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By Dan Frechtling. Generations of digital innovation reveal a pattern. The first generation re-creates a physical example, the second generation creates something new. The presentation begins with examples drawn from gaming, animation, publishing, and mobile. The balance of the slides show how this pattern is recurring in digital shopper marketing and how practitioners can benefit.
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1 Blog: smartretailmedia.com Twitter: ShopperMedia
April 13, 2011
Beyond Redemption: Digital Shopper Marketing 2.0
1/26/10 2 DRAFT 2 More: www.smartretailmedia.com
Intro to Speakers
•Dan Frechtling VP Client Solutions
•Joe Battoe VP Shopper Marketing
2 Blog: smartretailmedia.com Twitter: ShopperMedia
3 Blog: smartretailmedia.com Twitter: ShopperMedia
What do these 4 images have in common?
4 Blog: smartretailmedia.com Twitter: ShopperMedia
First Digital Video Game 1952
Digital + Gaming?
5 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Gaming!
6 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Film?
First CGI Animal 1986
7 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Film!
8 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Publishing?
First New York Times homepage 1996
9 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Publishing!
10 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Mobile?
First mobile phone 1983
11 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital + Mobile!
1/26/10 12 DRAFT 12 More: www.smartretailmedia.com
First Generation (1G)
Re-creates
Simulate a paper game with pixels
Provide desktop news content
Enable a phone to travel
Make animals look photo-real
12 Blog: smartretailmedia.com Twitter: ShopperMedia
1/26/10 13 DRAFT 13 More: www.smartretailmedia.com
Second Generation (2G)
Creates
Let players become the controllers
Merge fantasy and reality
Add new experiences to news
Complete any e-task with one handheld
13 Blog: smartretailmedia.com Twitter: ShopperMedia
1/26/10 14 DRAFT 14 More: www.smartretailmedia.com
What does this have to do with digital shopper marketing?
14 Blog: smartretailmedia.com Twitter: ShopperMedia
15 Blog: smartretailmedia.com Twitter: ShopperMedia
Digital Shopper Marketing is Starting a 2G Transition
2G
1G
Time
Adoption
On this trajectory: • E-Circulars • Digital Coupons • Social media • In-store media • Targeted display • Mobile vehicles • …
16 Blog: smartretailmedia.com Twitter: ShopperMedia
Examples today
2G
1G
Time
Adoption
Today (approx)
On this trajectory: • E-Circulars • Digital Coupons • Social media • In-store media • Targeted display • Mobile vehicles • …
1/26/10 17 DRAFT 17 More: www.smartretailmedia.com
1. Understand 2G digital shopper marketing
2. Know how to use it more effectively
Objectives
Media reviewed • E-Circulars • Digital Coupons • Social media
1/26/10 17 DRAFT 17 Blog: smartretailmedia.com Twitter: ShopperMedia
18 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
19 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
right offers to the right behaviors
20 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
auto-adjusting campaigns
21 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
helpful product/ service suggestions
22 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
value realized in fewer steps
23 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
right offers to the right behaviors
24 Blog: smartretailmedia.com Twitter: ShopperMedia
Different Interpretations (Anagram Example)
HERE COME DOTS THE MORSE CODE
Naval communicator Layman
DIRTY ROOM DORMITORY
College student Parent
LIES – LET’S RECOUNT ELECTION RESULTS
Winning candidate Losing candidate
25 Blog: smartretailmedia.com Twitter: ShopperMedia
1G E-circulars
Prompt people into the store to buy more. • Feature weekly or seasonally promoted products • Promote launched or re-launched items • Localize product presentations based on store traits • Accentuate underperforming departments • Organize content for pre-trip searching and list making
26 Blog: smartretailmedia.com Twitter: ShopperMedia
2G E-circulars
Use targeting to more naturally stimulate purchases
• Expand purchases of popular products • Cross-sell complementary products • Re-activate lapsed product buyers • Align with individuals’ purchase cycles
27 Blog: smartretailmedia.com Twitter: ShopperMedia
2G E-circular Case Example S
ale
s l
ift
Offers Penetration (%)
Post Email vs. Pre Email Sales Impact Example: 10 recent categories
Source: DS-IQ
Cheese
Self Care
Canned Soup Ice Cream
Cereal Bars
Soda Eggs
Chicken
Pet Food
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0% 20% 40% 60% 80%
Average lift from personalization:
2.4X
28 Blog: smartretailmedia.com Twitter: ShopperMedia
1G Digital Coupons
Turn around the mass-coupon paradigm Pros: • Flip the model from push to pull, as shoppers log in or opt in to offers • Provide basic targeting e.g., past activations, clickstream, and banner/geo Cons: • Don’t distinguish individual buyers • Don’t personalize by product or increment
29 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Digital Coupons
Serve the right offers to the right shopper behaviors. Examples:
• Attract new buyers by selecting and targeting those most likely to try • Expand current buyer consumption by increasing frequency and units • Re-activate lapsed buyers such as brand switchers or category defectors
Stopped buying
Occasionally buys
Buys novelties (but not pints)
Source: DS-IQ
1/26/10 30 DRAFT 30 More: www.smartretailmedia.com
9%
Campaign redemption rate
2G Digital Coupon Case Example 1
17%
47%
Frozen entréecategory buyer
Brand buyersfrom othercategories
Identifying shoppers most likely to try
Frozen dinner
1/26/10 30 DRAFT 30 Source: DS-IQ
31 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Digital Coupon Case Example 2
36%
100%
Before During
>1 units per purchase
(avg 4.1)
Before During
Every 6
Every 2
Increasing loyal shoppers’ buying rate
Purchase frequency (mos)
Single serving meal
Source: DS-IQ
(avg 1.8)
32 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Digital Coupon Case Example 3
An email and mobile coupon program for a major grocer increased trips per week 12%
Pre-campaign
1.47
Pre-campaign
Pre-campaignDuring campaign
Test
Pre-campaignDuring campaign
Control
1.59
1.42
1/26/10 32 DRAFT 32 Source: Catalina Marketing
33 Blog: smartretailmedia.com Twitter: ShopperMedia
1G Social Media
Self-expression, instantly broadcast
• Express affiliation with brands more broadly • Automate word of mouth immediately • Opt-in to news from preferred brands • Join groups with shared affinity
34 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Social Media
Use targeting to engage passions
• Reach emotional loyalists • Engage them in an event they care about • Enable them to share and self-express • Add special insiders-only perks
Source: YOU Technology
35 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
auto-adjusting campaigns
1.Optimizing segments
2.Optimizing offers
36 Blog: smartretailmedia.com Twitter: ShopperMedia
Differing Outcomes (Optical Illusion Example)
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18.1%
27.3%
8.7% 9.5%
Heavy buyers(2 units)
Light buyers Lapsed brandcategorybuyers
Brand adjcategorybuyers
Categorybuyers
Affinitycategorybuyers
13.4% avg
Expand brand buyer
consumption
Convert category buyers
Generate non-category
buyer trial
14.3% 13.5%
$.75 $.75 $.60 $1 off 2 $.50 $.60
Segments
2G Optimizing Segments
Source: DS-IQ
38 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Optimizing Offer Values
Web coupon program for ConAgra and national retailer
12% cost/unit
improvement
New Buyers
Save $2.00
Save $1.75
Loser
Winner
Result Test Values
Source: DS-IQ
39 Blog: smartretailmedia.com Twitter: ShopperMedia
What Kind of Personalization?
3 approaches 1. Let shoppers select the kinds of
offers they wish to receive
2. Apply collaborative filtering or similar techniques to suggest what similar shoppers have chosen
3. Use individual purchase history to recommend the most relevant offers
40 Blog: smartretailmedia.com Twitter: ShopperMedia
Enough Talking About Marketers
41 Blog: smartretailmedia.com Twitter: ShopperMedia
2G Principles
value realized in fewer steps
1. E-circulars 2. Digital coupons
helpful product/ service suggestions
42 Blog: smartretailmedia.com Twitter: ShopperMedia
Offer Relevance
Loyal Mach 3 user
Timing and brand elements enable relevance
Right time Wrong brand
Schick Hydro
Current brand
Gillette Fusion
Right time Right brand (upsell)
43 Blog: smartretailmedia.com Twitter: ShopperMedia
Relevance Surveyed
“It made me buy the product about a week sooner than I would have…and I’m not sure I would have otherwise bought the two, but I
did, because it was relevant to my life.”
10%
30%
36%
42%
SwitchBrands
TrySomething
New
PurchaseMore ofSpecificProduct
Stock Upon OffersReceived
Source: Catalina Marketing
% of shoppers participating in a 2G program who said the offers made them:
1/26/10 43 DRAFT 43 Blog: smartretailmedia.com Twitter: ShopperMedia
44 Blog: smartretailmedia.com Twitter: ShopperMedia
Simplicity of E-circulars
Principle Availability Pre-selection
Delivery Browse hundreds of images or search by category
View relevant offers pre-selected and ranked
1G 2G
45 Blog: smartretailmedia.com Twitter: ShopperMedia
Simplicity of Digital Coupons
Principle Pull, not push Saving steps
Delivery Find offers, print out, and bring to store
Load-to-card and set up mobile reminders
1G 2G
46 Blog: smartretailmedia.com Twitter: ShopperMedia
Targeted right offers to right behaviors Dynamic auto-adjusting of campaigns Relevant helpful product suggestions
Simple realizing value in fewer steps
Examples today
Time
Ad
op
tio
n
2G
1G
47 Blog: smartretailmedia.com Twitter: ShopperMedia
Further Guidelines
Principle 1: Go beyond redemption. Principle 2: Don’t jail shoppers in static segments or zones. Principle 3: Look for ways to bet after the race has started.
1/26/10 48 DRAFT 48 More: www.smartretailmedia.com
More about digital shopper media: Blog: smartretailmedia.com Twitter: ShopperMedia Corporate: ds-iq.com
Dan Frechtling [email protected]
Joe Battoe [email protected]