advertising

NRF Bulletin: Personalization Done Right

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I’VE BEEN ON RECORD many times as a hater of shopper loyalty, but an advocate of intelligent personalization.

I admit my position can be construed as mincing words, but I remain stubbornly committed to the distinction. When marketers and retailers try to ascribe loyalty to their card-carrying customers they are usually delusional. When they demonstrate their commitment to those customers through good acts – by providing relevant values and experiences – they embark on a golden path.

Supermarket chains so regularly miss this distinction with their frequent shopper card programs that it is a small revelation to encounter one who seems to have it right. In a presentation at the National Retail Federation Convention and Expo this week in New York, Loblaw Companies, Ltd., the leading grocery operator in Canada, shared some insights about its PC Plus shopper program, launched last May, that suggest it belongs in that exclusive tier.

“From our best customers we capture 55-60% of their share of wallet. That leaves so much opportunity just with them,” said Peter Lewis, Sr. Dir., Customer Analytics & Loyalty at Loblaw (pictured at left in the photo above, with Graeme McVie, VP and GM at LoyaltyOne.)

That’s an insightful way of looking at the return from a frequent shopper program that truly distinguishes highest-value relationships and cultivates them accordingly. Best shoppers deserve our best efforts because they are our best prospects too.

Loblaw has embraced this approach with PC Plus, its digitally-enabled frequent shopper program, said Lewis. On a year-over-year basis, enrolled customers who used the targeted offers changed their behaviors in desirable ways:

  • They increased their number of visits by 12%
  • Their average basket size increased by 5%
  • The number of categories they purchase increased by 7%

Lewis also shared some statistics from the first 6 weeks of the program that indicated rapid acceptance:

  • 40% of sales were made using the card
  • More than 6,000 members were signed per store
  • 50% email open rate
  • 35% click-through rate on those emails

PC Plus uses analytics to deliver relevant, highly personalized offers. With thousands of offers available across the store, the mix is tailored down to the individual level, based on each shopper’s history.

“How big is the prize from personalization?” said Graeme McVie of LoyaltyOne, the company which helps Loblaw implement and operate PC Plus. “Even with best customers, opportunities exist to grow share of spend.” He shared an analysis of the 50 store categories across the top 20% of customers, which indicated a 50-70% share of spending, a finding which underscores the present value of best shoppers, but also their upside potential.

PC Plus is increasingly focused on the smartphone app as the “control center” for the shopper, Lewis said. It allows them to manage shopping lists from their phones, informs them of available offers, and allows them to accept offers in real time, even while waiting in the checkout lane moments before a transaction.

McVie added that the design of PC Plus is oriented toward “democratizing shopper insights.” Its strategy is two-fold: understand the needs of individual customers and consistently execute actions to satisfy them.

I’ve stated previously in this blog that we are entering a “post-loyalty” era, but intelligent personalization is far from dead. In fact it may just be hitting its stride at Loblaw.

© Copyright 2014 James Tenser

Authenticity in Content Marketing: If You Can Fake That…

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Groucho-1933-Duck-Soup-300

RIGHT NOW CONTENT MARKETING is the name of the game. That’s Content with a capital C, which is presently a thriving business in the ad agency domain. The idea is to influence the trends that flow through social and mobile media by inserting Content on behalf of brands.

There are many ways to accomplish this — ranging from hiring ringers to post favorable reviews and spam blog comments, to sharing genuinely valuable consumer information like product usage tips or recipes. It is also desirable to monitor Content posted by others, then respond as needed to amplify, rebut, or influence perceptions.

The motivation is, I think, largely fear-based. The social-mobile frenzy generates tons of uncontrolled consumer sharing, both pro and con, accurate and inaccurate. No doubt there are also dirty tricks being played every day by competitors bent on undermining their rivals. Brands lose sleep over losing control of their messages and so they hire hip young firms to help them create and spread content of their own.

The trick to making Content work is to put enough of it in front of the folks the brand wants to influence, especially the ones capable of influencing others — like bloggers and social media divas. The agencies are supposed to ensure that the Content is both artful and discoverable by the target audience. Hipness and coolness are good traits too.

So the goal is to create the right Content and embed it within the right Context, in order to better drive Commerce. A key attribute to making all of this work is authenticity — the perception that the Content is believable, relevant, and true (probably in that order). The new Content Marketing agencies are all over this, of course.

Today I shared a bit of content of my own on RetailWire.com as part of a discussion, Which Came First? The Content Or The Egg? It make me think about the quip about sincerity most often attributed to Groucho Marx, who is pictured here in the classic film, “Duck Soup.” (It may actually have been first uttered by French dramatist Jean Giradoux, but Groucho is funnier.)

Here’s my take:

It seems “content” is a wheel that keeps on rolling. Remember the “content is king” slogan that was popular at the peak of the dot-com frenzy? Its relevance then was the hunger for product data and other information needed to populate the new web sites. If you build it, you have to fill it with something, right?

Content was soon displaced by “commerce” as folks got the shopping cart and delivery mechanisms worked out and consumers got used to the idea of shopping remotely. After a period of more or less centralized control, the social-mobile reality has caused user-created content to explode, but in an entirely uncontrolled manner.

It is into this chaotic environment that the new content marketers are venturing. They hope their organized campaigns will somehow float above the SoMoLoMe din, resulting in a degree of influence over brand perceptions. A whole industry of B2C content marketing agencies is emerging to service this trend.

The risk is that these messages drown in a vast content sea in which the relevant mixes with the contrived. I don’t believe brands will win in this environment simply by opening the floodgates or turning up the volume.

Only quality and authenticity can win in such a content-flooded environment. To paraphrase the sage, Groucho: If you can fake that, you’ve got it made.

© Copyright 2013 James Tenser

Call It Mobile Yellow

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Scan these tags!

I SPIED THE WHOLE grocery universe in a single bunch of fruit. This transcendental experience occurred just last week in West Des Moines, IA. (Quite rightly.)

It all happened in a bright, spacious HyVee supermarket in an upscale, verdant neighborhood that a decade ago was pretty much a cornfield. I entered the store thinking, “They built this, so I have come.”

But my Field of Dreams reverie dissolved when I stepped up to the produce department. My first view was an abundant display of bananas – the largest selling produce item in most supermarkets.

I pulled out my smartphone and snapped this picture, with the classic lyric by Donovan resonating in my brain like a prophetic soundtrack:

Electrical banana is gonna be a sudden craze
Electrical banana is bound to be the very next phase

You see, what really blew my mind were the two little stickers on this hand of bananas. On the left, a stacked UPC bar code and on the right a QR (quick response) 2D code. Each of these artifacts tells a little story about the impact of digital technology on our business. (Quite rightly)

The UPC bar code is of format known as RSS_14 designed to convey more information than old-style 9-digit codes. When I scan it with a gadget on my smart phone it correctly identifies the product as Dole bananas. Presumably the POS scanners in this HyVee supermarket are just as smart. The advantage: it saves the checker a few keystrokes and accurately enters the PLU (price look up) code for this variety of produce which is sold by weight.

The QR code on the right is used to direct shoppers to a web site called yonanas.com . When I scanned it with the same smart phone app, it led me to a page pitching a simple kitchen appliance that lets consumers make a soft-serve dessert from frozen ripe bananas and other fruit.

The Dole brand is featured prominently on the target Web page. Presumably there’s a deal behind it all. The Yonana appliance is marketed by Healthy Foods LLC, itself a division of Winston Products LLC in Cleveland, Ohio.

Peering at my smartphone screen under the fluorescent lights in that immaculate HyVee store in one of the greenest places in America, I found myself thinking, “It really has come to this: agricultural and digital have converged in America’s heartland.”

Then the digital banana concept set off a minor cascade of linguistic play: Bananas come in hands… Digit is Latin for finger… Smart phones are made with gorilla glass… (Quite rightly)

So in tribute to Donovan, the iconic Sunshine Superman inducted this year into the Rock and Roll Hall of Fame, I’d like to offer this (somewhat less lilting) variation on his theme:

Digital banana is gonna be a sudden craze
Digital banana is bound to be the very next phase
I call it mobile yellow (Quite rightly)

© Copyright 2012 James Tenser

A Web of Truths

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WATCH OUT, Shopper Marketers! You may find yourselves entangled in a web of truths of your own making.

It all began innocently enough; in 2005 when brand marketing behemoth Procter & Gamble advanced a provocative set of ideas around what it called the first and second moments of truth. Thanks to some savvy and persistent promotion, the terminology caught on fast:

  • FMOT, the first moment, refers to the brief period when a shopper selects a desired product in the store.
  • SMOT, the second moment, refers to the at-home consumption experience associated with that product.

Within the then-nascent Shopper Marketing community, this framework was a minor revelation. For brand marketers, FMOT gave credence to the argument that real marketing persuasion needed to be extended from measured media into the shopping environment. The store, it was discovered, shelters a separate marketing reality, where pre-purchase leanings are transformed into final choices.

Shopper Marketing defined a path to purchase that commences with media-induced product awareness and proceeds to interest, formation of intent, and ends with product selection at the shelf, FMOT. Once home, SMOT, or the actual product experience, takes place influencing subsequent decisions.

FMOT/SMOT was a pretty handy framework at first. But the concurrent rise of digital out of home and mobile media conspired to make things a lot more complicated, fast. The path to purchase, it turns out, is littered with hundreds of moments – text messages, in-store video ads, Web search, service encounters, Facebook apps, twitter feeds, QR codes and downloadable coupons, to name a few.

Stuck in the Moments

A few weeks ago the gleefully disruptive folks at Google seized the opportunity to coin a new Moment of Truth and promote it hard. They call it Zero Moment of Truth or ZMOT. Its premise is that interactions with search, Web, social and mobile price and product research media create a third type of online decision-making moment. The concept is a bit self-serving coming from the world’s largest seller of online advertising, but it has attracted much commentary and attention.

Almost immediately, new Moments starting appearing like so many pop-up windows on an e-commerce Web site.

In his post, “What is missing from moments of truth marketing”, blogger Joel Rubinson argues for the existence of “minus one” moments of truth that include such influences as word of mouth, in-store product visibility, and various types of advertising. Most interestingly, he proposes that these -1MOTs may occur in any sequence relative to FMOT and SMOT.

Joel’s point about the non-linear nature of the Moments of Truth is worthy of frequent repetition. Product experience is certainly a web of moments, not a fixed linear sequence. Call it WOT (Web of Truths)?

On the very same day and from an independent thought process, blogger David Berkowitz proposed adding “The Infinite Moment of Truth” to the model, which reflects his excellent observation that consumers may well describe their product and service experiences to others, relaying and amplifying the message beyond the scope and control of the marketer.

Bon MOTs

I applaud David for extending this Shopper Marketing discussion from the path-to-purchase toward the path-to-loyalty. A good thing, really, since the linkages are powerful and real. It made me think about Fred Reicheld’s 2006 book, The Ultimate Question, which proposed that genuine loyalty was best judged by an individual’s likelihood to recommend a product or service to others. Social media can super-charge this potential.

Both bloggers are smart, experienced people I know for some years and their ideas are intelligent and worthy of respect. But I must confess to an impish reaction that led me to ponder: Just how many bon MOTs can one industry handle? ZMOT; FMOT; SMOT; Rubinson’s -1MOT; Berkowitz’s IMOT…

At risk of attracting ridicule, my imp compels me to toss another acronym into the mix: XMOT, the eXtended Moment of Truth. It’s my way of stretching the Web of Truths a bit wider – not quite to infinity, but toward its potential to help us understand the multifaceted tangle of influences each person receives, reflects and responds to in their roles as shoppers, consumers, and friends.

© Copyright 2011 James Tenser