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Dachis Group - Lessons Learned from 2011 Shopping Season
1.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 Lessons Learned from the 2011 Shopping Season By Brian Kotlyar Consultant, Dachis Group 1 ©2012 Dachis Group | www.dachisgroup.com
2.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 Marketers Can Influence Seasonal Shopping Conversation Despite an aggregate social media ecosystem numbering in the hundreds of millions across Facebook and Twitter, major retailers have only recently matured to the point of integrated marketing across traditional, digital and social media efforts. Dachis Group analyzed six major retailers during the critical holiday period to understand how marketers should attack key seasonal events from a social media perspective. 2 ©2012 Dachis Group | www.dachisgroup.com
3.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 3 ©2012 Dachis Group | www.dachisgroup.com
4.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 New Year’s Day, Martin Luther King day, Super Bowl, Valentine’s day, Mother’s day, Cinco de Mayo, Father’s day, college graduation, Labor Day, Memorial Day, President’s Day – for most people these are celebratory events and long weekends to mark on their calendar. For marketers these are battlegrounds for consumer attention and activity. For all the hype around agile marketing, massive campaign exercises dominate the minds and resources of marketers at every big brand as they try to ‘win’ key seasonal events. To succeed in the scrum for attention marketers plan and fund elaborate integrated marketing campaigns that span across every medium and channel. The newest and least understood factor in this campaign equation is social media. Dachis Group studied the 2011 holiday shopping season to get to the bottom of what works and what doesn’t for mass marketers. We chose this period and study group (large retailers) because these companies earn as much as 40% of annual revenues in this holiday time period. Consequently it is also the highest stakes time of year for their marketing efforts — the right campaign combined with the right pricing strategy can make a huge difference in year-end sales and Wall Street valuations. The results, detailed below, suggest that marketers have become highly effective in driving interest within their consumer ecosystems around deals and shopping, but that they are leaving an opportunity untapped in the area of integrated brand marketing. Brand campaigns extended to social media are the strongest predictor of sustained campaign conversation. For the period studied Wal-Mart was the most successful in creating relevant signal within their social media ecosystem with Amazon.com and Best Buy just behind. These raw measures of activity in a given ecosystem are an important measure of success for brands. They help capture which brands most effectively activated their ecosystem and hint at the much broader potential distribution across user’s social connections. 4 ©2012 Dachis Group | www.dachisgroup.com
5.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 Despite this seemingly clear victory for Wal-Mart in the holiday period, raw activity only tells a part of the story. No brand wants customer service or other off-topic issues to be the focus of conversation during a key shopping period. Consequently, on-topic conversation takes on outsized importance and is essential to understanding what sorts of tactics can elicit a sustained campaign or shopping conversation. Of all the brands studied, Best Buy, Kohl’s and Target were able to spark significant amounts of valuable campaign conversation in their ecosystems. In each case they benefited from a tight linkage between branded campaigns and paid media that sparked campaign conversation for the duration of that tactic. Best Buy and Target maintained marketing momentum while Kohls tailed off. Retailers that brought a focused and sustained series of branded tactics to bear, above and beyond simple deal sharing, were consistently able to beat their competition in sparking campaign conversation. Best Buy, Target and Kohl’s proved most successful at this approach, while Toys R’ Us was thwarted by technical difficulties in its attempts to keep pace. 5 ©2012 Dachis Group | www.dachisgroup.com
6.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 In the “before” period, conversation within the Best Buy ecosystem was almost entirely campaign focused. During the same period, Kohls and Target were effectively creating significant amounts of campaign conversation as well. In Kohls’ case the crossover from television to social media was a natural extension of its Black Friday commercial, based on the viral song ‘Friday’ by Rebecca Black. Target benefited from wrapping almost all of its “before” period tactics around the ‘Christmas Champ’ character — including 16 videos, a broadcast television commercial and dozens of Tweets. All of these tactics worked initially, but as the initial burst of activity around Kohls died down, Best Buy and Target’s more structured and regular tactics kept their momentum. Best Buy transitioned its efforts to promoted ads on Twitter, organic hashtag promotion and linkages between in-line activity and online activity. Meanwhile Target kept its barrage of ‘Christmas Champ’ activity going and continued to garner major campaign conversation. In the ‘after’ period Target kept, and Kohl’s regained, some campaign momentum, but only Best Buy was able to keep the conversation firmly fixed in the marketing realm as it launched its “8 Days of Movies” campaign to a strong reception. In each period, brands that effectively executed integrated branded tactics benefited from spikes in campaign activity above and beyond ambient shopping conversation in their ecosystem. This speaks to the ability of marketers armed with the right tools and budget to cause substantive shifts in the nature of interaction across their audience. 6 ©2012 Dachis Group | www.dachisgroup.com
7.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 Unlike campaign conversation, shopping conversation is hard to influence. Shopping conversation was fairly evenly distributed across companies and time frames. This is not terribly surprising, first because shopping is of major interest to consumers in this time period. Second, because every retailer is unveiling deals and doorbusters or publishing circulars across their ecosystem. These are table stakes tactics that have the predictable consequence of generating shopping buzz. 7 ©2012 Dachis Group | www.dachisgroup.com
8.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 Of all the retailers only Amazon employed a differentiated set of tactics aimed at generating shopping buzz. Amazon mirrored retailer’s decision to open early on Black Friday by offering weeks of deals prior to the official start of the day. This sustained activity enabled Amazon to spark a significant shopping conversation earlier in the holiday cycle than its competitors, and suggests that in future years other retailers may benefit from similar actions. Focus is key as non-essential messages get lost in the shuffle. It is notable that most brands launched or mentioned some kind of a cause- related marketing initiative during this time, yet the existence of these efforts barely registers in our analysis. The explanation comes down to a lack of attention by both consumers and companies. While it is true that much of the holiday spirit relates to good deeds, the reality is that the real conversation starters at this time of year have little to do with charity. Gift giving, deal sharing, large meals and travel schedules dominate the conversation and without sustained messaging from brands cause marketing messages fail to break through. To make cause marketing work in this context, retailers would be better served waiting until a quieter period where there is less fervor around deals. Alternately, brands could attempt to link the cause campaign more concretely to their holiday activities, but in doing so risk commercializing their giving which may alienate the audience. Summary and recommendations Despite the high-stakes nature of the holiday period retailers are still perfecting how to approach it. The consensus moving into this year was certainly that deals and circulars would rule the day. Certain brands were able to cut through the noise with brand-focused tactics. This approach should be studied and replicated across next year’s holiday period as well as any other significant cultural events. The next page features a visual representation of our key findings and recommendations regarding brand marketing tactics, cause marketing, timing, and cross-channel integration. 8 ©2012 Dachis Group | www.dachisgroup.com
9.
Lessons Learned from
the 2011 Shopping Season by Brian Kotlyar | January 18, 2012 9 ©2012 Dachis Group | www.dachisgroup.com
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