Captivating Connections.

online spending is going up. so too are consumer demands.

According to eMarketer, 70% of all Internet users ages 14 and up bought something online in 2011, as eCommerce accounted for 6.6% of retail sales. However, that number is destined to go up, as consumers increase the number of shopping-enabled devices and up their confidence in shopping via desktop, laptop, tablet, smartphone, etc.

So what do these shoppers want? According to AdWeek:

"As people increasingly shop across channels, they're expecting more from retailers. Most of all, shoppers want consistency in salespeople's knowledge of products; the ability to check availability of products in their local store before going to shop; and the ability for salespeople to check inventory at another store and have items delivered from there."

If predictions hold true, online shopping could represent 20% of total retail sales over the next decade. Check out AdWeek's infographic breakdown of the details here.

smart(er) shoppers leading to smart(er) shopping.

The NY Times has a great article looking at how consumer smarts and tactics are increasingly impacting the shopping experience, including pricing. 

As the article explains, "pricing has always been a tug of war between retailer and shopper, with the retailer having more muscle." However, the Internet and the slew of apps that have hit our smartphones and browsers (incuding daily deals, coupons, price comparisons, etc.), have given consumers new weapons in the war on prices, and are forcing retailers to be more flexible in their pricing.

In this day and age, there's really no such thing as a set price anymore. 

Think about the last time you bought a pair of pants: Did it cross your mind to do one of the following?

1. Look up (online, on an app, in a circular) if they were on sale somewhere?

2. See if someone else offered it cheaper than the retailer you were looking at to make your purchase?

3. Search online to see if you could get it cheaper? The retailer's website? Ebay?

Apps and the Internet are making all of this easier for you, and more difficult for retailers. The new shopper mentaliy really has become "there's never a reason to pay full price." We're way too savvy for that.

As consumers become experts, brands are trying plenty of tactics. For example, "J.C. Penny has introduced a streamlined system: daily prices, lower monthlong specials and clearance prices. Mango, the fashion retailer, has cut all prices by one-fifth. Stein Mart, the specialty chain, has reduced its coupons. Supervalu, the grocery chain, has sworn off heavy promotions and lowered some prices. Even Walmart has pledged to match competitors’ prices if it sets its own too high."

The real result is an interesting game of cat and mouse, with each side trying to outfox the other. However, at what point do these tactics from retailers just consumer the customer to take a pass on their offerings? Aren't these consumers tools supposed to empower by providing simplicity, not forcing the retailer to increasingly 'complixify' their strategy?

What do you think of these pricing strategies? Do they impact your shopping habits?

consumers are savvier than ever (alleviating me of my high school shame).

In high school, I remember buying this really cute tank top at Target. Full disclosure: said tank top was purchased because I had spilled a frozen caramel machiatto on myself while driving to my friends house, and, while this isn't unusual for me, I didn't have anything else to change into. I got a lot of compliments on that tank top, but, I distinctly remember awkwardly changing the subject when asked where it was from. While I thought it was a STEAL at $10 for something that garnered so much attention, I was embarrased it wasn't from Nordstroms or Express (or something more respectable in those days).

This, my friends, was before the days of "Tar-jaaaaaaay" and before it was cool to get something at a great price or on sae. Now, it's pretty much a badge of honor to say you snagged something at a thrift shop, Gilt Groupe, or that it was "totally 30% off of the 60% off and I had a coupon!"

This isn't just for apparel. According to the American Pantry Study, a Deloitte and Harrison Group, consumers are savvier than ever before, and that they "expect discounts, shop for deals, know when the deals are and like (some) private-label brands just fine."

Here's some stats:

- 80% of shoppers like to see how much money they can save via coupon use or shopper loyalty cards

- 69% are disappointed when they discover that a brand recently purchased is on sale at another store

- About 50% of the items consumers buy on stock-up trips are sale items, and about a third estimate that 70% of the items they bought on those trips were deals

- 62% said that have a good idea when products they want to buy will be on sale

- 90% said they are becoming more precise in what they buy

- 80% said they have become more efficient at getting in and out of the store

- 87% of respondents cited several store brands that they think are just as good as national brands when it comes to saving money without giving up quality

- 90% said they have already figured out which store brands and private labels work for their families

So what's the bottom line for CPG brands (and brands in other industries as well)? According to Pat Conroy, vice chairman, Deloitte LLP and consumer products sector leader, “shoppers today expect to get a deal on the products they purchase. With this mindset it is critical that consumer products companies take measures to enhance brand loyalty by connecting early and often with key audiences in environments outside of the store.”

mobile's ambush on the in-store experience.

We know mobile is having a major impact on consumers and their shopping experiences. People are using phones to scout out locations of local retailers, checking in to get deals, and integrating the phone into the shopping experience. 

Now, online brands and retailers are leveraging mobile to maximize the purchase potential of every consumer who walks into a competitor's store. As the New York Times examples, they are "offering an arsenal of mobile-only deals intended to pick off shoppers as they wait in line," with the idea being that you can target a shopper who's sick of waiting in line with a better deal online, thus stealing the purchase from your competitor.

Gilt Groupe is a great example: "Gilt Groupe...which operates several Web sites, usually offers sales at noon. But on Friday, it will promote mobile exclusives at 6 a.m. — precisely when shoppers are expected to be crammed into checkout lines at some of its high-end competitors."

Brillz.

the path to in-store purchase.

When it comes to purchasing product in-store, the path to purchase is increasingly starting long before consumers set out to the store.

"Determined to find the best deals, more shoppers are researching their grocery lists online before going to the store. For marketers, that means big changes in how and when they tempt consumers to buy.

In-store marketing—the practice of trying to influence consumers' buying decisions as they shop—traditionally consisted of flashy product displays, special promotions at the end of the aisle and attention-grabbing packaging on the shelf.

'No more,' says Dina Howell, chief executive of Saatchi & Saatchi X, an in-store marketing unit of Publicis Groupe SA. 'This isn't just about cardboard displays anymore—you need to accommodate the way shoppers behave now, and that means online and in stores.'

It's well known that consumers research expensive products like electronics online, but coming out of the recession, consumers are more scrupulous about researching their everyday products such as diapers and detergent, too. More than a fifth of them also research food and beverages, nearly a third research pet products and 39% research baby products, even though they ultimately tend to buy those products in stores, according to WSL Strategic Retail, a consulting firm."

 

the role packaging plays.

James Black makes an interesting argument for packaging and its role in the marketing process, claiming that there are "two fundamental truths about packaging are routinely overlooked by marketers. First, packaging is the only marketing vehicle that 100% of the consumers who buy your product see. Not every consumer sees the brand's advertising or is exposed to the exciting social media that your brand is doing. But all of the consumers who buy your brand do interact with your humble package.

 

Second, and equally important, the package is really the only vehicle that you have 100% control over in-store. While your product can end up in the wrong location or shelved in the wrong direction, the package remains a constant, and once it has a consumer's attention, it starts conveying your message. Displays may not make it out to the floor, or may not be assembled correctly, or can be overlooked by the shopper; indeed, shelf vehicles may be missed altogether. Thus, it is vital to get the communications right on the package. The first step is to decide what message you want packaging to convey to consumers."

So, what's he getting at?

"If we explore further and ask "who is the consumer?" and "how do we intend to close the sale?" we reveal a variety of roles for the package.

Let's take a look at just three. A package can attract new users rather than just retain current users, often a truly artful balancing act. A package can also be updated to communicate a new positioning for the brand. And third, packaging can close a sale with the consumer in store."

Great read.

 

the ongoing fight between ecommerce & physical retail.

Despite how this article positions it, it would be nice for companies to realize that bricks & mortar stores & online shopping CAN live in harmony...

"According to StrategyOne's Annual Shopping Index, 65% of Americans surveyed said they were in no hurry to buy gifts and are still waiting for better deals, sales and promotions before they do a significant amount of shopping. Sixty percent of consumers said they haven't seen nearly enough deals so far this season.

'People are going to the stores and returning home without the products they intended to buy,' Bradley Honan, senior vice president at StrategyOne, tells Marketing Daily. 'What we can say is that people's perceptions are [that] the deals aren't there.'

Furthermore, 55% said they had begun holiday shopping, but held off buying certain gifts because the prices weren't low enough yet. (Conversely, 54% said they saw several items representing a good value as they shopped.)"

So what about those deals?

"When it comes to finding deals, 52% of Americans said they are finding the best deals online, while 48% said they're finding the best deals in brick-and-mortar stores."

consumers not as hot as you think on healthy eating.

We all know we should probably eat a bit healthier, but why isn't the healthy eating trend catching on across America like you'd think it would?

"A new report by Catalina Marketing identifies factors that draw grocery shoppers to healthy foods -- and factors that deter many from buying more of those goods.

It's not as though consumers can't find health-friendly goods when they go to the supermarket. In a survey conducted for the report (with support from the Food Marketing Institute), 72 percent of respondents agreed that the store they go to 'stocks a wide variety of healthful foods and beverages.' They're less impressed, though, with the store's utility as a source of information and guidance on healthy eating -- particularly among shoppers who have kids in the household. While 50 percent of all respondents said their supermarket 'helps me make healthy food choices,' just 35 percent of parents said the store 'helps me make healthy food choices for children.'

Among all respondents, well under half (38 percent) said their store 'provides information on foods and beverages that help manage specific health concerns.' And that tendency isn't confined to consumers who may not be disposed to notice such information even if it's there. Even among those who claim to eat healthy meals 'most days,' just 44 percent said their supermarket provides information of that sort."

Check out the article to see how marketers can help consumers help themselves. And, do me a favor, eat your veggies today. :)

the cultural (and healing) powers of food infiltrate affluents.

Food isn't just for foodies this season as fashionistas get in on the food festivities (try saying that 5 times fast!)...

"Barneys New York will flaunt food as fashion this holiday in its New York windows.

In a partnership with the Food Network, Cooking Channel and Illycaffe, Barneys says the windows will be themed 'Have a Foodie Holiday,' with an unveiling scheduled for Nov. 16, which it will promote with national print and online advertising.

Tableaus will celebrate the foodie pantheon, including a Bad Boys window (everyone from Mario Batali and Bobby Flay to Jean-Georges Vongerichten), A Revolutionary Stew, which will include trailblazers like Julia Child and Jamie Oliver, and the Gals, with such chic luminaries as Lidia Bastianich, Sylvia Weinstock, Rachael Ray and Paula Deen.

The trendwatchers at Iconoculture say it's just one more example of how 'the cultural power of food is on the rise,' with a special appeal for Gen X shoppers. 'Chefs have become tastemakers in so many ways, from gentrifying urban neighborhoods with their restaurants to inspiring the fashion world with their bravura.'"

I wouldn't have necessarily thought of Food NEtwork watchers as a Barneys consumers, but, hey, love me some Co-op, and love me some Thanksgiving Food Network specials!

 

if i've told you once, i've told you 100 times...

...it's not all about price when it comes to winning over consumers.

Take grocery, for instance:

"A new report from Nielsen shows that retailers need to do more to win fans than just compete on price.

'We're seeing a continuation of people pulling back from making shopping trips,' Todd Hale, Nielsen's SVP/Consumer & Shopper Insights tells Marketing Daily.

But while consumers are still very focused on price -- planning their trips by making lists, and clipping coupons -- stores that focus only on price are making a mistake. 'If all you do is focus on price and value, you're not going to win. To make you chain a place people want to shop, you need other points of differentiation.'

Nielsen reports that the downward trend of consumers shopping less hit a new low in February, with a 4% year-over-year decline in monthly trips to all types of food stores, including supercenters, club stores, grocery stores, dollar stores, and drug and mass merchandisers.

Plus, consumers consistently shopped fewer retailers each period in 2009 than they did in 2008. 'Our attitudinal research shows that in addition to shopping at fewer stores, planned shopping is the norm,' he says. 'They are paying attention to store circulars, doing comparative store checks, and making lists.'

While grocery store trips are down in the last four months, it continues to be the most popular channel, with shoppers heading to the grocer two-plus times more often than other store types."