Don't start the creativity revolution, I mean recession, without me

In their continuing coverage of the “R” word the New York Times recently ran a story about how marketing campaigns are responding to economic fears. What does selling look like during a recession? New advertisements focus on value for the dollar, saving money, and living cheaply while still living well. Surprising stuff, given the ad industry’s historical love of excess. Despite growing economic divides since the 1980s, the push for new goods and newly defined luxuries-as-necessities, it’s interesting to see marketing that’s, well, trying to be honest.

At the same time, there’s something quite depressing about the thought that advertisers are only creative when there’s nothing to be sold. Perhaps. Or perhaps, like any profession in the 24/7 economy, the daily pressure to produce at such a pace sucks all the fun out of advertising. It’s no surprise that some of the most innovative and interesting ads come from companies or groups who are not trying to secure a seat on the stock market. Look to socially responsible and green-focused campaigns for more innovating approaches to advertising. Companies that create socially conscious short films and movies circulated via YouTube and email are able to bridge the gap between selling something and recognizing that for some consumers in a tight economy, less is more. The best messages combine self-interest and altruism. People generally choose organic foods first for their own health benefits, but are then grateful to think they are contributing to the health of the planet. They also care more about the larger society in times of hardship and crisis. Selling value in a tight economy could also be about selling social good.

When consumer purchasing is corralled by tight budgets, advertisers need to re-think their purpose. Some argue that because of all the new digital media (especially cell phones), advertising as we know it is on its way out. Another argument might be that today’s conditions require new approaches, such as a better focus on information and communication rather than imprinting brands and their implied identity boosts.

Honesty, after all, is actually a great design feature.

Tags: advertising, marketing

Tommy experiments with a new kind of retail TV

While much has been made of major brands launching (or at least testing) in-store TV networks, Tommy Hilfiger has decided to take a different direction and launch their own branded content channel -- on the Internet. Now obviously Internet video channels are nothing new, and in fact some consumer products companies have been trying their hand at branded video channels for a while (does Bud.tv ring a bell? No? Yeah, that's been the big problem). But according to this little blurb at PROMO Magazine, "Tommy Hilfiger has launched TommyTV in collaboration with Sony BMG to present live concert performances online from the ongoing Hilfiger Sessions series along with archived footage of past performances."

Of course, a bunch of live performances isn't going to gather a huge and loyal audience. No, for that the company has decided to turn up the mix, with, "exclusive artist interviews and backstage footage from intimate concert settings around the world." Additionally, "Hilfiger Auditions section will let aspiring musical artists upload videos of themselves and compete for a shot at stardom on a platform intended to draw music industry executives and casual Web surfers." While user-generated content isn't a 100% sure-fire way to grab and hold an audience or build a fanbase, you can't deny that it worked for YouTube, and gained a huge following when user-generated commercials were run during the 2007 Superbowl. And in fact, the company has been savvy enough to partner with the big user-generated video sites, noting that, "TommyTV branded channels on YouTube and Joost will feature concert clips to draw surfers to the Web site. Clips will also be accessible on MySpace and Facebook. Sony BMG’s myplay music network will feature pre-roll videos and banner ads intended to push traffic to TommyTV.com."

On the one hand, it shouldn't be rocket science to create a modestly successful video website. Populate it with enough A-grade content that can't be found elsewhere, foster growth via user submissions and the usual bevy of social media technologies, and all the while promote the brand on other channels and in other media. But I don't quite understand what the company hopes to gain for their effort. Tommy's image has changed significantly in the few decades that it has existed, as has its target audience. That having been said, it doesn't strike me that having a video channel - even a reasonably successful one (and let's face it, that's the best they can possibly hope for) will do much to spread their message, build their brand image, or attract new potential customers.

Tags: retail TV, branding

It's just not as funny in email...

A recent study by researchers at NYU and the University of Chicago found that people routinely overestimate the success of their ability to communicate over email. In particular, sarcasm was a big miss. Overconfidence and egocentrism are the main culprits.

Well, gee, I’m not surprised (and yes, that IS a hint of sarcasm you read in my words). Once again, it’s really great when business school research confirms what people already know. After all, given their conclusions, it sounds like people in business, marketing, even education might need a reminder. But right now, as you read this, there are probably fifty newly minted education doctoral students whose dissertations focused on the difficulties that eighth graders encounter when trying to decipher textbooks, classic novels, or their history homework. Despite their love of the image, sometimes the world of business and advertising forgets that reading and communicating are skills.

If you take a look at what the advertising industry says are some of the top advertising slogans of the past ten years, you’d be surprised at what you find. Interestingly, many of them also have rather memorable icons to go with them (the Geico lizard, for example). What the study does point out is that we communicate better when we have images, nonverbal cues, gestures, and intonation helping us out. Or, better yet, a recognizable universe of cultural ideas that we share. Communication is always imperfect, but it works better if we have some clues in common.

It’s the same in the world of food. For researchers, despite advances in chemistry and molecular science, taste is incredibly difficult to pin down. And while I may wax on and on about the most amazing chocolate I had in Montreal last week and even bring you a piece to try, what you taste and what I taste is only imperfectly shared. It works better if we both have lots of shared images (chocolate bars! bonbons! truffles!), experiences (remember eating that molten chocolate cake in Boston!), and cultural stories (Mr Hershey, I presume?) about chocolate (it’s supposed to be sweet, dessert, indulgent, not laced with hot pepper, and definitely not as a sauce over the fish. Okay, well, maybe. You try it first.). And some chocolate creations (poop shaped, perhaps? ) are never ever funny. Knowing about taste in food is actually something we develop - based on the people we meet and the places we go -- as much as we think we’re born with it.

What’s important about this for the new forms of media is that communication isn’t as straightforward as you think it might be. No matter what kind of technology you have, words are important. The most important finding in this study has to do with the presumed state of mind of the communicator. Egocentrism is widely available in our culture, especially among those who think it’s their job, their mandate, and their calling to create the commercial messages that shape our landscape.

What the email research tells us is that marketing folks need to make a much greater effort – develop some skills, shall we say -- understanding the visual worlds of people who don’t look, think, eat, or email like them. Digital and new media have a world of tools way beyond emoticons at their disposal. The trick is using them for something everyone might understand.

Tags: marketing, advertising

Brave New World revisited: Blissful ignorance, like Soma for consumer regrets

“The warm, the richly colored, the infinitely friendly world of soma-holiday. How kind, how good-looking, how delightfully amusing every one was! "
- Aldoux Huxley

We all know someone like this, be it a friend, a co-worker, a sister, in-law, or favorite cousin: At a restaurant with this person, whatever they order, it’s going to get sent back to the kitchen.

My special someone like this – let’s call her Heidi – always, always, always wants her steak done differently, her fish without sauce, and her sandwich without mayonnaise, even if she ordered it that way in the first place. She could find a dirty spot on lettuce that has been put through an industrial dishwasher. And then there’s Heidi’s partner, Stan, who likes to buy things at Costco, bring them home, and then take a few weeks to decide if he really likes them. He put a flat screen television on his American Express card a few months ago, watched the Super Bowl, decided it was too small, and back it went. Picky eaters, buyer’s remorse, indecisiveness, rejection, and regret are anathema to manufacturers and marketers alike. Wouldn’t it be great if you pre-empt or eliminate this, without perhaps, lacing the water supply with mood-enhancing drugs?

It might not be necessary, according to a study done by professor of marketing Dhananjay Nayakankuppam at IU, which found that people don’t want to know too much negative information about their purchases. The study used three fairly typical experiments on consumer choice: two consumer tests on chocolate and hand lotion, and then a video rating experiment.

Researchers dubbed their finding the “Blissful Ignorance Effect,” but they might as well have called it, “the Marketer’s Dream Study” because it’s so keyed in to what the marketing world wants to hear about its clients – less is more and the image is all.

But if you look closely, the key point is this: “once people commit to buying or consuming something, there is a kind of wishful thinking that happens and they want to like what they’ve bought.” I wonder: is that such a complex insight that needed a funded study? Give me some chocolate and unless it tastes like cardboard (or is shaped like something hideous), it’d take a cataclysmic event to get me to regret eating it. I mean really, chocolate?!!! What is there to regret? Nayakankuppam says, “We want to be happy with our decisions.,” and points to people’s emotional attachment to their purchases. But it’s false reasoning (or wishful thinking!) to apply those insights backwards to the original decision-making process and suggest people don’t need the information in the first place.

What marketers often fail to consider is that all material things – especially consumable goods – have a biography and history. Marketers focus on brand loyalty a lot, but the truth is, it’s much more complex, especially when products are relentlessly and continually altered and labeled “new.” The unending quest for newness has to be countered by something, perhaps either regret or blinders, just so people have a chance to move on! Case in point: I’ve just barely begun to enjoy my latest cell phone or my laptop and there’s a better version of it out there. Yes, technology changes fast. But does that mean I don’t want information about it? Certainly not AFTER I bought it.

What is lacking in this study is context. After all, if people professed to be unhappy with their purchases, would that be better? Are consumer experiences really divided only into angry regret and blissful ignorance? One key question the UI researchers neglected was whether they’d go back and buy the same product again.

Consumers have the unenviable conundrum of having both too much and too little information. From chocolate to hand lotion to DVD players, how much does any of us really know about the exact process by which they are made (ask and I’ll be happy to tell you all about chocolate)? The only time it’s transparent is when there’s a problem (lead paint) or the production process is part of what’s being sold (the market for green or sustainably-produced goods, for example). So much information that comes with advertising is not useful or not clearly authoritative. Ignoring bad feelings or second thoughts after a purchase is probably a great safety mechanism for our overloaded brains. Simplicity is good, but not because consumers are whacked out on soma, but because they’re bored with too much useless info and a lot of pressure to move on to another purchase before they’ve had much time to enjoy the one they’ve got!

Now eat your soma, I mean chocolate, and be happy.

Tags: retail, marketing, advertising

Wal-Mart learning from P&G in India

Back in August of last year the Wall Street Journal had an interesting and insightful article about the predominant shopping styles in India, and in particular how many preferred the "controlled chaos" of traditional markets and stalls to the sometimes antiseptic Western approach to the task.

While it's still a bit too early to point out lots of success stories from big Western chains finding their way in the subcontinent, the biggest of them all -- Wal-Mart -- has already decided that they're going to have to enlist some pretty serious help if they want to stand a chance in the fiercely-competitive retail landscape. That's why, according to this article from The Economic Times, they're studying longtime-partner P&G's data on the Indian market while revising their own strategy:

Globally, the relationship between [Wal-Mart and P&G] goes well beyond a vendor-retailer relationship and P&G has offered to share its understanding of the Indian market to help Wal-Mart in building efficiencies in supply chain and merchandising for its cash-and-carry business.

Senior officials at P&G told ET that its India unit has shipped its first consignment of personal-care products to Bharti-Wal Mart, a joint venture for the cash-and-carry and logistics initiatives.

While the joint venture will focus on B2B business, the Bharti group plans to launch small-format retail stores shortly. The officials said P&G India is helping Wal-Mart understand the nuances of doing business in India. Wal-Mart’s India exposure has been so far restricted to sourcing from the country for its global operations.

Considering that something like 95% of all trade falls outside of what's considered "organized retail" in India, it's clear that even Wal-Mart would have a pretty hard time trying to move into the market with their large- or super-sized stores. Taking a page from Indian retail entrepreneur Kishore Biyani's playbook, a focus on hyperlocal markets might be the best way for the retailer to establish a foothold with the core population in that country.

Tags: india, retail

Burger King asks: would you like IM with that?

So the guys over at Three Minds @ Organic posted this picture and asked, "Shouldn't the answer be about customization of your hamburger online, not spending more time online?" And I started to wonder... Is this really a bad thing? Granted, I'm probably too connected for my own good, but I'd be willing to bet that there's a large and growing population that wants to have the option to get connected everywhere they go, and that includes fast food establishments.

To Organic's point, Burger King's first and main goal must be to produce quality (?!) food at a quick pace. If they can't pull that off, no amount of connectivity is going to help them keep their customer base happy. However, customizing your whopper online? Really? Where's the value in that? To me, BK's offer to provide web services seems much more valuable than allowing me to pull up a saved order over the web.

In a world where differentiation is becoming more difficult at the low-end, I think BK's approach makes a lot of sense: their core offering stays the same, their core audience remains unalientated, the process most critical to their business, ordering, remains simple and standard, and they maybe pick up some extra margin on the low-cost, easy-to-swap-if-they-dont-work, and partner-centric digital services that tweens, teens and twentysomethings already expect, and more are coming to use.

All that having been said, how long before the old fast food cliché becomes "would you like advanced digital and/or web services with that?" It doesn't seem to roll off the tongue quite so easily :)

Tags: store experience

Books or screens: why not both?

The rise of the digital age has been hailed as the death knell for books. But books don’t seem to want to go away that easily, do they? The idea that "book people" and "media people" are inherently different seems embedded in our collective consciousness, yet in the real worlds of commerce and letters, the business of books is closely tied to the business of digital media, as a recent article from ISMI reminds us..

Some people won’t date folks who don’t share their literary tastes. With two rooms of overflowing floor-to-ceiling bookshelves, I can relate: everyone in my house is a reader. But we’re also pretty heavy on the digital side, too, with daily use of computers, digital cameras, and mobile devices. The angry war between print and screen is not what it’s cracked up to be, and Borders is counting on that with the introduction of its new media blitz stores that offer genealogy services, movie and music downloading, audible books, and even a publish-your-own option, all topped with a generous helping of well trained staff to help you navigate the digital toys.

Borders was one of the few early mega bookstores to break through my hatred of the breed. I first discovered them around ten years ago while visiting family, on a day when my older relatives probably needed a break from the Parent-and-Toddler show. Local bookstores are my natural habitat, but not all of them are suitable for a two year old. Well before Barnes & Noble invested in couches and cappuccino, here was a store with a carpeted (!!) children’s section, benches and little tables, and my favorite part, a café with highchairs, coffee, and chocolate pastries: the Big Three Essentials to anyone with small children.

I admit I’m a book geek, but taking just one look at the promotional videos for the new Borders store I’m already salivating at the prospect of digital and print media, all in one spot. I’m not big on finding the ancestors at the genealogy site, but I would definitely take whole classrooms full of kids to publish their own books, photo essays, and soundtracks. Sure, I can make my own great media productions from my setup at home. But it’s much more fun when you’ve got all those resources, knowledgeable help, and some other folks doing the same thing right next to you, and of course not everyone will have the same access to technology from home.

Before Starbucks became an empire, CEO Howard Shultz admitted to enjoying Ray Oldenberg’s The Great Good Place, a book which takes a bunch of intellectual ideas about social geography and makes a lucid plea for new spaces for public life. Life in my little college town has all those features right nearby. But most people, especially suburbanites, live in areas where that kind of space doesn’t exist. The new Borders store, while not technically public, anticipates how digital media are already an extremely important part of people’s social and public experience, and seeks to make the Borders destination a central hub for our new print-cum-digital generation.

Tags: retail experience, borders

Still shopping in the Paleolithic age

So a new study from the Wharton School at the University of Pennsylvania suggests what we all think we know: men and women are different kinds of shoppers. The study claims men shop with a purpose (hunting?) while women treat shopping as a total experience (gathering?). Not surprising really, especially when you consider that women do the vast majority of shopping for themselves, their family members, their friends and relatives, and the household itself. Of course women say they spend more time and thought in stores – they have to!

This kind of study makes me put on my Certified Gender Research Scientist hat and squint hard: on the surface, what you see is what you get. But look a little deeper and the gender knot unravels. What do we know in the world of gender studies that market researchers and MBAs do not?

Indeed, there’s always something that feels like truth in stereotypes. That's how they emerge in the first place, as a handful of superficial observations that eventually morph into a blanket over a whole group. I know plenty of men who zip into stores, get what they need, and get out. But then there are those other guys who take forever picking out a new jacket or a pair of running shoes. Heck, sometimes it’s the same guy – it just depends on what he’s shopping for. So, why does the stereotype exist – and why did the men interviewed about their shopping habits spew back what the researchers wanted to hear?

We’ve known since the 1970s that there are two kinds of gender effects in survey research. First, if the researchers are looking for differences between men and women, they will find them. It’s incredibly rare for gender research to turn up findings that oppose what the researcher set out to find (and this is not true for other kinds of research, so it’s something about our deep seated beliefs about the differences between men and women). Second, there's an effect that comes from this great concept called 'social desirability.' Here's one guy's version: "There's such cultural phobia about looking feminine, most men won't admit to liking shopping even if they do. Men are allowed to talk about buying cars, appliances, technology, and sports equipment. And maybe wine or beer." You want to appear manly? Then don't admit to non-manly behaviors -- especially in a co-ed focus group.

It’s too bad the "primitive psychology" angle was so attractive to the Wharton researchers (like others before them!). As any anthropologist will tell you, hunter-gatherer myths tend to play better in today’s ads than in the historical record. The Paleolithic analogy distracts from the truly interesting findings about sales staff: both men and women cared a lot about individualized service and problem solving by store clerks. Thus the study’s most interesting conclusion was ultimately its least surprising one as well:

"Retailers need to step up and deliver more sophisticated, segmented service… There's no such thing as customer homogeneity. We're not a homogeneous bunch at all. Yet as organizations, we end up treating customers as one big happy family. You've got all sorts of demographic and psychographic forces at play."

Even while concluding that consumption is deeply segmented, the authors still focused on gender differences as an easy approach to "solving" the segmentation conundrum. Unfortunately the slight differences noted by the researchers could tempt overzealous retailers into using sexist psychological sales tactics (wittingly or not). But imagine what could happen if these arguments started showing up as guidelines in corporate sales training manuals…

Tags: customer experience, shopping, retail

Brave new world of emerging media

You've got to choose between happiness and what people used to call high art"

-- Aldous Huxley

Lately, advertisers seem almost giddy at the prospect of all the new media channels available for selling product and creating brand images. Imagining all the ways digital media allows us to break out of flat spaces is a designer’s dream. Adweek highlighted the new Scion urban street displays, where passersby approaching the store window experience the cars moving further away. The Japanese are already masterful at using old and new digital media for short burst campaigns: the pop star Ayumi Hamasaki’s last concert featured a fleet of “tribute vans” each airbrushed with a different alluring image of Ayumi, tractor trailers wrapped with her album cover, and huge digital signs peppering the Tokyo skyline.

But those who venture into this Brave New World of Bluecasting, moving screens, and SMS often have trouble demonstrating how such venues will actually pay off in sales and profit. And then the biggest venues for marketing can complicate life with gate keeping techniques or worse, allowing your competitors to siphon off customers (think of the complaints about Google’s new “search within a search” feature.) Not only does it undermine a company’s ability to get to consumers first, but it can be counterintuitive. Like diet books advertised on a gourmet recipe page featuring molten chocolate cakes, if you don’t know the big Freudian question (what DO consumers want?) digital media can easily confuse or annoy rather than entice. Emerging channels are new to both the seller and the buyer. The savvy media campaign takes a line from Lou Reed and engages both sides in the “beginning of a great adventure.”

Companies need to get their feet wet with digital media, despite the uncertainty of its uses, especially to avoid those gate keeping measures and to establish brand identity in new venues. I don’t want a Scion (my dog, our daily muddy walks, and her serious furriness are better suited to something with a big washable hatchback. I’m so not Gen X or Y anyway…) but I’ve certainly been hyped at enough to know one when I see it. Scott Wensman claims that using emerging channels is more about developing an audience – and, most significantly, doing some solid consumer research to figure out what works. If emerging channels are going to evolve into the great advertising boon they’ve been hyped to be, advertisers are going to have to figure out how to sell product for people in lifestyle niches beyond teenagers, 20-somethings, and wannabes. While my 80 year old father might be enticed by a beautiful girl with a Red Bull LCD image on her chest, my 80 year old mother (who does all the shopping) would not. Show her an interactive video cookbook or a version of DDR with big band music, and you just might get her attention. Let her tell you what recipes to include or what songs she likes, and the technology gets sold along with the product.

Tags: customer experience, emerging media, bluecasting

Catching up on retail media news...

Whew! It's been a while since I've had the time to sit down and write a post for this blog. Between GlobalShop, the POPAI Digital Signage contest and the usual rigors of day-to-day operations I've come across way too many articles that were neat, but would have to "wait till later" for closer study. Here are some of the more interesting things I've been meaning to post about, but haven't had the chance to:

Jesse Bove, Associate Editor for ddi Magazine and bona fide Retail Design Diva asks "What makes shoppers tick?" in an examination of some of the newest trends and techniques in customer observation and behavior analysis. It's a good introduction to some of the cool/creepy technologies on the horizon that promise to turn your everyday trip to the grocery store into something from Minority Report -- and not necessarily in a good way.

Our friends over at Brand Experience Labs announced that they completed a deal with theater advertising company National CineMedia to install AudienceGame, their audience-controlled "'advergame' which is played by theatre audiences moving together to act
as a 'virtual joystick' to control the gaming elements on the big
screen."

POPAI announced the OMA and Digital Signage Award winners at GlobalShop last week, with top honors going to Creative Instore Solution/Red Bull, Idea Plant/20th Century Fox and Drissi Advertising/Paramount Pictures. For a list of digital signage winners, check out Digital Signage News.

Last but certainly not least, RetailBulletin has had several great articles the past three or four weeks, but my favorite was this article about supermarkets reacting to anti-packaging campaigns in an effort to satisfy consumer demand for green. No, not money, the other kind of green. You know, the one Al Gore invented.

So that's what's caught my eye these past few weeks. Thankfully, to keep from falling even further behind, we're bringing in some new blogging blood, so watch this space for more frequent articles, and definitely some that take a decidedly different spin from the normal pro-retail-media rah-rah-rah kind of stuff that I'm inclined towards :)

Tags: retail media, store media, advertising

When high-tech packaging crosses the line into "retail media"

For most big CPG companies, package design almost assumes the status of "black art," and is relegated to a team of highly specialized designers and engineers who know how to get the most branded surface area out of a few the square inches that the typical product must occupy for it to be economical for retailers to carry. Consequently, we've seen some extremely creative packages crop up here and there that go the extra mile to really try and get the passing shopper to stop and take notice. For the most part, though, packages still tend to be pretty bland and generic-looking.... in fact I'm having a hard time wracking my brain to try and think of a good example of exceptional product design.

That aside, some folks are clearly thinking out-of-the-box about what they can do to make their products look more exciting and inviting on the shelf, and the New York Times just wrote a story about one such success, a new shaving gel called NXT.

While I don't know anything about the product itself, it's really the packaging that's the star, and in the already-crowded world of men's grooming products, it was ultimately this package that convinced Target to bother carrying the item (a new product from a small company, so this is no small feat!). How did they do it? The Times recounts this anecdote:

ABOUT a year ago, when Jamie Leventhal was trying to convince big chain stores to stock his new line of shaving gels for young men, a buyer for Target asked a crucial question: How much would he spend on advertising?

“I told him we would not spend a single dollar,” Mr. Leventhal said.

The buyer was stunned until Mr. Leventhal pulled a prototype out of his briefcase. The product, called NXT, is sold in an arresting triangular container that lights up from the bottom, illuminating air bubbles suspended in the clear gel. The plastic is tinted blue, and when the AAA batteries in its base are lighted, the whole thing looks like a miniature lava lamp or a tiny fishless aquarium.

The novelty of the light-up container worked, and NXT’s shaving gel — as well as its after-shave and face wash, similarly packaged — will hit the shelves at Target this month.

To call attention to themselves, the products, which are aimed at 18- to 24-year-old men, will glow on the shelves, inviting customers to pick them up. Every 15 seconds, a light-emitting diode (LED) in the bottom of the container flares on, stays lighted for a few seconds, then fades out.

The most interesting part of the whole story (to me) is that Leventhal identified advertising as a problem, and not a solution. Thus, rather than dump a whole bunch of money into advertising the product in the "usual" places (on TV, print, radio and the Internet, all of which require dozens to hundreds of individual ad buys for maximum coverage), he instead spent his money on getting his product noticed at the one place where it really counts -- at the store, where you can actually buy it. Further,

While most brands want to be placed at eye level or higher, Mr. Leventhal said the ideal shelf location for NXT is lower. “When you look down at them it’s more dramatic, so what I’m doing is going into retailers and saying, ‘Let’s take the less valuable real estate on the shelf and make it more valuable,’ ” he said.

So the package is even more appealing to retailers who vary their slotting fees based on shelf location (which is pretty much all of them these days).

I think NXT is probably going to do well thanks to their in-store strategy, even despite their lack of traditional advertising. However, now the bar has been raised. I'm pretty confident that Target isn't going to want a dozen different products blinking up and down each of their aisles, and for brands that are already spending a lot on advertising, the additional packaging costs for this type of gimmick may be prohibitive. But considering that hundreds of new brands are launched every year -- many from smaller companies that don't have the budget of a Unilever or a P&G -- I expect that we'll see a lot more creative packaging-as-promotion ideas in the future.

Tags: retail media, marketing at retail, NXT

Consumers pay more attention to circulars than other advertising

Two reports highlight the growing importance of in-store marketing. The first (noted by Progressive Grocer) was released by Vertis Communications two weeks ago and noted that, "47 percent of Americans cited inserts and circulars as the most effective, a 9 percent increase since 2003. Also according to the report, inserts and circulars have surpassed TV advertising as the medium most able to draw consumer attention." Further, "Forty-three percent of those surveyed said TV advertising interested them the most, but that was a 10 percent decline from five years ago. Meanwhile, 38 percent of respondents thought newspaper advertising best grabbed their attention, down from 45 percent in 2003."

Helping to confirm those results are new findings from BIGresearch that also point to the increasing importance of marketing at retail. Across all demographic groups, 27.4% of those surveyed said in-store promotions influenced their decisions, up 0.5% from last year. That compares favorably to TV/Broadcast at 27.9%, though still ranks behind traditional forms of retail promotion like newspaper inserts (30.5%) and word of moutn (42.6%). Of course, the influence of newspaper inserts have also been falling steadily the last few years, and plunged -4.5% last year lone (the influence of word of mouth promotion remained steady).

Tags: retail marketing, in-store advertising

Reenergizing Starbucks

You know a company is good when the mere suggestion that a tiny fraction of its stores may be closing in the next 12 months is taken as a sign of general economic malaise. After all, if it's not the force of the global economy slowing down, how else might Starbucks explain the sudden deceleration of their growth? Surely it can't have something to do with their expensive, mediocre coffee (especially compared with much cheaper fare from McDonald's), right?

Well, according to this article in Business Week, maybe it actually does. I know, I know, this would mean that throngs of Wall St analysts and FOX News personnel would be wrong, but apparently CEO Howard Schultz thinks that yes, maybe Starbucks has been doing a few things wrong the past couple of years. Business Week's Matt Vella does a great job of outlining the current problems facing the company (the biggest of which being deteriorating customer experiences at existing stores, and a playing field crowded by the likes of Dunkin' Donuts, Burger King and McDonald's), but also notes some possible solutions:

Brian Collins, chief creative officer of New York's Collins design research firm, thinks "technology seems underleveraged at Starbucks." Collins says the company could better use its digital resources to learn the tastes of regular customers. "Somebody call Facebook," he jokes, suggesting the company should create social networking tools to foster communities and facilitate social interaction at individual Starbucks stores.

Others, however, remain adamant that it's the coffee, not the technology, that will see Starbucks through. Geoff Vuleta, CEO of New York innovation consultancy Fahrenheit 212, says he has a radical solution that will solve the chain's problems even as it soothes Wall Street's jangled nerves: Open a chain of microstores devoted solely to making coffee. "No travel cups, no music, no machines, just amazing beans and a narrow range of the best-in-the-world coffee drinks," he envisions. Such microstores, he says, could hone the Starbucks experience—and result in a smaller, less costly footprint than regular stores which change at a slower pace. Jeneanne Rae, president of the Alexandria (Va.) service innovation consultancy Peer Insight, agrees, saying, "They can't move away from the essence of the brand; they have to focus on getting back to the basics."

I've spoken to folks at Starbucks a number of times about kiosk and digital signage projects, and in general their opinion has been that less is always more, especially when it comes to any form of 3rd party advertising. While I'm generally bullish on the use of in-store technology, I think the idea of microstores that focus on a few key coffee products is the best idea of the bunch. While admittedly it's going to be tough cramming lots of Starbucks style and panache into a couple hundred square feet, working with a small environment and limited product range will allow the company to identify and enhance the most core elements of the Starbucks brand in a cost effective fashion. These findings, of course, can then travel back up the chain into their regular format stores quickly and with little risk, since they essentially will have been vetted by hardcore Starbucks fans frequenting the microsites.

There's lots of speculation as to what direction the firm will take. But we're going to have to wait until March 19th to find out the truth: that's when CEO Schulz will announce his plans for rescuing the company from mediocrity.

Tags: starbucks, store experience, microstores

Will lickable ads help take product experience home?

This is one of those stories that's a little too bizarre not to mention. According to this Wall Street Journal article, Welch's is taking out full page ads in People magazine this month that feature a lickable patch that supposedly tastes like its grape juice. Innovative, gross, or both? You decide:

Marketers are excited about the prospects for lickable ads, but also have to deal with the "ick" factor. Since magazines are often passed from reader to reader (think doctors' offices) there is a good chance that saliva could be left on the ad. Readers are supposed to peel off the entire sticker on the Welch's ad before licking, says First Flavor, the company that developed the technology used in the ad. If someone doesn't rip off the whole sticker, First Flavor says, the flap can't reseal, giving people an easy way to know whether the ad has already been licked....

Well, that addresses at least one concern. And kudos to the WSJ for pulling out perhaps the worst example -- sharing lickable ads at a doctor's office -- to make sure readers think twice about whether the idea of a magazine ad that goes in your mouth is really a good idea. However, Welch's seems to be excited by the prospect of offering prospective customers a taste of their products without having to get them into a store first. At least, they certainly seem to have put a lot of effort into the campaign:

[Welch's], which is owned by a cooperative of grape growers, says it went to great lengths to make sure the ad tasted good and that the ingredients used in the lickable strip met safety guidelines laid out by the Food and Drug Administration. It says it spent weeks conducting consumer taste tests and enlisted more than 50 company employees to try the lickable ad. The ad was created by WPP Group's JWT.

Print ads present a unique challenge for marketers because they don't typically have "sound or motion," the two things that tend to make ads stand out, says Paul Caine, president of Time Inc.'s Entertainment Group, which includes People magazine. Adding taste is one way to create a new way to grab reader attention, he says. People has experimented with adding sound chips to some print ads.

Welch's says the ad costs a couple hundred thousand dollars more to create than a normal national print ad because it had to pay to make the sticker plus an additional fee to People for the added production costs. The ad will appear in the Feb. 18 issue of the magazine, which has a circulation of about 3.6 million.

Getting people to use multiple senses to process ads is a good way to build a stronger connection with consumers, ad experts say. "It's hard to forget whose brand you are licking," says Lisa Haverty, a cognitive scientist who works in the marketing field.

Of course as we've all talked about before, being able to really interact with products is one of the big draws of brick-and-mortar retailers today, and that will likely remain the case for some time (even if lickable ads do become all the rage). But it's pretty cool to see a company recognize that their print advertisements were only so effective, and trying out some out-of-the-box solutions to see if they could bring benefits traditionally associated with the in-store environment into a consumer's home.

As for me... well, I think I'm going to avoid any ads that have a "your tongue goes here" sticker on them. At least for now :)

Tags: advertising, lickable, Welch's

Guessing the impact of mobile media at retail

I've been watching a conversation at RetailWire about mobile device integration develop for a few days. It seems like the data is finally in and most opinions are settled, and I wanted to draw some attention to what the folks in the discussion -- arguably some of the better-informed, savvy retail analysts and consultants out there -- are saying about the future of mobile phones and devices for the typical retailer. To begin with, Amanda Ferrante, Assistant Editor for the website Retail TouchPoints, asked what seemed like a simple enough question: Within the next five years, what percentage of Americans will have used mobile devices as part of their shopping experience?

Surprisingly, as you can see from the chart, 40% of those who responded think that within five years, at least 60% of shoppers will be using mobile phones to aid and improve their experiences. Almost another 30% of respondents think that it 40-60% of shoppers will do so. No matter how you slice it, these people think that mobile integration is going to be big, soon.

I'm not quite so sure. Yes, I've had a WAP-capable phone since 1999, and I clearly remember trying to do some comparison shopping while at a Barnes & Noble store. Most clearly, I remember the bewildered look of the clerk as I tried to explain that bn.com was selling the same book for less, and I wanted the lower price. Needless to say, the five or six lines of text on the tiny black-and-white screen wasn't the best visual aid to help make a compelling argument.

Anyway, the point is that I've been hoping for better use of mobile devices by retailers for a while. And despite nearly a decade of technological advances, trying to use mobile in a store today isn't much different than it was in 1999. Sure, the mobile Internet is now faster, prettier, and generally more like the regular Internet than ever before (heck, on an iPhone it is the real Internet). But very few are using their devices to try and connect the virtual and real worlds, which I think is a major component of all of these retail-oriented programs I've been reading about and waiting for.

Will mobile devices become a big part of the shopping experience? Sure. We all have them. They keep getting more useful (we can use them as phones, computers, GPS tracking systems, and even payment devices right now). And for the most part, they work pretty well. But in 5 years I expect things to look much the same as they do now: people carrying around gadgets, stores talking about using said gadgets to get better access to the customer and provide better service, and deployments of useful and usable in-store mobile integration systems still very few and far between.

Tags: store experience, retail media, mobile marketing