The future of retail marketing – from return on investment to return on involvement
Unprecedented economic circumstance has changed forever the way consumers operate.
By Simon Hathaway
This creates real challenges that retail marketers have to deal with, right now. Shoppers are spending less, the way they’re shopping is changing, and so is the technology they use to do so. The future of retail and shopper marketing must be considered in light of the combined forces of these technological and economic changes.
2010 will be the first year that digital natives will outnumber baby boomers; social media has exploded and continues to grow exponentially. Business has gone beyond 24/7 functionality, now we’re in contact with our customers second by second, minute by minute, in real-time, sharing together a continuous stream of information. This has had a huge effect on shopper’s expectations and what it takes to influence them.
As a result we’re headed toward what we call the new model of a ‘participation economy’. Yesterday shoppers just needed to be informed; today they need to be engaged. Tomorrow, they will need to be inspired.
Accordingly, yesterday’s retail marketing was all about ROI (which has and always will be important) and today is about ‘Return on Integration’. The biggest brands now seek the biggest bang for buck for their whole marketing spend, and to be more effective with less money, all your marketing strategies must be fully integrated. That means you must take a ‘discipline agnostic’ approach, and choose your media channels according to the context of your campaign.
But the future will be about ‘Return on Involvement’. Only by finding out what is truly meaningful to your customers will you be able to involve them, and encourage them to participate in the experience you are offering.
So how can we find success in a future with increasingly demanding and hard to influence shoppers? There are four key considerations that retailer and marketers must be aware of in 2010 and beyond.
1. Find meaningful shopper insights
To understand the difference in mindset between a shopper and a ‘normal’ person, consider Cinderella. The difference is akin to Cinderella, now wearing that fateful slipper, and hunting for her prince. It’s our job to convince her when she is in this frame of mind, that our products are the prince she is looking for. And to do that job, there is one thing we must know, what does she care about?
If you know that one thing, then you can understand what is ‘meaningful’ for her, and can make your proposition relevant to her.
Over the past 13 years, Dr. Christopher Gray, vice president of shopper psychology for Saatchi & Saatchi X, has been delving into the minds of consumers to understand the motivations and influences that shape attitudes, decision-making, and purchase behavior. Dr. Gray’s recent work has identified eight drivers of human shopping decisions, which have been tested in countries around the world, and found to be consistent.
These top four emotional drivers show that meaning for the contemporary shopper is found in the following areas:
• Mastery
This is the emotional satisfaction that shoppers get from knowing what they are doing, and that they’re doing a good job.
• Connection
This is about feeling like an authentic part of both their family and community.
• Security
This is about the consumer feeling that the product or service they are considering buying will be safe for them and their family.
• Sport
Shopping can be a competitive activity; this emotional driver is the desire to get there first, to get the best items before anyone else.
The key thing to remember, with all of these drivers is that 85% of all purchasing decisions are based on emotion not rationale. Logic leads only to conclusion, it’s emotion that leads to action.
2.Be first to the fringe
Dr. Stephen J. Gould, the late American paleontologist and evolutionary biologist had a theory called ‘punctuated equilibrium’. This theory states that when species undergo change, it happens as a spurt, and also that this change occurs at the edge of the ecosystem. This means that mainstream northern U.S. retail marketing for example, is not the fringe.
The fringe right now is places like a retailer in Japan, where if you scan the barcode of some packaged meat with your phone, you can immediately see images of the cow it came from, the farmer that produced it and the farm it comes from. At the fringe you see incredible ideas, like this example of the evolution of supply chain transparency.
Wal-Mart began as a fringe idea, so did the concept of a ‘freemium’ economy. We must look and remain alert to the environment outside of our own businesses and locales if we are to find new ways to inspire shoppers.
3.Win from the store back
This is about retailers and marketers using the store itself to shape and test ideas, even before a product launches. Because, if you can’t get it clear, keep it simple and make it functional in-store you probably won’t be able to make it work long term. For example, our UNICEF and Pampers campaign that provided one baby in the developing world with a tetanus vaccine was based on the key shopper insight that just as Mum’s care about their baby; they also care about all babies.
The sales results were phenomenal, but it was crucial to make it work with the store as the primary touch point. The simple proposition of one pack equalling one vaccine had both clarity, and an emotive call to action.
Increasingly we’re seeing inspiring activity happening first and foremost, in-store. That means everything from five-star chef’s giving live cooking classes in the grocery store, to Apple allowing whole school classes to have an in-store field day, laying out their lesson plans and being taught in their high-tech surroundings.
4.Create authentic participation
The final key insight is to know what really connects people and what doesn’t. For example, Guinness has always been a celebration brand, which people drink on occasions when they get together. The most volume by far is shifted on St. Patrick’s Day, so knowing this was a motivation behind the shoppers purchase decisions, we discovered Arthurs day. This was a celebration of 250 years since Arthur Guinness first signed the lease on St. James’ Gate Brewery, an authentic annual occasion that people can believe and participate in.
The amount of in-store comms technology is increasing too. But this doesn’t always equate to increased participation, from a retailers point of view, digital POS is expensive, from the shopper’s point of view, it feels like technology. Consider mobile comms, 85% of people don’t shop without their phone, this presents a huge marketing opportunity via a medium that is as familiar as can be. Retailers can also be sure they’re investing their capital in the shopper, and not just the shelf. It’s platforms like this that create the kinds of participation we will increasingly be asked to deliver.
In summary, keep your comms real and based on meaningful insight. Remember that technology is not an idea, but an enabler that amplifies them. Finally, and perhaps the hardest of all, let go, and allow the consumer to take control. Only then will your marketing generate the ‘return on involvement’ that will help your business win in the participation economy.”
Simon Hathaway is CEO UK/EMEA Saatchi & Saatchi X
