Tuesday, March 31, 2015

Mobile Optimization: 4 Tips for Tapping Into the Asian Market

A mobile strategy in Asia is essential, and getting the user experience right is just as important.
It had long been predicted, but 2014 was the year mobile Internet access finally overtook desktop for the first time on a global scale. Mobile marketing is hugely important wherever your business operates, but it can be absolutely vital in key Asian markets. 

India and China both reached their own mobile tipping points in 2012 and according to the ITU, the UN’s agency for ICT statistics, Asia and the Pacific have the highest number of mobile broadband subscriptions, more than 750 million by 2014. 

Research from the Google Consumer Barometer, meanwhile, found that Singapore (85 percent) and South Korea (80 percent) had the highest smartphone penetration rates. 

Many Asian markets also have significant numbers of consumers who accessed the Internet exclusively via their smartphones. Thirty-five percent of Malaysian consumers, 24 percent of Vietnamese, and 16 percent of Singaporeans only access the Internet using their phones. 

Despite this, it’s clear that many businesses are still not optimizing their websites for mobile. 

Julian Persaud, managing director of Google Southeast Asia, says 88 percent of Singaporeans have experienced problems when accessing websites on their phones, "so clearly there’s a lot more work to be done. It’s vital for every business to think mobile-first." 

"This is a massive wake-up call to any business in Singapore without a mobile-optimized site or app. This is no longer a viable approach – you're effectively slamming your shop door in the face of your customers." 

Simplify Your Site 

Whether you’re adapting your existing website to work better when accessed on a mobile device or designing a site exclusively for mobile, you should be aware that some things that work well on desktop might not be as effective on a smaller screen. 

Only a third of mobile users make it past the first page of a site they visit, so it’s important to place important information, calls to action, and clear navigation options as prominently as possible on the landing page. 

Page-loading time is another huge issue. Almost half of mobile users expect a website to load within two seconds and 40 percent are likely to abandon a site that takes longer than three seconds to load. 

Cutting down on large photo files and auto-loading sound and video files can help reduce loading-times, as well as making your display design easier to get right. It’s worth remembering that Apple doesn’t support Flash and, with the iPhone currently enjoying an upsurge in Asia, it might be best to avoid Flash altogether. 

Responsive Design 

Some designers still use a separate m. domain to direct mobile visitors to a just-for-mobile site, but in 2015 this is looking increasingly old-fashioned. There are still benefits, as this approach can allow you to create a desktop website that can incorporate elements that simply wouldn’t work on mobile. 

For most businesses, however, responsive design offers a simpler solution. 

Responsive websites automatically resize and adjust their display parameters so that they display correctly on a range of different devices. This can allow you to maintain a single domain for desktop and mobile, but stringent testing is important. It also means your design must be suitable for both desktop and mobile visitors in terms of navigation and content. 

Abercrombie & Fitch is using this technique to target Asian customers, so it will be interesting to see how successful this approach becomes. 


The way people navigate around a site they are visiting on mobile can differ considerably from the way they navigate around the same site on desktop. 

The main input device in mobile is usually a finger, which is much less precise than a mouse cursor. Make navigation buttons clear and large enough to use. Avoid clustering small hot spots together as it can be easy to tap the wrong one and also steer clear of text links that can be even more difficult to use on a smaller screen. 

You might also consider putting more information on a single page. Mobile users often don’t like to scroll too far, but this can still be preferable than having to click through to different pages. If you build in an infinite scroll feature, which auto-loads more results or information as the viewer approaches the bottom of the page, it can be useful to include a static "Return to top" button. 

Site Search 

One handy way for people to navigate your site is the inclusion of a "Site search" box. This can be particularly useful if, for example, you have a range of products that people might want to browse. 

An auto-complete or suggestion feature can help cut down the amount of text that users actually have to type into the box – and getting the right translation partner to help with this can make all the difference. 

Again, incorporate a "Return" or "Back" button that allows users to easily return to the landing page or to previous results. When you consider the rapid growth of mobile Internet use, it’s clearly important to give your users the best experience you can when they visit your site. 

Optimizing for mobile can help you tap into the mobile revolution and increase your competitive edge. 


Monday, March 30, 2015

Are Coupons Being Cut Out of the Online Grocery Business

Consumer packages goods (CPG)) manufacturers currently distribute more than $300 billion in paper coupons with more than $3 billion of those coupons being redeemed in physical stores. Hardly any of these coupons are redeemed online, even though consumer shopping behavior continues to shift to digital channels. This is especially true for online and mobile grocery commerce. While these platforms are gaining in popularity among consumers looking for convenience and assortment, coupon and promotion efforts have been slow to adapt to this space. As a result, many retailers and manufacturers are overlooking an opportunity to market to this growing category.

The two key limitations facing food retailers and manufacturers when it comes to promotions and coupons for online ordering are technology and process. Currently, the coupons offered by online grocers are limited to two primary formats (if coupons are accepted at all):

  • Retailer-issued coupons, such as a Fresh Direct coupon, “clipped” for a specific deal
  • Paper-based manufacturer coupons exchanged manually with the driver at the point of delivery.

As you can imagine, both formats pose a number of challenges and inefficiencies. To successfully transition coupon and promotions efforts to the online space, food retailers and manufacturers will have to embrace new ways of issuing and redeeming manufacturer’s coupons online.

For example, a manufacturer could issue a traditional coupon and convert it using software into one million unique single-use coupon codes. These codes could be distributed by marketers via email or other digital communication channels and consumers could redeem the unique code at any participating online grocery retailer. On the back end, the retailer would receive reimbursement from the manufacturer for the coupon value, and the manufacturer would receive confirmation that the unique redemption took place.

For consumers, this familiar coupon experience would be similar to coupon codes offered by other online retailers. For food retailers and manufacturers, the use of online coupon codes could reduce the timeframe for the coupon and promotions clearing process, allow for increased consumer targeting and provide additional marketing data on the efficacy of these programs.

As online and mobile grocery commerce continues to grow, retailers and CPG manufacturers will have trouble meeting consumer expectations unless they are willing to embrace new technologies and processes for promotions and coupons. These new technologies will not only allow them to meet their customer’s needs in these growing formats, but could have implications for improved targeting and results reporting as well.


Tuesday, March 24, 2015

What the Apple Watch Really Means for Brand Advertisers

The Apple Watch is opening up a whole new world for marketers - but what can brands realistically do on the device?
On April 24, nine countries will have access to the Apple Watch for the first time.
According to Apple's chief executive (CEO) Tim Cook, the product "begins a new chapter in the way we relate to technology and we think our customers are going to love it." Elsewhere online, the Apple Watch is being called "the perfect gizmo for the narcissistic." Others still have questioned the need for it, saying"because it's 'cool' or super-functional doesn’t mean it’s practical."
Regardless of how you feel about the concept, it's sure to bring some big changes to the mobile world. But what does the Apple Watch mean for brands? Many are already working on new smartwatch apps, including Starwood Hotels, Shazam, and Air New Zealand. On the advertising front, Midwestern grocery chain Marsh Supermarkets has announced that in partnership with mobile retail marketing platform inMarket it will extend its current iBeacon program to the Apple Watch this year. "It's an amazing time for consumers and commerce as digital and physical experiences converge," Todd Dipaola, CEO of inMarket, said.
Mobile ad exchange TapSense, meanwhile, is testing a programmatic advertising platform for Apple Watch ads. According to the company, the ads will combine interactive formats with hyper-local targeting. TapSense believes the watch will be useful for delivering retail store coupons, as well as an intimate user experience.
In Chicago, Matt Murphy, president and CEO of interactive marketing firm Fusion92, sees a third marketing application for the Apple Watch: cross-platform integration. "Because this is such a niche product and specific to Apple, there'll be a lot of exploration early on as brands investigate what they're allowed to do and how consumers are engaging with the device," Murphy says. One possibility is an ad that "ping pongs" between the Apple Watch and iPhone. "Maybe you accept an ad and it pushes to your phone for a fuller experience, or a third-party interaction," he says. "Depending on the capabilities, there could be rich media built into that."
The ad world's adoption of the device could progress quickly. It wasn't so long ago that marketers went from desktop advertising to mobile. While that shift necessitated an entirely new approach to creative, targeting strategies, and messaging, the Apple Watch's smaller screen won't seem quite so daunting.
But while interactivity is an ongoing priority for digital marketers, there's a chance that the screen will simply be perceived as too small to supply any kind of rich experience. If users are reluctant to engage and it isn't feasible to consume ad content on the watch, Apple Watch ads will bear little resemblance to the mobile formats we use now. Murphy suggests we might even see a regression back to a click-based ad model that triggers an email message consumers can check at a later time.
When it comes to predicting the early adopters, Murphy – whose agency has produced interactive mobile and digital experiences for such companies as AT&T and Sony – points to the health care and fitness industries. The fact that the watch touches the user's skin, coupled with the potential to incorporate sensors that could record blood pressure, body temperature, and other measurements of health, is in line with the current medical community trend toward leveraging wearable devices.
Fusion92 intends to pursue Apple Watch advertising, and you can be sure that it isn't alone. Brands would be wise to hang back some, however, both to be certain that the device aligns with their marketing objectives, and to follow Apple's lead. "Brands will always seek new opportunities, but they're still beholden to whatever Apple allows," Murphy says. "Apple does control the ecosystem."

Monday, March 23, 2015

Is Your Marketing Budget Mobile Enough? [Study]

Reviewing campaigns from Coca-Cola, MasterCard, Walmart, and AT&T, the Mobile Marketing Association measured mobile's impact scientifically, and found that a bigger mobile budget will lead to greater ROI.
A new study from the Mobile Marketing Association (MMA), the Smart Mobile Cross Marketing Effectiveness (SMoX) Report, examines every dollar spent in campaigns from four major brands – Coca-Cola, Walmart, MasterCard, and AT&T – to scientifically assess the value of mobile ad spend. The report’s findings show that mobile generates results across all stages of the purchase process, from raising brand awareness to driving more sales.
For example, when Coca-Cola launched its campaign Gold Peak Tea, mobile accounted for 6 percent of the sales despite only making up 5 percent of the budget. According to the study, if Coke had allocated 10 percent of its budget to mobile instead, the soft drink giant would have seen an extra 4 percent in sales - enough bottles to line up from New York City to Toronto.
During an MMA Forum panel, Tom Daly, group director for global connections of Coca-Cola, said that while marketers intuitively know about mobile's importance, they want hard numbers before they change their budgets.
"[Marketers] don't have the fact-based foundation to kind of adjust what they're doing," Daly said, on his decision to participate in the study. "These are real dollars and real capital investment - there's a lot on the line. It was really important to bring a set of facts to the discussion."
According to the MMA, dedicating just 8 percent of its budget to mobile would help MasterCard reinforce its image as a good card to carry while traveling by seven times.
"I was surprised at how effective [mobile ads] were in relation to other media," said Adam Broitman, vice president of global digital marketing for MasterCard. "We could make a big impact very quickly with video and social, but unless we change the creative, we're just wasting money."
Broitman said that while he does plan to make mobile a bigger budgetary priority, it can't happen overnight. Daly agreed, pointing out that operations and creative development have to change, while agencies have to be on the same page, as well. "There are also decades of muscle memory around TV," he added.
The study also found that ads that contain audio, video, and social components, as well as native advertising, all drive significantly more return on investment (ROI) than a standard mobile display ad.
Another big ROI booster, according to the report, was adding location targeting. When Walmart experimented with audience targeting - sending ads to consumers who have visited the store in the past - it didn't find a significant increase in foot traffic. However, using proximity targeting to reach people within range of the store proved 1.5 times more effective for the retailer.
According to Rex Briggs, chief executive (CEO) of Marketing Evolution, which provided analysis for the study, mobile has been treated like the red-headed stepchild of the digital world.
"It actually has some very specific characteristics that are not possible in other media channels," Briggs said. "It's not that mobile is a stepchild; it's more like the princess."

Wednesday, March 18, 2015

Data Breaches and Brand Management: How to Preserve Your Brand Value

With the recent data security breaches at several powerhouses, brands need to find new brand management strategies to maintain their value.
Every day, consumers are becoming more aware of the threat of cybercrime and its potential effects on their lives. Unfortunately, brands consumers trust are often unwitting accomplices. Target. Home Depot. Zappos. Sony. Anthem. Regardless of industry or size, no brand is immune to hacking. Even companies expected to be highly vigilant in guarding against cybercrime such as JP Morgan Chase have been compromised.
"We've spent over 12 years building our reputation, brand, and trust with our customers. It's painful to see us take so many steps back due to a single incident." Those aren't the words of Anthem's chief executive (CEO), but instead Zappos' CEO Tony Hsieh, following the 2012 data security breach that compromised 24 million customers' names, addresses and passwords. Aside from the costs of damage control after a breach has been discovered, the stigma attached to the loss of customers' personal information can have a negative impact on their willingness to choose a brand in the future. This calls for a new type of brand management. As more brands depend on customers maintaining online accounts — full of personally identifying information — to generate revenue and remain competitive, brands need to ensure their value propositions around online safety are more than window dressing.
Consider three numbers: 40. 61. 46 percent. Out of context, they're meaningless. Put into context, they show the importance of protecting the people who keep brands in business — especially in the ultra-competitive retail industry. Forty million is the amount of credit card numbers compromised in the Target Thanksgiving hack of 2013. The company spent $61 million in two months to cover damages from the breach. The biggest impact was the ripple effect on corporate profits for the holiday season, as Target suffered a 46 percent loss in profit from same-quarter sales year-over-year. The most mind-boggling aspect of the whole incident was that Target had spent more than $1 million to implement preventative cyber security and measures six months before it even happened.
Another cautionary tale is Sony Corp. The highly publicized breach at Sony Pictures earlier this year revealed once again that the billion-dollar, multi-national entertainment brand was lax in protecting its digital assets — similar to the incident that occurred with its PlayStation division in 2011. The issues with protecting customer data and their own employees' information raise serious concerns about entrusting sensitive personal information to any network that Sony operates. As Sony plans to launch its Vue premium cable-over-the-Internet service in 2015, the company's poor track record of protecting customers' personal information could impact its ability to attract new subscribers. With so many banking, retail, and entertainment options for consumers to choose from, and practically zero switching cost, security and privacy become more than just table stakes. They can provide a competitive advantage for brands.
Craig Spiezle, executive director and founder of the Online Trust Alliance, emphasizes brands' new role in protecting customers' personal information: "Privacy and security are important brand differentiators and companies need to move from a mindset of meeting compliance requirements to becoming a steward of consumer data." Nuala O'Connor, current president and CEO of the Center for Democracy and Technology and previous global privacy leader at General Electric, acknowledges that privacy and security have to be a cross-functional priority for companies, enhancing the marketing strategy with input from privacy and security experts: "Privacy professionals need to be engaged with teams across the organization, not just IT, legal, and compliance departments. They should participate in early stage product design processes, meet with the engineers and customer services representatives and take part in marketing and sales efforts."
No one wants to receive the dreaded "We regret to inform you..." letter or email from a trusted brand notifying them that their personal information has been compromised. The resulting potential for lost revenue and customer loyalty is even more worrisome to brands that allow customers' sensitive personal information to be exposed. With so much at stake, it's important for brands to ensure that claims of safety and privacy aren't just marketing fluff and that it is actually part of an overarching brand management strategy, but backed by solid systems and policies designed to protect customer data. Because most customers don't send letters or emails to notify companies about steps they're taking to resolve a situation after their personal data is exposed. Most customers just disappear as suddenly and silently as their data did.

Tuesday, March 17, 2015

Tips for a Global E-Commerce Strategy

When it comes to forging a global e-commerce strategy, localization is key.
E-commerce is a truly global phenomenon that shows no sign of slowing. A December 2014 eMarketer report shows China and the U.S. are the world’s leading e-commerce markets, combining for more than 55 percent of global Internet retail sales in 2014. By 2018, China’s retail commerce sales will exceed US$1 trillion, accounting for more than 40 percent of the total worldwide. The U.S. will maintain its position as the second-largest retail ecommerce market in 2018, with the U.K. in third place.

eMarketer also predicts that Asia-Pacific will become the leading region for e-commerce sales in 2015, representing 33.4 percent of the total, compared with 31.7 percent in North America and 24.6 percent Western Europe. 

Everybody wants a slice of the pie and the good news is, with a little forethought and planning, pretty much anyone can take one. 

E-commerce is no longer the preserve of the specialist trader or the multinational with resources to spare. Online trading allows businesses of all shapes to potentially reach new markets and customers all over the world. It’s easy to make mistakes, so here are four key priorities for a global e-commerce strategy. 

1. Localizing Properly 

There are no borders on the Internet, but if you are looking to sell internationally, it can help if you concentrate your efforts on specific markets and localize your online presence accordingly. To some extent English remains the online lingua franca or "common language," but in some important markets such as China, English remains a rarity. 

Common Sense Advisory study found that 75 percent of multilingual consumers still preferred to buy products in their native language. More than half (55 percent) said they would only buy from websites where information was available in their language and this figure was even higher in certain markets such as Japan (70 percent). 

Choosing a suitable translation partner is important. Working with native translators can help you to avoid errors and achieve a more natural, local feel to your copy, but don’t forget other elements of localization. 

Images, for example, should be culturally relevant and appropriate. The "thumbs up" sign means "OK" in many cultures, but is an obscene gesture in much of the Middle East, parts of West Africa, and parts of South America. 

Native translators can help to translate and transcreate content, but they can also serve as quality control editors, casting an eye over the whole thing to check it rings true and that there are no glaring cultural faux pas that might not be apparent to an outsider. 

2. Keywords 

One area that should never rely on straight "dictionary" translation is that of keywords. Keywords do not always translate literally and alternative words or phrases can often be more effective. 

The high-speed train, for example, is generally known as Shinkansen ("new trunk line") in Japan. In the U.K., they are still commonly known as "bullet trains" – which is actually a literal translation of the Japanese termdangan ressha, a nickname for the project that stems back to the 1930s. In France, meanwhile, you would search for "TGV" (Train à Grande Vitesse or "high-speed train"). All three phrases refer to the same basic concept but the literal meanings are very different. 

Keyword research will usually benefit from a bit of local knowledge and a partner skilled in both translation and SEO. 

On the subject of SEO, setting up fully localized websites with their own country-code top-level domains (such as .fr for France or .jp for Japan) can give you a boost in local search results, as well as giving your site a more "local" feel. 

3. Platforms 

It’s perfectly possible to conduct e-commerce using only your own website but many companies prefer to use or incorporate existing platforms. The China-based site Alibaba provides sales portals for online traders and a reported US$9.3 billion was spent in a single day during the Chinese equivalent of the USA’s Cyber Monday. 

Then there are other popular e-commerce platforms in the West that can give you the tools to run your own online store more effectively. 

4. Mobile

Mobile marketing is hugely important wherever your business operates. Mobile Internet access overtook PCs for the first time worldwide in 2014 but in some markets, such as India and China, mobile has been the most popular way to connect to the Internet for even longer. 

Research from Google in 2014 showed Singapore (85 percent) and South Korea (80 percent) had the highest smartphone penetration rates but many businesses still weren’t optimized for mobile. 

Julian Persaud, managing director of Google Southeast Asia, said, "88 percent of Singaporeans say they experienced problems when accessing websites on their phones, so clearly there’s a lot more work to be done. It’s vital for every business to think mobile-first. 

"This is a massive wake-up call to any business in Singapore without a mobile-optimized site or app. This is no longer a viable approach - you're effectively slamming your shop door in the face of your customers."


Monday, March 16, 2015

Procter & Gamble Banks on New Brands for Global Growth

While the U.S. represents about 35% of Procter & Gamble’s sales and over 40% of its profits, the company is looking to increase business around the world by leveraging an impressive product portfolio. Among those brands are three newcomers: Pampers Pants, Flexball and Always Discreet.

“The work we are doing to simplify and strengthen the portfolio will enable us to focus resources even more on the biggest opportunities in our core businesses in core countries and markets,” said Alan Lafley, Chairman, President and Chief Executive Officer. He outlined global prospects as part of an wide-ranging presentation in Boca Raton, Fla. at the annual conference of the Consumer Analyst Group of New York.

Lafley said P&G built Pampers into the leading baby diaper in the U.S. and in the world despite the absence of a consumer-preferred pant-style diaper. But the consumer products giant is now going to market with Pampers Pants, which he said provides exceptional dryness and skin comfort in an underwear-like design.

P&G just introduced Pampers Pants in Russia, and recently launched pants into China and Brazil. Plans call for launching into markets in Latin America and Asia later this year
“Initial Pampers Pants product test results in North America show a significant consumer preference versus the competition,” said Lafley. “Achieving fair share of the global diaper pant market represents up to a $2 billion sales growth opportunity for our company.”

In the grooming category, he is bullish for global sales of the “big obvious consumer preferred” Gillette FlexBall. P&G is now expanding the razor to Europe, Middle East, and Africa.
“We’re extending the Flexball product innovation to women with Venus Swirl, which began shipping in the U.S. this month. Women and men are telling us they significantly prefer these better performing products, and it looks like FlexBall and Swirl could be the biggest new shaving system innovations ever introduced by Gillette.”

P&G is accelerating the growth of the adult incontinence category with Always Discreet. In the U.S., the category growth rate is more than doubled to around 9%. Shipments to the U.K. began in July and to Canada and France in August. Always Discreet will launch in Germany, Switzerland, and Austria the first quarter of 2015.

“Our results have been improving in the U.S. market,” he said. “We are now growing share in about 60% of our sales, but there is still a lot of opportunity ahead. Growing the P&G U.S. business modestly ahead of market growth could improve the company’s top line by as much as $800 million.”


Sunday, March 15, 2015

Nestlé Gives Thumbs Up to Customized, Curated Products

Today’s discriminating shoppers don’t want one-size-fits-all products and services anymore. How many of them go to Starbucks to buy black coffee? They are looking for personalized options that fit their tastes and needs.

Innovative companies like Nestlé are listening to consumers online and offering new solutions for today’s lifestyle. E-commerce is where customizing products and curating orders can best take place. For example, customers can satisfy their need for a special diet like gluten free, low salt or lower cholesterol. A website can become a trusted advisor by suggesting new products and assembling orders based on past purchases and the results of an online dialogue.

“Between having digital expertise and having feet on the ground to make sure that chefs are working on our products, the flexibility is almost like the suspension on a car,” said Paul Grimwood, Chairman and CEO of Nestlé USA. “The suspension has to deliver whatever the road puts in front of it. We’re not big into backing a single horse. We like to spread our bets. If we see something develop, we are in a good position to support it, fund it and chase after it.”

Grimwood made these comments recently during a panel discussion at the Food Marketing Institute’s Midwinter Executive Conference in Miami. Other panelists included Bill Nasshan, Executive Vice President and Chief Marketing Officer at Bi-Lo Holdings, and Tom Furphy, CEO of Consumer Equity Partners. The discussion followed a presentation by Anthony Flynn, author of “Custom Nation” and founder of YouBar, maker of the world’s first customized nutrition bar.

“There was a point where big business stopped listening to consumers. What we are actually seeing now is a bit of a wake-up call,” said Grimwood, who added that customization is not a “shiny object” today because consumers will continue to look for options.
He used the example of coffee. For direct-to-consumer sales, the company offers two options: the Nespresso machine that brews coffee and expresso from dozens of single-serve capsules, and the Dolce Gusto single-cup coffee machine for making cappuccinos, espressos and lattes. While Grimwood didn’t list the brands for sale in stores, they include Nescafé premium coffee, Taster’s Choice instant coffee, and two brands for Latinos: Nescafé CLÁSICO and Nescafé Café con Leche.

“Having that flexibility it absolutely key to either a retail model or a supply model,” he said.
Nestle engages in a dialogue with consumers – online with Nespresso users and via telephone, letter and online with those brewing soluble coffee.

“You got to have the ability to have feedback from your consumer,” Grimwood said. “You have to be able to listen to the consumer no matter what the route to market is. But you can’t receive it and do nothing. It’s getting that information and acting quickly and responsively to what consumers ultimately want. And that could be customization.”

He also enthused about a special training center in Nestlé’s headquarters in Vevey, Switzerland where a team of young people from different countries and backgrounds monitor and engage consumers on various social media platforms. The team also serves as digital lab which tests new and emerging technologies from start-ups and established firms.
“They are looking at what people are talking about around the world,” Grimwood said. “What is a key driver? All of that information is analyzed on a daily basis. For me, it’s quite fascinating because it shows the opportunity that is still out there if you have the flexibility to react.” 

Nestle presumably is looking at all opportunities for growth these days. The world’s largest food maker recently reported its slowest annual sales growth since 2009. Nestle, like most CPG companies, is grappling with low consumer confidence around the world and new preferences in food. Consumers are opting for more fresh foods and less packaged products like frozen meals.

The two other panelists at the FMI conference were also enthusiastic about customization and curation in CPG and grocery retail. Furphy of Consumer Equity Partners implied that it’s necessary because some food-oriented dot.com companies are already siphoning center store business from supermarkets. He advised grocers to engage with shoppers.

“Look at their past purchases,” he said. “Engage with manufacturers on what products they would like. Build a repeatable basket either to shop from the store or be delivered.

“The manufacturer and retailer can both participate with the shopper,” he continued. “It becomes very personal with manufacturers understanding their products and consumers and retailers understanding their local marketing and shoppers. That is an incredibly powerful combination that can be very well managed digitally. It enables us to create that customization on a massive scale, but kind of systematically so each shopper feels like they are being catered to individually.”

Nasshan of Bi-Lo agreed that bringing together insights from both trading partners is very powerful.  But he suggests that curation can move from taking place online to occurring in the store itself.

“I believe a merchant’s role is to provide their customers and their partners opportunities they don’t have at the moment. Think about how you find those opportunities – and I think this notion of curation is one of those big opportunities. It’s going to take marrying consumer insights with customer insights.

“I don’t think anybody would say curation will not be part of our future,” he continued. “There is a path and a journey. It really starts with putting a premium on where the conversations need to be in the store, making sure you understand the demand occasions. We got folks who are very used to interacting with customers. Then you can start stepping into this notion of curation. We need to move from just asking the shopper, ‘Did you find everything you needed’ to ‘You should try this product.’”


Saturday, March 14, 2015

Marketers’ Strategies Deliver Increased Consumer Savings

Consumer savings rose to $3.6 billion in 2014, as consumer packaged goods (CPG) marketers increased the average coupon face value available to shoppers, according to NCH’s annual topline view of the Coupon Facts report. Marketers for both food and non-food products strategically offered consumers more savings value with their coupons while also managing the redemption impact to their budgets.

While both food and non-food marketers increased the average face value available through their coupon promotions, only non-food increased the total number of coupons distributed in 2014. Additionally, only non-food received a positive redemption increase. The net effect was a 2.9 percent – or $100 million – overall increase in consumer redemption savings.

In an effort to work within 2014 budgets, marketers issued a total of 310 billion CPG coupons, down 1.6 percent from the previous year. Marketers achieved a total of 2.75 billion coupons redeemed in 2014, down 1.8 percent, through a strategic combination of media mix, product segment changes, offer tactics and various forms of retailer support.

The Free-Standing Insert (FSI) remained the dominant coupon vehicle, accounting for 92.2 percent of total CPG coupon distribution volume, as marketers leveraged the vehicle’s mass reach for its brand-awareness value. Although digital coupon distribution increased, it remains less than 1 percent of total coupon distribution.

Unlike in previous years, the tactical changes marketers made to coupon offer characteristics were focused on face value. Average face value distributed rose a healthy 6.2 percent to $1.72, while offer duration fell only slightly and multiple-purchase requirements were relatively unchanged.

Similar to the recent past, year-over-year variability in the products promoted via coupons affected the annual trends. In the non-food segment, marketers distributed 3.5 percent more coupons in 2014. This led to substantially more non-food coupon redemption, which was up 11.4 percent, reversing a prior year decline.

In the food segment, conversely, marketers distributed 10.4 percent fewer coupons and redemption fell by 10.3 percent from 2013. With 43 percent of food coupons requiring the consumer to purchase two or more items, a drop in redemption volume had an even greater impact on the quantity of product moved with a coupon for food marketers and retailers.

The overall reduction in food coupons had the largest impact on retailers in the grocery and mass merchandiser retailer channels, which experienced a 5.1 and 3.3 percent decline in total redemption volume, respectively. Yet, the vast majority of redemption – nearly 80 percent – occurred in these two channels.

While retailers and CPG companies have increased investment in digital paperless coupons, it was not enough to compensate for the other factors reducing total redemption volume in the food segment.

The increase in non-food coupons benefited the drug retailer channel, which saw a 16 percent increase in total redemption volume during 2014. The smaller “all other” retailers channel, which includes dollar stores, also saw a similar redemption volume increase.

CPG marketers managed their budgets in 2014 to balance their coupon promotion objectives of consumer motivation, brand awareness and retailer trading partner support. At the same time, many have also invested more in the analysis, enhanced controls and risk mitigation areas that were all required to manage their coupon expenditures and optimize coupon performance to benefit brands, retailers and consumers.

NCH will publish the 50th edition of the Coupon Facts report in 2015. For access, and to opt-in to receive future email notifications, please visit www.NCHResourceCenter.com. More details on 2014’s coupon trends, including client-exclusive analysis opportunities, may be obtained by contacting a NCH rep.


Monday, March 9, 2015

Kellogg's Needs to Play Catch-Up on Mobile

A recent panel discussion joined marketers from Kellogg's, the Mobile Marketing Association, and Dropbox to discuss the limitations brands face when struggling to integrate mobile into marketing.
At a panel discussion held in New York City this week, Kellogg’s vice president of global media and digital strategy, Jon Suarez-Davis, admitted that the brand was "woefully behind" when it comes to mobile.
Though Kellogg's is responsible for some truly iconic print and TV campaigns, such as "Leggo My Eggo" and breakfast mascots like Toucan Sam, its mobile efforts have often fallen flat. For example, last year the brand released an app that attempted a The Amazing Spider Man 2 tie-in by having users capture Spiderman-themed images on the sides of packaging in exchange for the chance to manipulate photos of themselves so that they appeared to be wearing a Spiderman costume. 
"We've made great strides," Suarez-Davis said, "but we're not where we need to be, not in terms of the competition, but with the consumer."
On the same panel, chief executive (CEO) of the Mobile Marketing Association (MMA) Greg Stuart revealed that an upcoming study by the MMA found that marketers should be spending 10 to 15 percent of their budgets on mobile, and that even big global brands, like Coca-Cola, have seen sales increase upward of 5 percent from strategic use of the platform.
"Mobile is the closest you can get to a consumer," Stuart said. "Dunkin’ brands recently built an app that informs how they satisfy the consumer. Mobile makes that possible, and it’s a real threat to brands that don’t have that."
But the problem facing a global brand like Kellogg’s, which has more than 100 subsidiaries, including Morningstar Farms and Eggo, is that testing mobile on a large scale takes time, and convincing brands to risk that time on unproven methods is often difficult. "We don’t have a great understanding of the value proposition," Suarez-Davis said. "We understand TV, we know print, online video, and we have ROI on building brand equity. But only in the last 18 months have we tested the ROI on mobile."
In some ways, it’s easier for a smaller, newer company to explore opportunities for mobile marketing, according to Julie Herendeen, vice president of marketing for Dropbox. "When we run a campaign, 60 to 70 percent are probably viewing it on mobile," Herendeen said. "It’s great to have that data, but we’re also able to get deeper with customers and understand how they are using mobile in their lives. They’re touching Dropbox 70 to 100 times a day."
Consumer insights is definitely an area where smaller brands have the flexibility to make quick, actionable decisions in the mobile space, an advantage that larger brands still struggle to gain.
"It’s about the ability and the agility to activate more quickly," Suarez-Davis said. "We’re simply not designed the way we need to be to compete right now. It’s not a tech issue. It’s largely leadership and culture change we’ve got to embrace."

Sunday, March 8, 2015

It’s the End of the Retail World as We Know It

Retail businesses not yet engaging in online platforms need to catch up, and quickly. Trade is in our bones.
Retail has been with us since prehistoric times. Some say that long-distance commerce started 150,000 years ago, and was a main form of communication used by Homo sapiens along the Danube River around 35,000 and 30,000 BC. 

Moving forward very fast, capitalism is fueled by consumption, which is in turn served by retail and hence the link to present times and the importance of the retail in our world. 

Told you it is in our bones. 

But retail is changing, and fast. Pure players will not be able to survive if they continue selling on only one single channel, says Scott Galloway, professor of marketing at NYU. 

They will have to change and be excellent not only in retail, but also in digital. And so, pure-play retailers will have to be online, and pure-play e-commerce will need to have physical shops to support their sales. 

From Brick-and-Mortar to E-Commerce 

There are macro-economic trends that are affecting retailers and forcing them to change the way there are doing business, most notably:
  1. Increased costs of rental, especially for brands 
  2. High costs of inventory 
  3. Hyper-competition on prices from e-commerce shops 
  4. Demographic changes in the areas of the shops 
And so traditional retailers are growing and investing significantly in their e-commerce business. 

Among the fastest-growing e-commerce businesses in the U.S. are the traditional retailers: Nordstrom, Macy’s, Costco, AutoZone, and a few others. 

These companies understand the importance of having a physical presence as well as an online presence, and invest a lot of their budget in digital channels. And it’s clearly paying off: from an investor standpoint, Macy’s, Nordstrom, Walmart, and Best Buy yielded better returns for their investors when compared to Amazon for the period of December 2013 to December 2014. 

The advantages of having an e-commerce presence are clear: allowing greater reach to more customers, and capitalizing on existing inventories and warehouses to deliver goods without the expensive retail space and personnel involved in selling the merchandise. 

Despite this, you will be surprised that some of the world’s most famous brands and retailers (not only in developing economies) still do not have e-commerce shops. Take a look at the luxury industry – brands like Chanel or Panerai, to name but two, do not have any e-commerce presence. 

Having said that, many retailers do have at least one online channel they are selling on – let’s call it "traditional e-commerce." 

From E-Commerce to Brick-and-Mortar

However, there is no safe haven in the pure-play e-commerce sector, with its own pressure points on the business model, such as:
  1. Low profit margins due to the ease of comparing prices online 
  2. Returning buyers. The third repeated purchase is the Holy Grail of retailers. However, customer retentiononline is not easy.  
  3. High customer acquisition costs 
  4. Shipping costs, which can also be a silent killer for any business 
Research also supports that, for a variety of reasons, consumers still prefer to touch and feel the goods before making the buying decision. 

And that is why many pure-play e-commerce businesses are opening physical shops.

Examples? Sure! In the U.S., traditional pure-play e-commerce players like Warby Parker and Rent the Runway opened brick-and-mortar shops. In Asia, the Ensogo group and Groupon opened click-and-collect shops. 

The advantages of a physical shop are clear: a point for the customers to interact and feel the products before they buy them, and they also provide savings on logistics and shipping as well as places to warehouse and centralize goods delivery in case of need. 

They also improve brand building and interaction in the real world with customers, and hence have an impact on loyalty, too. 

The Collision Point of Multi-Channel Retailing: O2O

The Holy Grail, therefore, for this sector is multi-channel retailing. The key here is the connection between the channels, hence O2O (online-to-offline). The primary driver of O2O and multi-channel selling is the mobile economy that shapes the way we are researching products and buying them.
I will dedicate one of my next columns to the mobile economy. What does it mean for digital marketers? It means that you will need to drive an omnichannel customer experience and generate revenue on different channels as your business is changing. 

Here is a partial list of possible channels: 

The need of the consumers to touch and interact with products, the increase of costs of delivery and rental, as well as the explosion of the mobile economy, are all redefining the way the products are going to be marketed and sold to us as consumers. Until next time, stay tuned, Ohad.