Best Practices in Digital Shopper Marketing

8/8/2019 Best Practices in Digital Shopper Marketing

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INDUSTRY REPORT

A supplement to Shopper Marketing magazine

Clicking Throughthe Path to Purchase:Best Practices inDigital ShopperMarketing

1. INTRODUCTIONRead quickly. In the time it takes to read this report, some o the best practices in digitalshopper marketing that it examines may already be obsolete.

While this special report was in production, Apple Inc. introduced both the iPad andiPhone 4. On July 1, Unilevers Dove Men + Care became Apples pioneering iAd advertiser

by launching a multi-dimensional advertorial (to use an outmoded phrase) that combinedsports content, product inormation and a rat o attention-grabbing rich media tricks.

Shortly thereater, Krat Foods launched Big Fork, Little Fork, an iPad-specic applicationdesigned to help parents nd healthy meal solutions or their children.

Such rapid-re developments have become commonplace in todays society, where therate o new technology introductions is matched only by the speed with which consumersadopt them. Among the tools currently at the peak o the consumer adoption curve are

numerous digital shopping aids.Morgan Stanley analyst Mary Meeker theorizes that society is undergoing the th

major technology cycle o the last 60 years. The main dierence between this cycle andthe previous our the emergence o mainrame computers in the 1960s, mini-computers

in the 70s, desktop computers in the 80s, and the Internet era o the 90s is that this onerees the user rom the prior restrictions o time, place or even device. It is the era o the

Mobile Internet.

The consumption o media has changed accordingly. There are 221 million Internet usersin the United States, which represents 71.2% o the population, according to eMarketer.

There are 292 million television viewers, although 35% o them actually do some o thatviewing through the Internet, according to comScore. And, 66 million are occasionally

PRESENTS:

TABLE OF CONTENTS

1. I ntroduc tion ........................................................1

2. Th e Digital Landscape ........................................3 Step1:ConsumerDemandGeneration Step2:ShopperPurchase/RetailerSales Step3:ConsumerLoyalty

3. KeyConsumerBehavior......................................5

4.WhatToDo:StrategiesForCommunication......9 B randing Sales/Discounts Coupons ConsumerPromotion Consumer/ShopperSolutions LoyaltyMarketing CauseMarketing Co-Marketing E-Commerce

5.WhereToBe:StrategiesForPlacement ...........13 OnlineDestinations TargetedSites SocialNetworks BrandSites Retailer Sites InStores

6. HowToDeliver:StrategiesForConnecting......17 a .Onl ine b .In-Store c.OntheGo/Anywhere

7. KeysToFutureSuccess......................................22


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DIGITAL SHOPPER MARKETING

logging on while

watching TV, according

to In-Stat.

Such media multi-

tasking will becomeeven more the norm

in the uture. Nielsenorecasts that 51% o

U.S. consumers willown Internet-enabled

smartphones by the endo 2011. By 2014, morepeople will be accessing

the Internet via mobiledevices than desktop

computers, according toMorgan Stanley.

These technological changes are wreaking havoc inthe marketing industry, which enjoyed a relatively easy 75

years o controlling consumer communication, dictatingthe times, places and delivery channels to a nation opassive consumers via radio and TV.

The Internet reversed that, turning the act oconsuming into a sel-driven exercise rather than a

passive process. Todays consumer actively seeks out theinormation or hersel, and increasingly is able to ndeverything that she needs quickly, easily and, thanks to

mobile phones, whenever and wherever she needs it.The result is an increasingly complex path to

purchase, said Lori Aulnger, Procter & Gambles directoro consumer and market knowledge, at a recent industry

conerence. Consumers are using more and more

touchpoints to decide what to buy and where to buy it.Digital marketing is now aecting very directly

the shopping occasion, says Peter Cloutier, president oCatapult Marketing, Westport, CT.

Google Inc., whose primary business model entailsconnecting advertisers with interested consumers, has

dubbed the digital marketplace the zero moment otruth. I, as Procter & Gamble has amously proessed,the rst moment o truth occurs when consumers stand

in ront o a store shel and decide whether to buya product, then the zero moment is everything that

happens beorehand, according to Kevin Kells, Googlesnational industry director or consumer packaged goods.

Increasingly, that everything is taking place digitally.

Digital MarketingThe term digital marketing applies to anycommunication delivered through digital technology,

including the Internet, place-based networked signage,in-store kiosks and personal shopping assistants,advergaming and mobile phones. But the practice o

digital marketing has existed or much longer than the

term.Packaged goods marketers have been

communicating with consumers online or almost 15

years, both through advertising vehicles adapted or themedium and the development o content that could

attract visitors to brand websites.For a number o years, digital shoppermarketing

which ne-tunes the practice to directly inuence storechoice and product purchase has been a core strategy

or brands in consumer electronics, automobiles andother big ticket categories, where the path to purchasedemands a signicant amount o inormation gathering,

product comparison and price checking, and whereonline purchase options have been available or years.

Food and beverage marketers, however, have beenmore content to use the Internet as a brand-building

channel rather than a direct sales-driving mechanism. Thegeneral belie among CPGs was that consumers didnt

need to conduct research to decide between Cheeriosand Special K, and that the inormation shoppers needed

DoveMen+CaresiAd

KraftsiPadapp

KraftsFirstTastesite


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beore heading to the store was delivered in Sunday

newspapers.Likewise, pure-play Internet retailers such as Amazon.

com and Drugstore.com, along with traditional specialty

chains like Best Buy, have employed digital shoppermarketing practices or a number o years to attract these

online researchers, help them make their decisions and,ultimately, close the sale either online or in a physical

store.Traditional packaged goods retailers took much

longer to get involved, due to the understandable beliethat ood and household products werent enough o abig-ticket purchase to be made online. When Amazon.

com began selling groceries in 2006, ew supermarketoperators even had consumer-acing websites. (The idea

that weekly circulars should be posted online had notoccurred to most.)

It was only in the last ew years that traditional CPGretailers began attempting to build sites that would

attract shoppers, and even more recently that theyrealized digital marketing could inuence trips andpurchase decisions.

This shit in thinking was driven by many things,including the continued ragmentation o traditional

media, the near-ubiquitous household penetration o theInternet and the economic recession o 2008 the last owhich made the aorementioned Cheerios vs. Special K

decision much more critical or many consumers. Today,50% o packaged goods shoppers visit a retailers website

one or two days beore visiting the store, according toCatapult Marketings second annual Digital Shopper

Marketing Study (which will be discussed at length later).

But what sparked the current surge in digitalshopper marketing more than anything else has been

the emergence o the mobile phone as the consumersprimary lieline.

During holiday 2009, 10% o all cellphone usersalready were taking pictures o products in stores,

according to Morgan Stanley. These mobilized consumersalso used their phones to obtain (and use) coupons, makeshopping lists, compare prices, nd better deals at other

stores, and send those aorementioned photos to riendsto get a second opinion.

Such unctionality is making the mobile phone anindispensible liestyle tool or consumers a personal

shopping assistant, i you will.For marketers, the device is ostering direct, one-

to-one communication with consumers. But it has also

ushered in a new age in which the role o marketing is notjust to persuade consumers to buy products, but also to

provide them with digital tools that can acilitate thosepurchases.

2. THE DIGITAL LANDSCAPEDigital marketing encompasses a wide array o deliverymechanisms and promotional tactics that can be used

to reach consumers along the path to purchase, romdemand generation through the entire shopping process

to post-purchase relationship management.

Catapult Marketing segments these variousmechanisms and tactics into three distinct phases based

on the strategic roles they typically play or marketersand the stages along the path to purchase in which

consumers normally utilize them. For the time being, theyadditionally are segmented by the physical location

in which consumers most oten interact with them,although the rapid penetration o Internet-enabledsmartphones will ultimately make that distinction

obsolete.

Phase 1: Consumer Demand GenerationA number o digital tactics can be used to build brandawareness and equity while generating consideration and

demand or products, stores and services. Among themore common are:

SearchEngineOptimization(SEO): The calculateduse o content and technology to enhance a brands

prominence in search results (by appearing higher on lists,more oten, etc.) on Google, Yahoo, Bing and other search

engines.

SearchEngineMarketing(SEM):The use o paidsearch, display advertising and other tactics to guarantee

prominent top-o-page positioning in search results orspecic terms.

SocialNetworks: Building communities o brandenthusiasts and/or employing paid advertising to reach

the millions o registered members o Facebook, MySpace,Twitter and other social networks.

Brandwebsites:Developing unique

websites or brandsto draw consumer

trac, either through

straightorwardinormation(pampers.com),solutions-themed

content (P&Gshomemadesimple.

com) or promotions(Coca-Colas

mycokerewards.com).

KraftsiFoodAssistantapp


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The Digital Path to Purchase

Source: Catapult Marketing, July 2010

Shopper Purchase/Retailer Sales

In-Home

Consumer Demand

SEO/SEM

Online media

Social networks

Brand websites

Mobile sites

Smartphone apps

Digital promotions

Digital coupons

Retailer websites

SEO/SEM

E-commerce

Shopping apps

GPS

Mobile search

Mobile sites

Shopping apps

QR codes

RFID

Paperless coupons

Mobile scanner

Kiosks/Digital signage

Consumer Loyalty

Electronic CRM

Mobile CRM

Social media

Word of mouth

Advocacy

Product reviews

On-the-Go In-Store

Mobilesites: The reduced screen size, bandwidth and

graphics o smartphones makes viewing most existingwebsites impractical, requiring marketers to develop

more compatible mobile sites to attract repeated use.

Smartphoneapps: Unique interactive sotwareapplications providing some type o unctional service.

The poster child o brand apps is Krat Foods iFood

Assistant, which delivers a Recipe o the Day to itshundreds o thousands o users.

Digitalpromotions: Conducting action-inspiring

consumer promotions, either exclusively or as part o an

integrated eort. Nearly all national campaigns now usethe Internet as the primary method o entry/redemption,

and brands regularly conduct online-only promos as well.Text to win promos leveraging the user base o text-

capable mobile phones also have become common.

Phase 2: Shopper Purchase/Retailer SalesA relatively new strategic use o digital tools is to directlyinuence purchase decisions and/or drive sales at physical

retail locations or online e-commerce sites. The numeroustools that can be utilized or such shopper marketing

activity include tactics that reach consumers at-home,on-the-go and in-store. These three steps in Catapults

Digital Path to Purchase will be discussed at length insections 4-6.

Phase 3: Consumer LoyaltyDigital technologies have made it ar easier or brandsand retailers to maintain direct communication with

existing customers and recruit new ones. They also orbetter and worse have made it easier or consumers

to share their own (sometimes brutally) candid opinionsabout the products and services they encounter. Amongthe tools alling into this area are:

ElectronicCRM(CustomerRelationshipManagement):

Brands have long been using websites and e-mails toconduct targeted communication programs with key

customers and prospects (although the promise o trueone-to-one marketing remains largely unullled).

MobileCRM:A new wrinkle in the strategy isthe ability to communicate even more directly with

customers via their mobile phones. The ongoingpenetration o smartphones will add even more

capabilities.

SocialMedia:Facebook surpassed 500 million

worldwide users in July. Twitter boasts 74 million accounts(although turnover rates are high and actual usage low).

MySpace has 120 million. Although their primary goal is toconnect with amilies and riends, users o these networks

have demonstrated a willingness to interact with andeven help promote brands and retailers they like. In

response, marketers are devoting signicant resources toharnessing the power o these user bases.

WordofMouth: The worlds oldest orm o marketinghas become nearly systemized through social networks

(think o the now-ubiquitous Twitter re-tweet, orexample) and the thousands o online communities and

bloggers (rom watchdogs to anboys) now in operation.Many o these sites attract audiences that rival those o

consumer magazines and most TV programming, andmarketers thereore are engaging with them.

Advocacy:Marketers can establish relationshipswith the operators o such advocacy sites and provide

relevant, helpul content to their audiences, therebyostering goodwill within the community. (One brand

marketer says the process is similar to working with mediaeditors.) Perhaps most amously, Walmarts Elevenmoms


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InspireMe. Consumers want resh ideas and relevant,

problem-solving oers that will entice them to try newproducts and services. This explains the popularity o the

meal solution programs that have become a staple o

packaged goods merchandising over the last ew years.

SupportMyValues.Consumers are motivated bysocial causes that make sense and enhance their sel-

worth. There is no greater example o this motivationthan their response to the scores o marketing campaigns

every October in support o breast cancer awareness.Conversely, consumers now have numerous publicorums through which to rally against brands they believe

to be opposing their personal values. ConnectMe.Todays consumer not only wants to stayclose to amily and riends, but also be connected with

others who know, according to Catapult. The popularityo social networks and niche-content blogs is a byproduct

o this need. Many consumers also want to be the rst toknow, a desire illustrated by the rise o Twitter in generaland, more specically, P&Gs Tremor and Krat s First Taste

new-product websites.

program united

20 independentMommybloggers in a

bid to insinuateits own shopper

marketinginitiatives

into theconversation

(althoughthe programappears to have

been largelyabandoned

ater only one year).

Products/Reviews:At rst, the prospect o lettingconsumers provide reviews was intimidating to brand

marketers. They soon realized, however, that the Internetmade such sharing inevitable, and have thereoreembraced the concept by allowing unedited reviews

on their own sites and actively responding to criticismelsewhere.

3. KEY CONSUMER BEHAVIORDespite the emergence o this new digital shopper,its important or marketers to understand that the

consumers core needs dont change, just how they satisythose needs, says Seth Diamond, vice president-shopper

insights at Catapult. The agency segments these coreneeds into ve emotional drivers:

SaveMeTimeandMoney.While always a actor, theimportance o price has escalated since the economys

downturn in 2008. This explains the 42% rise in couponredemptions since the end o 2008, according to Nielsen.Current research studies suggest that price will remain

extremely important, since more consumers have learnedthat they dont necessarily need to sacrice quality by

choosing the best deal.

In addition to the savings aspect, this area also

encompasses the shoppers need to nd deals easily andnavigate the store quickly. The ormer already has been

enhanced dramatically through digital tools, and thelatter is quickly ollowing suit.

SurpriseandDelightMe.Although theyre more

actively searching or deals, consumers also desireunexpected rewards or their actions, and task-enhancingservices that exceed their expectations. This brings loyalty

programs and simple path-to-purchase tools to theoreront o the marketing plan.

WalmartsElevenmomscommunity

GiantFoodsmealsolutionsmicrosite

Coupons.com


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At-Home Technology Interest Levels

% of People Interested in Using% of People Who Have Used

Co-Branded Emails

Facebook

Email/News from Brands

Ratings/Reviews

Promos on Retailer Websites

Online Circulars

Printable Web Coupons 73%

63%

53%

62%

58%

57%

40% Email/News from Brands

Ratings/Reviews

Co-Branded Emails

Printable Shopping Lists

Printable Web Coupons

Online Circulars

Promos on Retailer Websites 48%

48%

45%

41%

40%

38%

37%


0 10 20 30 40 50 60 70 80 90 100

Shopping Widgets


Co-Branded Emails

Blogs

Promos on Retailer Websites

Email/News from Brands

Online Circulars

Ratings/Reviews

Twitter

Facebook

Printable Web Coupons

At-Home Technology Awareness LevelsAware and Have Used Aware and Have Not Used


For consumers, the greatest benet o digital

technology is that it can help ulll these needs aster andmore eciently, through channels that make marketing

ar more o an interactive exchange than a one-waydialogue.

Digital Behavior TrendsIn order to understand the eect o digital shoppermarketing tools on these core needs, Catapult elded its

second annual survey in summer 2010 (with assistance

rom Ipsos OTX). Based on an analysis o responses rom1,345 consumers, Catapult uncovered a landscape in

which awareness o digital tools is already high, usage

is increasing steadily and interest levels suggest greatpromise or the uture.

Catapult also ound a user base that, though stillrelatively small in numbers, already are starting to discernwhich tools enhance each step o their path to purchase,

and already are questioning the real value o some. Thesedigital shoppers are identiying which tools can help

them decide where to shop, and which ones are morehelpul or deciding what to buy, says Cloutier.


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The At-Home ShopperAwareness levels or at-homedigital shopping tools are

generally strong near 80% orbetter or most tactics. Thatsnot surprising, since most o

the tactics in this group arepersonal computer-based

and have been available or anumber o years.

What is surprising, however,is the dramatic increase inusage in just one year. Since

Catapults 2009 survey, theuse o printable coupons

jumped rom 54% to 73%,and online circular viewing

rose rom 33% to 63%. Lesssurprisingly, awareness o

both Facebook and Twitterincreased substantially as well.However, Diamond suggests

that Twitters relatively lowusage despite its high awareness implies that the network

already is experiencing some post-ad decline. Similarly,the use o shopping widgets (applets that can bedownloaded to a users computer desktop or embedded

in a web page) was at rom year to year, suggesting thatthe tool may become passe now that mobile apps have

emerged.

On-the-Go Technology Interest Levels


Mobile Phone Shopping List

Coupons Sent to Loyalty Card

Mobile Coupons

Scannable QR Codes

Image Recognition Software

Mobile Coupons Sent to Loyalty Card

Retailer Apps

Brand Apps

Text Alerts from Brands

GPS Locator

Mobile Websites

Mobile Search 43%

29%

28%

14%

13%

10%

30%

12%

9%

8%

7%

13% Mobile Phone Shopping List

Coupons Sent to Loyalty Card

Mobile Coupons

Scannable QR Codes



Retailer Apps

Brand Apps


GPS Locator

Mobile Websites

Mobile Search 23%

23%

33%

25%

21%

26%

49%

34%

33%

35%

25%

31%


But the surveys most signicant data may be thelevels o interest expressed by respondents who are

aware o the tactics but still have not used them. In thisregard, better than 35% o respondents are considering

uture use, which represents tens o millions o additionalconsumers.

0 10 20 30 40 50 60 70


Scannable QR Codes

Location-Based Check-In


Retailer Apps


Mobile Phone Shopping List

Mobile Coupons

Brand Apps

Paperless Coupons Sent to Loyalty Card

GPS Locator

Mobile Websites

Mobile Search

On-the-Go Technology Awareness LevelsAware and Have Used Aware and Have Not Used



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In general, shoppers are using at-home technologiesto plan their routine stock-up trips (which explains theirheavy use o circulars, shopping lists and promotions) or

to nd specic inormation about big-ticket items (wherethey oten turn to ratings/reviews).

Thereore, the highest levels o adoption are oundamong tools that provide direct value and relevant

inormation, says Jason Katz, Catapults executive vicepresident o emerging media. Consumers are usingthese tools to pre-shop the store, to decide where to buy

and what to buy.

The On-the-Go ShopperCompared with at-home tools, awareness o On-the-Gotechnologies is lower because most o these tools are

relatively new and engagement requires a smartphone,or at least advanced cellphone unctionality. Still, overall

awareness is better than 40% in most cases.Yet penetration rates are signicant and growing

steadily: use o Internet coupons delivered directly to

loyalty cards tripled to 30% between 2009 and 2010.More than 43% o respondents are already using mobile

search, and nearly one-third are taking advantage omobile websites and GPS (global positioning satellite)

mapping and directions. These tools are gainingtractions as smartphone penetration grows, says Katz.

Likewise, interest levels among non-users are lower

than with at-home digital tools. Theres clearly aneducation component here, says Diamond, suggesting

that some good old-ashioned awareness building maybe in order.

Unlike the at-home tools, which shoppers are usingor some airly clear shopping missions, these on-the-go

tools are utilized more consistently across trip type romstock-up to impulse, says Diamond.

0 10 20 30 40 50 60 70 80 90 100

Touchscreen digital signage

Handheld scanners*

*Ahold USA shoppers only

TV in-store (at shelf)

In-store kiosks

Walmart TV

Payment from cell phone

On-pack promotions: text to win

Self-checkout

In-Store Technology Awareness LevelsAware and Have Used Aware and Have Not Used


The In-Store ShopperIn the store, it seems clear that shoppers are opting in totechnologies that improve their experience and provideclear-cut solutions or their needs. That would explain

why 88% o shoppers have used sel-checkout lanes (uprom 71% in 2009), and why Redbox video-rental kiosks

have proved to be a hit.It also may explain why so many in-store technologies

have ailed to penetrate the marketplace in the last 10years: Many o the tools that have been tested shel-edge TVs, smart shopping carts, talking beer coolers

and even ully deployed at retail were ocused on pure

advertising and delivered no discernable advantage orshoppers. In addition, the more popular technologiesin Catapults study generally are opt-in or permission-

based tools that let shoppers choose to use.Overall, awareness o in-store technologies is high,

especially considering that ew o the tools have been

widely deployed. Nearly 50% o shoppers are now awareo such tactics as kiosks and in-store TV.

Whats more, usage levels have jumped considerablyover the last 12 months: Walmart TV rom 6% to 29%,

text to win on-pack promos rom 5% to 25%, kiosks rom12% to 31%, in-store TV rom 16% to 29%.

The act that a portion o these increases can be

attributed to wider deployment on the part o marketers especially or text to win promos and kiosks does

not diminish their magnitude overall. (In act, the numbero TV screens installed at retail in the packaged goods

industry may very well have dropped since spring 2009.)Interest in these tools is also strong, with more

than 40% o non-users expressing a desire or kiosks,

touchscreen digital signs and in-store TV.Based on the survey, Catapult theorizes that in-store

technologies are having a much greater eect on impulse


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In-Store Technology Interest Levels


34%

29%

29%

39%

25%

18%

24%

31%

88%

45%

45%

43%

37%

20%

30%

Source: Catapult Marketing, July 2010*Ahold USA shoppers only

On-pack promos: text to win


Handheld scanners*



Walmart TV

In-store kiosks

Self-checkout

On-pack promos: text to win


Handheld scanners*



Walmart TV

In-store kiosks

Self-checkout

purchases than they are on pre-meditated shopping trips,

which are more likely planned out using at-home and on-the-go tools.

The Integrated ConsumerThe emergence o smartphones is a technological

breakthrough that could blur the use o many o thesenow-unique shopper tasks, tools and missions. Ultimately,

it also could lessen the distinction between consumerand shopper, because the mechanisms that turn the latterinto the ormer will be omnipresent.

Already, many o the shopping tasks traditionallyperormed at-home are migrating to the smartphone.

On-the-go shoppers are searching the mobile Internet,downloading coupons, looking at circulars, building

lists and looking or deals. (See chart above.) The pre-shop planning stage now can be conducted anywhere,

anytime.In-store, shoppers likewise now can search or

product inormation, nd coupons, consult with riends

and compare the stores price with those at other retailers making the planning process an ongoing activity.

4. WHAT TO DO: STRATEGIESFOR COMMUNICATIONPerhaps the greatest danger to the continued growth o

digital shopper marketing is the potential or marketers toover-utilize these tools and bombard consumers with toomany communications.

In the early days o the Internet, there was strongbacklash against the relentless onslaught o advertising

that greeted users as they browsed. Over time, a

compromise was reached, with consumers resigningthemselves to a air amount o commercial messages and

marketers getting a little more sensitive about the ways inwhich they made contact.

Consumers will not be as understanding o intrusive,unwanted messages delivered to their smartphones.

Telemarketers were quickly dispatched rom the

cellphone medium early in its growth, and reputablemarketers are collecting opt-ins beore delivering text

messages. In stores, shoppers as theyve alreadyshown tend to avoid any technologies that oer

nothing but blatant advertising.Although the word has become somewhat o a

clich within the marketing industry, the overall goal

or marketers employing digital tools is to providesolutions oers, services and content that ulll

shopper needs. Thus, some traditional levers o marketingcommunications will have to be pushed harder, and some

perhaps hardly used at all.

Branding:While there may be opportunity or purebranding through some at-home or leisure-time Internetvehicles, there is little room or the strategy within digital

shopper marketing (or within any shopper marketingprogram, or that matter). By and large, digital tools are

best utilized by leading with a solution and earning thebrand a halo in the process.

Krats iFood Assistant app contains almost no visualbrand imagery, but connects the companys productswith consumers on a daily basis. P&Gs Charmin maintains

a visual presence as sponsor o Sit or Squat, a ree appthat helps users locate public restrooms, but the implied


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on mobile marketing.

In general, thetactic entails astraightorward oer

that resonates withrecession-minded

consumers. (The actthat participation

can be tracked betterthan most other

tactics is certainly aactor, too.)

Growth in digital

coupon redemption(especially online)

is easily outpacingall other delivery

vehicles, andredemption rates are

also signicantly higher. (In 2009, 15.9% o Internetcoupons were redeemed vs. 0.8% o newspaper FSIs.)

Throw in the act that digital coupons can be targeted to

pre-disposed shoppers rather than carpet-bombed tothe masses, that 39% o smartphone users nd mobile

coupons exciting (according to InsightExpress), andthat there are tangible savings related to eliminatingpaper-based distribution, and you have the elements o a

winning strategy.Online coupon aggregators have been around since

the original Internet boom o the late 1990s, but gainedstrong momentum when the recession arrived in 2008.

Although statistics rom comScore suggest that activity

may have peaked in late 2009, trac to these sites is stillheavy: segment leader Coupons.com had 6.7 million

unique visitors in April. And the sites two companionapps GroceryIQ and Coupons.com surpassed one

million downloads in June, with nearly one-third o thetotal coming in the preceding 45 days, according to the

company.The process already has become digitized rom

start to nish, with Target this summer introducing a

program in which shoppers text-message to receivecoded coupons that can be scanned on their phones at

checkout.Another sign o the times occurred in July 2010, when

Kroger staged a massive instant-win game in whichall 150,000 prizes consisted o ree product awarded ascoupons directly downloaded onto the winners store

loyalty card.Digital coupons, including those delivered by mobile

devices, have proven themselves to oer better return onour investment than coupons delivered via print media,

says Karl Schmidt, director-promotional marketing orGeneral Mills. The company is taking a leadership rolewithin the CPG industry in shiting coupon dollars to

goal is more to help consumers rather than push product.

Kellogg Co.s banner ads within ShopRites iPhone applink directly to a list o products that can be added to ashopping list, not to a brand website. Shopper marketing

activities tend to operate deeper in the purchase unnel,yet still play a critical role in building brand equity, says

Daniel Cooke, the CPGs director o digital shoppermarketing. Digital channels provide more options to

extend our brand messages [while helping] shopperslocate and purchase our products more conveniently.

Sales/Discounts:With 86% o Catapults surveyrespondents attributing their use o digital tools to saves

me money, sales and other oers are as important acomponent o digital shopper marketing as they are

anywhere else.In June 2009, Target joined with P&G or a Big Brands,

Small Prices campaign that represented the rst timethe retailer promoted store-only products on its website

(which sells general merchandise, but not packagedgoods). The program proved so successul at driving in-store sales that the tactic has become standard practice.

The bulk o retailer activity in the digital space isocused on sales promotion, based on the In-Store

Marketing Institutes marketplace analysis. ShopRitesiPhone app, or example, simply presents weekly specialsby category, enabling its 50,000-odd users to e-mail

themselves a shopping list and locate the nearest store.Through the third-party Cellre mobile coupon service,

the chains requentshoppers download

oers to their loyalty

cards.However,

marketers shouldconsider that the

importance oshopper marketing

is getting beyondprice, because it candeepen a brands

relationship withconsumers, says

Matthew Egol, vicepresident or Booz

& Co.s Consumer,Media & Digitalpractice.

Coupons: The practice o paperless coupons has

long been institutionalized on the Internet, throughnumerous third-party websites in addition to the

programs o retailers and manuacturers. In addition,coupon distribution has probably been the mostcommon entry point or brands and retailers embarking

Cellresmobilecouponservice

Targetsmobilegiftcardservice


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digital ormats.

However, an age-old criticism o coupons still applies:the tactic caters to cherry-picking deal seekers, andmay even erode brand equity among loyal consumers.

Although marketers may be required to participateto keep pace with the competition, they should use

it selectively and strategically (as collaborative retailermarketing, or perhaps loyalty-based rewards) to drive

incremental growth rather than replicating the Catch 22o continuous, share-renting oers that has occurred in

the paper-coupon world.

Consumerpromotion:Digital tools have been a great

benet to consumer promotion on the administrativeside, and also have greatly improved ease o entry or

consumers. For at least a ew years, the Internet has beenthe primary method o entry and redemption or most

promotional campaigns.More recently, marketers have begun activating

promotions through their Facebook pages, which alreadyare connected to tens (i not hundreds) o thousands oans and provide easy access to a ew hundred million

other consumers. In June, Krats Nabisco staged its latestcross-promotion with the Milk Processors Education

Board by sending consumers to Facebook to enter acontest and request coupons or a ree package o Oreos.(Would-be entrants rst had to register with Facebook.)

Online sampling also has been popular, despitethe act that the tactic embodies a contradiction: it

provides none o the instant gratication that typicallymakes digital channels more appealing to consumers.

Nonetheless, StartSampling.com, a direct-to-consumer

site that also operates branded programs or Walmart,Kroger, Walgreens and other retailers, has more than

three million registered users. Last spring, Pampersreceived requests or 10,000 trial packages o new Dry

Max diapers in less than one hour ater promoting theoer on Facebook.

In addition to cost savings, online consumeractivation makes it easier or marketers to collect data onparticipants and, in theory at least, begin the process o

ostering one-to-one relationships.

Consumer/ShopperSolutions:Marketers are ndingthat unique content that helps consumers solve their

everyday needs can help build communities aroundbrands and, either directly or indirectly, drive retail sales.Such content also can be used as a basis or co-marketing

programs that will directly drive sales.For classically trained brand managers, the tactic can

be hard to swallow, since the brands themselves otenare supporting players within the content (at least until

it comes time to present a promotional oer). Still, manycompanies now operate sites that subtly position theirbrands within a solution.

For example, while the URL or krattrecipes.com

makes ownership obvious, visitors must scroll to thebottom o the home page to nd any reerence to abrand; the site has more than 2.5 million monthly visitors.

The recipe-ocused bettycrocker.com operated byGeneral Mills also attracts 2.5 million visitors per month,

but it carries more o a branded presence including adsrom outside companies such as Nestl.

Elsewhere, P&G has Everyday Solutions (great

values & expert advice), which spans its entire brandportolio, as well as Home Made Simple, a site that

ocuses on household cleaning brands.

Retailers now are starting to ollow suit largelythrough collaboration with CPG partners. The most

common example in the last ew years has been themeal solutions now oered by nearly all retailers in the

ood-drug-mass channels. The concept centers on in-store displays o all the ingredients needed or a simple,

inexpensive meal, but is typically accompanied by anonline library o recipes and some orm o outbounddigital communication to the chains shoppers.

Content neednt always be task-oriented, however.The need or simple entertainment can also be solved.

For the last three years, Unilever has had success servingas exclusive sponsor o Walmarts Soundcheck, a

microsite oering musical perormances and behind thescenes content rom top perormers. Unilever rotates thesponsorship each month, matching artists with a brand

thats relevant to their audience. The sponsorship leadsto in-store activation on the Walmart Smart Network and

thematic product displays. (Soundcheck, by the way, isnow also available through an app.)

The concept now is migrating to the mobile platormthrough apps such as the iFood Assistant. Keep in mind,however, that there already are more than 180,000 apps

WalmartsSoundchecksite


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12


available to iPhone users, and brands will have to deliver

truly compelling content in order to stand out. Tokeneorts will be rejected. I its not inspiring, theres goingto be backlash, warns Diamond.

LoyaltyMarketing:Digital tools provide marketers

with multiple ways to establish two-way communicationwith shoppers, either to improve existing loyalty

programs or to oster new ones.The immediacy o e-mails and text messages makes

communication not only easier, but also more satisyingor operators and users. In act, it would be hard to nd anexisting loyalty program whose primary communication

channel isnt the Internet.The emergence o mobile-based scanning and other

technologies is making rewards redemption ast and easy,too. Kroger, Sams Club and other retailers let requent

shoppers download coupons directly to their cards. Thisall, Targets P-O-S systems will automatically deduct 5%

o the receipts o all TargetRed credit cardholders.On the brand side, too, digital channels have made

it more easible or the likes o Coca-Cola to operate My

Coke Rewards or Pampers to manage Gits to Grow,both o which reward members with prizes in exchange

or in-pack codes. (Pampers soon will be adding mobilecapabilities.)

In-store technologies, too, are perect or loyalty-

based interaction. Ahold USA oers its requent shoppersScan It!, a hand-held device that lets them scan groceries

while they shop or ast, one-swipe checkout at theregister; it also delivers targeted coupon oers based on

personal purchase history. CVS/pharmacy stores have an

ExtraCare Coupon Center kiosk that prints out targetedoers. Such in-store deployments allow shoppers to

activate rewards in the likeliest o places: at the point opurchase.

In a study released in July, the National RetailFederation suggests, The ability to tie a loyalty

membership number to a mobile phone not onlydramatically increases consumer participation [but] alsoenhances the data that is collected about that consumer.

Such typical complaints about programs lengthysign-up processes, conusing terms, delays in reward

redemption, and the need to carry cards are eliminated.

CauseMarketing:CauseWorld is an iPhone appin which users earn Karma Points that translate intomonetary donations or select charities by checking

in at retailers (conrmed by the phones GPS tracker) orscanning a products barcode. It has attracted 1.25 million

downloads since its April launch.That number underscores the surge in cause-minded

marketing that has taken place over the last ew years,which has been driven by an increase in cause-mindedconsumers. According to Cone Inc., 59% o consumers

say theyre more likely to purchase a product associated

with a cause. (Incidentally, 29% say theyd like to hearabout nonprot initiatives via mobile devices, Cone says.)

Thats why nearly every major P&G brand has a long-term

attachment to a nonprot organization. Its also whyBreast Cancer Awareness Month has become a key event

on the promotional calendar o most retailers.As with other orms o promotion, digital tools

acilitate the marketing and management o cause-marketing campaigns. In this case, the ease with

which a program can become viral through orwardede-mail, blogs and social networks makes it ar easier ormarketers to spread the word.

Mars Inc.s Pedigree brand ultimately donated 2.2million bowls o dog ood to animal shelters in 2009

through an online campaign that asked consumers toview a TV spot. Target used Facebook as the stage or

a 2009 eort asking consumers to decide which o sixcharities should receive the retailers unding. The eort

helped the chain quickly amass a an base o 500,000.(The total has since surpassed 1.5 million.)

Co-marketing: Generally speaking, using any othe aorementioned tactics in collaboration with retail

partners can enhance their eectiveness as shoppermarketing tools. We say that its all about engagingthe shopper, says Katz. But thats really only hal the

equation. Its also about the retailer. As with shoppermarketing in general, a key ingredient to success are

collaborativeprograms that

drive sales.

Leadingretailers now set

up micrositesor nearly all

o their majormerchandising

programs,oeringsponsorship

opportunitiesor CPGs i

not outrightcollaborative

execution. BothWalmart and

Target (among

others) work witha number o CPGs

to develop sites thatprovide relevant content, along with product ino and

promotional oers, thereby adding an eective at-homeelement to an in-store program.

In response, leading CPGs have been leveraging

MeijersMealBoxapp


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13

existing assets or account-specic work. The database

at Kratrecipes.com, or instance, has spawned MeijerMealBox and other retailer-specic online recipecenters; P&Gs homemadesimple.com begat a same-

named microsite at Walmart.com; or its annual summerbarbecuing platorm, Clorox Co. now regularly includes

supplying recipes, cooking tips and other digital contentto numerous retail partners.

Top companies such as General Mills, Kellogg andKrat also are helping retailers move into the mobile

realm. General Mills dominates the Cellre coupon service,or example, oten serving as the lone CPG supplyingcoupons to specic retailers. Kellogg is the sole advertiser

on ShopRites app.The justication is clear enough: 60% o respondents

to Catapults study say they have a more positiveshopping experience when using digital tools. More

importantly, though, 34% say they are more likely to shopat a retailer that oers shopper-enabling technologies,

and 24% are more likely to purchase the productseatured through them.

E-Commerce:There is no longer any doubt that theInternet will ultimately command a signicant portion o

packaged good sales. Bricks and mortar giant Saeway(in some markets) recently joined the ranks o Internetgrocers such as Aholds Peapod, FreshDirect and

NetGrocer in oering home delivery o goods orderedonline. Publix is among the chains letting shoppers buy

online and pick up at their local store.Among Catapults respondents, 9% had made a

purchase through an online grocer in the prior six months,

while 47% had shopped at Amazon.com, 24% at Walmart.com and 14% at Target.com.

Two noteworthy advancements have taken placerecently: Start-up Alice.com began shipping orders

or shel-stable oods and other packaged goods bymail, relying on CPGs to help with ulllment or their

own products. More than 180 companies already havepartnered with the site, including 30 that have addedlinked storeronts to their own websites.

P&G, meanwhile, launched pgestore.com, whichis directly selling to consumers or home delivery. The

company, however, has careully asserted that the goalis to better understand consumers rather than to bypass

the retail channel.Although the uture potential or direct-to-consumer

sales o packaged goods alls outside the scope o this

report, it represents yet another way in which digitaltechnologies are having a proound impact on the retail

industry and presents a uture area o execution ordigital shopper marketing.

5. WHERE TO BE:STRATEGIES FOR PLACEMENTIn addition to determining the right content strategy,marketers must also develop an ecient plan or

placement in a communications channel that seemslimitless. But both the eciency and cost savings o

digital marketing can deteriorate rapidly i marketerstry to be everywhere. You cant dilute the eort and

overextend your resources, says Mary Rodgers, directoro marketing communications or Cuisinart.

This section will discuss activity at-home on theInternet, on-the-go through mobile phones and in-store as separate places. However, these distinctions

are expected to largely disappear as mobile becomes theprimary method o accessing the Internet, and as in-store

tools evolve to provide online access and smartphoneintegration.

OnlineDestinations:The Internet is as viable a massmedium as broadcast TV, radio or print advertising, and

provides the added unctionality o directly connectingviewers to additional inormation and purchase

opportunities.Thereore, straightorward display advertising

on highly tracked websites can be an importantcomponent o a digital plan, to drive trac to whateverdestination will serve as the hub or a campaign.

Online networks such as Fox Interactive Media,Glam Media and Turner Network attract upwards o 85

million visitors permonth, according

to comScoredata. Individualproperties such as

The New York Times,eBay and The

Weather Channelcan deliver more

than 40 million.In addition,

establishing a

presence onsuch online-

only retailers as

Amazon.com andDrugstore.com islikely as importanta placement

these days assupermarket

circular eatures and will become

increasingly vitali private-label

Website Trac, June 2010Total Unique

Visitors (000)

Source: comScore Inc., June 2010

General Food Sites

Allrecipes.com 12,212

Cooks.com 8,554

Foodnetwork.com 7,821

About.com Food 5,375

AOL Food 4,849

Gourmandia.com 4,531

Chow.com 4,253

FoodBuzz.com 3,814

Delish.com 3,668

eHow Food And Drink 3,540

Brand Sites

Kratrecipes.com 2,758

Bettycrocker.com* 2,700

Pillsbury.com* 1,283

Kratoods.com 686

Tablespoon.com* 35

Nabiscoworld.com 310

Eatbetteramerica.com* 447*Owned by General Mills


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ormats. For the time being at least, social networks seem

to have supplanted blogs in the minds o consumers.

Socialnetworks:For sheer audience numbers, leading

social networks are also a place to be, although heretheres no guarantee that even a small percentage o total

Facebook or Twitter users will ever become a brands ansor ollowers unless theyre given compelling reasons to

do so. Thus, while some brands have been able to garnerollowings o one million consumers or more, many

others are ar rom reaching such critical mass.Furthermore, marketers must tread a ne line

between providing helpul inormation and blatantly

hawking their products when communicating throughthese networks. Cuisinart, or one, avoids outright

product pitches on its Facebook page because thecommunity tends to be put o by that, says Rodgers.

Instead, a Shop Cuisinart link at the top o the pagedirects ans to the brands site or more overt marketing.

While all signs point to Facebook as being a viabletool or brand building, no one has cracked the code orusing it to drive sales, says Diamond. In Catapults study,

social networks were rated highly or awareness andusage, but scored low in terms o being inuential or even

helpul or making purchase decisions, he notes.Convenience store giant 7-Eleven made an ambitious

attempt to directly drive sales via Facebook this summer

through a marketing pact with Zynga Game Network,the company behind wildly popular social games such as

Farmville. The chain staged a massive rewards program inwhich players earned game-playing credits by purchasing

real products in 7-Eleven stores. 7-Eleven was so

committed to the promotion that it revamped packagingor several SKUs.

I absolutely believe that Cuisinarts Facebookactivity drives sales, says Rodgers, while noting that the

brands indirect path to purchase entails Facebook linksto product-specic pages on the brands website, rom

which ans can then nd a convenient retailer. Cuisinartcurrently is working with retailer partners to quantiy thatbelie.

In the case o Twitter, We nd that it can play a role inpublic relations, but as o yet hasnt delivered meaningul

shopper value, says Katz. Cuisinart, in act, assignsresponsibility or managing the brands Twitter account

to its external PR agency.Twitter may be better employed at the local level,

several sources contend, such as a store manager

alerting ollowers in the neighborhood to a relevantsale: Immediately ater the Chicago Blackhawks won the

National Hockey Leagues Stanley Cup championship inJune, both Dicks Sporting Goods and Walgreens drove

trac to local stores by tweeting about the availability oteam merchandise.

growth and SKU rationalization remain signicant aspects

o bricks-and-mortar retail strategy.O course, or sheer numbers, Google, Yahoo and

other leading search portals are the prime locations or

advertising. Googles sites drew nearly 161 million U.S.consumers in May representing 81% o the entire online

audience or the month, according to Nielsen NetRatings.In addition, advertising on search engines provides the

added bonus o relevance, because placements are tiedto relevant search results.

PepsiCos Quaker brand generated 280 millionimpressions by running display ads this spring throughthe Google Display Network, a service that places

advertising on numerous relevant sites both large(Googles own YouTube) and small (niche blogs). The

brand ultimately gained a 9% sales lit through thecorresponding campaign.

Targetedsites: Beyond such high-trac destinations

are thousands o other websites with smaller audiencesthat can be ideal ad venues or specic brands. Someprovide as good or better a niche o consumer prospects

than a special-interest publication or cable televisionchannel.

Included here are the numerous content sites run bytraditional media companies, as well as the hundredso blogs and other consumer-operated sites that have

emerged to gain signicant ollowings and, in somecases, have turned into pseudo-commercial enterprises

themselves.The viral nature o consumer blogs one o the true

phenomena spawned by the digital age requires that

marketers at the very least monitor the discussions takingplace within them and, when possible, participate by

supplying meaningul, relevant content.Direct sponsorships and other paid relationships are

also possible and should be considered when available.(Aggregated services such as the Google Display

Network extend into the blogosphere and can helpmarketers identiy the best sites with which to considerpartnerships.)

While operating a blog internally is certainly an option,marketers must take care to populate it with relevant,

inormative and as much as possible unbiased contentin order to attract and maintain an audience. That means

largely avoiding straightorward marketing messages thatare required to close the sale. The trick is to establish acommunity that will do most o the work themselves.

When global retailer Tesco entered the U.S.marketplace with Fresh & Easy in 2007, its primary

marketing vehicle was a blog written by companyexecutives. Had the launch taken place this year, the

mechanism instead may very well have been a Facebookpage, which in early 2010 was a tactic employed bysuch retailers as H-E-B and Petco to publicize new store


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Brandsites: Most brands maintain a website that

serves as the central location or product inormation and/or promotions. More orward-thinking CPGs also provide

brand-neutral content relevant to their products use,

such as recipes or ood brands or housekeeping tips orcleaning brands.

Done well, such brand-operated content sites canthemselves become destinations. A key trend or the

uture may be co-marketed sites operated by non-competitive, complementary products extending the

promotional partnerships that theyre already conductingat retail (think Hershey and Krats annual Smorescampaign).

Among Catapults respondents, 39% said they visitbrand websites to look or recipes and other ideas, 32% to

participate in promotions, and 28% to research products.(See chart below.) The implication is that consumers are

using these sites or pre-shop planning or other occasionsrather than to help them directly make purchase

decisions.

Retailerwebsites: Although it took retailers a little

longer to identiy the need or robust consumer-acingwebsites, theyve caught up to brand marketers very

quickly over the last ew years, with most national chainsalready oering the basic shopping tools needed to plana trip to the store (and, increasingly, some online purchase

options as well).

Among those are the tools that consumers utilize

most requently: 55% o Catapults respondents look atcirculars online, 53% compare product prices, 39% lookor coupons and 34% read reviews and ratings.

The shoppers we talked to very clearly said thattheyre going to retailer websites or price and product

inormation, explains Katz. However, when they need arecipe or have heard about a promotion, theyre going to

brand websites.More recently, retailers have also begun to establish

themselves as content destinations, in great measure withthe help o manuacturer partners. The retailer wants toremain strongly in ront o the shopper, says Boozs Egol.

Coupons and online circulars are part o that, but theyalso need content.

We are constantly exploring digital collaborationswith our key retail partners to help build brand equity

and drive sales in-store, says Rob Candelino, Unileversmarketing director or personal wash in the U.S. When

its relevant to our target audience, and our retailpartner has a strong digital presence, a collaborativeand innovative digital program helps us deepen our

relationship with the consumer.Digital marketing serves as an ecient method or

account-specic programs, provided that it is plannedor on the ront-end, says Kelloggs Cooke, whose rolemakes him 100% dedicated to retailer activity. Having

dedicated resources in digital provides an additional

Motivations for Visiting Retailer vs. Brand Sites

Brand Site

Retailer Site


12%Look for recipes/ideas/tips

Look at circulars

Compare product prices

Look for coupons or deals

Research products

Look for product reviews

Participate in promos

Suggest new product ideas

Share new experiences

Connect with other customers

39%

55%

53%

39%

26%

35%

28%

34%

32%

14%

21%

13%

11%

13%8%

18%

21%

9%

11%


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0 10 20 30 40 50 60 70 80 90 100

Unique widgets/applications

Location-based marketing

Short-code text messaging

Version of website

Order status

Loyalty program status

Targeted promotions

E-wallet/payment processing

Stock check

Product informationTraditional online content

Social networking

Digital couponing

Mobile browsing

Status of Mobile Capabilities Among RetailersUp-to-date technology In process of deploying Deploying by end of 2010

Source: National Retail Federation, May 2010

opportunity or us to oster deeper collaboration with our

retail partners.Its not incidental to note that some retailer websites

serve rather nicely as destination sites as well. Walmart.com attracts more than 35 million and Target.com morethan 25 million visitors each month, although both o

those mass merchants draw large numbers o eyeballs ortheir non-grocery oerings. In the pure CPG marketplace,

Kroger.com and Saeway.com are the only supermarketsites capable o drawing more than one million unique

monthly visitors, according to comScore.It seems clear, then, that an eective digital shopper

marketing strategy requires brands to work both on their

own and with key retailers to ensure that all aspects o theconsumers path to purchase are adequately covered.

Instores:There is little in the recent history o in-

store technologies that would suggest a bright uture.Over the last ew years, it seems as i more devices havebeen removed rom stores than were deployed, and

the number o tested tools that never reached scale arelegion.

However, There is o-the-chart interest or in-storetechnologies, including the much-maligned in-store TV,

says Diamond. From a shopper standpoint, these toolsare starting to work or them.

Respondents to Catapults survey rated at-shel TV

and kiosks highly or both helpulness and purchaseinuence, while digital signage and Walmart TV scored

well or helpulness.Consumer perception o Walmarts technology,

in particular, improved dramatically compared withCatapults 2009 survey. And that may be a case in point

or other deployments: the retailers new Walmart Smart

Network, which is still rolling out to stores, is ar moreshopper-riendly than its predecessor, Walmart TV.

We continue to see success with in-store media, butthere is still room or improvement, says Cooke, who listsinteractive TV, digital signage and kiosks as the primary

tactics with each having their pros and cons. It comesdown to usability and relevance.

Shiting the strategic ocus to mobile-phone deliveryeliminates the biggest obstacle that in-store technologies

have always encountered: the cost o installing andmaintaining systems, which retailers have been loathe toincur and paid advertising models have been unable to

oset.On the other hand, a large-screen kiosk or digital sign

is a lot more viewer-riendly than a smartphones display,and a shoppers mission can probably be expedited

more by retrieving relevant inormation rom an in-storeterminal rather than rom their mobile devices.

Onthephone:Most industry practitioners aredownright giddy when discussing the potential o the

mobile phone as a shopper marketing tool. And theexpectations are warranted, given that the mobile

phones ability to deliver a targeted, relevant message atprecisely the right time is unprecedented.

Mobile is blurring the line between clicks and

bricks, says Katz. Its turning Main Street into the mainaisle o the store. Smartphones eliminate many o the

distinctions discussed in this report, because they makeall content strategies available anywhere a consumer is

holding one. Theoretically, the entire path to purchasecan be traversed in a ew thumb strokes.


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6a. HOW TO DELIVER: STRATEGIES

FOR CONNECTING ONLINESearch:In an April 2010 survey conducted by comScore,59% o consumers said that gathering inormation

online is important in helping them make purchasedecisions, and more than hal o those respondents

said its importance had increased in the last year. Otherstudies have ound that as many as 89% o consumers are

researching online beore buying (although still making93% o their retail purchases ofine).

The implications are endless. Marketers may soon

be talking about the impulse trip rather than theimpulse purchase, now that GPS-based tools can locateconsumers near a particular store and send an instant-

message oer that inspires them to stop in.(The next step, potentially, could be programmed

reminders: Dont you need deodorant? That Walgreensacross the street has a sale on Right Guard. Another is

real-time inventory reporting, directing shoppers to astore guaranteed to have a desired item in stock.)

It already is obvious that brand marketers need todevelop websites tailored to the unctional strengths andweaknesses o mobile devices. I they havent already

done so, they also must develop a strategy or deliveringpromotional oers via text or e-mail. That need is even

more urgent or retailers.However, marketers must resist the temptation to

try too much. The most signicant potential deterrentto mobile marketing is the backlash that will occur

i consumers are given too much inormation thatprovides too little in the way o real solutions. Simplyput, consumers do not need a smartphone app or every

retailer they shop, or or every brand they buy.The opportunities are boundless and the pace o

change is exciting, says Cooke. However, I also temperthis enthusiasm by ensuring that were not simplydeploying a tactic because its the latest trend. My role is

to ensure we are aligned strategically, and then executingthe most appropriate solution based on consumer need

and insight.

At-Home Technology Shopping Inuences


Twitter

ShoppingWidgets

Facebook

Blogs

Email/Newsfrom Brands


Co-Branded Emails

Promos onRetailer Sites

OnlineCirculars

PrintableCoupons

Reviews/Ratings

Helpfulness

Bran

dI

nuence

CuisinartsFacebookpage


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According to surveys conducted by Google, 66% omoms go online to obtain inormation about packagedgoods. Thats more than any other source, including

riends/relatives (used by 64%) and newspapers/magazines (50%).

I the Internet is a key component o the path topurchase, then search engine marketing is the on-ramp,says Egol, noting that more than hal o all online trac

is driven through search engines. At a recent industryconerence, JCPenney chie marketing ocer Mike

Boylson called search probably the richest and mostproductive marketing that we do.

Googles Kells likens the search-return page to a store,

with the lead Sponsored Link position as the endcapsand the right-column Sponsored Links as the digitalshel (see image above). Imagine walking into a storeand not nding your products on the shel, says Kells,

who beore joining Google spent 15 years as a brandmarketer at Revlon, Diageo and Unilever. Its sort o the

same thing on a search engine results page when yourenot there.

And Googles internal research provides a goodreason or marketers to use paid search, unless their SEOstrategy truly does generate optimal results: one-third

o Moms conducting searches never scroll down. Andnobody goes past the second page, notes Catherine Roe,

Googles head o consumer packaged goods, Midwest.Instead, they rene their searches i they cant quickly

nd what they want, she notes.While brands have used paid search to drive trac

to their own initiatives or years, the idea o using it or

retailer co-marketing is relatively new. But it has greatpotential, marketers say, with some even suggesting that

it ultimately could become a standard overlay to the tradepromotion calendar. Fundamentally, that could be huge,

Diamond posits. (Roe hints that a ew orward-thinking

CPGs are already doing so.)

In one recent case study, General MillsGreen Giant joined with Target beore the 2010Easter holiday to sponsor search terms such

as rozen veggies, Easter meal ideas andEaster side dishes (because, as Roe notes, the

vast majority o searches do not contain brandnames). Those searches generated a top-page

Sponsored link to Targets online circular, whichcarried a $1 coupon or the brand. The eort

drove 3,000 visits to Target.com in three days.Elsewhere, Google teamed with Compete

Inc. to track seven o P&Gs sitelets on Walmart.

com rom September 2008 to November 2009,and ound that trac to the pages increased

substantially when paid search was employed.Deciding where to send searchers is a

balancing act. You have to decide whatthe need is, says Kells. What does she want when

shes searching Pampers? At a recent conerence,Roe outlined one plan in which a search or Pampersgenerated three sponsored options: the rst linking to

Pampers.com or helpul inormation, the second toWalmart.com or a special order, and the third to Sams

Clubs site or searchers who might be planning a stock-up trip.

DisplayAdvertising: In whatever orm it takes, the ot-maligned display ad doesnt deserve all o the negative

press it receives. While average click-through rates are low(according to comScore, at 10% or less) theyre still more

productive than your average FSI (and a lot cheaper).

Whats more, a time-aligned analysis conducted bycomScore ound that trac to hyperlinked sites increases

during display campaigns at levels greater than the click-through rates alone produce implying a more latent

eect.Other studies conducted by comScore have ound

that display ads can increase store trac by 6% and,combined with paid search, can drive up visits 43%. In along-term study conducted in 2008-2009, the research

company ound that online ads generated an averagesales lit o 9%.

Targeting capabilities are a key benet. Last spring,General Mills ran a campaign through Google oering

$1 coupons on three brands. While the oer remainedconstant, the eatured retailer changed based on theconsumers location. The process even can be rened

through ads that speciy an exact retail location near theconsumers home, according to Roe.

SocialNetworking:It seems clear that marketers

should be involved in Facebook, Twitter, and othersocial networks as a mechanism or public relations andcommunity building. Exactly how well the strategy will

ApaidsearchcampaignforDoveandTarget


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19

serve as a shopper marketing

tool remains to be seen.As it now stands,

consumers dont view

Facebook or Twitter as helpulin their planning process

or as inuential in theirdecision-making, according

to Catapults study. But workin this area may help drive

consumers to other digitaltools that do a better jobo enhancing the path to

purchase.

ConsumerBlogs:Theblogosphere is alive and well

with millions o consumerswho are more than happy to

share their opinions bothgood and bad about brands.As with social networks,

thereore, it is important ormarketers to be involved in the

conversation.One case in point is

Viewpoints.com, a website that lets visitors rate and

review everything rom automobiles to PhiladelphiaSpinach & Artichoke Dip. Roe recently noted that this

relatively obscure product rom Krat had garnered430 reviews on the site a prime example o how well

inormed todays consumer can be.

Surprisingly, though, blogs didnt rate very highlyas helpul or inuential in the survey. This suggests

that consumers are looking or more ormal sourceso product inormation and reviews, such as retailer

websites.

ShoppingWidgets:Branded shopping widgets makeit easier or marketers to maintain an audience, becausethe applications are embedded on consumer websites

and desktops. ShopRites rst use o the tactic helped theEast Coast chain become a hot widget on New Jersey

Mom blogs, according to marketing vice presidentCheryl Williams. (It also helped the chain learn where our

customers were hanging out online, she noted.)ShopRite also has a Live Right with ShopRite widget

that lets users check complete listings o product

allergens, additives, ingredients and nutrients or specicproducts, then create a printable shopping list. The

Meijer MealBox widget automatically creates a shoppinglist ater users select a recipe, and also delivers exclusive

oers. Cuisinart has a widget that lets users nd and printrecipes. It keeps us in touch with consumers on a dailybasis, Rodgers says.

In-Store Technology Shopping Inuences


Payment from

Cell Phone

TouchscreenDigital Signage

Self-Checkout

In-Store Kiosks

HandheldScanners*

Walmart TV

TV at Shelf

Text-to-WinPromos

Helpfulness

BrandI

nuence

*Ahold USA shoppers only

Still, widgets scored poorly on helpulness andinuence in the Catapult study, largely because they

also ranked extremely low or awareness and usage. Assuggested earlier, however, the tools time may already

have passed, now that smartphone apps have arrived.The Meijer MealBox, or one, is already available as an app.

6b. STRATEGIES FORCONNECTING IN-STORE Packaging: In Catapults survey, the use o on-pack

tactics such as quick response (QR) codes and text-to-win messages rated poorly or both helpulness and

inuence. However, the tactic is enticing because it isthe only one that puts complete control o execution inthe hands o brand marketers and, thereore, is the one

way they can reach shoppers in the store without retailerinvolvement.

Although such tactics have earned a great deal omedia attention, they still have not been used widely,

according to Catapults study. Even text-to-win promos,which are airly commonplace (weekly co-op FSIs typicallyinclude one or more executions), earned relatively low

usage and interest levels in the survey and, thereore,rated poorly or helpulness and inuence.


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The uture o on-pack promotions may very well lie

in QR codes, which can quickly link shoppers to productinormation, direct them to a downloadable coupon, or

let them enter a promotion. Since the codes already arecommonplace overseas, the practice is expected to reachcritical mass here relatively soon.

Packaged goods marketers already are experimentingwith the codes in advertising. In July, an FSI or Nestl-

Purinas Friskies carried a code that linked smartphone

users to the brands TV spot. Duane Reade put them onoutdoor ads, sending scanners to a copy o the drugstorechains Duane Reader magazine.

Those eorts illustrate the act that, so ar, the codes

have largely been used as a novelty, letting consumerswatch movie trailers or promotional videos, rather than

providing a real shopper benet. QR codes are intriguing,but theres no plan yet on how best to deploy them, says

Diamond, who compares the tool to text messagingbeore American Idol: a technology in search o apurpose.

Earlier this year, Johnson & Johnson placed a codeon signs at CVS/pharmacy that let shoppers obtain a

coupon or Zyrtec. Last all, Rosemont wine placed a codeon packaging that allowed scanners to receive a phone

call rom Hells Kitchen che Gordon Ramsey. Such uniquepromotional uses could be the tiebreaker at the shel,suggests Katz.

QR codes also are being used to link consumers withproduct details, price comparisons and other online

data that can help inorm purchase decisions. The SearsPersonal Shopper app lets consumers e-mail scanned

barcodes rom any product to a customer service team

that will reply with where-

to-buy inormation within 24hours (even i Sears or Kmartdoesnt carry it).

Ubiquity, however, maybreed contempt. Ater all,

the goal o digital shoppermarketing is to simpliy

and enhance the shoppingexperience, not complicate

it. When youre on a missionand youre at the shel,Diamond asks, how oten

will you want to stop, clicka photo and go online or

more inormation?

Kiosks:No matter howhandy and unctional

smartphones become, onecan still imagine a uturerole or in-store kiosks. The

ability to instantly access anarray o inormation about products, sales and related

content without having to click, scan and search onpersonal devices would certainly be welcomed by eventhe savviest o mobile users.

That theory is supported by the act that Catapultsrespondents rated kiosks highly or both helpulness and

inuence, and 45% o non-users said they were interestedin the tactic.

While most deployments to date have oered

storewide inormation,the next step should be

category-level devicesthat address the specic

needs o particularshoppers. Earlier in 2010,

Target began rollingout shel-edge kiosksin health and beauty

departments that helpshoppers decide what

products will best solvetheir skincare or hair

coloring needs.

In-StoreTV/Digital

Signage: Technologyadvancements also

may be eliminatingany real distinction

between kiosks anddigital signage, sinceboth are now capable

On-the-Go Technology Shopping Inuences


Location-Based Check-In

Image RecognitionSoftware

Mobile Search

GPS Locator

QR Codes

Coupons to

Loyalty Card

Brand Apps

Retailer Apps

Mobile Sites

Mobile Couponsto Loyalty Card

Shopping List on Phone

Text Alertsfrom Brands

Mobile Coupons

Helpfulness

BrandI

nuence

CVSExtraCareCouponCenter


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o acilitating online access and other orms o shopper

interactivity.As with kiosks, the eectiveness o digital signs rests

in their ability to provide trip-enhancing inormation.

In upgrading the Walmart Smart Network, the chainscrapped its ormer content strategy o generic, storewide

ads and promotions in avor o department-level contenton some screens and product-specic inormation on

others. The Smart Network can also tailor programmingby region or even store.

This summer, Walmart took a longer stride into theuture by conducting a 10-store trial o virtual makeupmirrors that let shoppers test products by scanning

photos o themselves and the barcodes o cosmeticstheyd like to try. Users then could save the resulting

image and e-mail to riends to get a second opinion.

Personalshoppingassistants: The idea o hand-heldtools in stores probably has been directly supplanted by

the concept o direct-to-phone communication. Thereseems to be little need or shoppers to learn the use oanother system that basically unctions like a closed-loop

smartphone.The paradox o Aholds Scan It! system is that it

represents the most nely targeted marketing vehiclecurrently available in stores: Kimberly-Clarks Kleenex rana campaign that only delivered coupons to shoppers who

had scanned some canned soup (which, based on thebrands research, implies that someone has a cold). Yet it

operates on a device that wont be needed much longer.(The chain already is working with supplier Modiv Media

to add mobile phone unctionality, according to reports.)

6c. STRATEGIES FOR CONNECTING

ON-THE-GO/ANYWHEREIt already should be clearthat the segmentation o

the path to purchase as athree-place process at-

home, on-the-go and in-store is also becoming

obsolete due to mobiletechnology.

Some aspects may

remain within specicdomains. Pre-trip

research and planningprobably will remain

largely an at-homeactivity, or instance.However, its conceivable

that some uture shoppers could be using theirsmartphones to download pre-programmed shopping

lists with all related coupons and other discounts

automatically attached as they walk into the store.

Among the tools currently classied as on-the-go,several are resonating with consumers, according toCatapults survey. Paperless coupons downloaded directly

to loyalty cards is ar and away the most inuential othem, and in terms o helpulness is second only to GPS

locators (themselves a key to the uture o digital shoppermarketing).

Mobile-riendly search tools and websites were alsorated highly as helpul, which underscores the need or

marketers to provide them. Mobile coupons, retailerapps and phone-delivered shopping lists score well orinuence, but lag a bit in terms o helpulness.

One old tactic that Diamond suggests still presentsa huge opportunity or marketers is co-branded

e-mails, which currently reside among the at-hometools but may also prove to be inuential on-the-go or

even in-store. Catapults respondents rated it highlyor both helpulness

and inuence,suggesting that itcould be a catalyst or

collaborative activity.Text messages, the

on-the-go equivalento e-mails (as well as thedigital communication

avored by manyyounger consumers),

also were viewedavorably. In addition,

text-based marketing

provides two-wayopportunities, with

brands either sending oersto consumers or running promotions that entice them to

send their own.As noted throughout this report, mobile apps can be

a great way or marketers to establish deeper, ongoingrelationships with shoppers provided that they delivertrue shopper solutions. Much o the current buzz over

apps will likely disappear once their novelty has worn o.In theory, it might be necessary or most major

retailers to create an app oering store locators, shoppinglists, coupons and other tools discussed in this report,

because these tools might soon become standardrequirements. Target and Best Buy are among theretailers who already have upped the ante by including

QR readers in their apps.Walgreens new app oers most o the above, but

also has two other notable unctions: shoppers can orderprescription rells on their phones and receive a text alert

when the order is ready or pickup at the store theyvedesignated; they also can e-mail photos taken on theirphones to be printed at the store and ready or purchase

TideStainBrainapp

Groupon


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Googles innovative search technologies connect millions o people around the world with inormationevery day. Founded in 1998 by Stanord Ph.D. students Larry Page and Sergey Brin, Google today is a top

web property in all major global markets. Googles targeted advertising program provides businesses o all

sizes with measurable results, while enhancing the overall web experience or users. Google is headquartered in Silicon Valley with

oces throughout the Americas, Europe and Asia. For more inormation, visit www.google.com.

Catapult is an action-biased marketing solutions agency ocused on creative strategies that

inspire consumer action and drive trial, repeat purchase, and loyalty or its clients, which include

Reckitt Benckiser, Mars Petcare, Kelloggs, Krat, M&M Mars, Del Monte and Sara Lee. The agency

brings a deep understanding o the brand, consumer, and retailer to every assignment, and

considers retail insight and a genuine depth o shopper marketing knowledge as core dierentiators. For more inormation, visit

www.catapultmarketing.com.

The In-Store Marketing Institute is a global organization o brand marketers, retailers, agencies and

manuacturers ocused on improving retail marketing strategy worldwide. The Institute serves the

needs o its membership by providing inormation, research, education and training, networking

to spot inconsistencies. For it to be eective, digitalshopper marketing must be coordinated with the rest

o the marketing plan rom advertising down throughproduct distribution.

Measure: Digital tools give marketers an

unprecedented ability to measure consumer responseand, in tandem with point-o-sale systems, sales results.Successul marketers will engage their research and

analytics departments while designing programs (ratherthan ater the act) to assure a higher level o condencein the accuracy o results, Diamond advises.

Scrutinizepartnerships:As the in-store TV

marketplace has shown, not all technology partnersare equal, and its likely that many o the digital service

companies emerging today wont be in businesstomorrow. Some o 2010s most popular websites andsocial networks could quickly ade in popularity. All

marketing agencies will claim to have digital shoppermarketing expertise, but ew have thus ar truly become

experts in the practice. And, many retailers arent yetcapable o executing eective campaigns. Marketers

must pick their partners wisely.

Bereadytoadapt:Marketers barely had time toadapt their thinking to marketing via cellphones beore

the smartphone came along. Now, each passing monthdelivers mobile apps delivering more powerul shoppingtools. Marketers will not keep pace unless they can

react quickly to technological advancements and, more

importantly, the ways in which shoppers are utilizingthem.I cant say the ROI is always apparent at this stage, but

the media spend is small, said Joe Jackman, acting chiemarketing ocer o drugstore chain Duane Reade at arecent conerence. So the experimentation is just ne.

This space is constantly evolving, says Cooke. Tobe eective, you need to be nimble, adaptive and have a

hunger to learn. You must be willing to experiment withnew and emerging technologies, and to take a ew risks.

The greatest risk, however, would be to hesitateat a time when the marketing industry is entering amajor new cycle o its own, one in which mass media

could become secondary to the targeted shoppercommunications that digital tools can acilitate.

Best Practices in Digital Shopper Marketing

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