Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on RetailWire.com, retail industry executives get plugged in to the latest news and issues with key insights from a “BrainTrust” of retail industry experts.
By: George Anderson
After focusing on cross-channel promotions and online info-sites for years, Procter & Gamble is working with a third-party operated website, theEssentials.com, to sell its brands directly to consumers, thereby bypassing traditional retail outlets.
TheEssentials.com, which only sells P&G products, is part of a larger movement by consumer packaged goods (CPG) brands to test direct sales to consumers. P&G rivals L'Oreal and Estee Lauder, for example, have operated websites that sell beauty brands to consumers.
While it supports the operation of theEssentials.com, P&G spokesperson Paul Fox told The Financial Times, "We treat them like any other retailer as they buy product directly from us."
P&G's direct sales test is still somewhat uncommon among CPG manufacturers but is something that companies in apparel, electronics and other categories have used with varying degrees of success. Some retail experts were underwhelmed by P&G’s move and skeptical of its success.
While an interesting experiment, one has to ask why consumers would feel the need to buy these products directly from Procter & Gamble, when most of the products are available at either Drugstore.com, Amazon.com, or other online retailers. While it is a great way for P&G to gain insight from their consumers, they will have a difficult time providing a compelling reason as to why people should shop on this site. Unless on the other hand, they start to offer products or variations of products that are not available from other online retailers,” said Joel Warady, principal of the Joel Warady Group. “Let's not forget that P&G has sold directly to consumers before through their Reflect.com site. And that ended up in a failure, although it was a completely different model. Let's see where P&G takes this, and how they can make this work.”
“It's highly unlikely that CPG vendors will make significant sales directly to consumers over an Internet channel. For the bulk of P&G's products, it is far more convenient for consumers to buy them from a retailer that offers a broad assortment of products that can be purchased on one shopping trip. theEssential.com appears to be focusing on P&G's more expensive and complex products, such as OralB toothbrushes, Braun coffee makers, and Crest Whitestrips, not toothpaste and detergents,” said University of Florida professor Barton Weitz. “For these more expensive products, consumers might purchase them from an Internet channel with theEssentials.com being one of many Internet retailers offering the products. theEssentials.com does provide parts for P&G consumers that might be hard to buy through traditional supermarket channels. By offering these parts, theEssentials.com can provide a service to P&G customers--a service not offered by its retailers.”
Thursday, October 30, 2008
Tuesday, October 28, 2008
Q&A With OfficeMax VP Bob Thacker On Cause Marketing, Holiday Promos
OfficeMax has proven itself to be one of the most innovative marketers in the retail space. It recently announced it will reprise its highly trafficked Elf Yourself campaign this holiday season, after driving 193 million website visitors last year to upload a photo so they could see what they looked like as an OfficeMax elf. Following up on the Elf Yourself campaign, now OfficeMax is adding a layer of cause marketing.
The “A Day Made Better” cause marketing initiative, in which OfficeMax and education advocate Adopt-a-Classroom surprised over 1,000 teachers with school supplies across the US and Mexico, is one of the activities that “gives a company a soul,” according to OfficeMax VP of Marketing Bob Thacker. Retail TouchPoints had the opportunity to talk with Thacker and learn the fundamentals of the recent “A Day Made Better” cause marketing initiative. The former VP of marketing for Target Corp. and head of creative for Sears, Thacker is one of the more experienced and respected voices in retail marketing. In addition to detailing the Day Made Better campaign, Thacker also touched on the company’s holiday plans, and how the elves are taking over.
Retail TouchPoints: Can you speak to how and why cause marketing is becoming a more important element of a retailers’ marketing mix?
Bob Thacker: I’ve been involved in cause marketing for over 20 years. I actually helped create cause marketing when I was at Target and I felt then, and I feel even stronger now, that it is what gives a company a soul. People today are looking for a deeper relationship with companies they do business with. Many people today feel that they don’t want to do business with what I call a “carpet bagger,” a company that just comes into the market and just takes money out and doesn’t put anything back, or make the experience richer or more rewarding. People really expect companies to have a soul, and cause marketing is one of the ways that companies can do that.
RTP: How, if at all, does the economy factor into cause marketing?
Thacker: For [OfficeMax], it really wasn’t a factor at all. Other people have asked, ‘well, gee, with what the economy’s doing your sales are probably not as great as you’d want them to be. Have you thought about canceling that?’ My response is: would I cancel Christmas? They are two different things. Cause marketing can and does lead to increased sales, but that really isn’t why it should be on your marketing initiative. It has to do with who you are as a company. Do you put your soul away because sales are down? I don’t think so.
RTP: You had mentioned how consumers are looking for a deeper relationship with the companies they shop. How does the customer psychology and perception of cause marketing factor into it, and how is “A Day Made Better” really nurturing those thoughts?
BT: The Cone Cause Evolution study 2008, released this month, revealed that education was the leading issue among Americans. 79% of consumers said if the price and quality were similar they would switch to a brand associated with a good cause.
RTP: The “A Day Made Better” initiative was launched in 2007. Was there a difference in last year’s initiative to that of 2008?
BT: Yes.To go back and recap why we did it in the first place, the whole idea of teacher’s funding their own classrooms is a crime. And teachers spend $4 billion a year of their own money to pay their way, and on average, a teacher makes about $30,000 a year. Our whole attempt is to make this a national cause. We can’t fix it ourselves but we can certainly bring attention to it, do what we can and make the public aware of what a crime is being committed. In 2007, we did 1,000 classrooms all over the country. In 2008, we increased it by 1/3 to 1,300 classrooms and we involved Mexico. We also brought celebrity and key opinion leader attention to it. We had some very prominent people supporting this initiative, and in some cases, going out and surprising teachers. It grew in a really great way to become something bigger, more dynamic, than we had expected it to be.
RTP: Was there a criteria for the teachers selected who received supplies on “A Day Made Better?”
BT: Yes. They were all selected by our non-profit partner, Adopt-a-Classroom. We were not involved in the individual school selection. The teachers all needed to be in school that had a high level of need. A majority of the children in the schools are on free lunch programs, come from lower income families and in schools that have generally a greater need than, say, a well-endowed private school or a school that has some legacy or a huge foundation behind it. These are poor schools, underpaid teachers with kids who need it the most.
RTP: Does OfficeMax plan to continue the “A Day Made Better” effort in the future?
BT: Oh yeah, it’s deeply engrained in our culture and it’s’ really fun to walk around and hear people talk about ‘okay, next year on a day…’ It’s come down to a day and it’s referred to like it’s our day. I’ve been involved in 50 or so events like this in my career, and this has been the most emotionally effective and has done the most to raise the whole self esteem of the company… Our primary focus is on helping teachers and schools.
RTP: Does the company plan to bring back the “Elf Yourself” promotion for the holidays?
BT: He’s back! He’s going to be bigger than ever before. We’re just getting ready to launch him after Halloween. He’s going to be available in four different varieties of music and different dances. It has taken on a life of its own. It’s set a bar that nobody I know has been able to match, including us. The thing that’s different this year is that people will actually be able to make things out of the elf. You can make Christmas cards and different novelty items ad ornaments, so the elf can be preserved permanently, whereas before he used to be limited to the viral space. He will actually be available in product form so that’s going to be fun! It has become the viral equivalent of Frosty or Rudolph, the classic icons of the past. The elf is today’s version of that. Over 30% of the people who created elves said it made them feel better about OfficeMax.
The “A Day Made Better” cause marketing initiative, in which OfficeMax and education advocate Adopt-a-Classroom surprised over 1,000 teachers with school supplies across the US and Mexico, is one of the activities that “gives a company a soul,” according to OfficeMax VP of Marketing Bob Thacker. Retail TouchPoints had the opportunity to talk with Thacker and learn the fundamentals of the recent “A Day Made Better” cause marketing initiative. The former VP of marketing for Target Corp. and head of creative for Sears, Thacker is one of the more experienced and respected voices in retail marketing. In addition to detailing the Day Made Better campaign, Thacker also touched on the company’s holiday plans, and how the elves are taking over.Retail TouchPoints: Can you speak to how and why cause marketing is becoming a more important element of a retailers’ marketing mix?
Bob Thacker: I’ve been involved in cause marketing for over 20 years. I actually helped create cause marketing when I was at Target and I felt then, and I feel even stronger now, that it is what gives a company a soul. People today are looking for a deeper relationship with companies they do business with. Many people today feel that they don’t want to do business with what I call a “carpet bagger,” a company that just comes into the market and just takes money out and doesn’t put anything back, or make the experience richer or more rewarding. People really expect companies to have a soul, and cause marketing is one of the ways that companies can do that.
RTP: How, if at all, does the economy factor into cause marketing?
Thacker: For [OfficeMax], it really wasn’t a factor at all. Other people have asked, ‘well, gee, with what the economy’s doing your sales are probably not as great as you’d want them to be. Have you thought about canceling that?’ My response is: would I cancel Christmas? They are two different things. Cause marketing can and does lead to increased sales, but that really isn’t why it should be on your marketing initiative. It has to do with who you are as a company. Do you put your soul away because sales are down? I don’t think so.
RTP: You had mentioned how consumers are looking for a deeper relationship with the companies they shop. How does the customer psychology and perception of cause marketing factor into it, and how is “A Day Made Better” really nurturing those thoughts?
BT: The Cone Cause Evolution study 2008, released this month, revealed that education was the leading issue among Americans. 79% of consumers said if the price and quality were similar they would switch to a brand associated with a good cause.
RTP: The “A Day Made Better” initiative was launched in 2007. Was there a difference in last year’s initiative to that of 2008?
BT: Yes.To go back and recap why we did it in the first place, the whole idea of teacher’s funding their own classrooms is a crime. And teachers spend $4 billion a year of their own money to pay their way, and on average, a teacher makes about $30,000 a year. Our whole attempt is to make this a national cause. We can’t fix it ourselves but we can certainly bring attention to it, do what we can and make the public aware of what a crime is being committed. In 2007, we did 1,000 classrooms all over the country. In 2008, we increased it by 1/3 to 1,300 classrooms and we involved Mexico. We also brought celebrity and key opinion leader attention to it. We had some very prominent people supporting this initiative, and in some cases, going out and surprising teachers. It grew in a really great way to become something bigger, more dynamic, than we had expected it to be.
RTP: Was there a criteria for the teachers selected who received supplies on “A Day Made Better?”BT: Yes. They were all selected by our non-profit partner, Adopt-a-Classroom. We were not involved in the individual school selection. The teachers all needed to be in school that had a high level of need. A majority of the children in the schools are on free lunch programs, come from lower income families and in schools that have generally a greater need than, say, a well-endowed private school or a school that has some legacy or a huge foundation behind it. These are poor schools, underpaid teachers with kids who need it the most.
RTP: Does OfficeMax plan to continue the “A Day Made Better” effort in the future?
BT: Oh yeah, it’s deeply engrained in our culture and it’s’ really fun to walk around and hear people talk about ‘okay, next year on a day…’ It’s come down to a day and it’s referred to like it’s our day. I’ve been involved in 50 or so events like this in my career, and this has been the most emotionally effective and has done the most to raise the whole self esteem of the company… Our primary focus is on helping teachers and schools.
RTP: Does the company plan to bring back the “Elf Yourself” promotion for the holidays?
BT: He’s back! He’s going to be bigger than ever before. We’re just getting ready to launch him after Halloween. He’s going to be available in four different varieties of music and different dances. It has taken on a life of its own. It’s set a bar that nobody I know has been able to match, including us. The thing that’s different this year is that people will actually be able to make things out of the elf. You can make Christmas cards and different novelty items ad ornaments, so the elf can be preserved permanently, whereas before he used to be limited to the viral space. He will actually be available in product form so that’s going to be fun! It has become the viral equivalent of Frosty or Rudolph, the classic icons of the past. The elf is today’s version of that. Over 30% of the people who created elves said it made them feel better about OfficeMax.
Thursday, October 2, 2008
Retailers Need to Realign Wall Street Reporting Practices with Cross-Channel Reality
Written by John Gaffney
With Wall Street analyst firms and the investors they supposedly service back on their heels it is an excellent time for retailers to fix something that has been broken for some time. After years of toiling under the irrelevant judgment of comp store sales, retailers can change the game to the rules of cross-channel engagement.
Several retail and technology vendors have pointed this out during the past few weeks of economic turmoil. Retail stocks have largely outperformed the plunging market, and will most likely come out stronger from this crucible of repositioned credit and unreasonable growth expectations. But instead of looking at Wall Street wants, which is the simplicity of short-term measurements of comp store sales, it’s time for retailers to refocus investors on the reality of the cross-channel world. Circuit City provides the best and most recent example of how not to do this. Its comp store sales were way down last quarter, and its prospects for opening new ones were dim. So they bailed. They told Wall Street analysts “we’re not reporting anything anymore” and they filled financial press releases with platitudes about serving the customer and focusing on its core business.
Circuit City can do better and all retailers can do better. Wall Street judgments are reality. But so is the cross-channel retailing environment. Comp store sales were relevant when comp store sales were the only measurement available of retail performance. Retailers have a richer data palette to work with. We see five areas that should become an essential part of all financial reporting and as a consequence provide a more accurate financial picture of the current as well as future state of any retailer.
Channel growth: Comp store sales should be part of a three-pronged reporting approach. Retailers should call out their quarterly growth online, in-store, and direct channels. Obviously this will be different depending on the business model. Amazon and Overstock would not report in-store sales. But there is no better measure of retail performance than the ability to keep pace with the consumer’s desire to work different channels for purchase, information, and returns. Retailers should be judged on how they grow in all relevant areas. Retail executives don’t manage toward an obsessive focus on comp store sales, they manage across channels. So why are they still judged so simplistically?
Conversion Rates: Online conversion rates hover around three percent. In-store conversion rates are too inconsistent to measure, but could be measured if retailers focused doing so. Conversion rates are a true measure of how attractive pricing, promotion, and service are working. Example: The 80 percent increase in online conversion rates measured recently at Urban Outfitters should say more about the strategy and practices of that operation than comp store sales. And when compared on a quarterly basis, analysts will know more about “what works” instead of the short term and potentially misleading metric of “what sold.”
Customer Satisfaction: Customer experience, especially in a cross-channel world, can be an excellent predictor for retailers. Circuit City, for example, is investing a lot of money in sales associate technology as well as new store formats. If they reported the results of these efforts in terms of customer experience by settling on a consistent metric such as NetPromoter, it would say more about its future value than its sales of expensive electronics in an economy as tight as this one.
Traffic: Not just foot traffic. In the cross-channel world an increase in web site traffic can predict increased product research and an increased intent to purchase. A decline in web site traffic means the online component of a retailer operation has lost momentum. Once again, all these indicators can and should be judged holistically.
Customer Engagement: Analysts should know open and click through rates of marketing campaigns. They should know metrics about call center activity. They should know loyalty program registrations and points redeemed. They should know email response rates. All these metrics show the willingness customers have to take a relationship beyond simple purchases. Customer engagement is tricky to measure as an aggregate behavior. But it is a potentially powerful indicator of long-term retail financial fitness.
The Wall Street focus on comp store sales will not change in a day. And analysts will continue to weight those results heavily. But at the very least retailers can begin to prepare more relevant reporting information, and begin to work on a metric and an attitude that needs to be dragged into the cross-channel world.
With Wall Street analyst firms and the investors they supposedly service back on their heels it is an excellent time for retailers to fix something that has been broken for some time. After years of toiling under the irrelevant judgment of comp store sales, retailers can change the game to the rules of cross-channel engagement.
Several retail and technology vendors have pointed this out during the past few weeks of economic turmoil. Retail stocks have largely outperformed the plunging market, and will most likely come out stronger from this crucible of repositioned credit and unreasonable growth expectations. But instead of looking at Wall Street wants, which is the simplicity of short-term measurements of comp store sales, it’s time for retailers to refocus investors on the reality of the cross-channel world. Circuit City provides the best and most recent example of how not to do this. Its comp store sales were way down last quarter, and its prospects for opening new ones were dim. So they bailed. They told Wall Street analysts “we’re not reporting anything anymore” and they filled financial press releases with platitudes about serving the customer and focusing on its core business.
Circuit City can do better and all retailers can do better. Wall Street judgments are reality. But so is the cross-channel retailing environment. Comp store sales were relevant when comp store sales were the only measurement available of retail performance. Retailers have a richer data palette to work with. We see five areas that should become an essential part of all financial reporting and as a consequence provide a more accurate financial picture of the current as well as future state of any retailer.
Channel growth: Comp store sales should be part of a three-pronged reporting approach. Retailers should call out their quarterly growth online, in-store, and direct channels. Obviously this will be different depending on the business model. Amazon and Overstock would not report in-store sales. But there is no better measure of retail performance than the ability to keep pace with the consumer’s desire to work different channels for purchase, information, and returns. Retailers should be judged on how they grow in all relevant areas. Retail executives don’t manage toward an obsessive focus on comp store sales, they manage across channels. So why are they still judged so simplistically?
Conversion Rates: Online conversion rates hover around three percent. In-store conversion rates are too inconsistent to measure, but could be measured if retailers focused doing so. Conversion rates are a true measure of how attractive pricing, promotion, and service are working. Example: The 80 percent increase in online conversion rates measured recently at Urban Outfitters should say more about the strategy and practices of that operation than comp store sales. And when compared on a quarterly basis, analysts will know more about “what works” instead of the short term and potentially misleading metric of “what sold.”
Customer Satisfaction: Customer experience, especially in a cross-channel world, can be an excellent predictor for retailers. Circuit City, for example, is investing a lot of money in sales associate technology as well as new store formats. If they reported the results of these efforts in terms of customer experience by settling on a consistent metric such as NetPromoter, it would say more about its future value than its sales of expensive electronics in an economy as tight as this one.
Traffic: Not just foot traffic. In the cross-channel world an increase in web site traffic can predict increased product research and an increased intent to purchase. A decline in web site traffic means the online component of a retailer operation has lost momentum. Once again, all these indicators can and should be judged holistically.
Customer Engagement: Analysts should know open and click through rates of marketing campaigns. They should know metrics about call center activity. They should know loyalty program registrations and points redeemed. They should know email response rates. All these metrics show the willingness customers have to take a relationship beyond simple purchases. Customer engagement is tricky to measure as an aggregate behavior. But it is a potentially powerful indicator of long-term retail financial fitness.
The Wall Street focus on comp store sales will not change in a day. And analysts will continue to weight those results heavily. But at the very least retailers can begin to prepare more relevant reporting information, and begin to work on a metric and an attitude that needs to be dragged into the cross-channel world.
Thursday, September 25, 2008
Experts Say Recent Wall Street Tumbles Could Further Rattle Consumer Psyche
The roller coaster ride that is the financial marketplace over the past month will not affect retail open-to-buy dollars or inventories for the holiday season. But experts say retailers should get used to a phrase that will become much more important than any government bailout. That phrase: “the psyche of the American consumer.”
“Retail stocks may have hit their bottom in July. The real fluctuations are in the psyche of the American consumer,” says Bob Carbonell, EVP and Chief Credit Officer of retail financial analyst firm Bernard Sands. “What is the American housewife going to do this Christmas? The holiday season is everything, much more so this year than any other year.”
Prognostications from most every corner say that psyche is rattled and cautious. Holiday spending will most certainly be well off last year’s pace. But the depth of that decrease, the products that will succeed in hitting sales goals, the retailers that will attract customers, and the channels that will prevail are still very much in play. One relief can be found in the sound fundamental structure of retail purchase budgets and the credit necessary to execute them. Experts point to three reasons for that stability:
1. Timing: It’s simply too late in the sales cycle to back out of inventory commitments. “There’s just not a whole lot of time left in terms of actionable steps retailers can take, if they wanted to,” says Aberdeen retail analyst Ben Ream.
2. Retail Financing is Solid: Carbonell points out that the banks that lend most of the money to key retailers have not been caught up in the mortgage-based securities that have crippled many firms. Bank of America Retail Finance, GE Captial, and LaSalle financial are among the retail lending leaders and have established themselves as liquid.
3. Business Model Simplicity: Retailing is retailing, say many experts. “You buy stuff, you sell stuff, you answer questions politely, you treat your customers well,” says Carbonell. “Retailing has remained true to some very basic tenets and has avoided some of the complex issues that have hurt other businesses.”
Outside of the core fundamentals, retailing has become more complex in how goods are sold and how information is accessed. Therefore the cross-channel framework may be more important in addressing the damaged psyche of the cross-channel customer. Ream believes consumers will go “the extra mile” in terms of product research, price comparisons, product reviews and store locations this year in order to ensure that the purchase decisions they do make will be the most informed. Ream urges retailers to heavy up on cross-channel preparation and measurements. Understanding conversion rates in all channels, units per transaction, and repeat purchases are even more important to understand in a tough economy.
While open-to-buy dollars are expected to remain solid, promotional dollars have already taken a hit. Best Buy has officially announced an advertising cutback for the balance of the year, and tough Q3 numbers may lead more retailers to follow suit.
In terms of measuring the consumer psyche, Carbonell is looking toward Halloween as an early barometer. On a positive note, Visa has predicted an 18% bounce for Halloween, even after the stock market slide. The average person will spend $47 on candy and decorations, this year, up from the $40 Americans reported they were planning to spend on Halloween last year.
"Depriving our children, and our neighbors' children, of Halloween trick or treating is not something Americans seem willing to bear," said Jason Alderman, Director of Financial Education at Visa Inc.
Retailers arehoping that will hold true for spending around year-end holidays as well.
“Retail stocks may have hit their bottom in July. The real fluctuations are in the psyche of the American consumer,” says Bob Carbonell, EVP and Chief Credit Officer of retail financial analyst firm Bernard Sands. “What is the American housewife going to do this Christmas? The holiday season is everything, much more so this year than any other year.”
Prognostications from most every corner say that psyche is rattled and cautious. Holiday spending will most certainly be well off last year’s pace. But the depth of that decrease, the products that will succeed in hitting sales goals, the retailers that will attract customers, and the channels that will prevail are still very much in play. One relief can be found in the sound fundamental structure of retail purchase budgets and the credit necessary to execute them. Experts point to three reasons for that stability:
1. Timing: It’s simply too late in the sales cycle to back out of inventory commitments. “There’s just not a whole lot of time left in terms of actionable steps retailers can take, if they wanted to,” says Aberdeen retail analyst Ben Ream.
2. Retail Financing is Solid: Carbonell points out that the banks that lend most of the money to key retailers have not been caught up in the mortgage-based securities that have crippled many firms. Bank of America Retail Finance, GE Captial, and LaSalle financial are among the retail lending leaders and have established themselves as liquid.
3. Business Model Simplicity: Retailing is retailing, say many experts. “You buy stuff, you sell stuff, you answer questions politely, you treat your customers well,” says Carbonell. “Retailing has remained true to some very basic tenets and has avoided some of the complex issues that have hurt other businesses.”
Outside of the core fundamentals, retailing has become more complex in how goods are sold and how information is accessed. Therefore the cross-channel framework may be more important in addressing the damaged psyche of the cross-channel customer. Ream believes consumers will go “the extra mile” in terms of product research, price comparisons, product reviews and store locations this year in order to ensure that the purchase decisions they do make will be the most informed. Ream urges retailers to heavy up on cross-channel preparation and measurements. Understanding conversion rates in all channels, units per transaction, and repeat purchases are even more important to understand in a tough economy.
While open-to-buy dollars are expected to remain solid, promotional dollars have already taken a hit. Best Buy has officially announced an advertising cutback for the balance of the year, and tough Q3 numbers may lead more retailers to follow suit.
In terms of measuring the consumer psyche, Carbonell is looking toward Halloween as an early barometer. On a positive note, Visa has predicted an 18% bounce for Halloween, even after the stock market slide. The average person will spend $47 on candy and decorations, this year, up from the $40 Americans reported they were planning to spend on Halloween last year.
"Depriving our children, and our neighbors' children, of Halloween trick or treating is not something Americans seem willing to bear," said Jason Alderman, Director of Financial Education at Visa Inc.
Retailers arehoping that will hold true for spending around year-end holidays as well.
Thursday, September 11, 2008
With Shopping Trips Down, Retailers See Redemption Rates Soar On Work Targeted Promos
Fueled by rising gas prices and a slow economy, more consumers are shopping near work or on their commute route, according to recent research. In the August 2008 Consumer Intentions and Action survey from BIGresearch, 57.2 percent of respondents indicated they will be driving less because of gas prices. In addition, 54.4 percent said they would be taking “fewer shopping trips.”
By targeting “commute route shoppers,” one grocery chain recorded its strongest promotion results to date, according to Stephanie Molnar, CEO of WorkPlace Media, the promotion provider. The grocery chain’s coupon redemption exceeded 20 percent in a typical four- to eight-week promotion period. “I would have estimated a low single digit response and was shocked,” notes Molnar.
WorkPlace Media, in business for more than 20 years, has traditionally targeted the restaurant/foodservice industry with its workplace promotion solutions, but has recently begun to focus on other types of retail, including grocery and convenience stores. Some of its most well-known clients include Sheetz, Kmart, Lenscrafters and McDonalds.
The results of WorkPlace Media’s promotions are impressive. In the past year, grocery redemption averaged 11.3 percent, other retail/non-grocery averaged 8.06 percent, and all programs (including restaurants and CPG) averaged 8.99 percent, Molnar reports.
To get their errands and chores done, many consumers are combining their daily drive to and from work with stops for shopping, more than ever. “Historically the working consumer spends 60 percent of his or her waking hours at work or commuting to and from,” notes Molnar. “They are efficient in their shopping patterns, but even more so with the advent of high fuel costs.”
Commuters are taking care of a number of different types of errands during their drive to and from work, according to BIGresearch, in its At-Work Consumer Media & Shopping Behavior survey from December 2007:
Workers more likely to redeem
Marketing to workplace consumers has proven fruitful. Consumers who receive shopping promotions in the workplace are three times more likely to respond to those offers compared to offers received at home, says Molnar.
It’s also a win-win for the sponsoring retailers and the employers, Molnar adds. For retailers, WorkPlace Media can provide real-time consumer feedback to find out intent to purchase, in-store experience, feedback about the promotion and more. Employers are happy because they are able to provide a free benefit to their employees, “and they enjoy distributing them, usually face-to-face,” says Molnar.
At press time, WorkPlace Media maintained a network of 920 businesses which voluntarily participate in the firm’s permission base, allowing WorkPlace to reach more than 64 million consumers. “When we survey our network we typically find out that 98 percent want to receive more workplace promotions in the future,” says Molnar.
To further flesh out the reasons why the workplace consumer is growing in importance as a target market, WorkPlace Media is conducting a webinar in conjunction with the Promotion Marketing Association, on September 16, 2008 at 2:00pm EST. Visit https://www.pmalink.org/shop/aw_091608.aspx for free registration.
By targeting “commute route shoppers,” one grocery chain recorded its strongest promotion results to date, according to Stephanie Molnar, CEO of WorkPlace Media, the promotion provider. The grocery chain’s coupon redemption exceeded 20 percent in a typical four- to eight-week promotion period. “I would have estimated a low single digit response and was shocked,” notes Molnar.
WorkPlace Media, in business for more than 20 years, has traditionally targeted the restaurant/foodservice industry with its workplace promotion solutions, but has recently begun to focus on other types of retail, including grocery and convenience stores. Some of its most well-known clients include Sheetz, Kmart, Lenscrafters and McDonalds.
The results of WorkPlace Media’s promotions are impressive. In the past year, grocery redemption averaged 11.3 percent, other retail/non-grocery averaged 8.06 percent, and all programs (including restaurants and CPG) averaged 8.99 percent, Molnar reports.
To get their errands and chores done, many consumers are combining their daily drive to and from work with stops for shopping, more than ever. “Historically the working consumer spends 60 percent of his or her waking hours at work or commuting to and from,” notes Molnar. “They are efficient in their shopping patterns, but even more so with the advent of high fuel costs.”
Commuters are taking care of a number of different types of errands during their drive to and from work, according to BIGresearch, in its At-Work Consumer Media & Shopping Behavior survey from December 2007:
• 74 percent dine out during or to and from workIn addition, during work consumers often skip lunch and take care of shopping: 61 percent for apparel, 53 percent for beauty care and cosmetics, 48 percent for shoes and 24 percent for jewelry and watches.
• 72 percent purchase groceries and other food and beverages
• 56 percent are stopping to purchase medicines, vitamins and supplements
• 49 percent complete shores such as picking up dry-cleaning and purchasing new eyewear
• 35 percent get their cars serviced
Workers more likely to redeem
Marketing to workplace consumers has proven fruitful. Consumers who receive shopping promotions in the workplace are three times more likely to respond to those offers compared to offers received at home, says Molnar.
It’s also a win-win for the sponsoring retailers and the employers, Molnar adds. For retailers, WorkPlace Media can provide real-time consumer feedback to find out intent to purchase, in-store experience, feedback about the promotion and more. Employers are happy because they are able to provide a free benefit to their employees, “and they enjoy distributing them, usually face-to-face,” says Molnar.
At press time, WorkPlace Media maintained a network of 920 businesses which voluntarily participate in the firm’s permission base, allowing WorkPlace to reach more than 64 million consumers. “When we survey our network we typically find out that 98 percent want to receive more workplace promotions in the future,” says Molnar.
To further flesh out the reasons why the workplace consumer is growing in importance as a target market, WorkPlace Media is conducting a webinar in conjunction with the Promotion Marketing Association, on September 16, 2008 at 2:00pm EST. Visit https://www.pmalink.org/shop/aw_091608.aspx for free registration.
Thursday, August 14, 2008
Survey Says Fewer Brand Decisions Made at the Shelf
By George Anderson, RetailWire
Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on RetailWire.com, retail industry executives get plugged in to the latest news and issues with key insights from a “BrainTrust” of retail industry experts.
As an AdAge.com article points out, it has become common for those in consumer products to state that 70% of all decisions on what brand to buy are made at the shelf. A new study from OgilvyAction contends that it's time to throw out the old number and go with a new and lower one.
According to the study, 39.4% number is the real number of consumers who wait until they're in a store before deciding what brand to buy. About 10% change their minds while in the store and 20% leave a product on the shelf that they intended to buy. Nearly 30% of consumers wind up making a purchase from a category that they didn't intend to buy from before walking into a store.
"That 70% figure we've all heard over the years always sounded a little high, and we all know it's a little high," said Peter Hoyt, executive director of the In-Store Marketing Institute. "Some think it's a lot high. I think what the Ogilvy study does effectively is help decompose [the data]. I think it's closer to what we can accept as statistics having some validity. ... But it's not that 70% of every shopping cart is made up of something people didn't [originally] intend to buy. That's just not real."
The original 70% study was conducted in 1995 by Meyers Research Center for the Point of Purchase Advertising Institute (POPAI). In a statement, POPAI continued to support the 1995 findings. "There have been various studies that have arrived at different in-store decision rates over the years, based on unique methodologies, trade channels, and the context and location of consumer interviews. POPAI welcomes any research that helps brands, retailers and agencies understand the strategic importance of marketing at retail."
The OgilvyAction study was based on interviews with 6,800 consumers in the U.S. (14,000 total across the globe) and covered shopping behavior in 13 categories including beverages, confectionary, hair care, and household cleaning products.
While the new research failed to answer just how much advertising outside the store environment influences purchases, it did determine important factors that drive impulse purchases. Sampling and product displays ranked one and two.
"The good news for marketers is that a product display and sampling can build brand equity," Jeff Froud, senior strategic planner for OgilvyAction, told AdAge.com. "No matter what rulebook you studied when you were studying marketing, price promotions don't build any brand equity and in some cases can be equity destroyers."
"More and more of our communication is moving to store," A.G. Lafley, chairman and chief executive at Procter & Gamble, said last month at the International Advertising Festival in Cannes. "And the reason it's moving to store is that more and more consumers are... making their purchase decisions in store. And in a period where you have a fair amount of food price inflation, we think more of that shopping list, whether it's just in [a shopper's] head or actually written down, is being decided in the store."
Pursue at the Point of Purchase
“Getting through to the consumer with your product message and features is easier and more effective at the point of purchase,” says Dan Nelson, CEO of Leadership Resources. “The amount of clutter in more traditional media and the options of what consumers watch, read and view on the internet and cable has made effective use of advertising dollars much more difficult.”
One analyst acknowledges the impact of sampling and product displays on sales. “Whether it's 70% or 40%, the key point here is the immense opportunity that retailers and their suppliers have to dramatically influence consumer buying behaviors,” says Kevin Graff, president of Graff Retail. “Now, imagine if you can the impact you could make on performance if you could engage the workforce in the stores to the point that they become brand ambassadors, both for the store itself and for key products.”
The power of reviews and targeted offers are the way to go, says one analyst. “Impulse shopping is alive and well. But the shelf is now digital,” according to Liz Crawford, president of Crawford Consulting. “Increasing dwell time at the shelf, whether 3D or virtual, is still the name of the game. The field has moved, but the game is still afoot.”
Friday, August 1, 2008
Will The Logo Mean A Kinder, Cooler Wal-Mart? Can The Retail Giant Live Up to the Logo Change
By Andrew, Bogucki, Principal & Creative
Retail monolith Wal-Mart has taken the plunge and changed its identity. While I’m referring specifically to the logo and all the design elements that support it, a new aesthetic identity can also indicate a shift in a company’s corporate identity in a more universal sense.
Changing a corporate or brand identity is a big undertaking. When done right, it sends a powerful signal to the outside world. It makes you sit up and take notice, ready to hear the rest of the story. But if there is no story… well, it can do more harm than good.
Changing a logo, to use a personal analogy, is a little like changing your “look”: new wardrobe, new hairstyle, new glasses, etc. It sends a signal that something about you is new or has changed. When the loveable but slightly scruffy and lazy mailroom guy suddenly shows up to work clean-shaven and wearing a bespoke suit, people will notice. The message he’s sending is: “I’m not lazy anymore! Give me the chance and I’ll prove it to you!” And if, in fact, he changes his lackadaisical ways and becomes more disciplined and pro-active, then management may truly see him in a new light, and potentially offer him new opportunities.
But if the new suit is simply a cover-up for the same old lazy habits, the message he is sending is hollow, and will quite likely bring even more scrutiny. The same principle is true for companies and brands.
Truth be told, perceptions of the highly profitable Wal-Mart have started to suffer from decades of aggressive business practices and dubious employment policies. Now the bulk of the revenue-generating customer base might not be paying much attention to those issues. But on top of that, the world’s richest company has always had a decidedly un-cool, low-end, bargain-basement image. There’s no question that a re-positioning on some level is in order. So what’s Wal-Mart’s new story? Well, based on cryptic postings like this (sourced from identityworks.com), it sounds like a touch-up:
“This update to the logo is simply a reflection of the refresh taking place inside our stores and our renewed sense of purpose to help people save money so they can live better. The updated logo won’t begin to appear on storefronts until the fall."
In contradiction, the logo seems to be signaling a bigger personality shift than that. The former bold, all-caps, industrial strength typography has been replaced with a lighter, friendlier, upper- and lower-case treatment. This makes the name feel more approachable, as though being used in a conversation instead of an institutional pronouncement. The deep, monopolistic blue has been traded for brighter, less ominous cyan. This adds a certain freshness and energy to the mark. The military-style star has turned into a bright yellow spark. While not the most own-able symbol one could choose, it certainly feels more contemporary, optimistic, and yes, lively. And the hyphenated WAL-MART has become the single word Walmart, making it feel like a proper name, instead of a coined reminder of the mega-retailer’s somewhat humble roots. All-in-all, the logo change sets expectations for a pretty different version of the Wal-Mart experience.
The store environments themselves need to play a big role in that experience. The obvious competitor in the mega-retail space is Target, which has always understood the value of good design in all aspects of the brand experience; and its favorability scores overtook Wal-Mart’s last year in CoreBrand’s Brand Power Analysis. Shopping at a Target (while not exactly like browsing specialty shops and boutiques in, say, Paris) is certainly a different experience than shopping at a Wal-Mart. Much of the merchandise at Target tends to be better designed; the graphics and packaging are more sophisticated; the overall environment feels downright warm and inviting compared to Wal-Mart’s stark, fluorescent, Five-and-Dime glare. Revamping the in-store experience for Wal-Mart should be a large part of signaling change. What those changes are remain to be seen.
So what’s the rest of the story? At a cursory glance, certain changes are noticeable. Wal-Mart is stocking and promoting many “green” products, demonstrating not only environmental-consciousness, but purportedly allowing families to save money in energy usage. Their new high-production-value commercials feature lifestyle and benefit messaging, a shift from the pure price-slashing message from before. And new licensing deals are being sought out, such as an exclusive clothing line from rapper Master P, to add a hip, contemporary edge to the image.
It’s certainly a start. Wal-Mart is a mighty big ship to turn around, with a fair amount of brand baggage to purge before perceptions can really begin to change. Sheer scale, longevity, aggressiveness and ubiquity have woven Wal-Mart quite firmly into a very specific part of American, and increasingly world, culture. The new logo signals a pretty big change. Can they back it up? We’ll just have to wait and see.
directs all creative activities at CoreBrand. Before joining CoreBrand,
Andrew was Design Director at Interbrand where he was integral in creating
corporate identity systems for clients such as MCI, 3M, and BankBoston.
Since joining CoreBrand, Andrew has developed a full range of design and
identity systems for numerous global brands including AT&T, American Century
Investments, BearingPoint, Catalent, MasterCard Worldwide, Tektronix, and
Thomson.
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