Digitally Empowered Shopper

The DigitallyEmpowered ShopperHow Digital Technologies Are Impacting Consumers Along the Purchase Decision JourneyOctober 2009

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—“The Consumer Decision Journey” McKinsey Quarterly, June 2009

“The shift in consumer decision making means that marketers need to adjust their spending and to view the change not as a loss of power over consumers but as an opportunity to be in the right place at the right time, giving them the information and support they need to make the right decisions.”

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Digital technologies have had a dramatic impact on the relationships consumers have with brands and on the way they shop for them. Consumers are empowered like never

before. They are using these technologies to plan their shopping trips —researching products, getting usage ideas, seeking out deals and reviewing the opinions of peers and experts—and are entering the store with many of their brand decisions already made. While much of this behavior is being driven by newfound, on-demand access to information anytime, anywhere, both at home online and on the go on mobile devices, the economic downturn

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has heightened it. Consumers are taking a more disciplined approach to shopping; tighter budgets mean that shoppers want to avoid any mistakes. The conventional wisdom has always been that most brand purchase decisions are made in the store. But with the new, digitally empowered consumer entering the store better prepared than ever before, is the new reality that most purchase decisions are made at home or on the way to the store? The truth most likely lies somewhere in between.

So how can manufacturers ensure that their brands are included in the consideration set and make the final cut? They must identify shopper needs and behaviors at every phase during the purchase decision journey and deliver relevant experiences that shape purchase decisions, from pre-purchase to point of purchase, from consumption experience to post-experience reflection.

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2: The Purchase Decision Journey and the Four Phases of Brand Commitment

1: The Rise of the Digitally Empowered Shopper

Table of Contents

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4: Five Principles for Developing an Effective Digital Shopper Marketing Plan

3: The Digital Toolbox

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p. 33

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and on the way they shop for them—how they plan, de-termine and complete their purchases. Until recently, the conventional wisdom was that 70% of brand pur-chase decisions were made in the store.1 Now technol-ogy, coupled with consumer concerns about the state of the U.S. economy, may be creating a new reality, one where more decisions are made outside the store. Some research indicates that as many as 76% of pur-chase decisions these days are being made at home.2

Three trends, enabled by technology, have given rise to the new digital shopper: the Google mindset, social media and 24/7 connectivity.


Websites. Search engines. Rich media ads. Blogs. Facebook. Twitter. Flickr. YouTube. Wikis. Widgets.

SMS/MMS/WAP. QR codes. Mobile apps.

These advances in technology have resulted in a funda-mental shift in the way people consume media—from passive engagement to active participation. Consum-ers are evolving into content creators, distributors, pro-grammers and critics. They demand information when, where and how they want it, filtered by their peers, backed by expert opinions and shared with friends. They have, in effect, wrested control away from publish-ers and advertisers.

This newfound control is also having a major impact on the nature of the relationships people have with brands

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I. ThE GooGlE MInDSET: RESEaRCh anD MoRE RESEaRCh

Consumers are using technology to gather large amounts of information about the products they

buy. And that research isn’t necessarily limited to products that will be purchased online or that are high- involvement decisions: 70% of consumers indicate that they are researching everyday grocery products online.3

The economic downturn has heightened product re-search by consumers, driving them to adopt new strate-gies as they consider every dollar spent and attempt to avoid making mistakes they’ll regret. Two-thirds are preparing shopping lists prior to store visits.4 More and more consumers are checking store circulars before or at the store (71%, up from 64% in 2007) and are bring-ing along coupons (82%, up from 63% in 2007).2 About a quarter of these coupon clippers are finding coupons online; the number of people using online coupons has

grown by 50% between 2005 and 2008, to 36 million.5 The shift in attitudes and behaviors may be permanent: 70% of consumers claim that they will maintain some or most of the behaviors they have adopted during the re-cession well after it ends.6

With the Internet playing such a crucial role in how con-sumers shop, it is not surprising that 48% of consumers indicate that the Internet has increased in importance in their lives compared with the previous year.7

93% of consumers research products online before

purchasing them in a store.8

II. SoCIal MEDIa: EMpowERInG woRD of MouTh

Only one in four consumers believes that advertis-ing is a credible source of product information.9

But what many do find to be credible are the opinions and recommendations of friends and family. A host of social media platforms, such as message boards, blogs, and user ratings and reviews, have enabled consumers to easily share opinions, and social net-works have expanded the reach of this content and the very definition of “friends and family.” Jonathan Carson, President of Online, International, at Nielsen, posits that the “explosion in Consumer Generated Media over the last couple of years means consum-

ers’ reliance on word of mouth in the decision-making process, either from people they know or online con-sumers they don’t, has increased significantly.”10 And studies back this up. While 90% of consumers trust recommendations from people they know, an eye-opening 70% completely or somewhat trust the rec-ommendations of consumer opinions posted online.11 What’s more, 84% claim that online customer evalua-tions influence their purchase decisions.12

III. 24/7 ConnECTIvITy: MobIlE aS an ExTEnSIon of ThE CoMpuTER

With broadband access at 82%, consumers are increasingly reliant on the Internet to organize,


“The explosion in Consumer Generated Media over the last couple of years means consumers’ reliance on word of mouth in the decision-making process, either from people they know or online consumers

they don’t, has increased significantly.”—Jonathan Carson, President of Online,

International, Nielsen

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simplify and add new capabilities to their lives.13 The growth in mobile phone penetration, currently at 81%, means that consumers are always connected, with readily available information at their fingertips, both at home and on the go.13 In fact, on a typical day, half of mobile users go online with a mobile device, checking email, accessing the Internet, texting, watching videos or getting maps or directions.14 While most people con-sider mobile access important for staying in touch with others, they equally value it as a way to obtain instant information.

Smartphones, and the iPhone in particular, are game changers, with their computer-like functionality driving the growth of the mobile Web. Their nearly 19% share will increase dramatically over the next few years as people replace their older mobile devices.15 Smart-phone users are heavily invested in their phones and tend to use other functions, beyond voice and texting, while on the go: 80% surf the Web,16 while about 16% search the Internet for products and services.15

10% have used a mobile device

to text-message a friend or family member about a product while shopping.17

2: The purchase Decision Journey and the four phases of brand Commitment

Digitally empowered shoppers are using technology to find and research products, to determine how

much to pay for them and where to buy them, to un-cover deals and special offers, and to consult with peers and experts. The 24/7 connectivity that mobile devices offer means that not only do consumers have access to information while on the go and at the store, but retail-ers and manufacturers have expanded opportunities to reach and influence them at key points along the pur-chase decision journey.

More importantly, access to digital content doesn’t end at purchase. Consumers also go online for information on how to use a product they have bought, then return online after they’ve experienced their purchase to re-flect on the experience and to share their opinions with others.

These shopper behaviors are captured in the follow-ing four phases of brand commitment that occur once a purchase journey has been triggered.

• Pre-Purchase: During this phase, consumers ac-tively seek out information that will influence pur-chase. They research products, look for offers, review the opinions of peers and experts, prepare shop-ping lists and select stores. Acquiring knowledge and

gaining confidence are key as consumers evaluate the options, plan for the shopping trip and commit to purchase decisions.

• Point of Purchase: During this phase, consumers survey the store, search for a product and select a par-ticular brand. They are able to physically compare prod-ucts and select or deselect specific ones. They may also find inspiration in the form of product usage ideas, pro-motional offers, or other products or brands that they had not considered earlier. A positive shopping experi-ence will reinforce the consumer’s commitment to both the brand and the retailer.

• Experience:After purchase, the consumer experi-ences the product, interacting with the packaging and ultimately using the product. At this point, consumers will seek advice on stocking, preparation and usage. Positive usage experiences will provide validation that they made the right choice and reinforce brand commit-ment, which can influence future purchases.

• Reflection: During this phase, consumers assess the entire experience, from Pre-Purchase to Point of Purchase to Experience. A positive experience at each phase will reinforce brand commitment, while a nega-tive one will lead to brand rejection. During this phase,

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consumers will share their experiences with their peers and, in the process, review the opinions of others. Those opinions have the potential to influence their own evalu-ations positively or negatively.

Each of these phases can either reinforce or weaken connections made with the brand in the previous

PRE-PURCHASE

POINT OF PURC

HA

SEEXPERIENCE

REFL

ECTION

Assessing

Accepting/rejecting

Sharing

Evaluating

Planning

Coordinating

Stocking

Consuming

Retail impression

Getting inspired

Qualifying

Selecting

Purchasing

Trigger

phase. Maximizing brand commitment requires first understanding shopper needs and behaviors at each phase, then delivering against those needs as part of a comprehensive marketing plan that may include both digital and traditional initiatives. Our focus here is on digital initiatives.

3:TheDigitalToolbox:Pre-PurchasePhase

Marketers have an overwhelming number of digital tools and technologies in their arsenal, but which will cre-ate the most relevant, engaging interactive experiences and activate consumers? Brand commitment at each

phase of the purchase decision journey, and thereby higher sales, can be achieved by matching appropriate digital solutions to the goals and needs of three key players—the shopper, the manufacturer and the retailer—as reviewed on the pages that follow.

ONLINE

Websites (manufacturer, retailer, social media)

Advertising

Utilities

User ratings/reviews

E-circulars

E-coupons

Widgets

Message boards

SEM/SEO

Influencer programs

Email

IN-STORE

N/A

BRAND ENGAGEMENT AND COMMITMENT

Activate the purchase decision journey

• Assist and influence product research

•Address barriers to purchase

•Assist shoppers in preparing

for their shopping trips

Manufacturer Goals

KNOWLEDGE AND CONFIDENCE

Product research•

Offer research•

Brand selection•

List creation•

Store selection

Shopper GoalsRetailer Goals

STORE COMMITMENT

Activate the purchase decision journey •

Assist and influence product research•

Address barriers to purchase •

Assist shoppers in preparing for their shopping trips

MOBILE

WAP

Mobile apps

Bluetooth

QR codes

GPS

SMS/MMS

Coupons

PRE-PURChASE PhASE TOOlBOx.

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I.ThEPRE-PuRchasEPhasEDIgITalToolbox

In the Pre-Purchase Phase, a purchase journey has been triggered and consumers are focused on gather-

ing the information they need for their shopping trip. Manufacturers seek to drive brand engagement and commitment, while retailers want to drive consumers to their store to complete the purchase. A variety of online and mobile tools can be deployed to address the goals of all three players, including search, website utilities, peer-to-peer communications, digital coupons and/or mobile applications, or apps.

Search: Given that most consumers begin their prod-uct research using search engines, marketers are shift-ing more of their budgets to search engine marketing (SEM) and ensuring that their websites are search en-gine optimized (SEO). Some retailers, like Target, are taking advantage of paid search results to drive con-sumers directly to online circulars promoting special of-fers. Reaching consumers through search can also be extended to mobile devices, with the added bonus of GPS location-based results. Placecast’s mobile ad net-work delivers dynamic messaging based on consumer behavior and location. A mobile user searching for run-ning events while walking near a Niketown, for example, will be alerted to running gear sold nearby.

location-based Targeting: location-based target-ing can also serve to trigger purchases or to encour-age brand engagement. Bluetooth technology delivers

content and special offers at no cost to users on the go, adding measurability to out-of-home advertis-ing. As part of a recent campaign for Pepsi Smash de-signed to increase brand engagement, transit shelter ads prompted passersby to turn on Bluetooth on their phones and opt in to receive MicPass hip-hop video clips. The campaign yielded a 23% opt-in rate. Another Bluetooth campaign was designed to drive mall traffic to local restaurants. Mall billboards alerted shoppers to download $2 off Miller Beer coupons redeemable at specific restaurants. This location-based targeting cam-paign resulted in a 13% opt-in rate.18

PlACECAST’S MOBIlE AD NETWORk DElIvERS DYNAMIC MESSAGING BASED ON CONSUMER BEhAvIOR AND lOCATION.

QWIkkER hOT SPOTS DElIvER CONTENT AND SPECIAl OFFERS AT NO COST TO USERS WITh BlUETOOTh-ENABlED MOBIlE DEvICES.

entire purchase journey. In the case of the iFood Assistant, users can plan their meals for the week and prepare shopping lists dur-ing their commute to work. They can then access the lists while at the store and even find a recipe for the broccoli that happens to be on sale. At home, they can pre-pare the recipe while watching an instructional video on the app. later, at the time and place of their choos-ing, they can rate and review the recipe via the app.

Peer-to-Peercommunications:Customer reviews and recommendations greatly influence the buying decisions of shoppers. Thus, it is not surprising that mobile apps

website and Mobile utilities: Marketers can deploy a variety of Web and mobile utilities to overcome barri-ers to purchase and get their products on consumers’ shopping lists. A challenge for a drugstore brand like CoverGirl is the inability of shoppers to try on cosmetics before purchasing them, something that they are able to do in department stores with the assistance of beauty consultants. To address this barrier, CoverGirl’s website offers the CG Makeup Mirror, a virtual makeup try-on utility. A user uploads her photo and applies cosmetics to it, getting a preview of what various colors would look like. Products may be saved to a shopping list, which can be printed or sent to a mobile device, bringing the user one step closer to making a purchase.

Many marketers are adapting their existing website utilities or creating new ones for mobile distribution. kraft’s iFood Assistant iPhone app, launched in Decem-ber 2008, helps consumers with meal planning, shop-ping and preparation. Users browse recipes, create shopping lists organized by store aisle and then locate nearby stores via GPS. The app is also synced up with kraft’s website (kraftfoods.com), enabling users to ac-cess their recipe boxes and shopping lists on the go. It is priced at $0.99, and although it is sprinkled with ads for kraft products, it is consistently among iPhone’s top 100 paid apps.19

The portability of mobile apps means that they can be deployed by marketers to shape decisions during the

COvERGIRl’S MAkEUP MIRROR lETS USERS vIRTUAllY TRY ON COSMETICS.

iFOOD DElIvERS MEAl SOlUTIONS TO iPhONE USERS.

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and websites alike are integrating ratings and reviews into their offerings to influence consumers during their purchase decision journey. Manufacturers and retailers of a wide range of products, from cereals to vacuum cleaners to automobiles, are posting user rat-ings and comments on their websites. CoverGirl takes user-generated content one step further, incorporating ratings and reviews in email newsletter communications to website subscribers, alerting them to the beauty products rated most highly by CoverGirl’s online community.

Many brands are identifying and engaging with influenc-ers through social media to help shape consumer decisions during the purchase journey. Rubbermaid de-ploys a blogger outreach program to get the message out about product benefits through the voice of the consumer. It provides bloggers with product samples and encour-ages them to discuss their experiences with others.

Dunkin’ Donuts’ Dunkin’ Run is tak-ing a social approach to shopping prepara-tion. Its Dunkin’ Run website, mobile site and iPhone app make it easy for a user to compile separate coffee orders from multiple friends and create one consolidated list that can be viewed in an email, on the mobile site or on the iPhone app, or printed out to bring to the store.

COvERGIRl UTIlIzES PEER-TO-PEER RATINGS TO ACTIvATE INTEREST AND DESIRE.

Content Distribution and Digital Toolkits: Since consumers rely on a variety of online resources to research products—manufacturer sites, retailer sites, third-party review sites, blogs—it makes sense to ex-tend the content reach beyond websites via content partnerships. For example, the Campbell’s kitchen website (campbellkitchen.com) is a sponsor of the Dinner Tonight section of AOl Food, which features Campbell’s recipes and reaches busy cooks seeking recipe ideas beyond the website.

likewise, brands can provide online retailers with con-tent and utilities to help drive sales. These websites are playing an increasingly important role along the pur-chase decision journey as shoppers seek out deals: traffic to retailer online circulars grew 26% between November 2007 and 2008.20 The Grocery Shopper Network makes it easy for consumer packaged goods manufacturers to distribute content, such as recipes, to grocer websites. Additionally, contextually relevant ad placements on those sites offer the ability to add advertised products to shopping lists directly from within the ads. For example, 360 product tours for Canon products can be found on CircuitCity.com.

Digital Coupons: As consumers look for ways to stretch their budgets and as newspaper circulation declines, coupon websites, such as Coupons.com and SmartSource.com, are experiencing record-breaking traffic, stealing share from newspaper FSIs. Mobile coupons are also becoming increasingly pop-ular. These coupons tend to have higher redemption

rates than print coupons, because while consumers often forget to take their coupons to the store, they will rarely leave their mobile devices behind. Mobile coupon apps, such as Yowza!!, take advantage of the iPhone’s GPS capabilities to deliver electronic cou-pons for a variety of retailers and quick-service res-taurants (QSRs) based on a user’s physical location.

Mobile coupon redemption rates average 5%–15%.

CANON’S 360 PRODUCT TOUR IS MADE AvAIlABlE ON CIRCUITCITY.COM.

CAMPBEllkITChEN.COM CONTENT IS FEATURED ON AOl FOOD.

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QSRs have successfully launched mobile coupon pro-grams, with cashiers either manually entering the coupon codes or merely viewing the coupons on the mobile device. high-volume, low-margin supermarkets have had a harder time with implementation, since most checkout scanners are unable to recognize coupon bar codes, and cashiers can’t slow down lines to manually enter the codes. Cellfire and AOl’s Shortcuts have over-come this barrier by linking coupons to grocery loyalty cards. Users planning their shopping trips can browse coupons either online or on their mobile devices and apply the coupons to their loyalty cards. They can also browse coupon offers on their mobile devices while at the point of purchase. The savings are automatically realized when the purchase is made. Cellfire’s initial tests indicate redemption rates averaging 5%–15%, far exceeding the 1% average for paper coupons.21

product Research Mobile apps: Mobile apps are be-coming increasingly important in reaching and engag-ing consumers while they are researching purchases. For example, users of the SnapTell mobile app can pho-tograph the cover of any CD, DvD, book or video game, and the app will identify the product and provide local and online retailer price information, as well as product ratings. Android users can also take advantage of their mobile devices’ bar-code scanning capabilities as an-other means to get product information.

Augmented reality apps, which blend the real world with digital data, are being launched to assist consumers

with their pre-purchase research. Users of Metaio’s iliving iPhone app take a photograph of the room they want to furnish and then virtually place furniture in the room to get an idea of how it would look. The mobile augmented reality browser of SPRxmobile’s layar app associates and displays digital content—for example, real estate for sale, popular bars, ATMs—over the reality on view through the mobile camera’s lens.

lAYAR’S MOBIlE AUGMENTED REAlITY

BROWSER GIvES USERS INFORMATION

ABOUT hOMES FOR SAlE.

CEllFIRE USERS APPlY COUPONS TO ThEIR GROCERY lOYAlTY CARDS.

3:TheDigitalToolbox:PointofPurchasePhase

II. ThE poInT of puRChaSE phaSE DIGITal Toolbox

During the Point of Purchase Phase, consumers are focused on retrieving the research and offers they had amassed during the Pre-Purchase Phase, finding the products, making their selections and completing their

purchases. They may be inspired to deviate from their planned purchases by any new information they acquire at the store. In this phase, the manufacturer is focused on increasing share of basket, whereas the retailer is focused on increasing basket size, but both want to make it as easy as possible for shoppers to find the items they are looking for. Mobile technologies, such as quick-response two-dimensional bar codes (or QR codes), WAP-enabled sites and short message service (SMS), are particularly relevant in the store environment, as are other in-store technologies, such as kiosks and handheld scanners.

ONLINE

Retailer website digital toolkits

IN-STORE

QR codes

Mobile image recognition search

GPS

Kiosks

Handheld scanners

Interactive carts

Smart shelves

RFID

Digital screens

INCREASE SHARE OF BASKET

Assist in locating products•

Provide relevant solutions•

Ensure positive shopping experiences

Manufacturer Goals

Pre-store research and offer retrieval

• Product search

•Product discovery

•Offer discovery

Reassurance•

Selection•

Purchase


INCREASE BASKET SIZE

Assist in locating products•

Inspire unplanned purchases•

Provide relevant solutions•

Ensure positive store experiences

POSITIVE SHOPPING EXPERIENCE

MOBILE

WAP

Mobile apps

Bluetooth

QR codes


GPS

SMS/MMS

Coupons

POINT OF PURChASE PhASE TOOlBOx.

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Mobile product Research utilities: Mobile should be an integral part of marketers’ in-store shopper strate-gies, providing consumers with the information they need at the point of sale. QR codes extend the value of product packaging by providing shoppers with easy ac-cess to additional information on their mobile devices, helping them with their purchase decisions. For exam-ple, a shopper who takes a snapshot of a QR code on a Woollaston wine label with a mobile device is linked to wine reviews and tasting notes. QR codes are also being used to cross-sell products in-store, driving incremen-tal purchases. Although these codes are still in their in-fancy in the United States, it is predicted that within the next two years, most mobile phones will come with pre-installed QR code scanner apps.22 Meanwhile, market-ers can deliver similar experiences via SMS marketing. Calls to action can be placed in any media—shelf talkers, packaging, circulars—and consumers can initiate text messages to receive quick links to additional content.

Mobile videos are being used to address barriers to purchase and provide a work-around for any retailer infrastructure limitations. For example, when The home Depot wanted to convey to shoppers that its Safety Quick light ceiling fans and light fixtures were easy to install, it created mobile videos that could educate consumers at the point of purchase. Shelf displays prompted shoppers to send a text message to receive a link that initiated a streamed instructional video on how to install a particular fan or fixture. The video over-came a barrier to purchase (perception that installation

is complicated) and could also be used at home after purchase as a how-to guide.

Mobile apps are gaining more traction in-store. Seventh Generation’s label Reading Guide iPhone app offers a searchable index of ingredients, allowing shoppers to look up label ingredients while in the store. Users of the ShopSavvy app can scan product bar codes while at the store to review prices online and at local stores, giving them the confidence to complete their purchases.

SEvENTh GENERATION’S lABEl READING GUIDE AllOWS ShOPPERS TO lOOk UP

lABEl INGREDIENTS WhIlE AT ThE STORE.

ClOThING ShOPPERS CAN vIEW COMPlETE OUTFITS.

Recognizing that consumer product reviews can play a critical role in influencing purchases when consum-ers are on the go, Walmart enables its shoppers to text product UPC codes to its mobile service to retrieve product reviews and additional product information.

Social Shopping Technologies: Amazon.com revo-lutionized social shopping years ago by applying col-laborative filtering algorithms, based on peer product purchases and ratings, to product recommendations. Some marketers are looking beyond peer ratings, en-abling consumers to interact with a smaller, more trusted group of people they actually know—that is, friends and family—while they shop online or offline. Social shop-ping technologies let consumers virtually connect with friends at the point of decision, bringing in the element of fun while providing the validation they may need to complete purchases.

Bloomingdale’s experimented with social shopping in 2007. Its virtual Mirror enabled shoppers to connect live with friends and family members as they modeled outfits in front of a mirror. Shoppers could send pho-tos or videos of themselves to their MySpace page or to friends via email or cell phone. The friends voted “yes” or “no” on an outfit in real time and could text-message back. The mirror displayed the vote tally and messages.

ShopTogether, Sesh, Fluid Social and other social shop-ping technology vendors empower shoppers to in-tegrate their friends and family into their shopping

canon’s WaP-enabled site focuses primarily on ratings and reviews. The site, powered by the Mobilevoice product review app, enables shoppers to browse peer-to-peer ratings and reviews of Canon products on their mobile devices while at the store.

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zUGARA’S ONlINE ShOPPING APP COUPlES ThE FUNCTIONAlITY OF AUGMENTED REAlITY WITh MOTION CAPTURE.

ChARlOTTERUSSE.COM ShOPPERS ShARE ShOPPING

SESSIONS WITh ThEIR FRIENDS, GETTING ThE

vAlIDATION NECESSARY TO COMPlETE ThE PURChASE.

sessions at online retail sites. For example, visitors to the website of Charlotte Russe, a teen clothing and ac-cessories retailer, invite friends at different locations to shop with them virtually on the site via collaborative chat sessions. Early results from technology vendors in-dicate that shoppers who engage with these technolo-gies spend more time on retailer sites and have larger order values as they share product ideas with their friends.23

zugara is combining the functionality of augmented reality and motion capture to take social shopping to a new level. Its Webcam Social Shopper prototype al-lows shoppers to virtually try on clothes by using their webcams and computers, seemingly holding articles of clothing in front of themselves and creating the illusion that they are wearing them. They can livestream their webcams’ feeds to friends and family, and receive com-ments and feedback in real time.

“Inspector Gadget has taken up residence in retail

stores, with coupon-dispensing kiosks, Web Tv cooking programs, self-checkout

scanners, smart carts picking products based on grocery lists, text reminders of last minute items, and Internet

sites that track purchases and analyze nutritional content. Technology is changing the

rules at retail.”24

In-storeTechnologysolutions: Interactive technol-ogies are being deployed at retail to bring the store to life, to provide personalized experiences and so-lutions, and to help shoppers find the products that are right for them. ShoptoCook’s kiosks distribute branded recipes and coupons to shoppers who seek inspiration for quick and easy meal ideas. The com-pany’s research indicates that 80% of those who get recipes in-store buy the ingredients to make them. Ukrop’s loyalty program members scan their cards at Savings Spot kiosks when they arrive at a Ukrop’s gro-cery store in order to receive personalized circulars with messaging and offers based on their purchase history. Offers may include unadvertised specials for members only.

Modiv Media’s Scan It! system for supermarkets also brings personalization into the retail environment, combining shopper data (loyalty card purchase and redemption history), contextual data (radio-frequency identification, or RFID) and behavioral data (products put in the shopping cart) to deliver targeted advertis-ing and promotions. Shoppers scan their loyalty card at a Scan It! kiosk upon entering the store to access a handheld scanner device. They scan items as they put them in their cart and get cross-promotions and special offers. MediaCart’s interactive shopping carts

function similarly and can provide additional services on their screens, including product demonstrations and directions for finding items within the store.

UkROP’S kIOSkS DISPENSE PERSONAlIzED

CIRCUlARS TO lOYAlTY PROGRAM MEMBERS.

MODIv MEDIA’S SCAN IT! SYSTEM BRINGS PERSONAlIzATION INTO ThE RETAIl ENvIRONMENT.

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In-store Digital Networks: In-store digital screens and networks provide succinct, clear and relevant mes-sages that remind shoppers of brand associations or give compelling reasons to purchase a particular brand at the point of purchase. The Walmart Smart Network, for example, deploys message optimization technolo-gies that enable the delivery of targeted content by store, by screen location, by day and by time of day.

New technologies are adding additional layers of per-sonalization to these screens. METRO’s Extra Future Store in Rheinberg, Germany, has experimented with linking in-store screens to RFID product tags to deliver more relevant messaging and promotions. When shop-pers pick up tagged Pantene products, for example, an overhead screen delivers cross-promotional prod-uct offers. YCD Multimedia is testing facial-recognition technology to enhance in-store screen messaging. A shopper’s facial features—nose size and shape, eyes, cheekbones, jawline—are analyzed to determine the shopper’s particular demographics, resulting in highly targeted advertisements.

Many of these stand-alone technology solutions and in-store digital networks may eventually be integrated into consumers’ personal mobile devices. Acuity Mobile’s AisleCaster, currently in development, will link grocer

loyalty card data and in-store locations to deliver tar-geted messages and offers to shoppers’ mobile de-vices. Its Wi-Fi hot spots can identify and alert shoppers within a 3-foot radius to promotional offers while they are still shopping rather than after checkout (for exam-ple, Catalina Marketing).

ThE WAlMART SMART NETWORk DElIvERS TARGETED CONTENT.

3:TheDigitalToolbox:ExperiencePhase

III. ThE ExpERIEnCE phaSE DIGITal Toolbox

During the Experience Phase, when consumers experience their purchases and validate their brand choices, they seek usage directions and suggestions. Their experiences will contribute to determining their brand loyalty and

what they will share with others. Depending on the type of purchase, the approval of others may play a role. For example, a mom who has purchased Ragu pasta sauce for dinner will take her family’s feedback into consideration when later evaluating the experience. In this phase, both manufacturers and retailers can provide usage ideas and customer service solutions to ensure positive brand experiences. A variety of online and mobile customer service solutions, community tools and videos can address the goals of all three players.

ONLINE


Video

IM chat

Message boards

Email

IN-STORE

N/A

PRODUCT USAGE AND SATISFACTION

Provide usage ideas•

Ensure positive brand experiences•

Provide customer service solutions

Manufacturer Goals

VALIDATION AND APPROVAL

Usage directions•

Preparation•

Consumption


PRODUCT USAGE

Provide usage ideas•

Provide customer service solutions

MOBILE

WAP

Mobile apps

QR codes

Bluetooth

Video podcasts


SMS/MMS

ExPERIENCE PhASE TOOlBOx.

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product usage Guidance: Providing purchasers with guidance, advice and suggestions on how to use a product can ensure that consumers have posi-tive brand experiences. The QR codes that Springer Mountain Farms places on its chicken packaging al-lows mobile users immediate access to recipes and promotions at the company’s mobile website. Recipes on packaging are commonplace, but QR codes add an element of flexibility. The recipes associated with a particular QR code can change by the time of day they are scanned (for example, a breakfast idea versus a dinner idea), the day they are scanned (for example, a quick weekday dinner casserole versus a slow-cooked stew on weekends) or the season (for example, a Thanksgiving recipe versus a Christmas one).

Mobile and online videos are also helpful in en-hancing the brand experience and ensuring suc-cess, providing step-by-step guidance on how to use a product. Betty Crocker’s online cooking club, The Mixer, provides webcasts (live and recorded) of cooking demonstrations of various recipes by Betty Crocker experts. home cooks can follow along, preparing the recipes and having the op-portunity to ask questions during the live webcasts. CoverGirl’s step-by-step makeup application tips on its website and its YouTube channel videos advise cosmetics purchasers on how to get the desired look using the products they have purchased.

MEMBERS OF BETTY CROCkER’S ONlINE COOkING ClUB CAN COOk AlONG WITh ExPERTS.

SPRINGER MOUNTAIN FARMS ON-PACk QR

CODES lINk USERS TO ThE MOBIlE WEBSITE.

Customer Service utilities: Digital tools can be used to help ensure that consumers have positive brand ex-periences. live Chat is a method of responding to cus-tomer questions directly in real time through Internet chat technology. It is useful during the Pre-Purchase Phase, when consumers are conducting product re-search on websites and are having difficulty navigat-ing the sites or determining which products are right for them. live Chat is often used during the Point of Purchase Phase by online retailers to proactively in-vite a shopper to chat when they sense that she may be about to abandon her shopping cart. During the Experience Phase, live Chat customer service repre-sentatives can address consumers’ usage questions.

Weber’son thegrill iPhoneapp, which features hundreds of recipes linked to a shopping list that users can take to the store, provides instructional videos that can be fol-lowed while grilling. It also includes grilling techniques and a built-in grill timer that en-sures that recipes are done to perfection.

COvERGIRl’S lIvE ChAT BEAUTY CONSUlTANTS ARE AvAIlABlE FROM EvERY PAGE OF ThE SITE

TO PROvIDE ExPERT ADvICE IN REAl TIME.

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CoverGirl.com visitors can access CoverGirl’s live Chat Beauty Consultants from every page of the site to get advice about how to apply the products they have purchased. These sessions present an opportu-nity to promote additional products.

Social Media: “When you have a problem, your first instinct is not to call customer service because it’s going to be painful,” says Salesforce.com senior vice president Alex Dayon.25 Rather, consumers turn to social media—message boards, blogs, social net-works—where they can resolve issues on their own by interacting with one another. Many companies are enabling these customer self-service discus-sions by creating forums on their websites. Nestlé’s veryBestBaking.com community message boards fea- ture discussions on a wide range of baking topics. A purchaser of Nestlé Toll house Chocolate Morsels who is uncertain about how to prepare the on-pack cookie recipe can tap into the wisdom of other visitors to the message board.

Marketers are also closely monitoring brand conver-sations on Twitter and third-party blogs and message boards, and stepping in when appropriate to ad-dress customer service issues. While failure to meet customer expectations has always been an issue, the risks were not as great prior to the explosion of

vERYBESTBAkING.COM’S MESSAGE BOARDS ENABlE USERS TO INTERACT WITh EACh OThER ABOUT ThEIR PURChASES.

social media. Now a single consumer can broadcast a problem to thousands upon thousands, potentially damaging a brand. Companies such as Comcast, JetBlue and Starbucks are engaging their customers on Twitter, responding to inquiries within hours in a public forum and turning customers into fans.

3:TheDigitalToolbox:ReflectionPhase

Iv. ThE REflECTIon phaSE DIGITal Toolbox

During the Reflection Phase, consumers evaluate their purchase journey, from Pre-Purchase to Point of Purchase to Experience. Their evaluation of their experiences will impact retailer and brand loyalty and what they will

share with others. In this phase, both manufacturers and retailers can provide rewards for brand or store choice, encourage purchasers to share their positive experiences and trigger the purchase cycle again by providing repur-chase reminders. loyalty programs, social media tools and email and text message reminders are the goals of all three players.

ONLINE


Message boards

User ratings/reviews

Photo/video sharing

Loyalty programs

Email

IN-STORE

N/A

BRAND LOYALTY AND ADVOCACY

Reward brand choice•

Enable positive sharing•

Provide repurchase reminders•

Garner insights

Manufacturer Goals

EMOTIONAL CONNECTIONAND RECOGNITION

Brand evaluation•

Retail evaluation•

Sharing and endorsement•

Experience reinforcement


STORE LOYALTY AND ADVOCACY

Reward store choice•

Enable positive sharing•

Drive repeat store visits•

Garner insights

MOBILE

WAP

Mobile apps

QR codes

SMS/MMS

Loyalty programs

REFlECTION PhASE TOOlBOx.

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Social Media: While peer-to-peer and expert reviews play an important role during Pre-Purchase Phase product research, they also play a role post-purchase. After making purchases, consumers go online to voice their opinions in social media, such as message boards, blogs and social networks. In do-ing so, they may review what others have said, which could influence their final evaluations. For example, a consumer who had little success with an on-pack macaroni recipe may go online to write a review of the product and recipe, and find that others are confidently posting positive experiences. This may convince her to repurchase the product and give the recipe another shot. CoverGirl’s Facebook page encourages fans to share their product experiences and engage further with the brand in social media. CoverGirl website visitors also share opinions on all products through Bazaarvoice’s ratings and review software. Similarly, the Campbell’s kitchen website allows cooks to share their experiences with others through its recipe rating and review functionality.

Post-Purchasecommunications: Online marketers use post-purchase email communications to encour-age consumers to share their experiences with oth-ers; to send them replenishment reminders; and to cross-promote products that may be of interest to them. Williams-Sonoma’s emails invite consumers to return to the site to review purchases, stressing the importance of those reviews to both the company

and other shoppers. Neiman Marcus sends emails to customers who purchased beauty products online to remind them that it is time to purchase again.

WIllIAMS-SONOMA ENCOURAGES BUYERS TO RETURN TO ThE SITE TO RATE AND REvIEW ThEIR PURChASES.

NEIMAN MARCUS EMAIlS REPlENIShMENT REMINDERS FOR BEAUTY PURChASES.

loyalty programs: Retailers, the travel and hospi-tality industry, and financial services have long used loyalty rewards programs to strengthen relationships with their customers. U.S. households currently aver-age 14.1 program memberships, up 18% from 2007.26 That’s a lot of cards to carry around, so mobile ven-dors have launched apps that help consumers orga-nize all those loyalty cards. The Scanaroo iPhone app files all loyalty card information in the app; users take photos of their loyalty cards with their mobile devices, and the app converts the photos into digital format, providing on-the-go access.

Brand marketers have been getting on board the loyalty program bandwagon too. huggies recently launched the online rewards program huggies Enjoy

the Ride Rewards. This program lets parents earn points by registering and interacting on the website EnjoyTheRideRewards.com, and the points are sub-sequently redeemed for sweepstakes entries and prizes. My Coke Rewards members accumulate points for their purchases, which can then be redeemed for various prizes; members enter UPC codes and man-age their accounts online or on their mobile devices.

SCANAROO’S MOBIlE APP STORES lOYAlTY CARD INFORMATION.

harrah’smobileloyaltyprogramfor Rio hotel and casino in lasVegas leverages the property’s customer database to provide real-time offers, prop-erty information and loyalty points to guests on their mobile phones. When hotel guests check in, they are prompted to opt in to re-ceive text message offers on their mobile devices and, in turn, receive various offers during their stay.

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4: five principles for Developing an Effective Digital Shopper Marketing plan

I.lEaDWIThshoPPERINsIghTsaNDNEEDs,noT wITh TEChnoloGy.

It is not about technological bells and whistles to get shoppers’ attention at retail. It is about focusing on

shopper insights and applying meaningful technol-ogy at key touchpoints during the purchase decision journey in order to engage and convert shoppers into buyers.

Start by evaluating the objectives, motivations and technology capabilities of the key players:

• Theshopper: What are shoppers’ technographics? What barriers exist during the purchase decision jour-ney? how do consumers approach digital technolo-gies in their role as shoppers?

• The Retailer: What are shoppers’ in-store need states? What existing digital technologies and infra-structures can be leveraged to activate shoppers dur-ing the purchase decision journey?

• The Manufacturer: how do shoppers approach the product category and evaluate brands? What is the role of technology in achieving desired brand po-sitioning? In driving brand choice? What retailer tech-nologies can be leveraged to drive brand purchase?

Once you have completed the evaluation, map the right technology solutions against any barriers to pur-chase. how can you help consumers determine which products best address their needs? how can you allay any uncertainty consumers might have about brand performance? how can you help them know at which stores to find the products? And when they are in a store, how do you help consumers navigate their way to the products? how can you guide them in using the products? Given the similarity in goals, it behooves retailers and manufacturers to collaborate on some of the solutions—online, on mobile and in-store.

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II. wEavE DIGITal ShoppER MaRkETInG SoluTIonS InTo EvERy TouChpoInT alonG ThE puRChaSE DECISIon JouRnEy.

Marketers tend to focus on getting consumers to purchase their brands. But there’s a role for digital shopper marketing post-purchase as well. Provide consumers with the tools they need to ensure positive usage experi-

ences, reinforcing their confidence in the purchase choices they have made. Explore tools that enable consumers to share their experiences with others, and consider rewarding them for their loyalty and advocacy.

CoverGirl deploys various digital solutions to address barriers during the purchase decision journey. From its in-teractive website—where visitors can get personal makeup tips and advice from trained Beauty Consultants—to its WAP-enabled site that shoppers can access in the store to its how-to videos and live Chat functionality to its social media applications, all technologies serve to influence decisions during the purchase decision journey and trans-form purchasers into brand loyalists and advocates.

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PRE-PURCHASE

POINT OF PURC

HA

SEEXPERIENCE

REFL

ECTION

Assessing

Accepting/rejecting

Sharing

Evaluating

Planning

Coordinating

Stocking

Consuming

Retail impression

Getting inspired

Qualifying

Selecting

Purchasing

Trigger

COvERGIRl OFFERS DIGITAl SOlUTIONS AT EvERY PURChASE DECISION JOURNEY TOUChPOINT.

III. TEST anD lEaRn.

Now is not the time to sit back and wait. Manufactur-ers and retailers alike are experimenting with new

technologies, gauging consumer reactions and amass-ing learning that will give them competitive advantages in the future. Innovative manufacturers are focused on connecting with consumers in new ways, forging lasting relationships. Recent research indicates that the most successful retailers are deploying new technologies in-store to drive sales and to create more compelling and personalized in-store experiences for their custom-ers. They are experimenting with handheld devices, digital signage and mobile coupons.27

RetailWinnersareTesting NewTechnologies27

82% believe that innovation in how to connect with consumers is a very valuable

opportunity (versus 53% of laggards).

•

32% use in-store digital media (versus 17% of laggards).

•

14% use mobile coupons or incentives (versus 9% of laggards).

•

14% provide handheld scanners to shoppers (versus 4% of laggards).

Note: Winners are defined as those exceeding average industry growth rate,

and laggards, as those below the average industry growth rate.

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v. TREaT MobIlE aS ThE ConnECTIvE TISSuE.

look to mobile to reach consumers at every touch-point during the purchase decision journey. It is the

one channel that allows you to follow consumers in their lives and deliver highly targeted and personalized com-munications, and it is also highly measurable.

Mobile devices seamlessly connect what shoppers do online with what they do in the store. These devices are always on and always present; they are no longer just wireless online devices, but a very personal and custom-ized medium. It is no surprise, then, that mobile is dra-matically changing the way people shop: from the way they conduct product research to the way they make selections in-store to the way they experience the pur-chase to the way they, finally, evaluate that purchase.

Iv. haRnESS ThE powER of SoCIal MEDIa DuRInG ThE puRChaSE DECISIon JouRnEy.

With peer-to-peer recommendations more impor-tant than ever and easier to share through digital

technologies, it is critical to evaluate how, where and when consumers are sharing opinions and recommen-dations in order to determine how to best leverage these technologies:

• Pre-Purchase: Where are shoppers conducting their pre-purchase research and which social media are they tapping into?

• PointofPurchase: What role does social media play when shoppers are at the store? Do they need to touch base with friends and family in order to have the confi-dence to make purchases? Do they need to check on the ratings and reviews of peers?

• Experience: how can social media be leveraged to allow consumers to help one another ensure positive product experiences?

• Reflection: In what ways can social media be used to drive brand loyalty and advocacy?

Five Principles for Developing an Effective Digital Shopper Marketing Plan

Summary

Lead with shopper insights and needs, not with technology.

Weave digital shopper marketing solutions into

every touchpoint along the purchase decision journey.

Test and learn.

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Harness the power of social media during the

purchase decision journey.

Treat mobile as the connective tissue.

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Conclusion

Digital technologies have revolutionized the shopping landscape, empowering consumers and permanently altering the way they interact with—and shop for—brands. They research purchases before, during and after their shopping trips—on computers, on mobile devices and at kiosks. They demand information at the time and place of their choosing.

These technologies present marketers and retailers with a plethora of innovative and ex-citing opportunities to reach, engage and influence consumers. Winners in this new world are navigating ways to best deploy technologies along the purchase decision journey to maximize brand commitment, delivering consumers the right mix of information, solutions, inspiration and community. At home. In-store. And on the go.

Are you ready?

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References

1. Consumer Buying habits Study, Point of Purchase Advertising International, 1995.

2. Americanism Study: IRI Economic Trend Database™, IRI Attitudelink™ Survey of 1,067 Consumers, Q4 2008, February 2009.

3. 2007 Consumer Packaged Goods Survey, Prospectiv, January 2008.

4. “Gone in 2.3 Seconds: Capturing Shoppers with Effective In-Store Triggers,” Miller zell, 2008.

5. 2008 Printable Coupon Consumer Pulse, Coupons Inc. & Simmons Market Research Bureau, April 25, 2008.

6. “The Game Changer: how the Recession has Created Permanent Changes in Consumer Behaviour,” Connections Panels Study, Initiative, May 2008.

7. The State of the U.S. Online Retail Economy Through Q1 2009,” comScore, May 14, 2009.

8. Consumer Intentions and Actions Survey, BIGresearch, March 2007.

9. Edelman Trust Barometer 2008.

10. “Global Advertising: Consumers Trust Real Friends and virtual Strangers the Most,” Nielsen Wire, July 7, 2009. 11. The Nielsen Company Global Online Consumer Survey, April 2009.

12. Opinion Research Corporation Survey, 2009.

13. “The Infinite Dial 2009: Radio’s Digital Platforms,” Arbitron Inc./Edison Research, 2009.

14. “Wireless Internet Use,” Pew Internet, July 22, 2009.

15. Mobile Market view Study, The kelsey Group/ConStat, November 3, 2008.

16. Smartphone Usage and Brand Study, Crowd Science, June 16, 2009.

17. 2006 IBM national survey, presented at the National Retail Federation 96th Annual Convention & Expo, New York, NY, January 14-27, 2007.

18. Qwikker Inc.

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19. Emily Bryson York, “kraft hits on killer App for iPhone Marketing,” Advertising Age, January 19, 2009.

20. Nielsen Online Netview.

21. Cellfire.

22. Dan Butcher, “Mobile Drives Incremental Sales From On-the-Go Consumers,” Mobile Marketer Daily, July 13, 2009.

23. Fluid Social.

24. Todd hale and George Wishart, “Wired Retailers Deploy Digital Media,” Nielsen Wire, May 4, 2009.

25. Paul Boutin, “Customer Support via Twitter? Salesforce.com Makes It legit,” The New York Times, March 24, 2009.

26. Rick Ferguson and kelly hlavinka, “The 2009 COllOQUY loyalty Census, 2009,” COllOQUYtalk, April 2009.

27. Nikki Baird and Paula Rosenblum, “Enabling the Shopping Process: In-Store Marketing for the Empowered Consumer,” Retail Systems Research, July 2009.

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