Clicking Through the Path to Purchase: Best Practices in Digital Shopper Marketing

An industry report by the In-Store Marketing Institute sponsored by Catapult Marketing and Google Inc.Download the full report at right.ContentsIntroductionThe Digital LandscapeKey Consumer BehaviorWhat To Do: Strategies For CommunicationWhere To Be: Strategies For PlacementHow To Deliver: Strategies For ConnectingKeys To Future Success An excerpt from the report follows. Click on the Attached File at right to read the full report.1. INTRODUCTIONRead quickly. In the time it takes to read this report, some of the best practices in digital shopper marketing that it examines may already be obsolete.While this special report was in production, Apple Inc. introduced both the iPad and iPhone 4. On July 1, Unilever's Dove Men + Care became Apple's pioneering "iAd" advertiser by launching a multi-dimensional advertorial (to use an outmoded phrase) that combined sports content, product information and a raft of attention-grabbing rich media tricks. Shortly thereafter, Kraft Foods launched "Big Fork, Little Fork," an iPad-specific application designed to help parents find healthy meal solutions for their children.Such rapid-fire developments have become commonplace in today's society, where the rate of new technology introductions is matched only by the speed with which consumers adopt them. Among the tools currently at the peak of the consumer adoption curve are numerous digital shopping aids.Morgan Stanley analyst Mary Meeker theorizes that society is undergoing the fifth major technology cycle of the last 60 years. The main difference between this cycle and the previous four -- the emergence of mainframe computers in the 1960s, mini-computers in the '70s, desktop computers in the '80s, and the Internet era of the '90s -- is that this one frees the user from the prior restrictions of time, place or even device. It is the era of the "Mobile Internet."The consumption of media has changed accordingly. There are 221 million Internet users in the United States, which represents 71.2% of the population, according to eMarketer. There are 292 million television viewers, although 35% of them actually do some of that viewing through the Internet, according to comScore. And, 66 million are occasionally logging on while watching TV, according to In-Stat.Such media multitasking will become even more the norm in the future. Nielsen forecasts that 51% of U.S. consumers will own Internet-enabled smartphones by the end of 2011. By 2014, more people will be accessing the Internet via mobile devices than desktop computers, according to Morgan Stanley.These technological changes are wreaking havoc in the marketing industry, which enjoyed a relatively easy 75 years of controlling consumer communication, dictating the times, places and delivery channels to a nation of passive consumers via radio and TV.The Internet reversed that, turning the act of consuming into a self-driven exercise rather than a passive process. Today's consumer actively seeks out the information for herself, and increasingly is able to find everything that she needs quickly, easily and, thanks to mobile phones, whenever and wherever she needs it.The result is "an increasingly complex path to purchase," said Lori Aulfinger, Procter & Gamble's director of consumer and market knowledge, at a recent industry conference. "Consumers are using more and more touchpoints to decide what to buy and where to buy it.""Digital marketing is now affecting -- very directly -- the shopping occasion," says Peter Cloutier, president of Catapult Marketing, Westport, CT.Google Inc., whose primary business model entails connecting advertisers with interested consumers, has dubbed the digital marketplace the "zero moment of truth." If, as Procter & Gamble has famously professed, the first moment of truth occurs when "consumers stand in front of a store shelf" and decide whether to buy a product, then the zero moment is "everything that happens beforehand," according to Kevin Kells, Google's national industry director for consumer packaged goods.Increasingly, that "everything" is taking place digitally.Digital MarketingThe term "digital marketing" applies to any communication delivered through digital technology, including the Internet, place-based networked signage, in-store kiosks and personal shopping assistants, advergaming and mobile phones. But the practice of "digital marketing" has existed for much longer than the term.Packaged goods marketers have been communicating with consumers online for almost 15 years, both through advertising vehicles adapted for the medium and the development of content that could attract visitors to brand websites.For a number of years, "digital shopper marketing" -- which fine-tunes the practice to directly influence store choice and product purchase -- has been a core strategy for brands in consumer electronics, automobiles and other "big ticket" categories, where the path to purchase demands a significant amount of information gathering, product comparison and price checking, and where online purchase options have been available for years.Food and beverage marketers, however, have been more content to use the Internet as a brand-building channel rather than a direct sales-driving mechanism. The general belief among CPGs was that consumers didn't need to conduct "research" to decide between Cheerios and Special K, and that the information shoppers needed before heading to the store was delivered in Sunday newspapers.Likewise, pure-play Internet retailers such as Amazon.com and Drugstore.com, along with traditional specialty chains like Best Buy, have employed digital shopper marketing practices for a number of years to attract these online researchers, help them make their decisions and, ultimately, close the sale -- either online or in a physical store.Traditional packaged goods retailers took much longer to get involved, due to the understandable belief that food and household products weren't enough of a big-ticket purchase to be made online. When Amazon.com began selling "groceries" in 2006, few supermarket operators even had consumer-facing websites. (The idea that weekly circulars should be posted online had not occurred to most.)It was only in the last few years that traditional CPG retailers began attempting to build sites that would attract shoppers, and even more recently that they realized digital marketing could influence trips and purchase decisions.This shift in thinking was driven by many things, including the continued fragmentation of traditional media, the near-ubiquitous household penetration of the Internet and the economic recession of 2008 --- the last of which made the aforementioned "Cheerios vs. Special K" decision much more critical for many consumers. Today, 50% of packaged goods shoppers visit a retailer's website one or two days before visiting the store, according to Catapult Marketing's second annual Digital Shopper Marketing Study (which will be discussed at length later).But what sparked the current surge in digital shopper marketing more than anything else has been the emergence of the mobile phone as the consumer's primary lifeline.During holiday 2009, 10% of all cellphone users already were taking pictures of products in stores, according to Morgan Stanley. These mobilized consumers also used their phones to obtain (and use) coupons, make shopping lists, compare prices, find better deals at other stores, and send those aforementioned photos to friends to get a second opinion.Such functionality is making the mobile phone an indispensible lifestyle tool for consumers --- a personal shopping assistant, if you will.For marketers, the device is fostering direct, one-to-one communication with consumers. But it has also ushered in a new age in which the role of marketing is not just to persuade consumers to buy products, but also to provide them with digital tools that can facilitate those purchases.To read the full report, click on the Attached File at right.

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