may jump headfirst into shopper marketing before they are ready. In doing so, they could overlook the need to solve fundamental problems in the shopping experience and end up with unpredictable results in the store.

The urge to dive in is understandably tempting. Brands that invest in shopper marketing are seeing three times the return as compared to traditional marketing disciplines. But the discussion revolves around a very small percentage of brands, such as CVS/pharmacy and Mars Snackfoods, ShopRite and Kellogg’s, Walgreens which just announced it will engage in a shopper marketing pilot with The Hershey Company, and of course the eminence of shopper marketing, Procter & Gamble. All have been working on shopper marketing for years and have an extremely high level of expertise.

Instead of starting with the shopper journey, a company should first seek its own path. Ask yourself, ‘Where do you want to go?’ From there, you need to determine how that impacts your category growth strategies, partner relationships, and competitive advantages. Then you can look at your path in light of the path of the shopper you want to have. Shopper marketing understands the shopper psychology and what drives choice, but who benefits from that depends on what their business objectives are.

The performance-boosting strategy promised by shopper marketing is real. But there are many ways to get lost in the avalanche of rhetoric and the diversity of views among practitioners. Companies need to take the time to understand what separates effective from ineffective efforts.

Retailers looking for great examples of wirelessly connecting with their shoppers have three great brands to look to: American Eagle Outfitters, Netflix and Amazon.com. The continue to differentiate their shopping experiences with intimacy, responsiveness and relevance.

Even with millions of items for sale, Amazon connects intimately with customers, from its one-click ordering to its ability to become more relevant with each visit. The result is a “barrier to exit” that other brands envy.

American Eagle excels at aggressively integrating multi-channel marketing tactics into both its traditional and digital campaigns. It connects at all the right touchpoints, which goes a long way towards achieving brand loyalty. This year, AE included a mobile filed in its loyalty program, and used mobile as a point of entry into sweepstakes as well as an alerts program. Calls to action were posted on social networking sites, such as Facebook and Twitter in the form of banner ads, status updates and tweets.

Netflix invites feedback and gives customers what they want. The movie provider uses crowdsourcing to find ways to improve its service and offerings, and recently generated a lot of buzz with a million-dollar prize awarded to the customer who could improve its movie recommendations by ten percent—a classic way to allow customers to interact positively and co-create with the brand.

In the future, both online and brick-and-mortar retailers will need to focus on customer mobility to connect intimately and immediately with customers. The giving is no longer one-way. These brands clearly demonstrate the digital connections also provide valuable information that allows services and products to be personalized with the crucial insights that help companies stay relevant.

While we can all agree that price matters more to the consumer than ever, it’s not the be-all, end-all of shopping. At some point, the hunt for best price has to stop. And why it stops is up to the retail brand.

Shoppers attach to brand, not price. Brand—the distinct way you do business—needs to provide a reason to activate the purchase, a reason beyond price. It can be trust, convenience, fun, effortlessness, time savings, fashion or many other factors a brand makes itself known for.

Many retailers have learned the hard way that price-based competition is simply not sustainable. To survive, they need a balanced value proposition unique to the brand that makes the shopper confident she has found the right choice among similar offerings of the product or solution she seeks.

This year, retailers have made headway in the battle against “sameness” by negotiating exclusive famous name brands, making sure their private labels stand for something besides “cheaper” and by infusing the shopping experience with emotional appeal. One brand that renewed its value-plus-reason image is Old Navy. After veering off into fast fashion inspired by the designer runway, it has returned to bright basic family apparel surrounded and supported by its kitschy sense of humor. Shoppers are returning to the store and business is on the upswing.

Differentiation is crucial to brand strength. A lack of it kills value of both the brand to its owners and its worth in the shopper’s perception. Without a differentiated proposition, a company has less power to defend margins and create demand.

Recession or no, our research shows that shoppers enjoy finding something new in the store. It’s human nature. Whenever retailers bring energy and inspiration to the game—even when shoppers are thinking long and hard before opening their wallets—they still give the store credit for a better shopping experience. And from a better experience comes all good things: the engagement, loyalty and bottom-line bolstering that smart businesses seek.

“Something new” encompasses a lot of territory. It can be a new prototype, a store-within-a-store, a value product, a time-saving service or an educational program. For our client Burger King, it’s a combination of value and excitement, from Burger Shots to the Whopper Bar, a hip new restaurant design we helped them create.

The Whopper Bar is a great example of what many brands are trying to do right now—be more interruptive, opportunistic and dramatic with their innovations.

A key differentiator of the BK brand is flame-broiled burgers. We brought this attribute to life through various design elements. The overall look is darker and urban-industrial with textures of fire and metal, yet the space is simple to use and friendly. The smaller footprint of this concept has opened doors to new real estate opportunities. That plus the revitalized business brand strategy is helping BK enter venues no one would have considered them for previously.

One of the mistakes made most with new concepts is the lack of an idea that’s powerful enough to get you where you want to go. Companies know that doing something is better than doing nothing. And some are closing under-performing stores intending to do a better job with their best stores. But if your goal is disruption, you’ve got to really fire up the passion around your brand and find an aspect to dramatize.

The second most common mistake in retail seems to be lack of speed. While looking back on other times of crisis, a CEO of a dot-com recently recalled how his company managed to survive and thrive because he pushed for radical new ideas. But in hindsight he realized his biggest mistake was moving too slowly. Had he been quicker, he’d have a bigger share of the market today. The same often happens in retail.

Last year our clients were urgently asking us for “Quick Wins” in the store. This year they are more cautious. Despite the increased challenges facing them, moves are being carefully evaluated to minimize risk and preserve capital. But time is of the essence. We can’t let uncertainty rule. Surveys suggest that shoppers are taking more time to research their purchases both at home and in the store. That means they’re looking at your competition.

Most companies are quick to cut costs, but slow to find and execute the ideas that deliver a new bundle of value to the customer who’s looking for a retailer to help them reach a balance between frugality and the indulgences they’ve had to give up.

Today you can tap into the many innovative tools that help speed up decision making, such as research and modeling to create a business case for change or to deliver the solid insights needed in the creation of fresh strategies. Collaboration tools can help cut across silos so you can speed up productivity. You can make decisions with a replicable process that offers scale, speed and flexibility.

There are also optimization tools available. We’ve got one of the best that keeps proving itself very powerful and effective, StoreBoard. So if it’s simply not wise to make a radical change to your business, you can still do what you do better than anyone else. A top priority for your brand right now is generating ideas for improving relationships with customers. We’ve noticed creative retailers are putting more emphasis on service, getting credit for solving customer problems and earning trust. That will definitely score points.

Whether you decide on a dramatic brand update or a more simplified retail experience that’s emotionally engaging, the intelligence and invention available today can help you look past the challenges to see the opportunities. You can add intensity and difference without compromising—sort of like Angry Sauce on a Whopper.
Thoughtfully,
D. Lee Carpenter

The past year has seen an explosion of interest in shopper marketing. Reportedly 60 percent of brands and retailers are investing in shopper marketing efforts, up from six percent previously. Most, however, admit to being in the learning stages of the emerging practice.

Finding a common language is the first challenge. The term encompasses in-store media, brand marketing, trade relations and consumer promotions, as well as resetting shelves and rethinking categories, like the new initiatives recently announced by Walgreens. Basically, shopper marketing refers to marketing stimulus that is created based on a deep understanding of the shopper. The perceived benefits include increased sales, improved customer loyalty and overall return on investment, which certainly justifies the rush of interest.

A short but impressive list of case studies, from the few retailers who’ve made their efforts public, shows that although the in-store frontier may seem like the Wild West of trade activities right now, the physical space offers significant opportunity to support growth. What’s exciting is the increased industry talk around two things. Improved collaboration between retailers and manufacturers in order to share information and build on what’s working, and a growing awareness that customers alternate between being “consumers” and “shoppers.” The switch is flipped at the point where people are actually engaged in window-shopping the store or aisle, perusing the shelves, browsing the website or paging through the catalog. Knowing what’s happening at that moment is key. That’s why a significant factor in shopper marketing is high-quality behavioral data from which to draw the actionable shopper insights that help shape strategic plans.

“We use the term to encompass the strategies and tactics that engage and influence the customer inside the store,” says Tim Murphy, vice president, Interbrand Design Forum. “It’s a more holistic take on shopper marketing that starts at the top level—brand positioning, which informs the mid-level channel strategies, retailer requirements and category management—and goes all the way down to the promotional level. For the last seven years, we’ve been working on an approach we call Shoppernomics, created around our ability to understand what drives shopper decisions and then deliver that at retail. We’ve seen some very exciting results from Shoppernomics. It has the ability to address the whole store from brand to basket and it’s affordable, unlike a lot of the tools out there that are too narrowly focused.

”One store seeing a pronounced impact from the holistic approach to shopper marketing is arts and crafts specialty retailer, Michaels. By asking shoppers why they purchased, not just what, when and how much, it discovered their need went beyond craft materials to inspiration and fun. The store itself wanted more personality, so its brand positioning was brought to life through higher level category delivery, all the way to shelf and package level.

Michaels concentrated on five categories transformational to their business. Shopper marketing helped find the most productive opportunities, optimize those spaces and allow the retail brand to shine through. The refreshed jewelry section especially delights shoppers. Innovative design, merchandising and staffing gave it a boutique look and feel, while shopper insights led to a new shelf organization with the right breakups, flow and SKU placement. As a result, store productivity has gotten a boost and customers are giving Michaels credit for being fresh and inspirational. The new store experience has craft-related blogs buzzing.

Collaboration between manufacturers and their retail partners has always held the dual promise of reduced antagonism and gains in competitive advantage for both parties. Manufacturers often have more shopper data than their retail partners, who in the past simply merchandised categories based on POS data. But behavioral data from shopper marketing shows that consumers don’t think in categories.

“I hope we see more collaboration, and maybe the current sense of economic urgency will help overcome resistance to that,” says Amanda Yates, vice president of strategy and analytics. “The toughest part of the two groups working toward a new strategy seems to be getting both of them to decide to compromise for the greater good of the category. That means moving away from the proliferation of brand extensions, excessive SKUs. Things that often lead to a less rewarding shopping experience. Shopper marketing takes your thinking well beyond the planogram.”

A deeper level of intelligence allows the retailer and manufacturer to anticipate the needs of the shopper and arrange the store to influence them, not merely accommodate them. That was the thinking behind Cadbury Adams/Halls’ study to find out how shoppers behaved around the cold remedy purchase.

When the company conducted in-home and in-store communication research to find out what was involved in the decision-making process, it discovered issues around merchandising, packaging and experience. One surprising insight was that people shopped in a manner opposite to what the company previously believed. Additionally, it realized that light-reflecting metallic packaging was hard to read and soft bags were not conducive to storage at home.

Findings such as these give a CPG company the ability to improve packaging, strengthen aisle communication and modify assortments based on shopping styles, and include strategic brand-blocking to make a statement at shelf. Such plans for orchestration of the shelf set are seeing greater acceptance from retail partners.

“When you can flow with the shopper thought process, you have a better chance of connecting emotionally,” says Murphy. “It takes relatively little investment and has a huge upside. In the beauty aisle, for example, you may find that better educating her at shelf or including suggestions for new color combinations suits the prevailing shopping style. In a case like that, you’re not spending millions on media. You’re leveraging your assets to better connect with her needs.”

With the ability to interpret insights from shopper data and translate that into the physical space, retailers and manufacturers have a better chance of getting to that sweet spot—the shopping experience that keeps people in the store longer, strengthens a brand’s position, increases share, enhances ROI, saves marketing/trade money—all the while making life easier for the customer.