Posts Tagged ‘consumer buying behavior’

New data released this week and posted on marketingcharts.com confirms once again that retailers need to actively work on combating showrooming. As smartphones get ever more ubiquitous, using them to check out product reviews and competitive pricing while standing in a store aisle will become par-for-the-course consumer behavior.

How do you as a small businessperson fight against the online retailers like Amazon, who can price aggressively because they take a pass on brick-and-mortar locations? Here are a few ways to think about the challenge of closing the deal with a showrooming customers standing in your store:

Engage with them: Have sales reps be alert for shoppers working their phones. If the shopper is not typing aggressively (texting) or talking (on the phone), offer to help.

Keep your prices close to online retailers: You have the advantage of being able to satisfy the “get it now” urge. No one buying from your store has to wait days or a week for UPS or FedEx to show up with the goods. Plus, your price does not have to be just as low as online, thanks to the time savings (and perhaps even shipping cost savings.)

Offer deals: Instant savings on purchases made that day, by total or by item. Have a coupon dispenser in aisles where you suspect most showrooming occurs.

Offer deals in exchange for signing up for your digital marketing program: Offer a great deal (again using coupons in the aisle) if they sign on for either e-mail or mobile marketing.

Study aisle behavior: You have security cameras trained on all areas of your store. You can use that record to track in-aisle behavior to get anecdotal evidence for which products areas are showroomed most often. Those aisles become your priority for anti-showrooming initiatives! (Disclaimer: You are not tracking specific people using in-store cameras. Read this for a good pro-and-con summary of collecting marketing data using surveillance cameras. )

Promote your easy and no-questions-asked return policies: Nothing beats making a purchase easier than knowing you can reverse the decision easily, too. Try returning an online purchase to see what your advantage is!

Wailing, rending your garments and bemoaning the impact of technology on your business are not options, or at least are not where you should stop: Get cracking figuring out how to make your store the best place to complete a purchase, even when the person in the aisle has the whole internet at their fingertips.

Back before fruit received much marketing treatment, no one much cared that plums somehow morphed into prunes when dried. The same relabeling happens to grapes, which become raisins. Most dried fruits don’t have this issue. Apricots, when dried, stay “apricots,” for instance.

This wouldn’t be an issue if “prunes” had not accumulated a reputation for being the most effective dried fruit to take when you had a need to “regulate your digestive system.” All dried fruit shares the property of being helpful in regulating digestion, but apparently prunes are the king in this department. (Raisins don’t seem to have this reputational issue.)

“If you go back to the 1940s and ’50s some of the brands were advertising the medicinal properties of prunes,” Richard Peterson, executive director of the California Dried Plum Board, quoted in Failure Magzine a while back. The CDPB is an agricultural marketing association that works to expand demand for dried plums.

Even in the 1980′s, the benefits of lots of fiber (and prunes are loaded with fiber) sold lots of prunes. Times change, however, and prunes are not trendy. Which creates a marketing problem for prune sellers: Most people don’t have to regulate their digestion! And they are therefore leery of what eating prunes may do to their currently regular digestion.

Rebranding is Hard – And Takes Money

In order to sell more prunes to folks who don’t need a laxative, prune sellers came up with what looks like the best solution: Take a page from the apricot book and sell “Dried Plums.”

It seems to be working, as dried plum sales to younger people have improved since all this started five years ago. The issue remains complex, however:

• 

  Note the echo of “raisins” in “amazins”!

  Young people will eat dried plums, but not prunes.

• Older folks still seek their prunes, and want that name on the package.

Sunsweet solved this by still promoting “pitted prunes” on packaging, and jazzing up their dried plums in separate packages for the younger set.

Rebranding Takes a Long Time – Are You Going to Tough It Out?

The Dried Plum movement still has a ways to go, however. Take a look at this review of the plumAmazins product, found on SheSpeaks Reviews:

“Prunes are something I associate with my elders and I’ve never knowingly bought dried prunes before and frankly, never even considered them. Figured I’d pack them in my day pack for a quick snack on my commute as I could just trash them. Well, not only did I not trash them, but I ate the entire pack. Then, the next day, I did it again. … They did not seem to be disruptive to my constitution. These singlehandedly helped my move past my prune stereotypes.”

As you can see, the consumer bought dried plums, and in the review kept calling them “prunes,” even using the mixed up term “dried prunes.”! It is clear that he or she pushed past the labeling to develop an opinion of the fruit, but that only happens of the marketing can successfully induce trial. That must remain the driving force of the marketing for a while to come!

Do you eat prunes, or dried plums? Do you allow a brand reputation to drive your decisions, or do you push past the branding to consider the product?

 

I recently read a white paper that went into great detail about the “new psychology” of the 21^st Century consumer. I am not sharing the link, because unfortunately the only enlightenment I got was about yet another way to put lipstick on a pig. The report didn’t reveal any insights that a diligent small businessperson will already have gleaned from his or her own experiences. Certainly, we have improved our measurement tools with top-flight optics and computer power, so we measure better what we already “know”, but basic human impulses have not changed. Here are some of the insights that the report “uncovered”:

• Windows displays need to reflect current tastes for graphics, and be instantly understandable for the passersby. Check: Don’t be dowdy or old-fashioned! This has been true since (fill in whenever you were born here), and so is not new!
• The next insight: People, especially women, don’t like crowded aisles and having to brush up against people when browsing. Really?
• A third insight: Opinion-leaders and mavens are gaining in influence and must be courted. Internet-based resources do allow for more of these people and their preferences to be found, but I argue that this has always been true. Why, otherwise, have celebrity endorsements been around for over a century?
  

  Make 2012 a Year of Market Share Gain by Focusing Relentlessly on Providing a Great Shopping Experience

My conclusion: Consumers have not changed as much as people think. Read the rest of this entry »

The old politician Tip O’Neill famously opined that “all politics is local.” That is, the day-to-day issues of each voter drive his or her choice of candidate or political party.

Even in the age of internet shopping, “local” is still King with consumers, too. And here is the evidence: Big companies still try to interact with their customers and prospects locally to maximize the chance they will choose their brand. As noted in this article:

“Localization of messages, images, creative executions, offers, deals, and interactions is still critical to marketing effectiveness and customer relationship building across many business categories.”

Here are some highlights:

• 49% of marketers believe localized marketing is essential to business growth and profitability, particularly as it relates to demand generation and sell-through of products and services
• 30% of marketers have embraced local marketing automation platforms, resources and tools, compared to 62% who either don’t have them or only now evaluating these options
• 23% of marketing respondents allocate over 50% of their marketing and merchandising budgets to local programs; another 41% spend between 20 and 50% of the budgets on local marketing
• Cable and broadcast television, local magazines, and radio reportedly deliver the lowest return on spend, compared to top performers like local events, direct mail or FSIs, local partner or channel web sites, social networks and electronic messaging.

In other words, local small business people, the BIG Boys are horning into your turf. Are you fighting to retain your share of local consumer spending? How are you reminding the people in your target market that you are there, and have all the same stuff the Big Boys of Marketing do? Look at that last bullet point. It is a nice summary of all the places you can profitably position your own business against the big budgets of national brands. There is your level playing field!

• Monthly e-mails that have valuable offers for your regular customers?
• Prospecting in local coupon mailers (still effective) and online coupon marketing services (usually profitable if structured correctly)?
• Active on all local shopping and review sites (and tracking which ones actually bring leads)?
• Investigating local mobile marketing, and adding those mobile numbers (opted-in!!!) to your database? Especially those of you who cater to younger generations?
• How is your library of video clips coming along? Do you have a YouTube channel for your business yet?
• If you are getting uncomfortable reading this, you need to take action!
• Remember, you don’t have to do everything in the marketing toolbox. You just need to find those four or five tools that best work for you, and put the time and money in to make them work hard for you.

The year 2012 is upon us. It is going to be a year of reawakening consumers and reviving buying behavior (a trend started this year already). We are not getting back to the glory years of the mid-2000s, but better times are on the horizon, and you need to have plans laid in to get your fair share of all business done locally.

Even with all the lip service given over the last decade to focusing “like a laser” on fostering customer loyalty, consumer packaged goods marketing managers still struggle to generate good outcomes against that goal, for some very basic reasons.

CPG managers are told by the entire marketing industry to get serious about engagement and foster loyalty. The very day I sat down to write this I received a fresh example of this from Aberdeen Research:

“In order to truly offer a positive shopping experience, retailers must get insight into the mindshare of their customers and prospective customers. The shopping experience today goes far beyond simply walking into a store and selecting a product. Customer experience management begins with the use of customer intelligence and insights as a means for enhanced customer engagement. Engaging customers at all points in the shopping journey to better service, provide information, and ease of purchasing, is the key to customer-centricity.”

That said, here is some evidence that whatever CPG managers are trying, customer loyalty for CPG products is proving tough to hang on to.

Marketing “tenets” hold that keeping a customer is 6-10 times cheaper than finding a new one, but that might not be the case when it comes to CPGs. Boiling the challenge down to the essence: The company is not standing in the aisle with the customer at the moment of decision, when the packaging and pricing of their product is just one of a number of competitors on the shelf. Even with a coupon in hand designed to block out the competitive options, the consumer may check pricing, see specials and decide to try something else.

Plus, the CPG manager hardly ever learns who that customer is, and so cannot reach out to him or her on a personalized basis. At what point can the company ask for an opted-in e-mail address? They can promote their social media communities on their packaging, and in their mass marketing, but only a small percentage of the total customers they need will raise their electronic hands and connect.

As a result, it is still far easier for a CPG marketing manager to work on big demand-building projects that involve mass media, direct mail and other such tools than it is to forge connections with each individual buyer of their product. Social media and other community building are a growing part of the mix, but are not yet game-changing, move-the-profit-needle initiatives.

What to do? I wish I had a magic wand on this one, because the answer is “keep at it:”

• Create active online communities
• Explore e-commerce options that could lock-in customers and keep them out of the retail aisle
• Advertise all your community options on your packaging
• Make those communities about the customer in interesting and inspiring ways
• Keep building demand through mass media (targeting to a preferred profile, of course!)
• Get better at working with retailers and gaining access to all their scanned data to improve your profiling

Loyalty is a tougher nut to crack for product peddlers who are not present when consumers make up their minds, but consumers are willing to listen, and the consistent quality of product does make an impression once trial (or re-trial) is induced.

Two recent research reports confirm that we are habitual in our daily regimes. We like patterns and predictability more than change, which is why motivating “trial” of a new product or service is not like falling off a log. We must build those bridges of trust to get over the hurdles of mistrust.

Here is the first report:

According to the Pew Internet & American Life Project, video media sharing activities are becoming a real habit, especially (no surprise) with younger people, and (surprise!) more with Blacks and Hispanics than with Whites. Sharing electronically is embedded in our culture now, and will only rise in importance. This should not be a shock: This is just a 21st Century edition of our enjoyment of story-telling and socializing. New tools, old habits.

The key statistic: 71% of internet users (about 80% of the population at this point) interact with video sharing sites. And 28% reported doing so “yesterday!”

Video is no longer “the coming thing,” is it? How is your video marketing strategy shaping up? (Hint: I can help rough that strategy into shape!)

The second report:

According to the most recent Ad Age/Ipsos Observer American Consumer survey, 37% of newspaper readers do so out of habit. Mind you, 85% do so to catch up on “local news,” so the categories are not mutually exclusive. But, it does confirm that habits die hard!

If you are chasing an older demographic, those newspaper reading habits confirm that there is still life in the medium, especially for local businesses.

When my wife first came to the U.S. from Ukraine in the late ’90s, one of the first purchases she made was a curling iron at a local pharmacy. She remembers being stunned by the challenge of choosing among ten different brands for this basic consumer item. Frankly, she was not pleased that the store made her do all the work. Why, she wondered, didn’t the store do more to winnow down the selection on her behalf?

From my native American perspective, consumer choice is good, but I saw her point: The store could have cut the options to five, say, and still have presented a sufficient range to satisfy most customers.

Today, that winnowing process is measurably more apparent. After years of expanding store sizes and stuffing shelves with “choice,” retailers are starting to reaccept some researching and winnowing responsibility in the face of demands from older generations, who apparently don’t want to wrestle with huge stores and extensive selections anymore.

A recent post on a Boomer Blog I follow explored this trend towards smaller stores that offer fewer choices while still emphasizing quality at a fair price. Older consumers seem to be voting with their dollars in support of this, as it meets their needs for less physically demanding spaces that don’t require lots of walking.

Oh, my aching knees!

Why is this important to all marketers? Because Boomers are retiring, and they will start demanding (as usual) that we accommodate their growing infirmities! They, and their parents, are moving their business to concepts like Tesco’s Fresh and Easy: Smaller stores with less broad selection, but enough choice to satisfy shoppers who trust that the retailer’s buyers keep the customers’ needs in mind.

Much as a newspaper editor selects which news goes to his or her readers, so stores are renewing their ability to add value by screening the hoards of available products more finely, and leaving less work for the customer in the aisle.

Retail shops may start emulating the online marketing experience.

If this trend plays out fully, we may even return to the general store concept, where you walk in with your list and a counter clerk does all the walking around to fill your order. Of course, the “clerk” may be a kiosk rather than a person — and that kiosk might have a chair in front of it. At that point your bricks and mortar store experience will feel just like your online shopping experience, an ironically full turn back to the “future!”

Small businesses have had a hard time justifying the time investment needed to properly leverage social media communication channels because the evidence of ROI has been lacking.
Research is beginning to answer that, and here is fresh evidence to consider, courtesy of Knowledge Networks/The Center for Media Research (in a new study called “The Faces of Social Media”):

• 38 million U.S. adults ages 18-80 report that they discover new products and brands or refer to social media before making purchase decisions, up 14% from 33.3 million six months ago.
• 23.1 million say they discover new brands or products through social media, up 22% from 18.9 million in 2010
• 22.5 million who use social media to learn about unfamiliar brands or products, up 9% from 20.6 million last year.
• 17.8 million say social media has “strongly influenced” their purchase decisions, up 19% from 15 million in 2010
• 15.1 million say they make sure to refer to social media before making a purchase decision, up 29% from 11.7 million last year.

Part of this is driven by the increasing number of smart phones, which make mobile online searching a very handy tool. You cannot ignore this trend, therefore, because “searching on the go” is here to stay,

It is clear that given this growth in social media shopping behavior by consumers, being active in social media has great potential to supplement your ability to deliver postive impressions to big batches of people. Obviously, you have to do it correctly to reap this gain (the devil is truly in the content and placement details in social media!) But across most demographics it is becoming a requisite place to be.

I am going out on a limb here to state that the preponderance of this growth of social media relevance is still more relevant for B2C firms, with B2B firms still “safer” in focusing on non-social channels of communication for awareness and lead generation. I would caution, however, that at least passive monitoring of social media needs to be embedded into marketing tasks, because your B2B customers are still people, and their consumer habits do seep over into their business buying behaviors. It is ok (for now) if a smaller B2B firm is not highly prevalent on social media, but it is not OK to allow others to “dis” the firm there without a response from it.

Plus, you absolutely must use social media tools for your own research needs. Trolling Facebook and Twitter have great informative value for any business looking for ideas or keeping up with competitors.

I could go on, but you get the idea. Or do you?

Here is another article on this topic that references more postive research from Ogilvy & Mather at the bottom.

To the surprise of no one, aside from certain people with money, Blippy has closed its doors. Blippy was an online service that allowed people to share what they were buying with their network of friends.

At first blush, it seemed an obvious extension of Facebook, then Foursquare; a copy-cat service that focused on one particular corner of social sharing: Product and service reviews and activity. People share what they have bought and give their opinions all the time, so why not make it automatic?

Where was the research that actually supported the idea that people would move such commenting from their already established accounts on Facebook et al., or review sites like Angie’s List, Yelp, or Cnet?

This struck me as one idea too far down this road when it was announced. But VC guys ponied up about $12 million to find out anyway. Yikes. I meet great start-ups all the time that struggle to get funding, and Blippy gets $12 mill? Something is not right in VCland…

Saturday Night Live Producer Lorne Michaels has a well-earned reputation for staying relevant. He has kept his show on the air for close to 40 years by moving with his market. Staying “plugged in,” in effect. 

So it makes complete sense that he currently keeps it “up to date” by going back in time: Boomer celebrities feature heavily in his line-up, and it is clear that Boomers are the viewers he seeks, now that you don’t have to stay up past midnight to watch, with shows available 24/7 in various ways.

It’s a good media play, as many of these Boomer icons (Elton John, Steve Tyler, even SNL graduates like Dana Carvey) also have contemporary or retro appeal to younger generations who actually stay up to watch it live. The focus, though, is clearly on getting Boomers back to watching the show, because that is where the money is for advertisers.

Michaels isn’t alone, either. The entire marketing profession is waking up to the fact that their rote system of focusing attention and budgets on the 18-45 age bracket is out of date. It was built by Boomers to talk to themselves (something they still do, but that’s another story.) Now the Boomers have moved out of that bracket, and have taken their money with them.

It took a while, because the marketing business is filled with young people, but the payers of the bills (their clients) have finally pushed enough to break the young, hip, tech-savvy focus back to “who has the money?”

That would be Boomers. Still our largest generation. Still our richest generation, and still not saving any of that money for retirement. Which is good for people who try to sell them stuff, if not the Boomers themselves!

Find more at the Engage: Boomers blog on MediaPost.