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INDUSTRY REPORT
A supplement to Shopper Marketing magazine
Clicking Throughthe Path to Purchase:Best Practices inDigital ShopperMarketing
1. INTRODUCTIONRead quickly. In the time it takes to read this report, some o the best practices in digitalshopper marketing that it examines may already be obsolete.
While this special report was in production, Apple Inc. introduced both the iPad andiPhone 4. On July 1, Unilevers Dove Men + Care became Apples pioneering iAd advertiser
by launching a multi-dimensional advertorial (to use an outmoded phrase) that combinedsports content, product inormation and a rat o attention-grabbing rich media tricks.
Shortly thereater, Krat Foods launched Big Fork, Little Fork, an iPad-specic applicationdesigned to help parents nd healthy meal solutions or their children.
Such rapid-re developments have become commonplace in todays society, where therate o new technology introductions is matched only by the speed with which consumersadopt them. Among the tools currently at the peak o the consumer adoption curve are
numerous digital shopping aids.Morgan Stanley analyst Mary Meeker theorizes that society is undergoing the th
major technology cycle o the last 60 years. The main dierence between this cycle andthe previous our the emergence o mainrame computers in the 1960s, mini-computers
in the 70s, desktop computers in the 80s, and the Internet era o the 90s is that this onerees the user rom the prior restrictions o time, place or even device. It is the era o the
Mobile Internet.
The consumption o media has changed accordingly. There are 221 million Internet usersin the United States, which represents 71.2% o the population, according to eMarketer.
There are 292 million television viewers, although 35% o them actually do some o thatviewing through the Internet, according to comScore. And, 66 million are occasionally
PRESENTS:
TABLE OF CONTENTS
1. I ntroduc tion ........................................................1
2. Th e Digital Landscape ........................................3 Step1:ConsumerDemandGeneration Step2:ShopperPurchase/RetailerSales Step3:ConsumerLoyalty
3. KeyConsumerBehavior......................................5
4.WhatToDo:StrategiesForCommunication......9 B randing Sales/Discounts Coupons ConsumerPromotion Consumer/ShopperSolutions LoyaltyMarketing CauseMarketing Co-Marketing E-Commerce
5.WhereToBe:StrategiesForPlacement ...........13 OnlineDestinations TargetedSites SocialNetworks BrandSites Retailer Sites InStores
6. HowToDeliver:StrategiesForConnecting......17 a .Onl ine b .In-Store c.OntheGo/Anywhere
7. KeysToFutureSuccess......................................22
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DIGITAL SHOPPER MARKETING
logging on while
watching TV, according
to In-Stat.
Such media multi-
tasking will becomeeven more the norm
in the uture. Nielsenorecasts that 51% o
U.S. consumers willown Internet-enabled
smartphones by the endo 2011. By 2014, morepeople will be accessing
the Internet via mobiledevices than desktop
computers, according toMorgan Stanley.
These technological changes are wreaking havoc inthe marketing industry, which enjoyed a relatively easy 75
years o controlling consumer communication, dictatingthe times, places and delivery channels to a nation opassive consumers via radio and TV.
The Internet reversed that, turning the act oconsuming into a sel-driven exercise rather than a
passive process. Todays consumer actively seeks out theinormation or hersel, and increasingly is able to ndeverything that she needs quickly, easily and, thanks to
mobile phones, whenever and wherever she needs it.The result is an increasingly complex path to
purchase, said Lori Aulnger, Procter & Gambles directoro consumer and market knowledge, at a recent industry
conerence. Consumers are using more and more
touchpoints to decide what to buy and where to buy it.Digital marketing is now aecting very directly
the shopping occasion, says Peter Cloutier, president oCatapult Marketing, Westport, CT.
Google Inc., whose primary business model entailsconnecting advertisers with interested consumers, has
dubbed the digital marketplace the zero moment otruth. I, as Procter & Gamble has amously proessed,the rst moment o truth occurs when consumers stand
in ront o a store shel and decide whether to buya product, then the zero moment is everything that
happens beorehand, according to Kevin Kells, Googlesnational industry director or consumer packaged goods.
Increasingly, that everything is taking place digitally.
Digital MarketingThe term digital marketing applies to anycommunication delivered through digital technology,
including the Internet, place-based networked signage,in-store kiosks and personal shopping assistants,advergaming and mobile phones. But the practice o
digital marketing has existed or much longer than the
term.Packaged goods marketers have been
communicating with consumers online or almost 15
years, both through advertising vehicles adapted or themedium and the development o content that could
attract visitors to brand websites.For a number o years, digital shoppermarketing
which ne-tunes the practice to directly inuence storechoice and product purchase has been a core strategy
or brands in consumer electronics, automobiles andother big ticket categories, where the path to purchasedemands a signicant amount o inormation gathering,
product comparison and price checking, and whereonline purchase options have been available or years.
Food and beverage marketers, however, have beenmore content to use the Internet as a brand-building
channel rather than a direct sales-driving mechanism. Thegeneral belie among CPGs was that consumers didnt
need to conduct research to decide between Cheeriosand Special K, and that the inormation shoppers needed
DoveMen+CaresiAd
KraftsiPadapp
KraftsFirstTastesite
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beore heading to the store was delivered in Sunday
newspapers.Likewise, pure-play Internet retailers such as Amazon.
com and Drugstore.com, along with traditional specialty
chains like Best Buy, have employed digital shoppermarketing practices or a number o years to attract these
online researchers, help them make their decisions and,ultimately, close the sale either online or in a physical
store.Traditional packaged goods retailers took much
longer to get involved, due to the understandable beliethat ood and household products werent enough o abig-ticket purchase to be made online. When Amazon.
com began selling groceries in 2006, ew supermarketoperators even had consumer-acing websites. (The idea
that weekly circulars should be posted online had notoccurred to most.)
It was only in the last ew years that traditional CPGretailers began attempting to build sites that would
attract shoppers, and even more recently that theyrealized digital marketing could inuence trips andpurchase decisions.
This shit in thinking was driven by many things,including the continued ragmentation o traditional
media, the near-ubiquitous household penetration o theInternet and the economic recession o 2008 the last owhich made the aorementioned Cheerios vs. Special K
decision much more critical or many consumers. Today,50% o packaged goods shoppers visit a retailers website
one or two days beore visiting the store, according toCatapult Marketings second annual Digital Shopper
Marketing Study (which will be discussed at length later).
But what sparked the current surge in digitalshopper marketing more than anything else has been
the emergence o the mobile phone as the consumersprimary lieline.
During holiday 2009, 10% o all cellphone usersalready were taking pictures o products in stores,
according to Morgan Stanley. These mobilized consumersalso used their phones to obtain (and use) coupons, makeshopping lists, compare prices, nd better deals at other
stores, and send those aorementioned photos to riendsto get a second opinion.
Such unctionality is making the mobile phone anindispensible liestyle tool or consumers a personal
shopping assistant, i you will.For marketers, the device is ostering direct, one-
to-one communication with consumers. But it has also
ushered in a new age in which the role o marketing is notjust to persuade consumers to buy products, but also to
provide them with digital tools that can acilitate thosepurchases.
2. THE DIGITAL LANDSCAPEDigital marketing encompasses a wide array o deliverymechanisms and promotional tactics that can be used
to reach consumers along the path to purchase, romdemand generation through the entire shopping process
to post-purchase relationship management.
Catapult Marketing segments these variousmechanisms and tactics into three distinct phases based
on the strategic roles they typically play or marketersand the stages along the path to purchase in which
consumers normally utilize them. For the time being, theyadditionally are segmented by the physical location
in which consumers most oten interact with them,although the rapid penetration o Internet-enabledsmartphones will ultimately make that distinction
obsolete.
Phase 1: Consumer Demand GenerationA number o digital tactics can be used to build brandawareness and equity while generating consideration and
demand or products, stores and services. Among themore common are:
SearchEngineOptimization(SEO): The calculateduse o content and technology to enhance a brands
prominence in search results (by appearing higher on lists,more oten, etc.) on Google, Yahoo, Bing and other search
engines.
SearchEngineMarketing(SEM):The use o paidsearch, display advertising and other tactics to guarantee
prominent top-o-page positioning in search results orspecic terms.
SocialNetworks: Building communities o brandenthusiasts and/or employing paid advertising to reach
the millions o registered members o Facebook, MySpace,Twitter and other social networks.
Brandwebsites:Developing unique
websites or brandsto draw consumer
trac, either through
straightorwardinormation(pampers.com),solutions-themed
content (P&Gshomemadesimple.
com) or promotions(Coca-Colas
mycokerewards.com).
KraftsiFoodAssistantapp
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DIGITAL SHOPPER MARKETING
The Digital Path to Purchase
Source: Catapult Marketing, July 2010
Shopper Purchase/Retailer Sales
In-Home
Consumer Demand
SEO/SEM
Online media
Social networks
Brand websites
Mobile sites
Smartphone apps
Digital promotions
Digital coupons
Retailer websites
SEO/SEM
E-commerce
Shopping apps
GPS
Mobile search
Mobile sites
Shopping apps
QR codes
RFID
Paperless coupons
Mobile scanner
Kiosks/Digital signage
Consumer Loyalty
Electronic CRM
Mobile CRM
Social media
Word of mouth
Advocacy
Product reviews
On-the-Go In-Store
Mobilesites: The reduced screen size, bandwidth and
graphics o smartphones makes viewing most existingwebsites impractical, requiring marketers to develop
more compatible mobile sites to attract repeated use.
Smartphoneapps: Unique interactive sotwareapplications providing some type o unctional service.
The poster child o brand apps is Krat Foods iFood
Assistant, which delivers a Recipe o the Day to itshundreds o thousands o users.
Digitalpromotions: Conducting action-inspiring
consumer promotions, either exclusively or as part o an
integrated eort. Nearly all national campaigns now usethe Internet as the primary method o entry/redemption,
and brands regularly conduct online-only promos as well.Text to win promos leveraging the user base o text-
capable mobile phones also have become common.
Phase 2: Shopper Purchase/Retailer SalesA relatively new strategic use o digital tools is to directlyinuence purchase decisions and/or drive sales at physical
retail locations or online e-commerce sites. The numeroustools that can be utilized or such shopper marketing
activity include tactics that reach consumers at-home,on-the-go and in-store. These three steps in Catapults
Digital Path to Purchase will be discussed at length insections 4-6.
Phase 3: Consumer LoyaltyDigital technologies have made it ar easier or brandsand retailers to maintain direct communication with
existing customers and recruit new ones. They also orbetter and worse have made it easier or consumers
to share their own (sometimes brutally) candid opinionsabout the products and services they encounter. Amongthe tools alling into this area are:
ElectronicCRM(CustomerRelationshipManagement):
Brands have long been using websites and e-mails toconduct targeted communication programs with key
customers and prospects (although the promise o trueone-to-one marketing remains largely unullled).
MobileCRM:A new wrinkle in the strategy isthe ability to communicate even more directly with
customers via their mobile phones. The ongoingpenetration o smartphones will add even more
capabilities.
SocialMedia:Facebook surpassed 500 million
worldwide users in July. Twitter boasts 74 million accounts(although turnover rates are high and actual usage low).
MySpace has 120 million. Although their primary goal is toconnect with amilies and riends, users o these networks
have demonstrated a willingness to interact with andeven help promote brands and retailers they like. In
response, marketers are devoting signicant resources toharnessing the power o these user bases.
WordofMouth: The worlds oldest orm o marketinghas become nearly systemized through social networks
(think o the now-ubiquitous Twitter re-tweet, orexample) and the thousands o online communities and
bloggers (rom watchdogs to anboys) now in operation.Many o these sites attract audiences that rival those o
consumer magazines and most TV programming, andmarketers thereore are engaging with them.
Advocacy:Marketers can establish relationshipswith the operators o such advocacy sites and provide
relevant, helpul content to their audiences, therebyostering goodwill within the community. (One brand
marketer says the process is similar to working with mediaeditors.) Perhaps most amously, Walmarts Elevenmoms
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InspireMe. Consumers want resh ideas and relevant,
problem-solving oers that will entice them to try newproducts and services. This explains the popularity o the
meal solution programs that have become a staple o
packaged goods merchandising over the last ew years.
SupportMyValues.Consumers are motivated bysocial causes that make sense and enhance their sel-
worth. There is no greater example o this motivationthan their response to the scores o marketing campaigns
every October in support o breast cancer awareness.Conversely, consumers now have numerous publicorums through which to rally against brands they believe
to be opposing their personal values. ConnectMe.Todays consumer not only wants to stayclose to amily and riends, but also be connected with
others who know, according to Catapult. The popularityo social networks and niche-content blogs is a byproduct
o this need. Many consumers also want to be the rst toknow, a desire illustrated by the rise o Twitter in generaland, more specically, P&Gs Tremor and Krat s First Taste
new-product websites.
program united
20 independentMommybloggers in a
bid to insinuateits own shopper
marketinginitiatives
into theconversation
(althoughthe programappears to have
been largelyabandoned
ater only one year).
Products/Reviews:At rst, the prospect o lettingconsumers provide reviews was intimidating to brand
marketers. They soon realized, however, that the Internetmade such sharing inevitable, and have thereoreembraced the concept by allowing unedited reviews
on their own sites and actively responding to criticismelsewhere.
3. KEY CONSUMER BEHAVIORDespite the emergence o this new digital shopper,its important or marketers to understand that the
consumers core needs dont change, just how they satisythose needs, says Seth Diamond, vice president-shopper
insights at Catapult. The agency segments these coreneeds into ve emotional drivers:
SaveMeTimeandMoney.While always a actor, theimportance o price has escalated since the economys
downturn in 2008. This explains the 42% rise in couponredemptions since the end o 2008, according to Nielsen.Current research studies suggest that price will remain
extremely important, since more consumers have learnedthat they dont necessarily need to sacrice quality by
choosing the best deal.
In addition to the savings aspect, this area also
encompasses the shoppers need to nd deals easily andnavigate the store quickly. The ormer already has been
enhanced dramatically through digital tools, and thelatter is quickly ollowing suit.
SurpriseandDelightMe.Although theyre more
actively searching or deals, consumers also desireunexpected rewards or their actions, and task-enhancingservices that exceed their expectations. This brings loyalty
programs and simple path-to-purchase tools to theoreront o the marketing plan.
WalmartsElevenmomscommunity
GiantFoodsmealsolutionsmicrosite
Coupons.com
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DIGITAL SHOPPER MARKETING
At-Home Technology Interest Levels
% of People Interested in Using% of People Who Have Used
Co-Branded Emails
Email/News from Brands
Ratings/Reviews
Promos on Retailer Websites
Online Circulars
Printable Web Coupons 73%
63%
53%
62%
58%
57%
40% Email/News from Brands
Ratings/Reviews
Co-Branded Emails
Printable Shopping Lists
Printable Web Coupons
Online Circulars
Promos on Retailer Websites 48%
48%
45%
41%
40%
38%
37%
Source: Catapult Marketing, July 2010
0 10 20 30 40 50 60 70 80 90 100
Shopping Widgets
Printable Shopping Lists
Co-Branded Emails
Blogs
Promos on Retailer Websites
Email/News from Brands
Online Circulars
Ratings/Reviews
Printable Web Coupons
At-Home Technology Awareness LevelsAware and Have Used Aware and Have Not Used
Source: Catapult Marketing, July 2010
For consumers, the greatest benet o digital
technology is that it can help ulll these needs aster andmore eciently, through channels that make marketing
ar more o an interactive exchange than a one-waydialogue.
Digital Behavior TrendsIn order to understand the eect o digital shoppermarketing tools on these core needs, Catapult elded its
second annual survey in summer 2010 (with assistance
rom Ipsos OTX). Based on an analysis o responses rom1,345 consumers, Catapult uncovered a landscape in
which awareness o digital tools is already high, usage
is increasing steadily and interest levels suggest greatpromise or the uture.
Catapult also ound a user base that, though stillrelatively small in numbers, already are starting to discernwhich tools enhance each step o their path to purchase,
and already are questioning the real value o some. Thesedigital shoppers are identiying which tools can help
them decide where to shop, and which ones are morehelpul or deciding what to buy, says Cloutier.
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The At-Home ShopperAwareness levels or at-homedigital shopping tools are
generally strong near 80% orbetter or most tactics. Thatsnot surprising, since most o
the tactics in this group arepersonal computer-based
and have been available or anumber o years.
What is surprising, however,is the dramatic increase inusage in just one year. Since
Catapults 2009 survey, theuse o printable coupons
jumped rom 54% to 73%,and online circular viewing
rose rom 33% to 63%. Lesssurprisingly, awareness o
both Facebook and Twitterincreased substantially as well.However, Diamond suggests
that Twitters relatively lowusage despite its high awareness implies that the network
already is experiencing some post-ad decline. Similarly,the use o shopping widgets (applets that can bedownloaded to a users computer desktop or embedded
in a web page) was at rom year to year, suggesting thatthe tool may become passe now that mobile apps have
emerged.
On-the-Go Technology Interest Levels
% of People Interested in Using% of People Who Have Used
Mobile Phone Shopping List
Coupons Sent to Loyalty Card
Mobile Coupons
Scannable QR Codes
Image Recognition Software
Mobile Coupons Sent to Loyalty Card
Retailer Apps
Brand Apps
Text Alerts from Brands
GPS Locator
Mobile Websites
Mobile Search 43%
29%
28%
14%
13%
10%
30%
12%
9%
8%
7%
13% Mobile Phone Shopping List
Coupons Sent to Loyalty Card
Mobile Coupons
Scannable QR Codes
Image Recognition Software
Mobile Coupons Sent to Loyalty Card
Retailer Apps
Brand Apps
Text Alerts from Brands
GPS Locator
Mobile Websites
Mobile Search 23%
23%
33%
25%
21%
26%
49%
34%
33%
35%
25%
31%
Source: Catapult Marketing, July 2010
But the surveys most signicant data may be thelevels o interest expressed by respondents who are
aware o the tactics but still have not used them. In thisregard, better than 35% o respondents are considering
uture use, which represents tens o millions o additionalconsumers.
0 10 20 30 40 50 60 70
Image Recognition Software
Scannable QR Codes
Location-Based Check-In
Mobile Coupons Sent to Loyalty Card
Retailer Apps
Text Alerts from Brands
Mobile Phone Shopping List
Mobile Coupons
Brand Apps
Paperless Coupons Sent to Loyalty Card
GPS Locator
Mobile Websites
Mobile Search
On-the-Go Technology Awareness LevelsAware and Have Used Aware and Have Not Used
Source: Catapult Marketing, July 2010
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In general, shoppers are using at-home technologiesto plan their routine stock-up trips (which explains theirheavy use o circulars, shopping lists and promotions) or
to nd specic inormation about big-ticket items (wherethey oten turn to ratings/reviews).
Thereore, the highest levels o adoption are oundamong tools that provide direct value and relevant
inormation, says Jason Katz, Catapults executive vicepresident o emerging media. Consumers are usingthese tools to pre-shop the store, to decide where to buy
and what to buy.
The On-the-Go ShopperCompared with at-home tools, awareness o On-the-Gotechnologies is lower because most o these tools are
relatively new and engagement requires a smartphone,or at least advanced cellphone unctionality. Still, overall
awareness is better than 40% in most cases.Yet penetration rates are signicant and growing
steadily: use o Internet coupons delivered directly to
loyalty cards tripled to 30% between 2009 and 2010.More than 43% o respondents are already using mobile
search, and nearly one-third are taking advantage omobile websites and GPS (global positioning satellite)
mapping and directions. These tools are gainingtractions as smartphone penetration grows, says Katz.
Likewise, interest levels among non-users are lower
than with at-home digital tools. Theres clearly aneducation component here, says Diamond, suggesting
that some good old-ashioned awareness building maybe in order.
Unlike the at-home tools, which shoppers are usingor some airly clear shopping missions, these on-the-go
tools are utilized more consistently across trip type romstock-up to impulse, says Diamond.
0 10 20 30 40 50 60 70 80 90 100
Touchscreen digital signage
Handheld scanners*
*Ahold USA shoppers only
TV in-store (at shelf)
In-store kiosks
Walmart TV
Payment from cell phone
On-pack promotions: text to win
Self-checkout
In-Store Technology Awareness LevelsAware and Have Used Aware and Have Not Used
Source: Catapult Marketing, July 2010
The In-Store ShopperIn the store, it seems clear that shoppers are opting in totechnologies that improve their experience and provideclear-cut solutions or their needs. That would explain
why 88% o shoppers have used sel-checkout lanes (uprom 71% in 2009), and why Redbox video-rental kiosks
have proved to be a hit.It also may explain why so many in-store technologies
have ailed to penetrate the marketplace in the last 10years: Many o the tools that have been tested shel-edge TVs, smart shopping carts, talking beer coolers
and even ully deployed at retail were ocused on pure
advertising and delivered no discernable advantage orshoppers. In addition, the more popular technologiesin Catapults study generally are opt-in or permission-
based tools that let shoppers choose to use.Overall, awareness o in-store technologies is high,
especially considering that ew o the tools have been
widely deployed. Nearly 50% o shoppers are now awareo such tactics as kiosks and in-store TV.
Whats more, usage levels have jumped considerablyover the last 12 months: Walmart TV rom 6% to 29%,
text to win on-pack promos rom 5% to 25%, kiosks rom12% to 31%, in-store TV rom 16% to 29%.
The act that a portion o these increases can be
attributed to wider deployment on the part o marketers especially or text to win promos and kiosks does
not diminish their magnitude overall. (In act, the numbero TV screens installed at retail in the packaged goods
industry may very well have dropped since spring 2009.)Interest in these tools is also strong, with more
than 40% o non-users expressing a desire or kiosks,
touchscreen digital signs and in-store TV.Based on the survey, Catapult theorizes that in-store
technologies are having a much greater eect on impulse
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In-Store Technology Interest Levels
% of People Interested in Using% of People Who Have Used
34%
29%
29%
39%
25%
18%
24%
31%
88%
45%
45%
43%
37%
20%
30%
Source: Catapult Marketing, July 2010*Ahold USA shoppers only
On-pack promos: text to win
Payment from cell phone
Handheld scanners*
Touchscreen digital signage
TV in-store (at shelf)
Walmart TV
In-store kiosks
Self-checkout
On-pack promos: text to win
Payment from cell phone
Handheld scanners*
Touchscreen digital signage
TV in-store (at shelf)
Walmart TV
In-store kiosks
Self-checkout
purchases than they are on pre-meditated shopping trips,
which are more likely planned out using at-home and on-the-go tools.
The Integrated ConsumerThe emergence o smartphones is a technological
breakthrough that could blur the use o many o thesenow-unique shopper tasks, tools and missions. Ultimately,
it also could lessen the distinction between consumerand shopper, because the mechanisms that turn the latterinto the ormer will be omnipresent.
Already, many o the shopping tasks traditionallyperormed at-home are migrating to the smartphone.
On-the-go shoppers are searching the mobile Internet,downloading coupons, looking at circulars, building
lists and looking or deals. (See chart above.) The pre-shop planning stage now can be conducted anywhere,
anytime.In-store, shoppers likewise now can search or
product inormation, nd coupons, consult with riends
and compare the stores price with those at other retailers making the planning process an ongoing activity.
4. WHAT TO DO: STRATEGIESFOR COMMUNICATIONPerhaps the greatest danger to the continued growth o
digital shopper marketing is the potential or marketers toover-utilize these tools and bombard consumers with toomany communications.
In the early days o the Internet, there was strongbacklash against the relentless onslaught o advertising
that greeted users as they browsed. Over time, a
compromise was reached, with consumers resigningthemselves to a air amount o commercial messages and
marketers getting a little more sensitive about the ways inwhich they made contact.
Consumers will not be as understanding o intrusive,unwanted messages delivered to their smartphones.
Telemarketers were quickly dispatched rom the
cellphone medium early in its growth, and reputablemarketers are collecting opt-ins beore delivering text
messages. In stores, shoppers as theyve alreadyshown tend to avoid any technologies that oer
nothing but blatant advertising.Although the word has become somewhat o a
clich within the marketing industry, the overall goal
or marketers employing digital tools is to providesolutions oers, services and content that ulll
shopper needs. Thus, some traditional levers o marketingcommunications will have to be pushed harder, and some
perhaps hardly used at all.
Branding:While there may be opportunity or purebranding through some at-home or leisure-time Internetvehicles, there is little room or the strategy within digital
shopper marketing (or within any shopper marketingprogram, or that matter). By and large, digital tools are
best utilized by leading with a solution and earning thebrand a halo in the process.
Krats iFood Assistant app contains almost no visualbrand imagery, but connects the companys productswith consumers on a daily basis. P&Gs Charmin maintains
a visual presence as sponsor o Sit or Squat, a ree appthat helps users locate public restrooms, but the implied
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DIGITAL SHOPPER MARKETING
on mobile marketing.
In general, thetactic entails astraightorward oer
that resonates withrecession-minded
consumers. (The actthat participation
can be tracked betterthan most other
tactics is certainly aactor, too.)
Growth in digital
coupon redemption(especially online)
is easily outpacingall other delivery
vehicles, andredemption rates are
also signicantly higher. (In 2009, 15.9% o Internetcoupons were redeemed vs. 0.8% o newspaper FSIs.)
Throw in the act that digital coupons can be targeted to
pre-disposed shoppers rather than carpet-bombed tothe masses, that 39% o smartphone users nd mobile
coupons exciting (according to InsightExpress), andthat there are tangible savings related to eliminatingpaper-based distribution, and you have the elements o a
winning strategy.Online coupon aggregators have been around since
the original Internet boom o the late 1990s, but gainedstrong momentum when the recession arrived in 2008.
Although statistics rom comScore suggest that activity
may have peaked in late 2009, trac to these sites is stillheavy: segment leader Coupons.com had 6.7 million
unique visitors in April. And the sites two companionapps GroceryIQ and Coupons.com surpassed one
million downloads in June, with nearly one-third o thetotal coming in the preceding 45 days, according to the
company.The process already has become digitized rom
start to nish, with Target this summer introducing a
program in which shoppers text-message to receivecoded coupons that can be scanned on their phones at
checkout.Another sign o the times occurred in July 2010, when
Kroger staged a massive instant-win game in whichall 150,000 prizes consisted o ree product awarded ascoupons directly downloaded onto the winners store
loyalty card.Digital coupons, including those delivered by mobile
devices, have proven themselves to oer better return onour investment than coupons delivered via print media,
says Karl Schmidt, director-promotional marketing orGeneral Mills. The company is taking a leadership rolewithin the CPG industry in shiting coupon dollars to
goal is more to help consumers rather than push product.
Kellogg Co.s banner ads within ShopRites iPhone applink directly to a list o products that can be added to ashopping list, not to a brand website. Shopper marketing
activities tend to operate deeper in the purchase unnel,yet still play a critical role in building brand equity, says
Daniel Cooke, the CPGs director o digital shoppermarketing. Digital channels provide more options to
extend our brand messages [while helping] shopperslocate and purchase our products more conveniently.
Sales/Discounts:With 86% o Catapults surveyrespondents attributing their use o digital tools to saves
me money, sales and other oers are as important acomponent o digital shopper marketing as they are
anywhere else.In June 2009, Target joined with P&G or a Big Brands,
Small Prices campaign that represented the rst timethe retailer promoted store-only products on its website
(which sells general merchandise, but not packagedgoods). The program proved so successul at driving in-store sales that the tactic has become standard practice.
The bulk o retailer activity in the digital space isocused on sales promotion, based on the In-Store
Marketing Institutes marketplace analysis. ShopRitesiPhone app, or example, simply presents weekly specialsby category, enabling its 50,000-odd users to e-mail
themselves a shopping list and locate the nearest store.Through the third-party Cellre mobile coupon service,
the chains requentshoppers download
oers to their loyalty
cards.However,
marketers shouldconsider that the
importance oshopper marketing
is getting beyondprice, because it candeepen a brands
relationship withconsumers, says
Matthew Egol, vicepresident or Booz
& Co.s Consumer,Media & Digitalpractice.
Coupons: The practice o paperless coupons has
long been institutionalized on the Internet, throughnumerous third-party websites in addition to the
programs o retailers and manuacturers. In addition,coupon distribution has probably been the mostcommon entry point or brands and retailers embarking
Cellresmobilecouponservice
Targetsmobilegiftcardservice
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digital ormats.
However, an age-old criticism o coupons still applies:the tactic caters to cherry-picking deal seekers, andmay even erode brand equity among loyal consumers.
Although marketers may be required to participateto keep pace with the competition, they should use
it selectively and strategically (as collaborative retailermarketing, or perhaps loyalty-based rewards) to drive
incremental growth rather than replicating the Catch 22o continuous, share-renting oers that has occurred in
the paper-coupon world.
Consumerpromotion:Digital tools have been a great
benet to consumer promotion on the administrativeside, and also have greatly improved ease o entry or
consumers. For at least a ew years, the Internet has beenthe primary method o entry and redemption or most
promotional campaigns.More recently, marketers have begun activating
promotions through their Facebook pages, which alreadyare connected to tens (i not hundreds) o thousands oans and provide easy access to a ew hundred million
other consumers. In June, Krats Nabisco staged its latestcross-promotion with the Milk Processors Education
Board by sending consumers to Facebook to enter acontest and request coupons or a ree package o Oreos.(Would-be entrants rst had to register with Facebook.)
Online sampling also has been popular, despitethe act that the tactic embodies a contradiction: it
provides none o the instant gratication that typicallymakes digital channels more appealing to consumers.
Nonetheless, StartSampling.com, a direct-to-consumer
site that also operates branded programs or Walmart,Kroger, Walgreens and other retailers, has more than
three million registered users. Last spring, Pampersreceived requests or 10,000 trial packages o new Dry
Max diapers in less than one hour ater promoting theoer on Facebook.
In addition to cost savings, online consumeractivation makes it easier or marketers to collect data onparticipants and, in theory at least, begin the process o
ostering one-to-one relationships.
Consumer/ShopperSolutions:Marketers are ndingthat unique content that helps consumers solve their
everyday needs can help build communities aroundbrands and, either directly or indirectly, drive retail sales.Such content also can be used as a basis or co-marketing
programs that will directly drive sales.For classically trained brand managers, the tactic can
be hard to swallow, since the brands themselves otenare supporting players within the content (at least until
it comes time to present a promotional oer). Still, manycompanies now operate sites that subtly position theirbrands within a solution.
For example, while the URL or krattrecipes.com
makes ownership obvious, visitors must scroll to thebottom o the home page to nd any reerence to abrand; the site has more than 2.5 million monthly visitors.
The recipe-ocused bettycrocker.com operated byGeneral Mills also attracts 2.5 million visitors per month,
but it carries more o a branded presence including adsrom outside companies such as Nestl.
Elsewhere, P&G has Everyday Solutions (great
values & expert advice), which spans its entire brandportolio, as well as Home Made Simple, a site that
ocuses on household cleaning brands.
Retailers now are starting to ollow suit largelythrough collaboration with CPG partners. The most
common example in the last ew years has been themeal solutions now oered by nearly all retailers in the
ood-drug-mass channels. The concept centers on in-store displays o all the ingredients needed or a simple,
inexpensive meal, but is typically accompanied by anonline library o recipes and some orm o outbounddigital communication to the chains shoppers.
Content neednt always be task-oriented, however.The need or simple entertainment can also be solved.
For the last three years, Unilever has had success servingas exclusive sponsor o Walmarts Soundcheck, a
microsite oering musical perormances and behind thescenes content rom top perormers. Unilever rotates thesponsorship each month, matching artists with a brand
thats relevant to their audience. The sponsorship leadsto in-store activation on the Walmart Smart Network and
thematic product displays. (Soundcheck, by the way, isnow also available through an app.)
The concept now is migrating to the mobile platormthrough apps such as the iFood Assistant. Keep in mind,however, that there already are more than 180,000 apps
WalmartsSoundchecksite
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DIGITAL SHOPPER MARKETING
available to iPhone users, and brands will have to deliver
truly compelling content in order to stand out. Tokeneorts will be rejected. I its not inspiring, theres goingto be backlash, warns Diamond.
LoyaltyMarketing:Digital tools provide marketers
with multiple ways to establish two-way communicationwith shoppers, either to improve existing loyalty
programs or to oster new ones.The immediacy o e-mails and text messages makes
communication not only easier, but also more satisyingor operators and users. In act, it would be hard to nd anexisting loyalty program whose primary communication
channel isnt the Internet.The emergence o mobile-based scanning and other
technologies is making rewards redemption ast and easy,too. Kroger, Sams Club and other retailers let requent
shoppers download coupons directly to their cards. Thisall, Targets P-O-S systems will automatically deduct 5%
o the receipts o all TargetRed credit cardholders.On the brand side, too, digital channels have made
it more easible or the likes o Coca-Cola to operate My
Coke Rewards or Pampers to manage Gits to Grow,both o which reward members with prizes in exchange
or in-pack codes. (Pampers soon will be adding mobilecapabilities.)
In-store technologies, too, are perect or loyalty-
based interaction. Ahold USA oers its requent shoppersScan It!, a hand-held device that lets them scan groceries
while they shop or ast, one-swipe checkout at theregister; it also delivers targeted coupon oers based on
personal purchase history. CVS/pharmacy stores have an
ExtraCare Coupon Center kiosk that prints out targetedoers. Such in-store deployments allow shoppers to
activate rewards in the likeliest o places: at the point opurchase.
In a study released in July, the National RetailFederation suggests, The ability to tie a loyalty
membership number to a mobile phone not onlydramatically increases consumer participation [but] alsoenhances the data that is collected about that consumer.
Such typical complaints about programs lengthysign-up processes, conusing terms, delays in reward
redemption, and the need to carry cards are eliminated.
CauseMarketing:CauseWorld is an iPhone appin which users earn Karma Points that translate intomonetary donations or select charities by checking
in at retailers (conrmed by the phones GPS tracker) orscanning a products barcode. It has attracted 1.25 million
downloads since its April launch.That number underscores the surge in cause-minded
marketing that has taken place over the last ew years,which has been driven by an increase in cause-mindedconsumers. According to Cone Inc., 59% o consumers
say theyre more likely to purchase a product associated
with a cause. (Incidentally, 29% say theyd like to hearabout nonprot initiatives via mobile devices, Cone says.)
Thats why nearly every major P&G brand has a long-term
attachment to a nonprot organization. Its also whyBreast Cancer Awareness Month has become a key event
on the promotional calendar o most retailers.As with other orms o promotion, digital tools
acilitate the marketing and management o cause-marketing campaigns. In this case, the ease with
which a program can become viral through orwardede-mail, blogs and social networks makes it ar easier ormarketers to spread the word.
Mars Inc.s Pedigree brand ultimately donated 2.2million bowls o dog ood to animal shelters in 2009
through an online campaign that asked consumers toview a TV spot. Target used Facebook as the stage or
a 2009 eort asking consumers to decide which o sixcharities should receive the retailers unding. The eort
helped the chain quickly amass a an base o 500,000.(The total has since surpassed 1.5 million.)
Co-marketing: Generally speaking, using any othe aorementioned tactics in collaboration with retail
partners can enhance their eectiveness as shoppermarketing tools. We say that its all about engagingthe shopper, says Katz. But thats really only hal the
equation. Its also about the retailer. As with shoppermarketing in general, a key ingredient to success are
collaborativeprograms that
drive sales.
Leadingretailers now set
up micrositesor nearly all
o their majormerchandising
programs,oeringsponsorship
opportunitiesor CPGs i
not outrightcollaborative
execution. BothWalmart and
Target (among
others) work witha number o CPGs
to develop sites thatprovide relevant content, along with product ino and
promotional oers, thereby adding an eective at-homeelement to an in-store program.
In response, leading CPGs have been leveraging
MeijersMealBoxapp
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existing assets or account-specic work. The database
at Kratrecipes.com, or instance, has spawned MeijerMealBox and other retailer-specic online recipecenters; P&Gs homemadesimple.com begat a same-
named microsite at Walmart.com; or its annual summerbarbecuing platorm, Clorox Co. now regularly includes
supplying recipes, cooking tips and other digital contentto numerous retail partners.
Top companies such as General Mills, Kellogg andKrat also are helping retailers move into the mobile
realm. General Mills dominates the Cellre coupon service,or example, oten serving as the lone CPG supplyingcoupons to specic retailers. Kellogg is the sole advertiser
on ShopRites app.The justication is clear enough: 60% o respondents
to Catapults study say they have a more positiveshopping experience when using digital tools. More
importantly, though, 34% say they are more likely to shopat a retailer that oers shopper-enabling technologies,
and 24% are more likely to purchase the productseatured through them.
E-Commerce:There is no longer any doubt that theInternet will ultimately command a signicant portion o
packaged good sales. Bricks and mortar giant Saeway(in some markets) recently joined the ranks o Internetgrocers such as Aholds Peapod, FreshDirect and
NetGrocer in oering home delivery o goods orderedonline. Publix is among the chains letting shoppers buy
online and pick up at their local store.Among Catapults respondents, 9% had made a
purchase through an online grocer in the prior six months,
while 47% had shopped at Amazon.com, 24% at Walmart.com and 14% at Target.com.
Two noteworthy advancements have taken placerecently: Start-up Alice.com began shipping orders
or shel-stable oods and other packaged goods bymail, relying on CPGs to help with ulllment or their
own products. More than 180 companies already havepartnered with the site, including 30 that have addedlinked storeronts to their own websites.
P&G, meanwhile, launched pgestore.com, whichis directly selling to consumers or home delivery. The
company, however, has careully asserted that the goalis to better understand consumers rather than to bypass
the retail channel.Although the uture potential or direct-to-consumer
sales o packaged goods alls outside the scope o this
report, it represents yet another way in which digitaltechnologies are having a proound impact on the retail
industry and presents a uture area o execution ordigital shopper marketing.
5. WHERE TO BE:STRATEGIES FOR PLACEMENTIn addition to determining the right content strategy,marketers must also develop an ecient plan or
placement in a communications channel that seemslimitless. But both the eciency and cost savings o
digital marketing can deteriorate rapidly i marketerstry to be everywhere. You cant dilute the eort and
overextend your resources, says Mary Rodgers, directoro marketing communications or Cuisinart.
This section will discuss activity at-home on theInternet, on-the-go through mobile phones and in-store as separate places. However, these distinctions
are expected to largely disappear as mobile becomes theprimary method o accessing the Internet, and as in-store
tools evolve to provide online access and smartphoneintegration.
OnlineDestinations:The Internet is as viable a massmedium as broadcast TV, radio or print advertising, and
provides the added unctionality o directly connectingviewers to additional inormation and purchase
opportunities.Thereore, straightorward display advertising
on highly tracked websites can be an importantcomponent o a digital plan, to drive trac to whateverdestination will serve as the hub or a campaign.
Online networks such as Fox Interactive Media,Glam Media and Turner Network attract upwards o 85
million visitors permonth, according
to comScoredata. Individualproperties such as
The New York Times,eBay and The
Weather Channelcan deliver more
than 40 million.In addition,
establishing a
presence onsuch online-
only retailers as
Amazon.com andDrugstore.com islikely as importanta placement
these days assupermarket
circular eatures and will become
increasingly vitali private-label
Website Trac, June 2010Total Unique
Visitors (000)
Source: comScore Inc., June 2010
General Food Sites
Allrecipes.com 12,212
Cooks.com 8,554
Foodnetwork.com 7,821
About.com Food 5,375
AOL Food 4,849
Gourmandia.com 4,531
Chow.com 4,253
FoodBuzz.com 3,814
Delish.com 3,668
eHow Food And Drink 3,540
Brand Sites
Kratrecipes.com 2,758
Bettycrocker.com* 2,700
Pillsbury.com* 1,283
Kratoods.com 686
Tablespoon.com* 35
Nabiscoworld.com 310
Eatbetteramerica.com* 447*Owned by General Mills
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DIGITAL SHOPPER MARKETING
ormats. For the time being at least, social networks seem
to have supplanted blogs in the minds o consumers.
Socialnetworks:For sheer audience numbers, leading
social networks are also a place to be, although heretheres no guarantee that even a small percentage o total
Facebook or Twitter users will ever become a brands ansor ollowers unless theyre given compelling reasons to
do so. Thus, while some brands have been able to garnerollowings o one million consumers or more, many
others are ar rom reaching such critical mass.Furthermore, marketers must tread a ne line
between providing helpul inormation and blatantly
hawking their products when communicating throughthese networks. Cuisinart, or one, avoids outright
product pitches on its Facebook page because thecommunity tends to be put o by that, says Rodgers.
Instead, a Shop Cuisinart link at the top o the pagedirects ans to the brands site or more overt marketing.
While all signs point to Facebook as being a viabletool or brand building, no one has cracked the code orusing it to drive sales, says Diamond. In Catapults study,
social networks were rated highly or awareness andusage, but scored low in terms o being inuential or even
helpul or making purchase decisions, he notes.Convenience store giant 7-Eleven made an ambitious
attempt to directly drive sales via Facebook this summer
through a marketing pact with Zynga Game Network,the company behind wildly popular social games such as
Farmville. The chain staged a massive rewards program inwhich players earned game-playing credits by purchasing
real products in 7-Eleven stores. 7-Eleven was so
committed to the promotion that it revamped packagingor several SKUs.
I absolutely believe that Cuisinarts Facebookactivity drives sales, says Rodgers, while noting that the
brands indirect path to purchase entails Facebook linksto product-specic pages on the brands website, rom
which ans can then nd a convenient retailer. Cuisinartcurrently is working with retailer partners to quantiy thatbelie.
In the case o Twitter, We nd that it can play a role inpublic relations, but as o yet hasnt delivered meaningul
shopper value, says Katz. Cuisinart, in act, assignsresponsibility or managing the brands Twitter account
to its external PR agency.Twitter may be better employed at the local level,
several sources contend, such as a store manager
alerting ollowers in the neighborhood to a relevantsale: Immediately ater the Chicago Blackhawks won the
National Hockey Leagues Stanley Cup championship inJune, both Dicks Sporting Goods and Walgreens drove
trac to local stores by tweeting about the availability oteam merchandise.
growth and SKU rationalization remain signicant aspects
o bricks-and-mortar retail strategy.O course, or sheer numbers, Google, Yahoo and
other leading search portals are the prime locations or
advertising. Googles sites drew nearly 161 million U.S.consumers in May representing 81% o the entire online
audience or the month, according to Nielsen NetRatings.In addition, advertising on search engines provides the
added bonus o relevance, because placements are tiedto relevant search results.
PepsiCos Quaker brand generated 280 millionimpressions by running display ads this spring throughthe Google Display Network, a service that places
advertising on numerous relevant sites both large(Googles own YouTube) and small (niche blogs). The
brand ultimately gained a 9% sales lit through thecorresponding campaign.
Targetedsites: Beyond such high-trac destinations
are thousands o other websites with smaller audiencesthat can be ideal ad venues or specic brands. Someprovide as good or better a niche o consumer prospects
than a special-interest publication or cable televisionchannel.
Included here are the numerous content sites run bytraditional media companies, as well as the hundredso blogs and other consumer-operated sites that have
emerged to gain signicant ollowings and, in somecases, have turned into pseudo-commercial enterprises
themselves.The viral nature o consumer blogs one o the true
phenomena spawned by the digital age requires that
marketers at the very least monitor the discussions takingplace within them and, when possible, participate by
supplying meaningul, relevant content.Direct sponsorships and other paid relationships are
also possible and should be considered when available.(Aggregated services such as the Google Display
Network extend into the blogosphere and can helpmarketers identiy the best sites with which to considerpartnerships.)
While operating a blog internally is certainly an option,marketers must take care to populate it with relevant,
inormative and as much as possible unbiased contentin order to attract and maintain an audience. That means
largely avoiding straightorward marketing messages thatare required to close the sale. The trick is to establish acommunity that will do most o the work themselves.
When global retailer Tesco entered the U.S.marketplace with Fresh & Easy in 2007, its primary
marketing vehicle was a blog written by companyexecutives. Had the launch taken place this year, the
mechanism instead may very well have been a Facebookpage, which in early 2010 was a tactic employed bysuch retailers as H-E-B and Petco to publicize new store
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Brandsites: Most brands maintain a website that
serves as the central location or product inormation and/or promotions. More orward-thinking CPGs also provide
brand-neutral content relevant to their products use,
such as recipes or ood brands or housekeeping tips orcleaning brands.
Done well, such brand-operated content sites canthemselves become destinations. A key trend or the
uture may be co-marketed sites operated by non-competitive, complementary products extending the
promotional partnerships that theyre already conductingat retail (think Hershey and Krats annual Smorescampaign).
Among Catapults respondents, 39% said they visitbrand websites to look or recipes and other ideas, 32% to
participate in promotions, and 28% to research products.(See chart below.) The implication is that consumers are
using these sites or pre-shop planning or other occasionsrather than to help them directly make purchase
decisions.
Retailerwebsites: Although it took retailers a little
longer to identiy the need or robust consumer-acingwebsites, theyve caught up to brand marketers very
quickly over the last ew years, with most national chainsalready oering the basic shopping tools needed to plana trip to the store (and, increasingly, some online purchase
options as well).
Among those are the tools that consumers utilize
most requently: 55% o Catapults respondents look atcirculars online, 53% compare product prices, 39% lookor coupons and 34% read reviews and ratings.
The shoppers we talked to very clearly said thattheyre going to retailer websites or price and product
inormation, explains Katz. However, when they need arecipe or have heard about a promotion, theyre going to
brand websites.More recently, retailers have also begun to establish
themselves as content destinations, in great measure withthe help o manuacturer partners. The retailer wants toremain strongly in ront o the shopper, says Boozs Egol.
Coupons and online circulars are part o that, but theyalso need content.
We are constantly exploring digital collaborationswith our key retail partners to help build brand equity
and drive sales in-store, says Rob Candelino, Unileversmarketing director or personal wash in the U.S. When
its relevant to our target audience, and our retailpartner has a strong digital presence, a collaborativeand innovative digital program helps us deepen our
relationship with the consumer.Digital marketing serves as an ecient method or
account-specic programs, provided that it is plannedor on the ront-end, says Kelloggs Cooke, whose rolemakes him 100% dedicated to retailer activity. Having
dedicated resources in digital provides an additional
Motivations for Visiting Retailer vs. Brand Sites
Brand Site
Retailer Site
Source: Catapult Marketing, July 2010
12%Look for recipes/ideas/tips
Look at circulars
Compare product prices
Look for coupons or deals
Research products
Look for product reviews
Participate in promos
Suggest new product ideas
Share new experiences
Connect with other customers
39%
55%
53%
39%
26%
35%
28%
34%
32%
14%
21%
13%
11%
13%8%
18%
21%
9%
11%
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DIGITAL SHOPPER MARKETING
0 10 20 30 40 50 60 70 80 90 100
Unique widgets/applications
Location-based marketing
Short-code text messaging
Version of website
Order status
Loyalty program status
Targeted promotions
E-wallet/payment processing
Stock check
Product informationTraditional online content
Social networking
Digital couponing
Mobile browsing
Status of Mobile Capabilities Among RetailersUp-to-date technology In process of deploying Deploying by end of 2010
Source: National Retail Federation, May 2010
opportunity or us to oster deeper collaboration with our
retail partners.Its not incidental to note that some retailer websites
serve rather nicely as destination sites as well. Walmart.com attracts more than 35 million and Target.com morethan 25 million visitors each month, although both o
those mass merchants draw large numbers o eyeballs ortheir non-grocery oerings. In the pure CPG marketplace,
Kroger.com and Saeway.com are the only supermarketsites capable o drawing more than one million unique
monthly visitors, according to comScore.It seems clear, then, that an eective digital shopper
marketing strategy requires brands to work both on their
own and with key retailers to ensure that all aspects o theconsumers path to purchase are adequately covered.
Instores:There is little in the recent history o in-
store technologies that would suggest a bright uture.Over the last ew years, it seems as i more devices havebeen removed rom stores than were deployed, and
the number o tested tools that never reached scale arelegion.
However, There is o-the-chart interest or in-storetechnologies, including the much-maligned in-store TV,
says Diamond. From a shopper standpoint, these toolsare starting to work or them.
Respondents to Catapults survey rated at-shel TV
and kiosks highly or both helpulness and purchaseinuence, while digital signage and Walmart TV scored
well or helpulness.Consumer perception o Walmarts technology,
in particular, improved dramatically compared withCatapults 2009 survey. And that may be a case in point
or other deployments: the retailers new Walmart Smart
Network, which is still rolling out to stores, is ar moreshopper-riendly than its predecessor, Walmart TV.
We continue to see success with in-store media, butthere is still room or improvement, says Cooke, who listsinteractive TV, digital signage and kiosks as the primary
tactics with each having their pros and cons. It comesdown to usability and relevance.
Shiting the strategic ocus to mobile-phone deliveryeliminates the biggest obstacle that in-store technologies
have always encountered: the cost o installing andmaintaining systems, which retailers have been loathe toincur and paid advertising models have been unable to
oset.On the other hand, a large-screen kiosk or digital sign
is a lot more viewer-riendly than a smartphones display,and a shoppers mission can probably be expedited
more by retrieving relevant inormation rom an in-storeterminal rather than rom their mobile devices.
Onthephone:Most industry practitioners aredownright giddy when discussing the potential o the
mobile phone as a shopper marketing tool. And theexpectations are warranted, given that the mobile
phones ability to deliver a targeted, relevant message atprecisely the right time is unprecedented.
Mobile is blurring the line between clicks and
bricks, says Katz. Its turning Main Street into the mainaisle o the store. Smartphones eliminate many o the
distinctions discussed in this report, because they makeall content strategies available anywhere a consumer is
holding one. Theoretically, the entire path to purchasecan be traversed in a ew thumb strokes.
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6a. HOW TO DELIVER: STRATEGIES
FOR CONNECTING ONLINESearch:In an April 2010 survey conducted by comScore,59% o consumers said that gathering inormation
online is important in helping them make purchasedecisions, and more than hal o those respondents
said its importance had increased in the last year. Otherstudies have ound that as many as 89% o consumers are
researching online beore buying (although still making93% o their retail purchases ofine).
The implications are endless. Marketers may soon
be talking about the impulse trip rather than theimpulse purchase, now that GPS-based tools can locateconsumers near a particular store and send an instant-
message oer that inspires them to stop in.(The next step, potentially, could be programmed
reminders: Dont you need deodorant? That Walgreensacross the street has a sale on Right Guard. Another is
real-time inventory reporting, directing shoppers to astore guaranteed to have a desired item in stock.)
It already is obvious that brand marketers need todevelop websites tailored to the unctional strengths andweaknesses o mobile devices. I they havent already
done so, they also must develop a strategy or deliveringpromotional oers via text or e-mail. That need is even
more urgent or retailers.However, marketers must resist the temptation to
try too much. The most signicant potential deterrentto mobile marketing is the backlash that will occur
i consumers are given too much inormation thatprovides too little in the way o real solutions. Simplyput, consumers do not need a smartphone app or every
retailer they shop, or or every brand they buy.The opportunities are boundless and the pace o
change is exciting, says Cooke. However, I also temperthis enthusiasm by ensuring that were not simplydeploying a tactic because its the latest trend. My role is
to ensure we are aligned strategically, and then executingthe most appropriate solution based on consumer need
and insight.
At-Home Technology Shopping Inuences
Source: Catapult Marketing, July 2010
ShoppingWidgets
Blogs
Email/Newsfrom Brands
Printable Shopping Lists
Co-Branded Emails
Promos onRetailer Sites
OnlineCirculars
PrintableCoupons
Reviews/Ratings
Helpfulness
Bran
dI
nuence
CuisinartsFacebookpage
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DIGITAL SHOPPER MARKETING
According to surveys conducted by Google, 66% omoms go online to obtain inormation about packagedgoods. Thats more than any other source, including
riends/relatives (used by 64%) and newspapers/magazines (50%).
I the Internet is a key component o the path topurchase, then search engine marketing is the on-ramp,says Egol, noting that more than hal o all online trac
is driven through search engines. At a recent industryconerence, JCPenney chie marketing ocer Mike
Boylson called search probably the richest and mostproductive marketing that we do.
Googles Kells likens the search-return page to a store,
with the lead Sponsored Link position as the endcapsand the right-column Sponsored Links as the digitalshel (see image above). Imagine walking into a storeand not nding your products on the shel, says Kells,
who beore joining Google spent 15 years as a brandmarketer at Revlon, Diageo and Unilever. Its sort o the
same thing on a search engine results page when yourenot there.
And Googles internal research provides a goodreason or marketers to use paid search, unless their SEOstrategy truly does generate optimal results: one-third
o Moms conducting searches never scroll down. Andnobody goes past the second page, notes Catherine Roe,
Googles head o consumer packaged goods, Midwest.Instead, they rene their searches i they cant quickly
nd what they want, she notes.While brands have used paid search to drive trac
to their own initiatives or years, the idea o using it or
retailer co-marketing is relatively new. But it has greatpotential, marketers say, with some even suggesting that
it ultimately could become a standard overlay to the tradepromotion calendar. Fundamentally, that could be huge,
Diamond posits. (Roe hints that a ew orward-thinking
CPGs are already doing so.)
In one recent case study, General MillsGreen Giant joined with Target beore the 2010Easter holiday to sponsor search terms such
as rozen veggies, Easter meal ideas andEaster side dishes (because, as Roe notes, the
vast majority o searches do not contain brandnames). Those searches generated a top-page
Sponsored link to Targets online circular, whichcarried a $1 coupon or the brand. The eort
drove 3,000 visits to Target.com in three days.Elsewhere, Google teamed with Compete
Inc. to track seven o P&Gs sitelets on Walmart.
com rom September 2008 to November 2009,and ound that trac to the pages increased
substantially when paid search was employed.Deciding where to send searchers is a
balancing act. You have to decide whatthe need is, says Kells. What does she want when
shes searching Pampers? At a recent conerence,Roe outlined one plan in which a search or Pampersgenerated three sponsored options: the rst linking to
Pampers.com or helpul inormation, the second toWalmart.com or a special order, and the third to Sams
Clubs site or searchers who might be planning a stock-up trip.
DisplayAdvertising: In whatever orm it takes, the ot-maligned display ad doesnt deserve all o the negative
press it receives. While average click-through rates are low(according to comScore, at 10% or less) theyre still more
productive than your average FSI (and a lot cheaper).
Whats more, a time-aligned analysis conducted bycomScore ound that trac to hyperlinked sites increases
during display campaigns at levels greater than the click-through rates alone produce implying a more latent
eect.Other studies conducted by comScore have ound
that display ads can increase store trac by 6% and,combined with paid search, can drive up visits 43%. In along-term study conducted in 2008-2009, the research
company ound that online ads generated an averagesales lit o 9%.
Targeting capabilities are a key benet. Last spring,General Mills ran a campaign through Google oering
$1 coupons on three brands. While the oer remainedconstant, the eatured retailer changed based on theconsumers location. The process even can be rened
through ads that speciy an exact retail location near theconsumers home, according to Roe.
SocialNetworking:It seems clear that marketers
should be involved in Facebook, Twitter, and othersocial networks as a mechanism or public relations andcommunity building. Exactly how well the strategy will
ApaidsearchcampaignforDoveandTarget
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serve as a shopper marketing
tool remains to be seen.As it now stands,
consumers dont view
Facebook or Twitter as helpulin their planning process
or as inuential in theirdecision-making, according
to Catapults study. But workin this area may help drive
consumers to other digitaltools that do a better jobo enhancing the path to
purchase.
ConsumerBlogs:Theblogosphere is alive and well
with millions o consumerswho are more than happy to
share their opinions bothgood and bad about brands.As with social networks,
thereore, it is important ormarketers to be involved in the
conversation.One case in point is
Viewpoints.com, a website that lets visitors rate and
review everything rom automobiles to PhiladelphiaSpinach & Artichoke Dip. Roe recently noted that this
relatively obscure product rom Krat had garnered430 reviews on the site a prime example o how well
inormed todays consumer can be.
Surprisingly, though, blogs didnt rate very highlyas helpul or inuential in the survey. This suggests
that consumers are looking or more ormal sourceso product inormation and reviews, such as retailer
websites.
ShoppingWidgets:Branded shopping widgets makeit easier or marketers to maintain an audience, becausethe applications are embedded on consumer websites
and desktops. ShopRites rst use o the tactic helped theEast Coast chain become a hot widget on New Jersey
Mom blogs, according to marketing vice presidentCheryl Williams. (It also helped the chain learn where our
customers were hanging out online, she noted.)ShopRite also has a Live Right with ShopRite widget
that lets users check complete listings o product
allergens, additives, ingredients and nutrients or specicproducts, then create a printable shopping list. The
Meijer MealBox widget automatically creates a shoppinglist ater users select a recipe, and also delivers exclusive
oers. Cuisinart has a widget that lets users nd and printrecipes. It keeps us in touch with consumers on a dailybasis, Rodgers says.
In-Store Technology Shopping Inuences
Source: Catapult Marketing, July 2010
Payment from
Cell Phone
TouchscreenDigital Signage
Self-Checkout
In-Store Kiosks
HandheldScanners*
Walmart TV
TV at Shelf
Text-to-WinPromos
Helpfulness
BrandI
nuence
*Ahold USA shoppers only
Still, widgets scored poorly on helpulness andinuence in the Catapult study, largely because they
also ranked extremely low or awareness and usage. Assuggested earlier, however, the tools time may already
have passed, now that smartphone apps have arrived.The Meijer MealBox, or one, is already available as an app.
6b. STRATEGIES FORCONNECTING IN-STORE Packaging: In Catapults survey, the use o on-pack
tactics such as quick response (QR) codes and text-to-win messages rated poorly or both helpulness and
inuence. However, the tactic is enticing because it isthe only one that puts complete control o execution inthe hands o brand marketers and, thereore, is the one
way they can reach shoppers in the store without retailerinvolvement.
Although such tactics have earned a great deal omedia attention, they still have not been used widely,
according to Catapults study. Even text-to-win promos,which are airly commonplace (weekly co-op FSIs typicallyinclude one or more executions), earned relatively low
usage and interest levels in the survey and, thereore,rated poorly or helpulness and inuence.
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DIGITAL SHOPPER MARKETING
The uture o on-pack promotions may very well lie
in QR codes, which can quickly link shoppers to productinormation, direct them to a downloadable coupon, or
let them enter a promotion. Since the codes already arecommonplace overseas, the practice is expected to reachcritical mass here relatively soon.
Packaged goods marketers already are experimentingwith the codes in advertising. In July, an FSI or Nestl-
Purinas Friskies carried a code that linked smartphone
users to the brands TV spot. Duane Reade put them onoutdoor ads, sending scanners to a copy o the drugstorechains Duane Reader magazine.
Those eorts illustrate the act that, so ar, the codes
have largely been used as a novelty, letting consumerswatch movie trailers or promotional videos, rather than
providing a real shopper benet. QR codes are intriguing,but theres no plan yet on how best to deploy them, says
Diamond, who compares the tool to text messagingbeore American Idol: a technology in search o apurpose.
Earlier this year, Johnson & Johnson placed a codeon signs at CVS/pharmacy that let shoppers obtain a
coupon or Zyrtec. Last all, Rosemont wine placed a codeon packaging that allowed scanners to receive a phone
call rom Hells Kitchen che Gordon Ramsey. Such uniquepromotional uses could be the tiebreaker at the shel,suggests Katz.
QR codes also are being used to link consumers withproduct details, price comparisons and other online
data that can help inorm purchase decisions. The SearsPersonal Shopper app lets consumers e-mail scanned
barcodes rom any product to a customer service team
that will reply with where-
to-buy inormation within 24hours (even i Sears or Kmartdoesnt carry it).
Ubiquity, however, maybreed contempt. Ater all,
the goal o digital shoppermarketing is to simpliy
and enhance the shoppingexperience, not complicate
it. When youre on a missionand youre at the shel,Diamond asks, how oten
will you want to stop, clicka photo and go online or
more inormation?
Kiosks:No matter howhandy and unctional
smartphones become, onecan still imagine a uturerole or in-store kiosks. The
ability to instantly access anarray o inormation about products, sales and related
content without having to click, scan and search onpersonal devices would certainly be welcomed by eventhe savviest o mobile users.
That theory is supported by the act that Catapultsrespondents rated kiosks highly or both helpulness and
inuence, and 45% o non-users said they were interestedin the tactic.
While most deployments to date have oered
storewide inormation,the next step should be
category-level devicesthat address the specic
needs o particularshoppers. Earlier in 2010,
Target began rollingout shel-edge kiosksin health and beauty
departments that helpshoppers decide what
products will best solvetheir skincare or hair
coloring needs.
In-StoreTV/Digital
Signage: Technologyadvancements also
may be eliminatingany real distinction
between kiosks anddigital signage, sinceboth are now capable
On-the-Go Technology Shopping Inuences
Source: Catapult Marketing, July 2010
Location-Based Check-In
Image RecognitionSoftware
Mobile Search
GPS Locator
QR Codes
Coupons to
Loyalty Card
Brand Apps
Retailer Apps
Mobile Sites
Mobile Couponsto Loyalty Card
Shopping List on Phone
Text Alertsfrom Brands
Mobile Coupons
Helpfulness
BrandI
nuence
CVSExtraCareCouponCenter
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o acilitating online access and other orms o shopper
interactivity.As with kiosks, the eectiveness o digital signs rests
in their ability to provide trip-enhancing inormation.
In upgrading the Walmart Smart Network, the chainscrapped its ormer content strategy o generic, storewide
ads and promotions in avor o department-level contenton some screens and product-specic inormation on
others. The Smart Network can also tailor programmingby region or even store.
This summer, Walmart took a longer stride into theuture by conducting a 10-store trial o virtual makeupmirrors that let shoppers test products by scanning
photos o themselves and the barcodes o cosmeticstheyd like to try. Users then could save the resulting
image and e-mail to riends to get a second opinion.
Personalshoppingassistants: The idea o hand-heldtools in stores probably has been directly supplanted by
the concept o direct-to-phone communication. Thereseems to be little need or shoppers to learn the use oanother system that basically unctions like a closed-loop
smartphone.The paradox o Aholds Scan It! system is that it
represents the most nely targeted marketing vehiclecurrently available in stores: Kimberly-Clarks Kleenex rana campaign that only delivered coupons to shoppers who
had scanned some canned soup (which, based on thebrands research, implies that someone has a cold). Yet it
operates on a device that wont be needed much longer.(The chain already is working with supplier Modiv Media
to add mobile phone unctionality, according to reports.)
6c. STRATEGIES FOR CONNECTING
ON-THE-GO/ANYWHEREIt already should be clearthat the segmentation o
the path to purchase as athree-place process at-
home, on-the-go and in-store is also becoming
obsolete due to mobiletechnology.
Some aspects may
remain within specicdomains. Pre-trip
research and planningprobably will remain
largely an at-homeactivity, or instance.However, its conceivable
that some uture shoppers could be using theirsmartphones to download pre-programmed shopping
lists with all related coupons and other discounts
automatically attached as they walk into the store.
Among the tools currently classied as on-the-go,several are resonating with consumers, according toCatapults survey. Paperless coupons downloaded directly
to loyalty cards is ar and away the most inuential othem, and in terms o helpulness is second only to GPS
locators (themselves a key to the uture o digital shoppermarketing).
Mobile-riendly search tools and websites were alsorated highly as helpul, which underscores the need or
marketers to provide them. Mobile coupons, retailerapps and phone-delivered shopping lists score well orinuence, but lag a bit in terms o helpulness.
One old tactic that Diamond suggests still presentsa huge opportunity or marketers is co-branded
e-mails, which currently reside among the at-hometools but may also prove to be inuential on-the-go or
even in-store. Catapults respondents rated it highlyor both helpulness
and inuence,suggesting that itcould be a catalyst or
collaborative activity.Text messages, the
on-the-go equivalento e-mails (as well as thedigital communication
avored by manyyounger consumers),
also were viewedavorably. In addition,
text-based marketing
provides two-wayopportunities, with
brands either sending oersto consumers or running promotions that entice them to
send their own.As noted throughout this report, mobile apps can be
a great way or marketers to establish deeper, ongoingrelationships with shoppers provided that they delivertrue shopper solutions. Much o the current buzz over
apps will likely disappear once their novelty has worn o.In theory, it might be necessary or most major
retailers to create an app oering store locators, shoppinglists, coupons and other tools discussed in this report,
because these tools might soon become standardrequirements. Target and Best Buy are among theretailers who already have upped the ante by including
QR readers in their apps.Walgreens new app oers most o the above, but
also has two other notable unctions: shoppers can orderprescription rells on their phones and receive a text alert
when the order is ready or pickup at the store theyvedesignated; they also can e-mail photos taken on theirphones to be printed at the store and ready or purchase
TideStainBrainapp
Groupon
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Googles innovative search technologies connect millions o people around the world with inormationevery day. Founded in 1998 by Stanord Ph.D. students Larry Page and Sergey Brin, Google today is a top
web property in all major global markets. Googles targeted advertising program provides businesses o all
sizes with measurable results, while enhancing the overall web experience or users. Google is headquartered in Silicon Valley with
oces throughout the Americas, Europe and Asia. For more inormation, visit www.google.com.
Catapult is an action-biased marketing solutions agency ocused on creative strategies that
inspire consumer action and drive trial, repeat purchase, and loyalty or its clients, which include
Reckitt Benckiser, Mars Petcare, Kelloggs, Krat, M&M Mars, Del Monte and Sara Lee. The agency
brings a deep understanding o the brand, consumer, and retailer to every assignment, and
considers retail insight and a genuine depth o shopper marketing knowledge as core dierentiators. For more inormation, visit
www.catapultmarketing.com.
The In-Store Marketing Institute is a global organization o brand marketers, retailers, agencies and
manuacturers ocused on improving retail marketing strategy worldwide. The Institute serves the
needs o its membership by providing inormation, research, education and training, networking
to spot inconsistencies. For it to be eective, digitalshopper marketing must be coordinated with the rest
o the marketing plan rom advertising down throughproduct distribution.
Measure: Digital tools give marketers an
unprecedented ability to measure consumer responseand, in tandem with point-o-sale systems, sales results.Successul marketers will engage their research and
analytics departments while designing programs (ratherthan ater the act) to assure a higher level o condencein the accuracy o results, Diamond advises.
Scrutinizepartnerships:As the in-store TV
marketplace has shown, not all technology partnersare equal, and its likely that many o the digital service
companies emerging today wont be in businesstomorrow. Some o 2010s most popular websites andsocial networks could quickly ade in popularity. All
marketing agencies will claim to have digital shoppermarketing expertise, but ew have thus ar truly become
experts in the practice. And, many retailers arent yetcapable o executing eective campaigns. Marketers
must pick their partners wisely.
Bereadytoadapt:Marketers barely had time toadapt their thinking to marketing via cellphones beore
the smartphone came along. Now, each passing monthdelivers mobile apps delivering more powerul shoppingtools. Marketers will not keep pace unless they can
react quickly to technological advancements and, more
importantly, the ways in which shoppers are utilizingthem.I cant say the ROI is always apparent at this stage, but
the media spend is small, said Joe Jackman, acting chiemarketing ocer o drugstore chain Duane Reade at arecent conerence. So the experimentation is just ne.
This space is constantly evolving, says Cooke. Tobe eective, you need to be nimble, adaptive and have a
hunger to learn. You must be willing to experiment withnew and emerging technologies, and to take a ew risks.
The greatest risk, however, would be to hesitateat a time when the marketing industry is entering amajor new cycle o its own, one in which mass media
could become secondary to the targeted shoppercommunications that digital tools can acilitate.