Taking a closer look at the role of brand engagement in driving purchase decisions among South African female household shoppers

1. A closer look at the role of brand
engagement in driving purchase decision
amongst SA female household shoppers
Engager™ Shopper Deep-dive: August 2012
1

2. Shopper marketing is rapidly encroaching
on traditional media budgets
With an estimated 5%
annual growth rate in
advertising spend
globally, digital and
shopper marketing are
rapidly encroaching on
the budgets of
traditional media
… and within this,
shopper marketing is
rapidly closing the gap
at an estimated 21%
annual growth rate
expected in 2012
2
Source: Global Advertising Forecast from Strategy Analytics, February 2012

3. With this shift in investment in mind, we need to ensure that our
marketers are well-equipped for success
Shopper marketing shifts the
focus from product- to shopper-
led marketing - decisions need
to be driven by shopper-specific
insight and behaviours.
We have used the power of Engager and the collective insight of Yellowwood to demonstrate the need
for marketers to critically evaluate their approach to shopper marketing. One size does not fit all and a
shotgun approach will not yield the desired results. 3

4. There is more thought and preparation going into shopping
today than ever before
A convention-challenging finding by A longitudinal study of shopper attitudes
Campbell’s research suggests that 80% and behaviours in the USA indicates that
of grocery brand decisions are made recessionary behaviour has stuck… more
before shoppers even get to the store. consumers pre-plan purchases, stick to
Their research identified the importance their lists and compare prices before they
of purpose, context and proximity to reach the store than ever before. And
consumption all being critical influencers even though the recession is formally
of the purchase decision. over, this behaviour continues to drive
much of mainstream shopper behaviour
www.retailwire.com, 8 August 2011 in 2012.
Symphony IRI MarketPulse Surveys 2011/2012
4

5. There is more thought and preparation going into shopping
today than ever before
A convention-challenging finding by A longitudinal study of shopper attitudes
Campbell’s research suggests that 80% and behaviours in the USA indicates that
of grocery brand decisions are made recessionary behaviour has stuck… more
before shoppers even get to the store. consumers pre-plan purchases, stick to
Their research identified the importance their lists and compare prices before they
of purpose, context and proximity to reach the store than ever before. And
consumption all being critical influencers even though the recession is formally
of the purchase decision. over, this behaviour continues to drive
much of mainstream shopper behaviour
www.retailwire.com, 8 August 2011 in 2012.
Symphony IRI MarketPulse Surveys 2011/2012
Shopper marketing is not just about what happens in the store at POP, but
requires a comprehensive approach to engagement along the full purchase journey.
5

6. CASE STUDY: Kraft’s iFood Assistant closes the loop
by accompanying the shopper along the whole journey
Although the intent is to drive Kraft sales, the app is focused
on the shopper and uses a combination of technology solutions
(geo-location, QR codes, integration into social media for peer
reviews etc.) to create a very engaging experience.
6
Source: Shoppernewsblog.com, August 2012

7. Some of the leading trends affecting shopper behaviour
Requires collaboration between To counter this, brands need to Increase in quick trip shopping
retailer and manufacturer to focus on innovation that adds patterns, facilitated by increased
create a memorable and real consumer value (quality access to convenience stores in
appealing shopper experience - convenience, health & wellness SA – exemplified by WW Food
driving footfall & brand preference are the current drive areas) to (Convenience stores accounted
avoid the discounting trap for US$1.4 bn revenue in
SA, 2009)
In a bid to try & disrupt habitual Massive increase in access to Leading online shopper activities
shopping, more and more retailers smartphones & Internet changing are price comparisons & product
are offering shoppers solution the way that South Africans information sourcing. Who needs
ideas.. Be that in the form of shop… Online shopping valued at a retail/brand apps when you
recipes, “dinner tonight” ideas or ~ZAR2bn in 2010, with 30% have Google? Content, payment
home improvement solutions, this growth projections compared to & auto-replenishment aps will be
is a great way to introduce 7% for traditional retail the future winners
shoppers to new brands & products www.southafrica.info
7
Source: Desk research, various articles and reports

8. Some of the leading trends affecting shopper behaviour
Requires collaboration between To counter this, brands need to Increase in quick trip shopping
retailer and manufacturer to focus on innovation that adds patterns, facilitated by increased
create a memorable and real consumer value (quality access to convenience stores in
appealing shopper experience - convenience, health & wellness SA – exemplified by WW Food
driving footfall & brand preference are the current drive areas) to (Convenience stores accounted
avoid the discounting trap for US$1.4 bn revenue in
SA, 2009)
In a bid to try & disrupt habitual Massive increase in access to Leading online shopper activities
shopping, more and more retailers smartphones & Internet changing are price comparisons & product
are offering shoppers solution the way that South Africans information sourcing. Who needs
ideas.. Be that in the form of shop… Online shopping valued at a retail/brand apps when you
recipes, “dinner tonight” ideas or ~ZAR2bn in 2010, with 30% have Google? Content, payment
home improvement solutions, this growth projections compared to & auto-replenishment aps will be
is a great way to introduce 7% for traditional retail the future winners
shoppers to new brands & products www.southafrica.info
8
Source: Desk research, various articles and reports

9. Some of the leading trends affecting shopper behaviour
Requires collaboration between To counter this, brands need to Increase in quick trip shopping
retailer and manufacturer to focus on innovation that adds patterns, facilitated by increased
create a memorable and real consumer value (quality access to convenience stores in
appealing shopper experience - convenience, health & wellness SA – exemplified by WW Food
driving footfall & brand preference are the current drive areas) to (Convenience stores accounted
avoid the discounting trap for US$1.4 bn revenue in
SA, 2009)
In a bid to try & disrupt habitual Massive increase in access to Leading online shopper activities
shopping, more and more retailers smartphones & Internet changing are price comparisons & product
are offering shoppers solution the way that South Africans information sourcing. Who needs
ideas.. Be that in the form of shop… Online shopping valued at a retail/brand apps when you
recipes, “dinner tonight” ideas or ~ZAR2bn in 2010, with 30% have Google? Content, payment
home improvement solutions, this growth projections compared to & auto-replenishment aps will be
is a great way to introduce 7% for traditional retail the future winners
shoppers to new brands & products www.southafrica.info
9
Source: Desk research, various articles and reports

10. Some of the leading trends affecting shopper behaviour
Requires collaboration between To counter this, brands need to Increase in quick trip shopping
retailer and manufacturer to focus on innovation that adds patterns, facilitated by increased
create a memorable and real consumer value (quality access to convenience stores in
appealing shopper experience - convenience, health & wellness SA – exemplified by WW Food
driving footfall & brand preference are the current drive areas) to (Convenience stores accounted
avoid the discounting trap for US$1.4 bn revenue in
SA, 2009)
In a bid to try & disrupt habitual Massive increase in access to Leading online shopper activities
shopping, more and more retailers smartphones & Internet changing are price comparisons & product
are offering shoppers solution the way that South Africans information sourcing. Who needs
ideas.. Be that in the form of shop… Online shopping valued at a retail/brand apps when you
recipes, “dinner tonight” ideas or ~ZAR2bn in 2010, with 30% have Google? Content, payment
home improvement solutions, this growth projections compared to & auto-replenishment aps will be
is a great way to introduce 7% for traditional retail the future winners
shoppers to new brands & products www.southafrica.info
10
Source: Desk research, various articles and reports

11. Some of the leading trends affecting shopper behaviour
Requires collaboration between To counter this, brands need to Increase in quick trip shopping
retailer and manufacturer to focus on innovation that adds patterns, facilitated by increased
create a memorable and real consumer value (quality access to convenience stores in
appealing shopper experience - convenience, health & wellness SA – exemplified by WW Food
driving footfall & brand preference are the current drive areas) to (Convenience stores accounted
avoid the discounting trap for US$1.4 bn revenue in
SA, 2009)
In a bid to try & disrupt habitual Massive increase in access to Leading online shopper activities
shopping, more and more retailers smartphones & Internet changing are price comparisons & product
are offering shoppers solution the way that South Africans information sourcing. Who needs
ideas.. Be that in the form of shop… Online shopping valued at a retail/brand apps when you
recipes, “dinner tonight” ideas or ~ZAR2bn in 2010, with 30% have Google? Content, payment
home improvement solutions, this growth projections compared to & auto-replenishment aps will be
is a great way to introduce 7% for traditional retail the future winners
shoppers to new brands & products www.southafrica.info
11
Source: Desk research, various articles and reports

12. Some of the leading trends affecting shopper behaviour
Requires collaboration between To counter this, brands need to Increase in quick trip shopping
retailer and manufacturer to focus on innovation that adds patterns, facilitated by increased
create a memorable and real consumer value (quality access to convenience stores in
appealing shopper experience - convenience, health & wellness SA – exemplified by WW Food
driving footfall & brand preference are the current drive areas) to (Convenience stores accounted
avoid the discounting trap for US$1.4 bn revenue in
SA, 2009)
In a bid to try & disrupt habitual Massive increase in access to Leading online shopper activities
shopping, more and more retailers smartphones & Internet changing are price comparisons & product
are offering shoppers solution the way that South Africans information sourcing. Who needs
ideas.. Be that in the form of shop… Online shopping valued at a retail/brand apps when you
recipes, “dinner tonight” ideas or ~ZAR2bn in 2010, with 30% have Google? Content, payment
home improvement solutions, this growth projections compared to & auto-replenishment aps will be
is a great way to introduce 7% for traditional retail the future winners
shoppers to new brands & products www.southafrica.info
12
Source: Desk research, various articles and reports

13. 13

14. The highest number of retailers in the Top 20 listing amongst
countries surveyed in 2011
Understanding the customer journey –
how different segments make
decisions, the influencers of those TAKE ACTION:
decisions & drivers of engagement –
is a critical component for future Ensure you are
success. engaging your
shoppers at critical
Then we can plan where we need to moments of truth,
be and when, with what tools, offers with the right
or experience to engage the shopper influencers.
14

15. In 2012, we have done a deep-dive
into shopper behaviour and the role
of brand engagement in driving
decisions…

16. …is a research tool
to help evaluate the depth and
drivers of engagement with
your brands

17. There are 9 pillars that contribute to the
Brand Engagement framework
Brand
engagement
17

18. The sample is demographically representative of the SA online consumer market - drawn from a reputable consumer panel.
18

19. According to AMPS 2011…
20

20. For the purposes of our survey, we…
Disproportionate amount of influence over
the household purchase decisions
More flexibility in their monthly grocery
spend – although still price conscious,
there is room to manoeuvre in what they
choose to buy
With the rapid growth in internet access
through smart phones, this is the future
market who will be shopping and engaging
online
Large South African consumer panel,
drawn from all regions and demographics
within our target audience
21

21. 6 everyday grocery categories were used to help inform our
shopper insights
22

22. …and a total of 60 leading brands across the 6 categories
were included
23

23. Brand rankings based on Engager Index
Tastic 143 KOO 141 Clover 133 Vaseline 152 Sunlight 148 McCain 139
Fatti’s & Moni’s 135 All Gold 139 Flora 131 Dettol 151 Handy Andy 145 I&J 129
Knorr 134 Crosse & Blackwell139 Danone 129 Dove 147 Sta Soft 143 Rainbow 121
Albany 129 Lucky Star 127 Parmalat 126 Johnson & Johnson 147 Domestos 136 Sea Harvest 118
Royco 129 Wellington’s 119 Rama 125 Aquafresh 146 Jik 135 Harvest Time 114
Sasko 123 All Joy 110 Stork 125 Nivea 144 Omo 130 Nature’s Garden 114
Blue Ribbon 118 John West 110 Ever Fresh 116 Lux 141 Mr Muscle 128 Today 114
Ace 113 Heinz 109 Dairybelle 114 Colgate 138 Vanish 126 County Fair 107
Iwisa 110 Rhodes 108 Fair Cape 105 Dawn 129 Skip 115 Fry’s 101
Surprise 108 Farm Girl 98 Bonnita 102 Mentadent P 126 Bioclassic 105 Dr Oetker 93
24

24. 5 Key Shopper Themes Investigated

25. 1.
Why is brand engagement important
when considering shopper
behaviour?

26. Brand engagement sets the context for our shopper marketing
plans
GLOBAL
AVERAGE
=100
In categories where product efficacy is important, brand engagement is
higher… where products are ingredients or there is lower risk in trial, brand
choice is less important & engagement is lower.
29

27. Looking beyond traditional brand measurements, brand engagement
gives us stronger prediction abilities than historical behaviour
.636
.671
The correlation between future
.695 purchase intent and brand
engagement is significantly
stronger than the correlation
.707 between historical buying
behaviour and purchase intent
.692
.855
Correlation analysis, significant at p < 0.01 30

28. 2.
So what drives brand engagement
amongst SA female shoppers?

29. The power of emotional brand connections sits at the heart of the
most engaging brands
Connection Connection Connection Connection Connection Connection
Advocacy Advocacy Integrity Integrity Integrity Relevance
Understanding Experience Understanding Advocacy Advocacy Understanding
Integrity Integrity Advocacy Understanding Understanding Integrity
Consistently, across all categories, the emotional connection between
the consumer & her brand is key in driving engagement
32
Driver analysis, using the top performing brands per category as benchmarks

30. …whereas our challenger brands have a more rational
relationship dynamic
Conviction Conviction Conviction Conviction Conviction Conviction
Understanding Connection Advocacy Commitment Understanding Advocacy
Advocacy Understanding Understanding Understanding Commitment Understanding
Connection Advocacy Connection Connection Advocacy Commitment
Shoppers have rationalised their purchase decision and actively defend it
33
Driver analysis, using the top performing brands per category as benchmarks

31. Relevance and integrity: Unilever runs a range of “Brands in Action”
initiatives that combine tangible customer benefits with smart business
goals
Combining the need to reduce
the carbon footprint of the Sunlight
brand with tangible socio-economic
benefits to the customer, the
Sunlight Solar initiative in Durban
is a great example of extended,
impactful brand relevance

32. Advocacy: Peer reviews are common practice in the travel industry -
Clover uses this feature on their website to drive product trail
Across 22 forms of advertising
“recommendations from people you know”
Is by far the most trustworthy advertising
Source for women surveyed in emerging (82%)
countries, followed by branded websites (60%,
emerging countries)…
Nielsen Women of Tomorrow Study, 2011
35

33. Emotion: Social media provide the ideal platform for building
emotional connections, allowing shoppers to express themselves
“Brands that enhance the quality of emotional connections
between consumers will benefit greatly in 2012. The desire Pinterest stats for 2011
For self expression in the home and especially in the kitchen Topics include: Cooking and baking,
is the key for many shoppers who want to their personal home décor and fashion amongst others
Style to shine. Content that empowers shoppers together Monthly page views: 421 million
With the expanding smartphone usage and lifestyle sites
Unique visitors: 3.3 million
Such as pinterest and will be setting new standards for
Self expression.” Thelaunchblog.com/2012 digital and mobile shopper
marketing trend: Self expression, January 2012
36

34. 3.
How do in-store touch points impact
on brand engagement?

35. Engaged shoppers are more likely to see and respond to your
in-store activity
38

36. Shopper marketing is more than retail activation
It needs to take into consideration the fact that many decisions are made or influenced by
factors outside of the store… consumption occasions, predisposition to brands, shopping
time etc. In store promotions may sway undecided consumers, but it is not going to drive
engaging relationships.
A virtuous cycle…
engaged shoppers
notice your in-store
activity more, affirming
their decisions at point
of purchase
Or wasted effort…
Disengaged customers
are less likely to even
notice you, never mind
respond to your in store
messaging
39

37. 4.
How important is participation really?

38. Participation is an important, although often under-utilised
element, in growing brand engagement in the SA market
McCain .542 Sunlight .491 KOO .544
Dr Oetker .479 BioClassic .544 Farmer Girl .589
Clover .554 Tastic .533 Vaseline .480
Bonnita .566 Surprise .585 Mentadent P .516
A statistically significant contributor to building brand engagement, there is latent
potential in harnessing participation opportunities to build your brand.
** Correlation analysis, all values are significant at p < 0.01 41

39. High engagement brands see a correspondingly higher level of
participation across platforms
Promoters in
engagement
Competition
participated
Coupons in
Call centre
participant
Facebook
Category
Website
Actively
Twitter
Panel
store
store
H 42% • • • • • • •
H 36% • • • • •
M 36% • • • • • • •
M 33% • • • • • • •
L 25% • • • •
M 23% • • • • • • • •
42

40. …whereas lower engagement brands have less active participation from
shoppers
Engagement
Promoters in
Competition
participated
Coupons in
Call centre
participant
Facebook
Category
Website
Actively
Twitter
Panel
store
store
H 34% • • • • • • • •
H 30% • • • • •
M 27% • • • •
M 23% • • • • • •
M 18% • • • •
L 15% • •
43

41. 5.
Breaking through habitual
buying behaviour

42. The role and impact of in-store shopper marketing is influenced
by the level of category and brand engagement
The POPAI Shopper Engagement Study 2012
identified in-store visual displays as being key to
influencing decisions at POP
The study found that 1 in 6 purchases in lower
brand engagement categories (pet food,
dishwashing soap, pickles etc.) were made when
a display was present in store
45

43. Shoppers in lower engagement categories are more vulnerable to
in-store activity
2-for-1 deal 2-for-1 deal 2-for-1 deal 2-for-1 deal
Value combo pack Value combo pack Value combo pack Value combo pack
Free item
Extra quantity for Fee item Extra quantity for Just about any
free item, value Value Pack free, % discount & in-store activity is
pack & charitable In-store sampling charitable donation likely to affect
donations ambivalence
It’s easy to create a sense of ambivalence and get shoppers to reconsider their
purchase in low engagement categories.
But the implications of this are quite different, depending on whether you are a brand with high or low
engagement within these categories.
46
*Drive change = at least 25% claiming would change brand for this
**Drive ambivalence = at least 50% claiming would consider a brand change for this

44. Shoppers in higher engagement categories are less susceptible
to competitor in-store activity
Value pack Two for the price of one
Two for the price of one Value pack
Extra quantity
Nothing overtly strong Charitable donation
enoughTo drive ambivalence Free item
In categories driven by efficacy, in-store activity and discounting alone won’t
create a sustainable change in behaviour
*Drive change = at least 25% claiming would change brand for this 47
**Drive ambivalence = at least 50% claiming would consider a brand change for this

45. Implications for building brands
amongst shoppers

46. Key take-outs
1. Consider your shopper insights programme and ensure that you
have predictive measures, not just retrospective views
2. Category context is key to defining the right shopper marketing
strategy for you
3. Understanding the level of pre-purchase engagement of your brand
is key to developing appropriate shopper marketing strategies
4. Retail marketing ROI is heavily influenced by the pre-existing brand
relationships – protecting your brand from competitor noise requires
strong pre-purchase engagement
5. There is untapped potential in brand participation – both in
enhancing brand engagement, but also in encouraging shoppers to
bring you into their worlds
49

47. Thought starters for Shopper Marketing in SA:
What to consider if you are…
Operating in a low Operating in a high
engagement category engagement category
• In-store activity is key to driving • Pre- & post-purchase brand building yields
ambivalence greater shopper marketing ROI as they are
• Need to find non-price based more likely to see & respond to your in-
mechanisms that don’t erode brand store messages
value, for enticing trial in-store - shoppers • In-store activity helps to reinforce positive
are open to persuasion at POP brand associations and reduce
• Identify ways in which to build emotive vulnerability to pricing sensitivity &
connections with shoppers, not just the competitor activity at POP
traditional functional focus of low • Digital platforms provide ideal
engagement categories opportunities to engage and socialise with
shoppers, who are more open to brand
messaging and sharing your brand with
others
Build your brand holistically – shopper marketing has the ability to extend and
enhance brand engagement, but you need a pre-existing relationship with your
shoppers to optimise ROI
50

48. Thank you for your time…
If you would like to know what EngagerTM can do
for your brand, we’d love to chat:
info@ywood.co.za
@askYellowwood