Data-Driven Shopper Marketing, Part 1: Digital Shopper Marketing 5.0

Five years after first documenting the explosion of online, social and mobile tools in the shopping culture, an annual study finds that just rolling out the latest "bright & shiny" app won’t cut it anymore.Walk through the doors of an FM-CPG retailer like Target and you’ll immediately see how dramatically shopper marketing has shifted over the past few years. Sure, you’ll still see traditional endcaps, in-store displays and elaborate paper signage designed to stop shopping-cart pushers in their tracks. But you’ll also find free Wi-Fi to connect shoppers to Target’s mobile app with its digital circular and easy-edit shopping lists. You’ll observe shoppers at checkouts who are scanning personalized offers from the store’s Facebook-linked Cartwheel app and then sharing the news online. They’re Googling prices, posting on Instagram, scanning QR codes, checking in via Foursquare or pulling up coupons from favorite brands.If seeing isn’t believing, however, consider this startling stat: 44% of shoppers now say that their smartphones never leave their hands while they walk a store’s aisles. The truth is, as retailers and CPG marketers work to integrate the digital and in-store shopping experience, they are both leading and just trying to keep up with consumers who already are doing so on their own with dozens of new technologies and tools.Digital PathsFive years ago, when Catapult delivered its inaugural Digital Shopper Marketing (DSM 1.0) study to its CPG and retailer clients, many of today’s standard digital technologies either didn’t exist or were only in their most nascent stages. This 2013 entry in the now-annual survey – DSM 5.0 – tracked more than 40 mobile, social, online and in-store shopping tools.For DSM 5.0, Catapult researchers surveyed more than 1,400 consumers at 18 top retail chains. The survey found, not surprisingly, that smartphone and tablet adoption has boomed with more than half of all respondents (52%) reporting that they now own these devices. In 2013, according to DSM 5.0, the number of consumers using mobile in-store grew even more sharply, with the largest gains coming from users of mobile shopping apps, text alerts from brand/retailers and mobile search.“We’ve seen a fascinating evolution since 2009 in how people shop, with the development of what truly has become a ‘digital path to purchase,’” says Jennifer Romano, director of digital shopper marketing at Catapult. As the number of available digital tools and devices has spiked, Romano adds, their usage has become so interwoven in the lives of shoppers that various functionalities that formerly were tied to usage “at home only” or “in-store only” are now more accurately characterized as being used “anywhere” along the path to purchase.But now, she explains, the newest edition of the study suggests that simply rolling out the latest “bright & shiny” app or tool won’t be enough to satisfy savvy shoppers, who are no longer easily wowed by the latest technology. In fact, the DSM 5.0 study found that 59% of respondents agreed with the statement that digital tools “have changed my shopping habits in some way.” While this is still a significant number, it is down dramatically from the 69% who felt similarly in 2012 (tracked in DSM 4.0). “We’re now in a stabilizing period, where form and function are just table stakes,” Romano says, adding that, at the same time, digital tools are indeed becoming more universal with increased awareness and usage. “But consumers now have higher expectations. They want their digital shopper marketing options to be easy, to be inspiring, and to save them time and money.”The survey also revealed some interesting correlations between chain patronage and smartphone usage. Generally, consumers who shop at club stores posted the highest smartphone ownership levels (roughly 60%) while patrons of value chains (dollar channel, Walmart, etc.) indexed the lowest (roughly 50%). But at a handful of chains, smartphone ownership has spiked over the past two years (see accompanying chart):Smartphone ownership by Food Lion patrons increased by 8 percentage points since 2012. During that same time period, Food Lion began linking its loyalty card program to the popular Ibotta mobile app.Smartphone ownership by Ahold shoppers was up 9 percentage points. In recent years, Ahold has been porting the technology behind its popular Scan It handheld shopping devices over to a smartphone app.Other increases were seen among patrons of Safeway (home of the “Just for U” app), Walgreens (“Balance Rewards” was a big mobile initiative in 2013) and Meijer (long a mobile innovator).Whether cause and effect, mere correlation or just a series of coincidences, this data does suggest that when retailers give their shoppers a good reason to use a digital tool, they will respond.Empowered Workhorses“Shoppers have gotten used to having everything available to them,” says Holly Manners, analytic consultant at Catapult. “They’ve grown to expect more and more, so they become more demanding of brands and retailers.” And what they’re demanding, she says, is a seamless, omnichannel journey where there is little difference along the path to purchase between online, mobile and bricks-and-mortar possibilities.These multi-device shopping patterns are rising fast. According to Google, while 65% of respondents start their path to purchase with a quick search on a smartphone, 61% continue that journey on their desktop computer or laptop. Traditional computers are still the most widely owned computing devices, and they still play a big role especially for managing coupons and deals. According to the DSM 5.0 survey, 25% of shoppers still start their path to purchase on the desktop or laptop and, of those, 19% continue on a smartphone and 5% on a tablet.In a multi-device, cross-channel world, shoppers think nothing of researching purchases in the store before buying online – otherwise known as “showrooming” – or the reverse, gleaning purchase information online and then heading to the store to buy – known as “webrooming.” A December 2013 Harris Poll found that while nearly half of U.S. consumers (46%) said they have showroomed, more than two-thirds (69%) said they have webroomed.Of the 40-plus digital tools that were measured for usage, helpfulness and influence in the DSM 5.0 study, several are considered “workhorses” that work hardest to deliver ROI, including printed Internet coupons, online circulars, digital coupons sent to loyalty cards and search engines. “People find these the most useful and keep coming back consistently,” Romano explains. Marketers, she adds, are likewise becoming more discerning about their investment choices. “Retailers and brands are saying, ‘This is our budget, and these are the tactics.’ Then, they say, ‘Let’s look at how we can make smarter, better choices’ about which digital shopper marketing tools and tactics will tie back the most to ROI.”On the other hand, while virtually every mobile tool addressed in the survey saw growth, some are still in their early days and are either considered niche options or early bets when it comes to success in shopper marketing. These include Pinterest, Google+, YouTube, location-based rewards and Snapchat. “Marketers need to be mindful of who their shopper is,” says Catapult’s Manners. “Millennials, for example, may do a lot of shopping research on YouTube, but older consumers may not yet be ready to use all the latest tools.”While shoppers are generally more pragmatic these days, there are a few “bright & shiny” tools out there that intrigue them. More than half of DSM 5.0 study respondents said, for example, that augmented reality (sometimes referred to as “AR”) shopping tools might be helpful, and almost as many believe that paying via the phone (i.e., the “mobile wallet”) could be a positive even though very few have actually encountered any real-world examples of either technology. The same holds true for Google Glass (13% said they wish they could use it for shopping) as well as wearable devices such as an “iWatch” (5%). Shiny or not, Manners says, it’s important for marketers to always consider whether a digital tool is truly helpful to shoppers and keeps their attention. “But yes, they do have to think about what they can do to be inspirational, and to offer something different and exciting.”Next Steps: A Data-Driven Shopper Marketing Evolution“Consumers have become more empowered,” says Jie Zhang, associate professor of marketing at the University of Maryland, of the way consumers can now harness multiple technologies and platforms to gather information and communicate with companies. But, she cautions, this is where the challenges loom large for marketers. “From the shopper’s perspective, they want a seamless experience that meets their expectations,” she says. “But from the marketer’s standpoint, the devil is in the details. They must make sure that they have a consistent strategy across channels and can harness the massive amounts of data available in each channel.”Tying the entire shopping journey together is the biggest goal but the toughest test for marketers, adds Jonathan Treiber, CEO of RevTrax, an omnichannel promotions platform that offers marketers the ability to drive and measure digital coupons both offline and online. “Marketers need to realize that consumers are no longer just taking a single path to purchase journey – there are multiple journeys, through different devices and tools.”In the past, the world of data was clear but rather limited. “Brands had panel data and knew what people were buying, and their demographics, but didn’t have any idea what was motivating them,” says David Bell, professor of marketing at the University of Pennsylvania’s Wharton School. Retailers may have had their valuable basket-level data, he adds, but may not have been able to analyze it sufficiently to develop useful shopper insights.Now, says Bell, both brands and retailers need to get close to a full 360-degree view of their shoppers. “Consumers can now be reached offline and online all the time, and you need to understand both sides to have the full picture.”To that end, the changing universe of shopper marketing is already evolving to the next level, say experts. This new, data-driven shopper marketing will be focused on using today’s sophisticated digital tools to drive deep insights that help develop a broader and deeper understanding of the consumer, so that brand communications and messaging can become better targeted, personalized and relevant.“This new access to so much digital data is a challenge, but also represents a hidden opportunity,” says Yory Wurmser, retail analyst for eMarketer. “So many competing channels may make advertising less effective in some ways, but it allows brands to gather information about people’s intentions and what they’re really after.”The progression from digital shopper marketing to data-driven shopper marketing, says Catapult’s Romano, is really about providing wins for retailers, brands and consumers. Those wins require a value exchange that works for consumers: “In order to gain consumer trust and their data, you have to offer consumers something of value and keep up with what they want.”Next month: Part 2 of this series will explore ways to gain a “360-Degree Shopper View.”About the SponsorCatapult is today the merger of two powerful agency brands – Catapult and RPM – now operating under a single vision and name. Catapult was launched in 2005 as an integrated agency resource, while RPM began in 2008 as a decentralized shopper marketing agency. Today both have come together under the Catapult name, delivering insights, brand strategy, shopper marketing, consumer promotions, digital, and outstanding creativity.

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