social media

Millennials: The Next ‘Pig in the Python’

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FOR GRAYING BABY BOOMERS like me, the awesome power of demographics has in many ways defined our lives. There are a lot of us. We clogged our kindergartens, our universities, our workplaces, our media, our politics and our communities with sheer numerical might; and the retail marketing universe seemed to revolve around our needs and our sense of entitlement.

In his 1980 book, Great Expectations, author Landon Y. Jones called this phenomenon “a pig in a python” – a rather visceral visualization of how the boomers’ demographic bulge has traveled through America’s culture, distorting as it goes.

Along the way we also had a lot of kids. So many, in fact that we engendered an echo boom that is numerically larger than our own. In case you haven’t noticed, those 75 million “millennials,” as the demographers like to call them, now largely dominate cultural, political and marketing discourse. Not to mention our consumer economy – the 18-34 cohort wields $2 trillion in purchasing power.

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Where’s the ROI for Social Media?

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AN INSTANT POLL that recently appeared on the home page of CPGmatters.com sheds some light on an important part of social media evaluation; namely, Return On Investment. Every CPG company of consequence has a social media strategy nowadays.

So do marketers think social media is a success?

ShopperTech.org
This article originally appeared on ShopperTech.org

Not really, say nearly nine of ten executives who took part in the poll. Only 12% say that social media is a success in CPG. Three of four respondents say concern over ROI is holding back success:

  • There is not enough ROI so far to be a success (19%)
  • It is very difficult to measure ROI at this time (56%).

Meanwhile, 12% say it’s too early to determine the success of social media in CPG.

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The End of Loyalty

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Tom Fishburne cartoonIF IT EVER WAS, it’s fading fast. I’m talking about shopper loyalty and the card-based frequent shopper programs that try to pass as loyalty builders.

I’ve long been a skeptic about the premise of customer loyalty. Card based programs are more about behavioral modification, segmentation and targeting. In many instances — airlines come to mind — the net result is the cultivation of dis-loyalty and skepticism, as a consequence of added complexity, suffocating rules, suspect prices and incentives that many users can never achieve.

Now comes news that the Kroger supermarket chain has begun converting its frequent shopper card holders to a smartphone app. This is news with big numbers behind it, as 96% of Kroger shoppers presently possess a card. Its personalized marketing subsidiary, dunnhumby, is surely driving this action.

This morning, the good folks at RetailWire.com asked its distinguished BrainTrust panelists: “Will Kroger’s App Replace its Loyalty Card?”  Here’s what I had to say about it:

Welcome to the post-loyalty era.

Card programs are not quite obsolete, but they are about to be absorbed by mobile apps. While a front-runner such as Kroger/dunnhumby may be able to convert many shoppers to its proprietary app for a while, the lasting future will be defined by electronic wallet solutions that aggregate frequent shopper plans, coupons and payments on the shopper’s terms. NFC communication with the POS will likely be a key enabling technology.

An observation: The pure value of of frequent shopper data is approaching its zenith. It now diminishes slightly in relative significance as the volume of social media interaction grows. This is the mind-bending next stage in behavioral-based marketing: Things people do, say and experience outside the store may soon eclipse what happens within the four walls.

For retailers that have steadfastly bucked the loyalty-card trend (like Walmart), this may be a moment of affirmation. Or maybe they just got lucky.

© Copyright 2013 James Tenser

The Incredible Dissolving Store

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Shopper CentricI WAS ASKED RECENTLY to address a group of consumer products managers about the possible future of Category Management.

The request came at a time when I had been devoting serious thinking to several topics that at first seemed only tenuously related. Computer-generated ordering is one. Optimization of markdowns is another. The impact of social, mobile and local media is a third. Then there was this trendy concept — Big Data — that keeps getting lots of mentions, but seems to defy clear understanding.

So what was I to make of Category Management in a world where these disparate forces swirl? More importantly, what practical insights could I deliver to this audience of the best and brightest that CPG companies had on their brand and account teams? I probably couldn’t tell them much they didn’t already know. Maybe I could try to make their heads explode instead.

Thought Experiment
I challenged this audience with the following thought experiment: Try to visualize what life could be like for Category Management professionals in a world with vastly more information and a good deal less control.

The diagram accompanying this post identifies ten factors or sources of input that a Category Manager of the future might incorporate into planning decisions. Many are already familiar — optimization of assortment, price, promotion and markdowns are well-established techniques built into software suites like those from IBM DemandTec. Other vendors offer macro space planning solutions, automated replenishment, capacity planning, In-Store Implementation and competitive analytics. These factors all interact in a dizzying matrix. But wait! There’s more!

Now fold in the massive influence of social/mobile/local media and online shopping and search behaviors, which are manifest as Big Data. We are witness to the vanishing boundaries of the in-store environment, due to the advent of personal digital technology, changing consumer habits, omni-channel business models and the immense flows of unstructured and structured data that these are creating for Shopper Marketers. I call this The Incredible Dissolving Store.

Big Data postulates that we will soon be routinely mining these external data flows for relevant behavioral insights and applying those insights on a continuous basis to enable shopper success and sustain meaningful competitive advantage.

Mix Mastery
It’s kind of like the marketing mix management problem. Heck, in many ways it’s a core part of the marketing mix problem. Shopper success — and therefore, the success of our category and promotional plans — are influenced by all these factors. Simultaneously. Continuously.

The increasing intricacy of the merchandising decision process reflects the proliferation of intersecting, measurable and optimize-able factors within the store. All these new data-based influences mean the locus of power is rapidly leaving the store and distributing across your customers’ mobile devices. The shopper is always in the center — no matter where you go, there they are.

It becomes increasingly apparent that Category Management in the Incredible Dissolving Store will not be about solving the equation — it will be about tuning the system. New analytics tools make the keys to relevance more accessible and more automated than ever. The life cycle of your decisions, shorter than ever. The power resides in the network and in the hands of individual shoppers.

Category Management, like it or not, is rapidly shifting from an orderly, controlled, recursive, planning process with boundaries and well-defined metrics into a deliberately dis-orderly, multidimensional, broad, shape-shifting and organic process that incorporates planning, detection, response and continuous strategic reconsideration.

In the Incredible Dissolving Store, we need to get used to the kind of ongoing discomfort this implies and think very carefully about the metrics we use to define success. If we listen actively and shed our bias, the shoppers will tell us what those must be.

© Copyright 2012 James Tenser