Wednesday, October 31, 2007

Will retailers look to the Internet for clues to success?

According to a new report released by Datamonitor Plc (and as reported by the Wise Marketer), "retailers around the world are hoping to win back lost market share by making their customers' shopping experiences a little more meaningful - and even theatrical - with emphasis placed on the sensuous elements of an in-store shopping trip." Of course this should come as no great surprise to those working in retail design and marketing, however the report's summary identifies a few key trends that, at least upon my initial cursory analysis, don't quite fit with what my customers and colleagues have been telling me recently.

The summary leads off with the notion that, "the next step in the battle to retain customers is to streamline the
buying experience, bringing it more in line with Internet shopping in
terms of ease and speed of transaction." While most retailers -- especially big ones -- do constantly try to optimize checkout lanes, reduce overall transaction time, and generally improve the part of the experience where the customer has to pay for stuff, in all other parts of the store retailers have been focusing on ways to make bricks-and-mortar less like the Internet, not more. The report notes that as tracking devices become more reliable at identifying a shopper's race, gender and age, retailers will be able to beam targeted ads and messages to nearby digital signs in hopes of catching their attention. So ok, maybe stores will start experimenting with Internet-style banner ads. However, where experience really counts, there's still no topping the bricks-and-mortar store.

Looking for a new guitar? Want to try on a pair of shoes? Is the Corinthian leather really that much nicer than the brushed vinyl? There Internet still lags far behind the real-world experience when it comes to examining/analyzing anything that can't be captured accurately in a photo or two. Lots of really innovative work going on inside the store these days tries to highlight the advantages of traditional commerce, and increasingly, hybrid commerce.

Of course, where the Internet excels is in instances where the customer can benefit from a very large amount of information, the ability to compare multiple products at once (for both price and features), and see reviews from (presumably) like-minded shoppers. And in my experience this is where retailers have been putting more effort lately. In an effort to combat Amazon, Borders has had kiosks in-store for a while, and Barnes and Noble is starting to follow suit. Best Buy and Circuit City have had product info/comparison kiosks for a few years, and recently I've even seen department and home furnishing stores get into the act.

While the Datamonitor study cites POS, RFID and proximity sensors, the key driver (which they also mention) is most likely to be mobile, or perhaps more accurately, a combination of local in-store kiosks, Bluetooth/WiFi beaconing, and mobile Internet, all delivered to a shopper's own handset and in-store digital signs. By letting shoppers access the same kind of information that they'd be able to get over the Internet, retailers can help level the playing field with e-commerce while still pushing native advantages like allowing shoppers to interact with products before buying them.

Giving shoppers the option to get information on their mobile devices forces retailers to give up some control (since the mobile devices come in all shapes and sizes, have differing capabilities, and of course can access content outside of the retailer's control). However, offering the service in the first place means that retailers can still control some of the content and marketing (as opposed to none), can provide for deeper interaction (by using digital signs as big display screens, or letting users snap a picture of an item's bar code to look up information on it, for example), and can help build customer loyalty in a highly value-added, purely opt-in fashion.

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Thursday, October 25, 2007

Three trends in product packaging: make 'em easy, smart and green

A few months ago I wrote about a Wall Street Journal article highlighting some of the dramatic changes going on in the product packaging industry. Media fragmentation, changes in viewing audiences, measurement conundrums and everything but the kitchen sink are being held up by ad execs as excuses for why media budgets continue to spiral upwards while ad effectiveness declines. But when push comes to shove, eventually people have to buy stuff. And when they do, they're going to come face to face with product packages.

Realizing this, CPG companies have started packaging strategies to guarantee that their wares will practically jump off the shelves thanks to eye-catching package designs that communicate their product's benefits and stand out from the competition. Even AdAge, who's not exactly the most friendly group when it comes to below-the-line advertising practices, featured a couple of articles about packaging and product sampling, illustrating how important the First Moment of Truth (FMOT) has become for product manufacturers. For example, in a recent (really good) article on the subject, Allen Adamson of branding consultancy Landor Associates notes that:
If you don't have luck connecting with the audience you want as they sit in front of TVs or laptops, sooner or later they're going to show up in front of a retail shelf. That's a great segue to the second dynamic driving rekindled interest in packaging as a branding tool: the increasingly difficult time brands are having differentiating themselves in a sea of shelf clutter. Any brand research worth its salt will tell you that differentiation, together with relevance, is the most critical factor in brand success.
His advice? First, use strong design cues to both draw attention to the product, and tell a story about it. Some of his favorite examples include Apple's products and Evian water, which all use the package to illustrate qualities inherent to the product (simplicity and elegance for Apple, purity for Evian). More interesting examples include those where the package is an actual part of the product, and thus needs to market itself reflexively (for example, Campbell's Microwavable Soups or Nabisco's 100-calorie packs). Second, follow the key trends going on in the packaging world right now. That means that:

1. Green is good: Be environmentally friendly -- or at least less unfriendly -- and you can tout it as a feature!

2. Smart is good: Engineer packages that help consumers use your product (like Hellman's mayo in a squeeze bottle).


3. Easy is good: If I have to open one more damned razor-sharp plastic clamshell package, I'm going to quit your brand for good.

Manufacturers are already picking up on lots of these trends, but examples of packages that meet all three are still few and far between right now. As product packaging grabs more attention I expect this to change, especially when you consider that it's one of the more affordable ways to make a really significant marketing impact at the point of sale these days. For now, though, those companies that had the foresight to start paying attention to the above trends and redesign their packaging accordingly are enjoying benefits on the shelf that will be hard to match with additional spending on above-the-line ads.

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Monday, October 22, 2007

High-tech carts inform shoppers of unhealthy choices

ABC News reports that shoppers London may soon have access to trolleys (that's shopping carts for us Yanks) that can warn us when we are buying too much unhealthy food at the supermarket. According to the article, "the high-tech model will be fitted with a computer screen and barcode scanner. It will read each product's individual code to give customers information about calories, nutrition, ethical sourcing and the environment."

This is definitely an interesting concept, though it seems there may be more drawbacks than benefits. There are thousands of products in any supermarket that are not healthy (in fact I wouldn't be surprised if the unhealthy ones outnumber the healthy ones). So how will the folks at Frito Lay, Coca-Cola, etc. feel about a machine attached to a cart that essentially tells shoppers not to buy their product? I think it's safe to say that they won't be making any contributions to EDS, the U.S. based company responsible for the technology any time soon (unless said contributions would help to reclassify what things are "healthy.") I also wouldn't be surprised to see some vendors lash out at supermarkets using the tech, since it will essentially be negating all of their product advertising and in-store promotions.

In the end, this kind of technology is probably better suited to high-end markets and specialized health food stores where people are making the conscious decision to eat an entirely healthy diet, and will be interested enough in what they're buying to stop and read the text on the screen for a minute or two. In such places it would be easy to tout the technology as a new service to provide even more information to consumers facing an increasing number of choices (especially in said high-end places where you're buying "lifestyle" as much as anything else). In mainstream supermarkets, though, I think it can only hurt business as a whole, and worse, it could pit the retailers against some of their biggest vendors.

Tags: shopping cart, smart cart, retail marketing

Wednesday, October 17, 2007

RetailWire asks: is the "seamless" store experience important?

There's another interesting conversation going on over at RetailWire, this time about how important it is (or will be) for retailers to provide a seamless transition between their brick-and-mortar and online properties. As RetailWire's editor George Anderson notes, "consumers can order a product online and pick it up in a store. They can order an item online at a kiosk located in a store. Today, retailers are looking for ways to integrate the virtual and brick and mortar shopping worlds to better serve consumers' needs and drive sales in the process." Of course, such integration comes at a price, and many have wondered what (if any) benefit there is to making it work.

Well, specifically they wonder about the benefit to the retailer, since the benefits to customers are obvious (better service, more options, etc.). And while some might argue that anything that benefits the customer is sure to benefit the retailer in the long run, the cost of making services like pick-up-at-the-store and product line extension kiosk networks can be large, and the logistical challenges associated with such projects are ongoing.

Even with that argument in play, though, it seems like retailers will eventually have to do whatever they can to make sure that their real and virtual presences are compatible, and ideally, completely integrated. To whit, here's the comment I left at RetailWire using Barnes & Noble (one of the companies actually doing something -- finally -- about linking their website and retail stores together):

I really like going to bookstores and trying out the merchandise before purchasing. However, if I can't find a book on the shelf, or an associate helps me to determine that it's out of stock, my choices are to either go to another store or have the book shipped (to the store or directly to me). I'm lazy, so in most cases the former isn't a viable option. As for the latter though, if the store *doesn't* have an easy way to order and ship it to me, I'll just go home and buy the item from Amazon, since either way I have to wait for it. Worse, I might just pull out my web-enabled phone and make the purchase from another vendor while I'm still in the store. Only by making access to inventory and alternative purchase processes as simple as possible does the brick-and-mortar retailer have any hope of securing that sale from me.

While I might be atypical in this regard right now (though I doubt it), I certainly won't be in the not-too-distant future.

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Thursday, October 11, 2007

'Regis & Kelly' join Walgreens for in-store promotion

Advertising Age has reported that daytime television sensation "Live with Regis and Kelly" is teaming up with Walgreens to promote their Halloween special.

According to the article, "The stars of "Live With Regis and Kelly" always dress up for its annual big Halloween show, but this year, the Oct. 31 episode will be broadcast in 3-D. Viewers will be able to enjoy the special effect if they pick up the required 3-D glasses at the photo department of a local Walgreens store as part of an advertising and promotional deal."

Older, retirement-aged audiences are the bread and butter of this promotion. They are the folks that spend a little more time in stores like Walgreens as they develop pictures of their grandchildren and search for bargains on bar soap and detergent. That same group also makes up a healthy (and growing) portion of the 'Regis' audience. By promoting the 3-D special on the show, the network can drive traffic to Walgreens (a current 'Regis' advertiser), with a specific call to action (who knows, it could be the deciding factor between a trip to Walgreens vs. CVS for some consumers). On the flip-side, Walgreens shoppers that don't normally watch the show might notice the 3-D glasses and associated POP and decide to check the episode out, completing the circle.

In addition, this is yet another example of how the entertainment industry is moving towards less-conventional out-of-home advertising techniques. It's becoming obvious that ad execs are paying more attention to OOH advertising in a serious way as they populate stores like CVS, Duane Reade and Walgreens with ads and feature billboards buses and all sorts of other things as part of integrated campaigns promoting the new fall network TV shows. Take a walk through the heart of Manhattan and you don't need to be a TV exec to know what shows are debuting and when... you just have to look around.

And while 'Regis and Kelly' is already an early morning staple with tons of brand equity, this move does help with brand reinforcement, and offers a longtime advertiser the chance to maybe gain even more of the audience's mindshare. If it works, and people respond positively, expect other similar promotions to pop up. After all, if an admittedly un-exciting store like Walgreens can successfully pull off something like this, then practically any store can.

Tags: out-of-home advertising, OOH advertising, Walgreens

Wednesday, October 03, 2007

Here's a novel way to study shoppers and shopping...

From the truth-is-stranger-than-fiction department comes a story (via ABC News) of an artists' cooperative that surreptitiously built a small apartment inside a shopping mall to, "understand the mall more and life as a shopper." According to artist and mall-dweller Michael Townsend, the idea for the project, "was inspired by a Christmastime ad for the mall which featured a 'an enthusiastic female voice talking about how great it would be if you (we) could live at the mall.'" The article recounts the entertaining points of the story:
[Townsend] said he and seven other artists built the 750-square-foot apartment beginning in 2003 and lived there for up to three weeks at a time.

The artists built a cinderblock wall and nondescript utility door to keep the loft hidden from the outside world.

But inside, the apartment was fully furnished, down to a hutch filled with china and a Sony Playstation 2 although a burglar broke in and stole the Playstation last spring, Townsend said.

There was no running water instead they used the mall bathrooms.
So while Townsend is now on probation (and probably far away from a mall), his story got me thinking about shopper marketing and retail anthropology. While a good number of CPG makers, malls and retail chains have done anthropological fieldwork in their stores and with their shoppers (almost always by hiring it out to a professional field service company like Envirosell), I haven't heard of anybody who did so for over four years at a stretch. And while I doubt that Townsend kept the kind of methodical, detailed notes that can yield significant insights, his little experiment would suggest that mall patrons might adopt a behavior pattern -- even a bizarre one -- and keep it up for quite a long time before someone notices.

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