Data point: Global shoppers looking for more types of goods online

September 27, 2012

As shopping steadily shifts online, consumers around the globe are expanding their purchases into more categories. Research from Nielsen shows that the category with the most significant growth in digital purchase intent between 2010 and early 2012 is computer/game software (the global gaming market is forecast to grow at a compound annual rate of nearly 14 percent through 2015, reaching $118 billion). Consumers have also become much more interested in buying entertainment tickets using their connected devices, according to the survey of more than 28,000 online consumers in 56 countries.

Notably, digital is starting to reshape the grocery sector. Intent to purchase food or beverage products rose 44 percent since 2010, to just over a quarter of respondents. Around half of respondents—and more than 6 in 10 Asian consumers—had bought a grocery product online, and 6 in 10 had gone online to do grocery shopping research. Nielsen notes that shoppers in CPG categories will likely become “omni-channel,” with online supplementing brick-and-mortar. With the rise of new ideas like “click and collect,” we’re starting to see retailers adjust their operations accordingly

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How to Retain Your Best Customers

May 1, 2012

Just spotted this blog reference retaining your best customers and thought it provided some good insight.
 
Most CPG marketing budgets allocate spending between  three “buckets”: Trade Marketing, Advertising (TV and  Print), and Consumer Promotion. But Michael Schiff, a loyalty marketing consultant, proposes an alternative viewpoint using just two categories: Acquisition and Retention. Acquisition is spending directly aimed at gaining trial of your brand by consumers who have never tried it before. Retention is spending directly aimed at stemming the inevitable attrition of current buyers.

“The simple act of recasting a budget can be a real eye-opener,” said Schiff, managing director of Partners In Loyalty Marketing (www.PartnersILM.com). “For most brands, it shows that upwards of 85% of their marketing spending is focused on Acquisition.”

Parsing retention spending into dollars focused against Heavy Buyers vs. Mediums and Lights also reveals valuable lessons. For most brands, Heavies (that is, the top 25% of buyers) control 60-75% of sales. In fact, the top 5% or the SuperHeavies can control 20-30% of dollars. In contrast, the bottom 50% of buyers typically account for 6-12% of sales. Many of these Lights are one-time buyers. Most brands spend just a tiny fraction, if at all, of their total budget on Heavy Buyer retention; the vast majority of retention spending is aimed at trying to “up-sell” Mediums and Lights, typically a very inefficient use of limited marketing dollars.

“For most brands, fully half of the franchise (that is, Lights) is MIA for most of the year,” says Schiff. “It makes us feel good to count them in the franchise, but the reality is they’re a distraction from the business of meeting the needs of consumers that count. Spending against retaining or up-selling Lights (and even Mediums) is generally very ineffective. When it does work, you’ve essentially ‘rented a share point’ and in many cases eroded brand equity by excessive dealing. Yet, almost every brand we’ve looked at is chasing new buyers and giving short-shrift to the Heavies that truly are the core of its business.”

While Schiff believes the balance between Retention and Acquisition spending can be narrowed, he doesn’t believe it should ever be 50/50. “Acquisition is an investment spend. It will always cost more to capture a new buyer than retain an existing one. Ignoring one comes at the expense of the other.”

According to Schiff, 10-20% of Heavy buyers of a brand on a year-over-year basis leave the franchise altogether. Another 15-30% “downsize” their buy-rate. Hence, rather than having a “lock” on its Heavy Buyers, most brands have a major retention issue.

“The reason brands give short-shrift to spending against Heavy buyer retention,” he explains, “is because they mistakenly believe their buyers – especially Heavies – are way more loyal than they really are. The truth is you’re in a daily hand-to-hand battle to hold on to the 25% of buyers that drive your business. Except in a few categories, even the SuperHeavies do not translate into SuperLoyals.”

Retention marketing is not easy. The skew of most budgets toward acquisition spending means that brand managers are primarily taught acquisition skills. Most “relationship marketing” programs fail because they try to build a closer relationship with the Heavies using the same messaging, offers and creative that the brand uses to acquire totally new consumers.

Schiff recommends employing some simple and effective strategies for building relationships. It’s key to understand that Heavies understand your brand benefits, point of difference and effectiveness. You have equity with them, so speaking to them in “acquisition mode” is both condescending and a waste of time. Instead, effective relationship communication focuses on allowing Heavy buyers to discover information that validates their pre-existing beliefs about the efficacy and good qualities of the brand.

“When you look at brand marketing budgets through the lens of Acquisition and Retention, what you see is that most brand spending is focused on the lowest yielding activities and consumer segments,” he says. “Brands winning in today’s marketplace are increasingly making Heavy Buyer retention an important and consistent part of their marketing mix, and growing their expertise at creating true relationship-building communications.”

This essay was written by Michael Schiff, managing partner of Partners In Loyalty Marketing, a Chicago-based consultancy that specializes in program strategy, optimization, and evaluation for CPG, Rx, and OTC companies. For more information: www.PartnersILM.com.

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Shops lose 88% of customers due to poor service

April 3, 2012

Despite an overwhelming preference for in-store shopping, consumers are being turned off to high street retail by low customer service levels, new research released today reveals.

In a survey conducted by customer intelligence company Market Force, electrical retailers had the lowest customer service satisfaction score of any service industry with just 2.24 per cent of shoppers left happy.

Clothing retailers scored only 2.69 per cent, supermarkets polled 6.10 per cent, local convenience stores received 6.48 per cent backing from consumers, while department stores got the highest score of any retail business type with 9.72 per cent left satisfied.

Of those surveyed 41 per cent said that their biggest frustration with store staff is a lack of interest in their needs and wants, and despite more than three quarter of people preferring bricks and mortar shopping to online as a many as 88 per cent will leave a shop if service is poor.

Tim Ogle, CEO at Market Force Europe, commented: “Good customer service doesn’t have to be expensive. Small, inexpensive changes can have an oversize impact on whether someone buys in your shop and how much they spend.

“For example, our research shows eight out of ten shoppers want to be taken to a product when asking about its location. It’s these little gems of insight that turn a question into a sale.”

Retailers are increasingly realising that in order to make their bricks and mortar offer as compelling as their online platforms they have to improve the experience of visiting their stores.

This morning the UK’s largest retailer Tesco announced a huge recruitment drive, which in part is in reaction to a perceived drop in the supermarket chain’s service levels in recent years.

Several simple service techniques could be employed by businesses to boost trading it seems, with Market Force also finding that 59 per cent of shoppers like products to be recommended to them by staff members.

Although shoppers like to have a personal service, they also seem open to new technologies which cut out staff interaction, with 63 per cent saying they like to use self-service machine and 49 per cent in favour of contactless payments.

In a warning to retailers keen to make more transactions automated however, the research shows that 37 per cent of consumers feel they should pay less when using self-service checkouts.

Compared to other industries retail appears to be struggling to please its consumers at present, with banks (10.8 per cent), restaurants/pubs (28.3 per cent), and hotels (31.5 per cent) all scoring higher customer satisfaction levels in the Market Force survey.

Ogle added: “These findings should be a wakeup call to retailers looking for cost effective ways to grow their business.”

Thanks to http://retailnu.wordpress.com/2012/03/19/shops-lose-88-of-customers-due-to-poor-service/

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How to Own the Customer Experience in the Store by Engaging with Shoppers through Your Branded App

March 29, 2012

The need for retailers to develop a rich, unique mobile shopping experience through a branded mobile optimized website and rich app enabling consumers to easily and conveniently search, browse and buy anytime and anywhere was the first step in a mobile strategy.

The next major strategic initiative is enabling location-based technology in a retailer’s own branded rich mobile app so they can develop a deeper relationship with their customers by engaging with them in a relevant, more personal way. Rich apps with location-aware technology give retailers the opportunity to immerse the consumer in their own branded experience and the power to know where their consumers are in relation to physical locations, when they enter the retail store, how long they are there and what they do while inside. By understanding consumers’ in-store shopping behavior, retailers can more effectively and successfully interact with shoppers, driving sales, customer loyalty and deep analytics about consumer buying behavior. For 2012, multi-channel retailers should implement location-based marketing and analytics in their mobile strategy through their own branded rich mobile app to better understand and engage with their consumers like never before. To fully engage with customers in the store through their own branded rich apps, retailers should:

1. Create geofences around physical store locations and other points of interest.

2. Engage with the consumer when they breach a geofence to drive them to the store.

3. Encourage consumers to check-in when they enter a store.

4. Enable barcode scanning in the rich app.

5. Place QR codes to highlight featured promotions in the store and have a QR code reader in the app.

6. Send customers store announcements while they are there.

7. Engage with consumers as they leave the store.

Mobile provides brands with a revolutionary tool: location awareness. Location awareness is completely transforming the relationship between brands and consumers. For the first time ever, brands have the power to engage directly with their customers based on where they are — when at home, when mobile and especially in the store—and it’s all available through their own branded rich app.

By developing a rich mobile app with location-aware technology, marketing, analytics and commerce, brands can effectively drive consumers to the store and engage with them while there to serve them better and to gain a deeper understanding of their buying preferences and habits, uncover conversion rates for products purchased in the retail store, and influence buying decisions.

To read about the 7 steps in full, download the white paper at  http://www.digby.com/resources/whitepaper/how-to-own-the-customer-experience-in-the-store-by-engaging-with-shoppers-through-your-branded-app/.

Thanks to http://www.themobileretailblog.com/customer-engagement/how-to-own-the-customer-experience-in-the-store-by-engaging-with-shoppers-through-your-branded-app/

 

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Retailers use of Social Media

August 15, 2011

More online consumers are using Facebook on a regular basis to find information about their favorite retail brands, whereas fewer consumers are turning to blogs, forums, and consumer review sites than they were a year ago, according to a new survey from Compete.

Moreover, Twitter is less popular than Facebook for finding retail information, but Twitter feeds are more successful than Facebook pages at influencing purchase decisions among users, the study found.

Among various social channels, more online consumers report using Facebook to find information about brands, according to Compete, while the use of retail forums and review sites is down:

  • 27% of surveyed online consumers visit official retail or consumer product Facebook pages at least once a month, up 3 percentage points (PPs) from the 24% who did so a year earlier.
  • 23% read or post on blogs, forums, consumer review sites, or discussion boards hosted by retailers on a monthly basis, down 6 PPs from the 29% who did so a year earlier.
  • 10% read Twitter messages from brands, down 1 PP from the 11% who did so a year earlier.

Below, additional findings from The Spring 2011 Online Shopper Intelligence report, based on a survey of 3,269 online buyers in the US.

Among those who visit retailers’ Facebook pages on a monthly basis, 56% say they do so to keep up to date on sales and promotions, while 29.0% do so to learn about a specific retailer.

Fewer consumers interact with Facebook pages for social reasons such to connect with others who like a specific brand (13.6%).

Influence of Facebook Pages

Facebook pages are influencing purchasing decisions: More than one in five online consumers say Facebook pages have been very influential (16.7%) or extremely influential (6.2%) in making a purchase decision.

Only 22.5% of online consumers say Facebook pages have no influence at all on their online purchase decisions.

Moreover, one-third (33%) of online consumers “like” six or more retailers or consumer products brands on Facebook

Thanks to www.marketingprofs.com

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Top 20 consumer trends for 2011 predictions

April 11, 2011

A great list of consumer trends predicted by the guys over at www.trendhunter.com It is a great list of ideas on how consumers habits are changing from wearable tech through to toddler touchscreens and discrete consumerism, our bet is that wearable tech will get much bigger over the next few years with brands like Vodaphone working with designers to create communication technologies that can also be stylish accessories.

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The Five Most Engaged Brands In Social Media

October 26, 2010

Coca-Cola Logo.

Image via Wikipedia

The five most engaged brands in social media are 1) Starbucks, 2) Coca-Cola, 3) Oreo, 4) Skittles. 5) Red Bull the figures for consumers who are engaged with these companies is remarkable. There is now a strong belief that interacting with your consumers makes them loyal and the figures that are being produced virtually daily do suggest that being more open and honest with your clients will bring you closer together. I have a strong belief that this type of strategy has a place in B2B and C24 is trying to develop the way we interact with everybody that touches us, employees, clients and the business world as a whole.

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