Of SKUs, CPUs and QR codes
Editor's note: Lisa Hurst is vice president-shopper practice lead at Upshot, a Chicago marketing agency.
Earlier this year, I moved to a new home. In between unpacking boxes, I did a little furniture shopping. I browsed PotteryBarn.com, putting things I liked into my cart even though I wasn’t quite ready to buy. You know, window shopping. A day or so passed and I got an e-mail from Pottery Barn with a personalized message offering additional services and even a 15 percent-off coupon. It all felt seamless (if a little creepy) because the retailer was clearly talking specifically to me about items that captured my interest.
Thanks to the PC and the mobile phone, technology has changed the shopping landscape. Today, the shopper is in command. She makes lists, she browses, she compares prices. The shopper controls the time and place of the transaction. It’s a sea change for brands and retailers but it’s also part of a 30-year continuum driven by two principles that determine the best use of data for shopper marketing.
Throughout the evolution of retail marketing, there have been two constants, intertwined, in every era: A primary shopper relationship drives strategy and the available data – driven by the technology of the day – determines the primary shopper relationship. They’re mutual catalysts, each refining the other in an ever-deepening cycle: The stronger the relationship, the finer the data; the deeper your data, the better the bond.
Along the way, data collection and analysis have revolutionized retail strategy and shifted the dynamic between manufacturer, retailer and shopper. At each generation we as marketers learn a new skill that refines and enhances the retail strategy (Table 1).
The tools we have now enable richer, deeper relationships; greater transparency from retailers and brands; more targeting that manifests in more personal, truly one-to-one marketing. Technology – especially shoppers’ own personal, wireless technology – has changed the path to purchase from linear to a more fluid and organic journey. Shoppers can go from awareness to consideration to purchase in a split second.
So how can marketers optimize the available tools and data to drive the shopper to action, whenever and wherever she is? How can we capitalize on the information, in real time, to turn consideration into sales?
We have the tools to isolate where the shopper is and what she’s doing – plus the data to know what she likes. Our challenge as marketers is to collect and combine it all in a way that’s relevant and scalable, to make the right offer at the right time and place. The shopper is ultimately looking for confidence in her choice. That looks very different buying a car than buying gum but she wants to feel confident enough in her choice to make the purchase. We help with that when we personalize, customize and localize her options – using technology and data to deepen the relationship.
A good example is Kraft Foods’ CookingwithKraft.com, a site created in 2009 as part of a retailer-specific shopper marketing program. What began as a clearinghouse for recipes and ingredient combinations is evolving into to a relationship site that tailors content, coupons and offers for the shopper – tied directly to Kraft’s partner retailer.
This type of relationship-based content marketing strategy is scalable, providing a cost-effective platform and allowing differentiation by retailer. The ability to combine behavior-based data from site interactions with transactional data from a retailer’s loyalty card makes shopper marketing programs smarter and more personalized, building retailer and shopper rapport. Plus, having that wealth of very granular consumer data on a national scale could influence R&D, flavors, packaging, assortment – even marketing partnerships, as manufacturers pinpoint companion items or ingredients in the shopper’s basket.
Neiman Marcus takes it to another level with an iPhone app now testing at four stores in Dallas; Austin, Texas; San Francisco and Palo Alto, Calif. It’s a great example combining social, local and mobile. Shoppers download the app from iTunes and opt in to the service. Sensors are installed at key entry points of the stores, so when a shopper with the app passes within range, she’s alerted to which of her preferred sales associates is in the store right now – plus new-product arrivals, sales, fashion trends and upcoming store events. Shoppers can use the app to make appointments or leave messages for associates; mark favorite products, which are automatically shared with her favorite sales associates; and scan QR codes on store signage for trend and product information. Neiman’s can synch her past purchase data too, enabling sales associates to provide relevant, tailored recommendations. The shopper controls if, when and how she wants to engage – and she can change that from trip to trip.
The app keys in on the shopper as an individual and fosters her relationship not only with the brand but also with specific sales associates. The technology and data make customer service more human: It helps the sales associate remember her and her shopping history and gets to the heart of what she wants in this specific trip. Data caters to the shopper, deepens and personalizes the customer service and reinforces Neiman’s core attribute of stellar service.
Trends are emerging
Among the three key components of retail marketing – relationship, tech tools and data – new trends are emerging.
Relationship. Social media, social media, social media. It primes the shopping experience and gives brands (and retailers) personalized information that they can use to make stronger connections with their shoppers. Cosmetics retailer Sephora does social media well, engaging in a dialogue with its shoppers – facilitating product reviews and recommendations, extending invitations to store events and customizing rewards and offers. We’ll see more aspects of social media being activated, more seamlessly integrated and building relationships with shoppers both out-of-store and in-store.
Tech tools. It’s all about mobile. Location-based tools like foursquare are trickling down from restaurants and specialty retail to packaged goods. A number of grocers and some drugstores are testing check-ins, providing tailored, real-time offers.
Walgreens is the first retailer to adopt a new service from tech startup LocalResponse to monitor GPS services, such as foursquare and Yelp, for “check-in” notifications. When a shopper “checks in” at one of Walgreens’ stores, the service tweets an ad to the shopper based on her location. For example, in January, Walgreens tweeted over 5,000 ads for Halls Cough drops: “Check out Halls new cough drops in the cold aisle.”
Data. Social media and other tools give valuable behavior-based data that looks towards the next purchase, not just transaction data that counted the last one. These days, I’m watching Pinterest. It has great potential for activating shoppers. Brands have started sponsoring certain Pinterest boards (I like the Spring Trends board – so does Nordstrom). In essence, Pinterest is a virtual wish list: People post stuff they like – clothes, foods, places, activities. You could take those items, arrange them into an outfit, or menu or itinerary – then help close the sale with bundled offers, value-adds, discounts.
Walking along the path
We’ll see more brands walking along the path-to-purchase with the shopper. Marketers will use more behavior-based data to coax them along toward an actual purchase. And retailers increasingly will capitalize on their ability to trail and influence the purchase decision. Once she’s in the shopper mind-set – putting items in her cart – the retailer can present her choices that make her feel confident enough to buy. Think back to PotteryBarn.com. This kind of “shopping cart remarketing” taps the retailer’s Web analytics platform and its e-mail marketing platform to ready a set of incentives once items are placed in the cart. If the shopper leaves the cart before purchasing, her interaction is saved on the site, which sends a trigger to the e-mail platform to dynamically generate an e-mail with offers to entice her back.
But techno-advancements are a double-edged sword. Shoppers’ access to retailers’ data (What’s in stock? And where is it cheaper?) brings new challenges to shopper marketing. Wireless tools make it easy to comparison-shop on-the-fly. That levels the playing field on price and facilitates transparency among retailers. It forces them to analyze what more they can bring to the value equation for shoppers. Proximity, convenience, a richer shopping experience? Exclusive inventory? That’s one way to prevent showrooming, where shoppers cruise the store to check out merchandise in person and then buy it cheaper online. Bundled goods? Look at Target’s free beauty bag, filled with hair care and skin care samples as a gift with purchase. (A similar first-aid bag is free with the purchase of three first-aid items.) It’s more department store than mass merchandiser and it adds value in a way that gets shoppers thinking beyond price.
One point of difference gaining ground among retailers is faster, more convenient checkout. A number of retailers have begun using iPhones to check out shoppers wherever they are in the store. Best Buy, the Apple Store, Nordstrom and even Chipotle are using this personal technology to improve the shopper experience to keep shoppers from going somewhere else. How’s that for a twist?
Oh, and Pottery Barn? I’m loving the new couch. Thanks for the discount.