Beyond Redemption: Digital Shopper Marketing 2.0

Beyond Redemption: Digital
Shopper Marketing 2.0
April 13, 2011

Blog: smartretailmedia.com Twitter: ShopperMedia 1

Intro to Speakers

•Dan Frechtling
VP Client Solutions

•Joe Battoe
VP Shopper Marketing

Blog: smartretailmedia.com Twitter: ShopperMedia www.smartretailmedia.com
DRAFT More:
1/26/10 2

What do these 4 images have in common?


Digital + Gaming?

First Digital Video Game 1952


Digital + Gaming!


Digital + Film?

First CGI Animal 1986


Digital + Film!


Digital + Publishing?

First New York Times
homepage 1996


Digital + Publishing!


Digital + Mobile?

First mobile phone 1983


Digital + Mobile!


First Generation (1G)

Simulate a paper Make animals look
game with pixels photo-real

Re-creates

Provide desktop Enable a phone to
news content travel

Blog: smartretailmedia.com Twitter: ShopperMedia
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1/26/10 12

Second Generation (2G)

Let players become Merge fantasy
the controllers and reality

Creates

Add new Complete any e-task
experiences to news with one handheld

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What does this have to do with
digital shopper marketing?

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Digital Shopper Marketing is Starting a 2G Transition

2G On this trajectory:
• E-Circulars
• Digital Coupons
Adoption • Social media
• In-store media
• Targeted display
1G • Mobile vehicles
• …

Time


Examples today

Today (approx)

2G On this trajectory:
• E-Circulars
• Digital Coupons
Adoption • Social media
• In-store media
• Targeted display
1G • Mobile vehicles
• …

Time


Objectives

1. Understand 2G digital shopper marketing

2. Know how to use it more effectively

Media reviewed
• E-Circulars
• Digital Coupons
• Social media

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2G Principles


2G Principles

right offers to the
right behaviors


2G Principles

auto-adjusting
campaigns


2G Principles

helpful product/
service suggestions


2G Principles

value realized in
fewer steps


2G Principles

right offers to the
right behaviors


Different Interpretations (Anagram Example)

DORMITORY DIRTY ROOM
College student Parent

THE MORSE CODE HERE COME DOTS
Naval communicator Layman

ELECTION RESULTS LIES – LET’S RECOUNT
Winning candidate Losing candidate


1G E-circulars

Prompt people into the store to buy more.

• Feature weekly or seasonally promoted products
• Promote launched or re-launched items
• Localize product presentations based on store traits
• Accentuate underperforming departments
• Organize content for pre-trip searching and list making


2G E-circulars

Use targeting to more naturally stimulate purchases

• Expand purchases of popular products
• Cross-sell complementary products
• Re-activate lapsed product buyers
• Align with individuals’ purchase cycles


2G E-circular Case Example

Post Email vs. Pre Email Sales Impact
Example: 10 recent categories

6.0
Self Care
5.0
Average lift from
personalization:
4.0 Pet Food
Cereal Bars 2.4X
Sales lift

3.0 Chicken

2.0 Eggs
Soda Cheese
Ice Cream
1.0 Canned Soup

0.0
0% 20% 40% 60% 80%
Offers Penetration (%)

Blog: smartretailmedia.com Twitter: ShopperMedia Source: DS-IQ 27

1G Digital Coupons

Turn around the mass-coupon paradigm

Pros:
• Flip the model from push to pull, as shoppers log in or opt in to offers
• Provide basic targeting e.g., past activations, clickstream, and banner/geo

Cons:
• Don’t distinguish individual buyers
• Don’t personalize by product or increment


2G Digital Coupons

Occasionally Stopped Buys novelties
buys buying (but not pints)

Serve the right offers to the right shopper behaviors. Examples:
• Attract new buyers by selecting and targeting those most likely to try
• Expand current buyer consumption by increasing frequency and units
• Re-activate lapsed buyers such as brand switchers or category defectors

2G Digital Coupon Case Example 1

Identifying shoppers most likely to try

47%

Frozen dinner

17%
9%
Campaign
redemption rate

Frozen entrée Brand buyers
category buyer from other
categories
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1/26/10 Source: DS-IQ
More: www.smartretailmedia.com 30
30


Increasing loyal shoppers’ buying rate

Purchase frequency (mos)
Every 2

Single serving meal Every 6

Before During

>1 units per purchase
100%

36%

Before During
(avg 1.8) (avg 4.1)


An email and mobile coupon program for a
major grocer increased trips per week 12%

Test

1.59

During campaign
Pre-campaign

1.47

Pre-campaign
Pre-campaign Control

1.42

During campaign
Pre-campaign
Source: Catalina Marketing
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1G Social Media

Self-expression, instantly broadcast
• Express affiliation with brands more broadly
• Automate word of mouth immediately
• Opt-in to news from preferred brands
• Join groups with shared affinity


2G Social Media

Use targeting to engage passions
• Reach emotional loyalists
• Engage them in an event they care about
• Enable them to share and self-express
• Add special insiders-only perks
Source: YOU Technology 34

2G Principles

auto-adjusting
campaigns

1.Optimizing segments

2.Optimizing offers


Differing Outcomes (Optical Illusion Example)


2G Optimizing Segments

27.3%

18.1%
14.3%
13.5%
13.4% 9.5%
8.7%
avg
$1
off 2 $.50 $.60 $.60 $.75 $.75

Heavy buyers Light buyers Lapsed brand Brand adj Category Affinity
(2 units) category category buyers category
Segments
buyers buyers buyers

Expand brand Convert Generate
buyer category non-category
consumption buyers buyer trial

Source: smartretailmedia.com Twitter: ShopperMedia
Blog: DS-IQ 37

2G Optimizing Offer Values

Web coupon program for ConAgra and national retailer

Test Values Result
Save $2.00
Loser

New Buyers 12%
cost/unit
Save $1.75
Winner improvement

Source: smartretailmedia.com Twitter: ShopperMedia
Blog: DS-IQ 38

What Kind of Personalization?

3 approaches

1. Let shoppers select the kinds of
offers they wish to receive

2. Apply collaborative filtering or
similar techniques to suggest what
similar shoppers have chosen

3. Use individual purchase history to
recommend the most relevant offers


Enough Talking About Marketers


2G Principles

helpful product/
service suggestions

value realized in
fewer steps

1. E-circulars
2. Digital coupons


Offer Relevance

Loyal Mach 3 user
Timing and brand elements
enable relevance

Right time
Wrong brand
Schick
Hydro
Current
brand
Right time
Right brand (upsell)
Gillette
Fusion


Relevance Surveyed

% of shoppers participating in a 2G
program who said the offers made them:
42%
36%
30%

10%

Switch Try Purchase Stock Up
Brands Something More of on Offers
New Specific Received
Product

“It made me buy the product about a week sooner than I would
have…and I’m not sure I would have otherwise bought the two, but I
did, because it was relevant to my life.”
Source: Catalina Marketing
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Simplicity of E-circulars

1G 2G

Principle Availability Pre-selection

Delivery Browse hundreds of images View relevant offers pre-
or search by category selected and ranked


Simplicity of Digital Coupons

1G 2G

Principle Pull, not push Saving steps

Delivery Find offers, print out, and Load-to-card and set up
bring to store mobile reminders


Examples today

Targeted
right offers to right behaviors

Dynamic
auto-adjusting of campaigns
2G
Relevant
Adoption

helpful product suggestions

Simple
realizing value in fewer steps
1G

Time


Further Guidelines

Principle 1: Go beyond redemption.

Principle 2: Don’t jail shoppers in static segments or zones.

Principle 3: Look for ways to bet after the race has started.


More about digital shopper media:
Blog: smartretailmedia.com
Twitter: ShopperMedia
Corporate: ds-iq.com

Joe Battoe Dan Frechtling
joe.battoe@ds-iq.com dan.frechtling@ds-iq.com

DRAFT
More: www.smartretailmedia.com
1/26/10 48

Beyond Redemption: Digital Shopper Marketing 2.0

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