Global Shop, April 2013

welcome

Nick Jones EVP, RETAIL PRACTICE LEAD

Lilia Arroyo Flores SVP, STRATEGY DIRECTOR

Molly Garris DIRECTOR, DIGITAL STRATEGY

Enrique Márquez SVP, STRATEGY DIRECTOR

A Study ofHow Humans Shop"

A Shared Problem Today"

Awareness"

New News"

Distinctiveness"

Relevance"

Likeability"

Which shoppers matter most?

What modes do these shoppers exhibit?

What needs should I address in each of these modes?

Which touch points should I use to address these needs?

How Did We Do This Study?"

13,400 People

7 Markets

24 Categories

40 Touch points

60 Attitudes

22 Trips and Modes

40 Needs and Motives

132 Shop-alongs

88 Journals

The Categories"

CANADA

FRANCE

GERMANY

ITALY

SPAIN

Archetypes: I am... Modes: I do...

To

uch

Poi

nts:

I us

e...

Needs: I need...

The 6 Shopper Archetypes"

What We Mean By Archetypes"

A shopping mindset rather than a specific individual.!!!

HabitualSprinter

DollarDefaulter

QualitySeeker

StrategicSaver

PassionateExplorer

OpportunisticAdventurer

HabitualSprinter

DollarDefaulter

QualitySeeker

StrategicSaver

PassionateExplorer


ExpplolpPa

Esipppp

asExass

xps

psss

EEEEEEEEEEE paE p

TRENDY

alSeek

ae

uaee

QSeek

lSeekQSeek

aQeueeeeeSSS kkkS kek

akkSS ke

uue

QSQSSQQQSSQQ

eaee rn retuurrerr

nisreur

tuntutuun

rerreetnntntnuututnunnnu

uninn

bitrin

HaSp

brip

ababbbultllllu ertellarultearrrrrrrrrrrr

veeraSarategaveavevveavettra gg

ertte

FEELERS"Seek fun and pleasure from shopping!

THINKERS"Seek information to help validate decisions!

DOERS"Seek to minimize time and money spent!

I am a THINKER"

StrategicSaverLayers multiple saving strategies to maximize value

EXPE

RT

Quality SeekerChecks for quality credentials thoroughly and diligently

PassionateExplorerShops for the experience and to discover new trends

Opportunistic AdventurerBargain shops justfor spontaneous fun

HabitualSprinterDefaults to usual choices to minimize time and e!ort

PR ICE

DollarDefaulterLooks to the lowest price to simplify decisions

I am a DOER"I am a FEELER"

Note: Index vs. total.!

Functionally Driven" Emotionally Driven"

Quality Seeker

175

Opportunistic Adventurer

140

Habitual Sprinter

126

Passionate Explorer

129

Strategic Saver 137

Passionate Explorer

122

Strategic Saver 122


121

Dollar Defaulter

129

A World Of Difference"

The same person can be a different archetype in a different category!

It’s Important We Remember"

Looking At One Archetype Today"

Shopping Apparel With THE Opportunistic Adventurer"

OA"

226"

Opportunistic "Adventurer"

Deal Hunter!!Trend Watcher!!Social Shopper!!Impulse Purchases!!Touch / Feel Product!!Spontaneous Fun!

Archetype"Characteristics"

Modes!!Needs!!Touch points!

Effects"

PE!

TRENDY

82"

SS!OA!

92"

DD!

67"

HS!

226"

81"

34"

QS!

Bargain shops for spontaneous fun!

FROM: Opportunistic" Adventurer"

HS!

146"

PR ICE

DD!

158"

122"

OA! SS!

58" 35"

QS! PE!

TRENDY

27"

Looks for the lowest price or regular brand to simplify decisions!

TO: Dollar Defaulter"

Note: height based on % size of segment index vs. total!


PE!

TRENDY

75"

SS!

68"

DD!

145"

OA!

167"

QS!

95"45"

HS!

Researches, creates multiple strategies to save money and !retain quality!

TO: Strategic Saver"FROM: Opportunistic" Adventurer"

PE!

TRENDY

82"

SS!OA!

92"

DD!

67"

HS!

226"

81"

34"

QS!


FROM: Opportunistic" Adventurer"

PE!

TRENDY

82"

SS!OA!

92"

DD!

67"

HS!

226"

81"

34"

QS!



PE!

222"

59"

OA!SS!

128"

44"

DD!

158"

QS!

57"

HS!

Seeks to discover and experience new trends, quality and value.!

TO: Passionate Explorer"

Q: "But how can that happen?"

A: "How people regard a category affects their mindset & behaviour towards that category"

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

RIS

K"

©Leo Burnett Co. Inc. 2007 !

Answers the question:"How much risk is there in making a wrong brand decision in this product category?!

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

REWARD"

©Leo Burnett Co. Inc. 2007 !

Answers the question:"How rewarding is it to think

about/choose amongst brands in this product category?!

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

Risk Reward n=5,000!

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

Leo Burnett Co. Inc. 2007 !

Appliances

Cell Phones

Banking

Kitchen Redesign

Car Insurance

Sports Equipment

Yogurt

Fashion

Soda

OTC

Hotels

Packaged Meat

Confectionary Cereal

Dairy

Cosmetics

Beer

HDTV

QSRs

Organic Food

Casual Dining

Auto

Laundry

Canned Food

Shopping Modes (I Do)"

What We Mean By Modes"

Discrete activities that people undertake while shopping!!

14%"Changing!Altering !an existing decision!

Note: % of people who engage in the trip!

Eight Dominant Modes (I Do)!

27%"Re-Stocking!Replenishing many items!

38%"Go-Getting!On a specific task!

37%"Bargain Hunting!Scouting!for deals!

29%"Pit-Stopping!Filling-in for an immediate need!

41!

29%"Exploring!Engaging and discovering!

23%"Cruising!Passing time for fun!

42%"Learning!Doing due diligence!

Note: DARK – Dominant | MEDIUM - Prevalent | WHITE - Absent

Learning!

Go-Getting!

Bargain Hunting!

Pit-Stopping!

Exploring!

Re-Stocking!

Cruising!

Changing!

Strategic Saver

Habitual Sprinter

Passionate Explorer

Dollar Defaulter

Quality Seeker


Archetype "[I am]!



OA"

226"


Cruising for fun!

Scouting for the deal!

Modes"Trip"Type"

Fun!!Bargains!!Inspiration!!

Archetype "[I am ]!

Modes"[ I do ]!

Learning! Go-Getting! Bargain Hunting! Pit-Stopping! Exploring! Re-Stocking! Cruising! Changing!

Strategic Saver

Habitual Sprinter

Passionate Explorer

Dollar Defaulter

Quality Seeker


Shopper Needs"

What We Mean By Needs"

Motives and goals people have in various shopping modes.!!!!!

25% "Treat!An escape or indulgence !

19% !Inspiration!To express my individuality !

8 Basic Shopper Needs (I Want)!

% of people who express the need !

39% "Efficiency!To minimize time and effort !

35% "Special Offers!Exclusive or limited offers !

35% "Flexibility!Convenient access 24/7 !

50% "Best Price!Find best savings!

38% Information!To validate a decision !36% "Advice!Unbiased expert input !

Functional! Rational! Emotional!

Best Price!

Efficiency!

Information!

Advice!

Special Offers!

Flexibility!

A Treat!

Inspiration!

Note: DARK – Dominant | MEDIUM - Prevalent | LIGHT - Absent

Needs"[Vary By!Archetype] !

Strategic Saver

Habitual Sprinter

Passionate Explorer

Dollar Defaulter

Quality Seeker




OA"

226"


Needs"

Shopping to express individuality (230)!

I shop to feel savvy or victorious(154)!

Part of the fun of buying a product is immersing myself in the store environment (174)!

I enjoy “hunting” for great bargains and deals (124) !

What she doesn’t need is as interesting as what she does need…"


OA"

226"


What She Doesn't Need"

Quality (85)!

Research (62)!

Peer Info (70)!

Sustainability (72)!

Convenience (88)!

Expert sources (69)!

It’s Important We Remember"

Like Modes… "!Needs vary by category because the RISK REWARD and Archetype vary by category!

Expert recommendation (160)!Reviews & peer reco’s (152)!Get extra perks or services (151)!

Impress others (192)!Be inspired (179)!

Feel sense of accomplishment (171)!Validate my decision (161)!See, touch, try a demo product (148)!

When She Redesigns Her Kitchen…"

228"Passionate Explorer"

PE"

Researcher!!Quality Obsessed!!Trend Follower!!Eco Correct!!High End Brand!!Price Insulated!!

Needs"

Needs"[I want]!

Best!Price! Efficiency! Information! Advice! Special Offers! Flexibility! A Treat! Inspiration!

Archetype "[I am]!

Modes"[I do]!


Strategic Saver

Habitual Sprinter

Passionate Explorer

Dollar Defaulter

Quality Seeker


Touch Points "(I Use)"

What We Mean By Touch Points"

Tools and channels people use to meet their shopping needs!!Some are physical e.g. specific store types!!Others are digital, traditional and even human!!!!!

Touch Points (I Use) 40 Touch Points "

59% "Broadcast Media!Passive media!

32% "Tools to interactand share!

64%"Promo Vehicles!Tools that deliver !news and offers!

59% "Expert Sources!

56%"Local Shops!

55% "Specialized Retail!

61% "Value Center!One-stop discount retailers!

PromotionalVehicles!

Value Centers!

Expert Sources!

Broadcast Media!

Specialized Retail!

LocalShops!

Engagement Tools!

Touch Points"[I use]!

Strategic Saver

Habitual Sprinter

Passionate Explorer

Dollar Defaulter

Quality Seeker




OA"

255"


Cruising for fun!

Department!Value Centre Discount!Supercentre!

Scouting for the deal!

Touchpoints"Retail website!Mobile!Social Site!Mag/Newsp/Radio!!

Best Price

Efficiency Information Advice Special Offers Flexibility A Treat Inspiration


Strategic Saver

Habitual Sprinter

Passionate Explorer

Dollar Defaulter

Quality Seeker


Promo!Vehicles! Value Centers! Expert !

Sources!Broadcast

Media! Specialized Retail! Local! Shops!

Engagement Tools!

Needs"[I want]!

Archetype "[I am]!

Modes"[ I do]!

Touch Point"[I use]!

What Did We Learn"

Risk Reward, Quantitative, n=5000 regular brand users and brand decision makers !

2. "Shopping journeys typically involve more than one mode""""High risk and high reward categories have much longer and more complex journeys than we imagined.!

1.   Archetype effects everything"!People fall into six distinct shopping archetypes (mindsets) that effect how they view and shop a given category.!

Key Findings"

Key Findings"

3.   Multiple, rather than singular needs are the norm for shoppers regardless of category.""""Every archetype has dominant and secondary needs, so not all are of equal importance to you or them.!

4.   Not every archetype is created equally when it comes to touch points."

!Every archetype does not require the same number of touch points to influence behaviour.!!!

Risk Reward, Quantitative, n=5000 regular brand users and brand decision makers !

What Does This All Look Like"

What Does This Provide Us"

Which SHOPPERS matter most!

What MODES these shoppers exhibit!

What NEEDS have to be addressed!

Which TOUCH POINTS matter most!

Drive Efficiency!!

& "!

Effectiveness!

Turning Shoppers" Into Buyers"

Hispanic population growth projected to outpace ethnic groups over the next 40 years

Source: Nielsen State of the Hispanic Consumer Report: The Hispanic Market Imperative

+42%

Total

+1%

WhiteNon-Hispanic

+56%

Black

+142%

Asian

+167%

Hispanic

Projected U.S. Population Growth from 2010 - 2050

U.S. Latinos are 52 million strong

Source: Geoscape: American Marketscape Data Stream 2010 Series

1,151,228 born every year

95,936 born every month

3,152 born every day

131 born every hour

2010-2015 Estimates

Hispanics are a young populationMedian Age

Non-Hispanic Whites Hispanics

17.6 17.3

5.6

10.611.4

12.6

17.1

11.812.8

14.0

15.6

10.5

13.6

6.8

8.77.8

3.62.3

< 5 years 5 to 14years

15 to 24years

25 to 34years

35 to 44years

45 to 54years

55 to 64years

65 to 74years

75years +

28 37

perc

enta

ge

Latinos are young and connected

Source: Nielsen

Stream 6:15 hours of video per month

Watch 33 hours of TV per week

Send/receive 941 texts per month

Hispanics are connected

Hispanic General Population

47%

18%

90% 81%

31% 33%57% 46%

Hispanics have influence

Source:Selig center of Economic Studies/University of Georgia 2009Central Intelligence Agency-World FactBook

Poland Argentina Greece

Israel South Africa Netherlands

Hispanics are the 13th largest economy in the world

Ahead of ...

20152010

$1 Trillion buying power

$1.5 Trillion buying power

51 million Hispanics in

the U.S.

50% growth in purchasing

power by2015

Source: 2012 Nielsen State of the Hispanic Consumer Report

Hispanics have enormous purchase power

Nothing Happens Until it Happens at the Store…

A void in the market

AcceptedHispanicShopper

Learnings

The most comprehensive tool for understanding Latino shoppers

Yogurt SodaConfectionary

Cereal

Beer

AppliancesBanking

Car Insurance

OTC

Hotels

Cosmetics

Canned Food

Laundry

Cell Phones and Carriers

Fashion

15 categories

Yogurt

Soda

Confectionary

Cereal

Beer

Appliances

Computer

Banking

Car Insurance

OTC

Hotels

Dairy

Cosmetics

Canned Food

Laundry

Fashion

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

Computer

Cereal

FashionCereal

Fashion

Fem Care

Fem Care

Hair Products

Computer

Hair Products

Archetype dominance

9%

15%

12%

25%

20%

19%

45090

90

66

200

136 450

2%

11%

6%

38%

22%

21%

Strategic Saver

PassionateExplorer


HabitualSprinter

DollarDefaulter

QualitySeeker

The Question is… Why?

Shopping is complex

“In order to win with Latino Shoppers, brands need to understand the Mindset and Strong Heritage that influences the

way they eat, clean, cook, and ultimately how they buy and consume goods.”

Source: Forbes, “Big Data Shows Hispanics Will Change Business Models”

Key Considerations3

1Consumer is not boss.CULTURE is boss.

22

For LatinosShopping is their playground

The playground

I want to be the 1st to have it.

Multi-dimensional

32%338 index

like to hear & give opinions & write reviews

Multi-touchpoint

36%200 index

I like to try new products

Multi-sensorial

45%284 index

I enjoy shopping with my children

Multi-generational

45%375 index

Store

Meet Social Expectationsvs.

Accomplish Individual Dreams

Index To General

Market

125

Typically shopped

Index To General

Market

139

Mindsets

Cell Phones

Kitchen Redesign

Sports Equipment

Fashion Electronics

Cosmetics

“wants”

“needs”

Cereal

Dairy

Beer

Laundry

Soda

Canned Food

Packaged Meat Fresh

Pharmacy

The Habitual Sprinter shopping journey

The Passionate Explorer shopping journey

They go to different stores to accomplish their goals.

But they can be one and the same person.

Habitual Sprinter

Passionate Explorer

The Challenge

Capture both mindsets and be the place that helps Hispanics

take care of their “basic needs” so they can

spend time on their “fun wants”.

All in the same store.

The opportunity: save time shopping to spend time shopping.

2 Shopping is a SOCIAL activity.

32

Latinos are social

Shopping is a social activity

Shopping is meant to be done with others

29%290 index

Word of mouth is key

37%217 index

Social media is the key enabler of collaboration

48%155 index

Share opinions and reviews

36%200 index

Fashion

[ High Risk ]

[ Low Risk ]

[ High R

eward ][ L

ow R

ewar

d ]

Fashion

Fashion

The dominant shoppers Fashion

Opportunistic Adventurer Fashion

Passionate Explorer

The tension

Collaborate

vsCompete

Ideal thing Right thing

The tension

vs

Recommendations

Social influencers bring inspiration and possibilities

42

Recommendations

Leverage peer-to-peer’s influence before, during and after the purchase

43

Make it easy for her to see what her friends like

Uniqlo digital hangers show how many people like each garment

Recommendations

44

Mobile & social media

Make it easy for her to see what her friends like

Help people by using technology to bring

trends to life

Help a few experience the latest products

3 Value means MORE THAN low price.

45

46

Recommendations matter

They want to get tailored advice and recommendations

48%200 index

55%145 index

The like to touch, feel and smell a product

before buying

Trust their senses

49%258 index

Visual cues are important

They judge product quality by product

packaging

Value does not mean buying cheap. It means getting more than what you pay for.

61%139 index

Multi-touchpoints inform decisions when shopping

Multi-touchpoints inform better

decisions

Won’t buy a product over lower quality even if it is on sale

45%128 index

Not willing to compromise

Laundry

Making the right choice is serious business

Wants to make sure she gets more than

she pays for

A wrong purchase decision carries

frustration as she feels she is

affecting her family

Wants as much information as

possible to make sure she makes

safe bets

Before going to the store

“I need to know the product, know it will give results, it is what I want.”

“I find out about products from TV.”

“I make sure a product works, or I look for

someone to talk to me about the product.”

In the laundry aisle

“I leave detergents for the end. It is my space to smell

and have some time for myself. It is like choosing a personal perfume that you

wear on your clothes.”

“I start to read the details of the products that interest me - the

packaging, the pictures...”

Minimize risk!

Avoid the package

regret effect!

Get her to the top of the social shopping game leaderboard

Make it risk free

Hispanics are leveraging digital incentives.

Let them try the product.

Help her choose the right product

Gain mobile ad drove key brand engagement and helped shoppers find the right scent

Help her choose the right product

Reward her for influencing others

Give her more incentive to share

Tesco Share and Earn gives users rewards for sharing their purchases

You are leaving money on the table.Having a Hispanic strategy won’t alienate. It will enhance your mainstream strategy.Lead. Learn. Enlarge.1+1=3. Use differences to discover, validate or bring dimension to your findings. The new mainstream is already here.

gracias.

Everything but the norm:

Global Trends 2013Molly Garris

Ultimately, the path to purchase has changed.

People are shopping more often,

in more places and across more channels.

4key shoppingneeds

efficiency

assurance

value

inspiration

efficiency

efficiency simply makeA PURCHASE

GET IN/ out quickly

FIND SPECIFIC brand/product

Habitual Sprinter

TRENDS‣ Hybrid formats

‣ Alternative forms of check out and payment

‣ New ways to fulfill orders / pick up goods / deliver goods

efficiency

Make Visits Faster and More Relevant

Get In and Out Quickly

Long Lines Disappear

Even Wallets are Going Away

24/7 Access

Beat Showrooming: Buy Online, Pick Up in Store

Buy Online, Pick Up 24/7

How about Same Day Delivery?

Auto-Delivery

assurance

Passionate Explorer

EXPE

RT

QualitySeeker

assurance WeighPROS/CONS

UNBIASED advice

see, TOUCH, demo, TRY

assurance

TRENDS‣ Better understanding quality

‣ Research tools

‣ Social Shopping

Offer Transparency

Offer Traceability

Bring in the Tablets

Have the Experts On Hand

Let them Snoop

Enable them to Poll Friends

Provide Purchase Protection

Challenge the Competition Head On

value

value

PRICEWORTH of a product or serviceSpecial OFFERS

PR ICE

Dollar Defaulter


StrategicSaver

value

TRENDS‣ Discount Stores and Private Labels

‣ Deals and Pricing Strategies

‣ Going Beyond Price

Aldi and Lidl Gain Share

Dollar Stores Cash In

11,000 Stores!

Retailers are Forced to Price Match

Innovative Pricing Strategies are Being Explored

But isn’t enough ENOUGH?

Retailers Must Add Value in Fresh Ways

New site, KinderStuff, also Addresses Little Needs

New Amazon site, Aggregift, Aids in Group Gifting

The Brands (and Frats) are Catching On

Brands Let Consumers Weigh In

Product Innovation is Being Pushed

The Ultimate Goal is not just to Push Sales but to Gain Loyalty

inspiration

inspirationa TREAT

EMOTIONAL needs

EXPERIENCE

Passionate Explorer

inspiration

TRENDS‣ Better and more interactive ways

to learn about and select products

‣ A fun or more unique way to shop

‣ The “Wow” factor

Open a World of Flavor

Relax and Recharge with the Family

Ease Fitting Room Frustrations

Have a Destination, not a Dressing Room

Dial up the Wow

Brands are Harnessing the Excitement too

Finding Meansto Engage with Customers in Unforgettable Ways

Experiences Don’t Necessarily Mean Costly Executions

Or Just for the Tech Savvies

Have Fun, Be Memorable

There’s no silver bullet.

In order to get ahead, start by:

‣ Better understanding your shoppers, their behaviors and needs

‣ Activate the right touch points

‣ Implement tests to gather actionable learnings

Nick Jones EVP, RETAIL PRACTICE LEAD

[email protected] 312.220.4533

Lilia Arroyo Flores SVP, STRATEGY DIRECTOR


Molly Garris DIRECTOR, DIGITAL STRATEGY


Enrique Márquez SVP, STRATEGY DIRECTOR


thank you