Digital CPG Blog

Significant findings of the  How America Shops MegaTrends report, “Moving On 2012″ report, by WSL/Strategic Retail, an authority on shopper behavior and retail trends, include:

·   Youth market no longer retail’s golden ticket. The youth market, 18-34 year olds, has the highest percent of those who do not have enough money to cover their basic needs, with close to a quarter (24%) in financial turmoil. Compared with people over 35, who were able to launch their careers 10 years ago, when times were good, this group is a long way from recovery, compelling retailers targeting this group to seriously rethink their strategies.

·      Branded products under threat. Shoppers in general are placing a greater focus on price, with two thirds (67%) of women agreeing that trusted brand names are not worth paying more for. More than a quarter (26%) of women admit that while they used to buy brand names they could not afford, they are no longer giving in to this indulgence. This figure is up 7 percentage points from 2010.

·       Six-figure incomes struggle. It takes a significantly higher income to feel financially secure in this economy, with nearly 30 percent of Americans in the $100-150K income bracket claiming they can only afford the basics. Once considered affluent, six-figure income shoppers are now identifying themselves as middle-income.

“There is a huge fundamental issue when more than half of Americans can only afford basic necessities and people who earn up to $150,000 think they are poor,” said Wendy Liebmann, CEO of WSL Strategic Retail.

Candace Corlett, president of WSL Strategic Retail, continued, “The youth market, which has traditionally been known for its enthusiastic spending of discretionary income, has virtually dried up. As today’s young adults struggle to find employment and pay down student loan debt, this demographic now represents the largest percentage of Americans who are challenged to afford even basic necessities.”

Key Additional Findings

A stunning 75 percent of women now say it’s important get the lowest price on everything they buy, up 12 percentage points from 2008 and up 22 percentage points from 2004. Some old and new methods of ensuring they get the lowest price include:

• 68 percent regularly use coupons to reduce costs — up 7 percentage points. vs. 2010.
• 45 percent claim they only buy items that are on sale — also up 7 percentage points
• 43 percent make a point to search online for store discounts before they shop — up 10 percentage points
• 14 percent of women say they use their mobile phones while in store to see if they can find a lower price, before they buy.
• The “cautious pause” before buying to ask, “Is this a smart use of my money?” (Total: 66%, HHI $150K: 47%)
• Managing their aspirations by sticking to brands and stores they can afford (Total: 58%, HHI $150K: 36%)
• Staying out of stores where they might be tempted to overspend (Total: 48%, HHI $150K: 28%), and,
• Buying less when they go shopping (Total: 43%, HHI $150K: 26%)

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Pampers tested livestreaming an online TV show to its UK & Ireland Facebook page earlier this year:

The session featured baby sleep expert Wendy Dean, who shared her advice with those watching.

P&G UK marketing innovation manager Ben Tatlow said that this is the first livestream the company has run within a social media platform in the UK.

It is exciting to be able to test and learn this new approach of providing streamed content not only to our core brand fan bases, but also to our wider target audiences through live streaming through Facebook ads. We look forward to piloting similarly innovative projects in the future.”

Streaming live into an event tab adds a new level of engagement to Facebook-based activity, since it allows a brand to invite its community to join the event – while providing a permanent reminder that it’s happening.

He added that an additional benefit of hosting a webchat via Facebook is that you get an instant idea of how popular ait will be, bearing in mind that the vast majority of views always come afterwards, on-demand.

Already we can see in Pampers’ case that 876 people have said that they’ll be attending, which is great.”

P&G will be running a video ad campaign within Facebook to drive more views over the two-hour period that the show airs.

Clicking one of the ‘watch now’ style messages in the right-hand column on Facebook will open a lightbox, with the player embedded, which will also feature its own mini wall. This means that P&G will be able to compare engagement according to viewers watching and commenting from within its page, to those clicking on an ad.

This is a proof of concept project for P&G, but Goldsmith says that he already believes it will be successful based on engagement levels from other client projects.

He also quotes stats from Facebook that suggest a brand only reaches 17% of its community with a simple wall post, since posts that friends’ have commented on or liked are more likely to be given top billing. It’s harder than ever to ‘be seen’ without paying for it.

Therefore the solution is to create content that your community wants to engage with, be that click on, share, like, comment or whatever’s appropriate. Although I’m naturally biased, video is far more engaging, and it’s what people love to share and talk about within social environments.”

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P&G’s optimization approach for digital is not unlike the continuous improvement processes long used on factory floors, and some of its brands, including Pantene, are using continuous data on consumers’ response to digital ads to tweak media buys and inform creative elements.

For about a year, Pantene has been using such a system, Smart Media, developed withResource Interactive, Cincinnati. Smart Media analyzes click-through rates and flash surveys on purchase intent across numerous permutations of ads and placements.

The billion-dollar hair-product brand has improved performance on those target metrics by 28% to 90% vs. the previous system of creative pretesting alone, according to Marketing Director Kevin Crociata.

The program evaluates three creative elements (the headline, hair visual and background color), and Pantene makes changes based on how different combinations of each element perform in various media placements.

The brand makes discoveries that inform future creative. Those have included that white backgrounds don’t work well on Yahoo, orange is effective on Facebook and blondes get a better response than brunettes on some sites.

“Background color is big,” Mr. Crociata said. “It sounds pretty simple, but it can have a dramatic impact on purchase intent.”

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CardSpring, an Accel Partners and Greylock Partners-backed start-up, went live last month with its application platform, which allows developers to create applications that can work with credit cards. Now, the nascent system is getting a huge boost with the help of payment processor First Data. First Data is using CardSpring’s API as the basis for its OfferWise solution, a program that allows publishers to attach offers, coupons and loyalty accounts to a consumers payment cards or mobile wallet. First Data, which serves more than 6 million merchant locations including 4 million in the U.S., is piloting OfferWise with dozens of merchants and will roll out the service to its retail customers starting in May.

The partnership addresses the growing shift toward what First Data calls “universal commerce” as consumers look for a shopping experience that bridges online and offline channels and incorporates personalized deals and product information at all times. Increasingly, consumers are looking for deals online and through mobile channels as they look to save money. But many retailers who conduct outreach and marketing online often run into problems trying to close the redemption loop on offers. With OfferWise, retailers will be to send out a deal through an an offer provider and they can now see which deals are actually redeemed at the store through a debit, credit or pre-paid card. It doesn’t have to be a card transaction either. OfferWise can also connect to NFC-contactless payments and digital wallets like PayPal.

American Express and Visa have also tried similar efforts to connect offers and actions to their cards. AmericanExpress allows deals offered through Facebook, Foursquare and LevelUp to be connected to a card transaction, so a coupon can be processed at check-out. Visa did a test with the Gap , allowing Gap shoppers who sign up, they can get offers pushed out to them when they make a purchase on their Visa card. With OfferWise and CardSpring, all cards are accepted, making it more flexible for consumers. And merchants can also tap into First Data’s analytics engine to improve consumer targeting and get performance analysis of their campaigns.

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Could these initiatives help your loyalty program?

Many social-media “experts” insist that a “two-way conversation” between marketers and consumers is the whole point of social, and anything less than that is a reflection of outdated, broadcast-style thinking. But the reality is that many people follow and “friend” brands simply because they want to hear from those brands, not necessarily talk back.

If you look at the behavior of the Twitter audience of one particular specialized business publication (@adage, with more than 350,000 followers) and one well-known art-rock band (@okgo, with more than 650,000 followers), you’ll see that most folks are only listening. Though Mark Naples could have reached out to OK Go or Ad Age on Twitter, he chose good old-fashioned email — wisely, I’d say.

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Agreed! Do you have all your eggs in the social media basket? How do you approach social media “conversations”?

Here are three ways brands can leverage Pinterest now:

1. Add Pinterest Content to Your Existing Facebook Presence.

Images are more effective than text at encouraging engagement, and an effective technology platform will allow you to surface visually appealing content on one or more Facebook Tabs. This content can be presented as a simple pinboard, as part of a game, or even in the News Feed.

2. Optimize Your Web Properties to Draw People to Your Pinterest Content.

You can always put a “Follow Me on Pinterest” button on your website. But remember, a user’s choice to “Follow” may not be brand-specific, but rather board-specific. This gives you an opportunity to segment your followers in ways relevant to your business. Lowe’s does a nice job of this and has seasonal boards (the Big Game, Valentine’s Day), themed boards (Craft Ideas, Unique Pet Projects), and boards that tie to specific merchandise areas (Lighting, Bedrooms, Bathrooms).

3. Make Your Pins Work Harder For You.

This means using a URL shortening and redirection strategy, preferably one that aggregates your Pinterest analytics (views, Repins, etc.) in a central location. This will allow the metrics to be combined with, and compared to, those from your othersocial properties. You also need to combat the link rot that can occur when the source image feeding your Pin is removed from its website.

Lastly, the pinned images themselves can be set to click through to a variety of sites. Imagine a Pin of a product that, once clicked, takes you to a flash sale where the product is sold at a discount after a minimum purchase threshold is met. All of this is possible now!

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Online shopping for CPG is most popular with those 45 and older. Surprised?

“The Checkout,” an ongoing shopper-behavior study, shows increasing comfort with shopping online among all age groups, with baby boomers taking the lead. Fifty-two percent of shoppers ages 50 to 54 buy health and beauty products online, and 29% of those ages 45 to 49 buy food and beverages online. “Grocery shopping online is a concept most shoppers have yet to adopt, which means there are conventions ingrained in their shopping behavior that must be disrupted,” said Craig Elston, senior vice president of The Integer Group.

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All hail consumer packaged goods.

Throughout 2011, CPG brands spent more than any other group on video advertising — making up 24% of all dollars spent, according to new data from YuMe. Health and pharmaceutical brands came in second — with a 16% share of the video ad market– despite a 400% year-over-year increase in spending.

The 25-54 consumers were the most-requested demographic — making up 15% of RFPs — the video ad network found.  Females 25-54 were the most-requested female demographic in 2011, with 39% of requested RFPs.

In another finding, the majority of ad impressions that YuMe served in 2011 were in California at 11.0% of total volume, followed by New York at 7.9% and Texas at 6.8%.

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Here are five reasons your brand should consider marketing on Pinterest.

1. Shift in consumer behavior from search to discovery – Search is great for finding answers. Discovery is great for finding inspiration. Pinterest taps into that phenomenon. As Samil Shah explained on TechCrunch back in November, Pinterest is bringing some of that discovery online…which could lead to a revolution in how we purchase items. Right now we are trained to go to Amazon or Google to find what we want. Pinterest starts before that search, before we even thinking we want to buy a particular product. For example, if I wanted a sound system for my laptop, I might hop on to Pinterest, browse a category devoted to sound systems and then land on a product. Within that discovery phase, however, I may never end up at Amazon since Pinterest drives traffic back to a retailer’s site.
2. Little interaction needed for brands – A legitimate concern for any brand considering jumping into a new social media platform is the resource question: do you have it in the budget to staff? The nice thing about Pinterest is there isn’t a lot of overhead. Outside of pinning, categorizing and tagging images, you don’t have to worry about managing comments or playing the follower game. You can push content at your own pace.
3. Connect with the visual segment of your audience - Pinterest is visual. So it attracts an entirely different crowd…those who may have an appeal for an image over written words. Why is this important? Consider how content marketers typically engage their audiences…through words, videos or audio podcasts. You can open the doors to a new segment of buyers who may be interested in your product…but not know about it…by building a community around the images you pin. That can draw others in who are inspired by your account and lead to referrals.
4. Repinning is the new “retweet” –It’s quite possible that you can build a community from simply sharing other people’s pins…the same way some Twitter power users have built a following off of retweeting or Tumblr users who’ve reblogged.
5. It’s beating out Facebook referrals – Finally, perhaps one of the best reasons for using Pinterest in your social media marketing plans is that it is outperforming Facebook. The general manager of digital for the print magazine Real Life said that Pinterest was a huge source of traffic in October 2011…more than Facebook. Time to re-tool our marketing strategies, don’t you think?

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General Mills is updating the marketing concept of surprises in the cereal box.

“You point to a logo [on food packaging], and things start to appear,” said Chief Marketing Officer Mark Addicks. “Maybe some functional content will pop up on a cake-mix box, or you might see entertainment and games coming from a cereal box. What I’m hoping for is pure entertainment.”

Addicks hopes to update the marketing concept of offering a surprise inside the cereal box. Instead, kids could point a smartphone at the box and “see visual surprises.”

He’s looking at QR (quick response) codes to do this — those little square boxes that appear now in so many ads and, when scanned with a smartphone’s camera, take consumers directly to a website. But he’s also looking beyond the code to apps. He’s already got apps for Betty Crocker and Yoplait Yogurt and is exploring apps for cereal brands. “You point to a logo and things start to appear,” he says. “Maybe some functional content will pop up on a cake-mix box, or you might see entertainment and games coming from a cereal box. What I’m hoping for is pure entertainment.”

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