Embracing the Digital Path to Purchase

A decade ago, the debate was over how much shopping consumers would do over the Internet. Now, it's a slightly different question: How much shopping are consumers doing as a result of what they learn on the Internet? Consider the following observations from Jim Murphy, regional vice president of sales at Yahoo!, during the recent Shopper Marketing Expo: Past purchase-based targeting at scale (i.e., in a big way, online) is the most effective means of driving short-term sales. Manufacturer programs that rely on geo-targeting of specific retailers have grown by 300% in the first nine months of 2010. Retailers are starting to include digital activation in their own marketing playbooks, moving dollars from offline to online media."Online is finally fulfilling its promise to be more relevant to consumers," said Murphy. "This is a consumer trend, not a marketing trend. The marketers are finally starting to catch up. I said that we [Internet providers] were relevant in 1999. We weren't. Based on what consumers want, need and expect . . . we are now."Murphy stressed that pre-shopping activity is becoming commonplace for "low-considered purchases," noting that 20 million consumers go online to search in the food and beverage category; half of these consumers are searching from a mobile device while shopping inside a store; and fully 40% make a purchase after looking up the product. "When your customers go to your website, they expect to find contests and offers," he said, "so you'd better have a promotional strategy tied to mobile, or they will go to the next channel."Searches about everyday products represent a huge opportunity for marketers, said Catherine Roe, head of CPG at Google, who can use data from search queries to hone messages or develop products. In one analysis, Google found that food-related searches for "gluten free" were up 140%, while "whole grain" queries were stagnant. A General Mills brand manager used this data to bolster her belief that gluten-free was an underserved category, leading to the development of new gluten-free Betty Crocker cake mix and the placement of callouts on existing General Mills products that are naturally gluten-free. The company now runs display ads for Chex cereal on Google's search results pages as part of a tie-in with Target stores."Traditional research would not have led to that innovation in the cake mix category," said Roe. "Most research notes that only 8% of the U.S. population has [gluten-related] Celiac disease, but that doesn't take into account friends or family members who are interested in the subject or their own general health. Google Insights lets you validate trends you think are out there."That same General Mills brand manager noticed a spike in searches for Green Giant vegetables around Easter and wanted to incorporate a price promotion into its paid-search ad campaign. "We didn't have time to build a customized Web page," Roe said. "We ran an ad on Target's online circular for dollar-off vegetables. Feedback from the brand person was that they drove over 3,000 clicks to Target.com and had record sales. They've signed up to do the same program over the holidays. We're talking about enhancing a program for less than $5,000."Price DriversFor consumers, price and value remain two of the biggest drivers in the online marketplace. Two out of every three consumers now search for coupons and special deals online, per Yahoo! In the past two years, coupon-related searches on Google.com are up 288%. Searches for online ratings and reviews are now ubiquitous even in the most mundane product categories. Roe noted that a review of the new Bounce Dryer Bar generated 2,600 posts on the Chicago-based ratings site Viewpoints.com. "A lot of this is driven by the recession," said Roe, "but when the economy turns around, consumers are still going to do price comparisons online, look for peer reviews and plan their baskets ahead of time." In response to these trends, Google has adapted its search pages so that queries for even basic household products produce ratings and retailer "buy" buttons in either the organic or paid-results sections.A Yahoo! survey found that women, aged 25 to 44, comprise the segment that's most interested in online circulars. Almost half of survey respondents said they use coupons and special offers that they find online themselves, 44% use offers sent directly to them via e-mail, 40% get them from retailers' websites, and 23% get them from "one central location such as a deals site." That last result, up from 17% in 2009, is "a clear sign that consumers want their lives made easier online," noted Murphy.Almost half of those surveyed said they prefer to receive online offers on Mondays and Saturdays. Women, ages 17 to 24, preferred delivery in the early morning hours, whereas their male counterparts chose the late afternoon and early evening hours. Murphy said that marketers should use this data to target consumers during the pre-shop period at optimal times. "Time of day is the most undervalued means to drive relevancy in digital marketing," he said. "If I have a product that's often purchased right when I'm leaving work, why wouldn't I communicate to people from 4 to 6 p.m., or before breakfast in the morning?"

Embracing the Digital Path to Purchase

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