Future Vision: Predicting Retail Trends

Future of Sustainability Sustainability will continue to gain currency, says Bevan Bloemendaal, senior director, global creative services at The Timberland Co., Stratham, NH. "Our material choices are very important to us, ensuring that we're reducing our carbon footprint," he says. "We're looking at ways to reduce our packaging. Wouldn't it be wonderful one day to not have a shoe box? I think we're going to see that." Walmart and other retailers see sustainability as a bottom-line issue, which gives it staying power beyond the public-relations splash, says Chris Hoyt. "They might dish it up as sustainability," he says. "A key part of it is reducing costs." "Consumers are going to be more concerned about it," predicts Virginia Cargill, president and CEO of CBS Outernet, Fairfield, CT. "The cost of petroleum and all that stuff is going to force everyone to come up with fewer [temporary pieces] and more permanent displays that are better merchandised. A lot of the cardboard stuff is going to go away." Julie DeWolf, director of retail marketing, Sunkist Growers Inc., Van Nuys, CA, says, "When we start understanding that we're talking about our future, our children's future and our grandchildren's future, anyone who has a family has to be vested in [sustainability]. And it ends up saving in the supply chain." Future of Retail Media Julie DeWolf, Sunkist Growers Inc., has mixed feelings about video and digital signage. "It could have a lot of value in those 'fresh' areas of the store, [but] I don't see myself, as a shopper, spending 10 minutes stopping to watch a demonstration video," she says. "Noise and TV kind of clutters up the environment. It's going to have to be done in a way that's noninvasive." Steve Hyland of Coca-Cola believes the costs will need to come down to the point where subtler, on-shelf applications become possible, "so companies can use it on their displays or where their products are located," he says. "A display with a 2-by-3 screen on-shelf that can talk about a product and explain it -- that will be relevant to the shopper." Jeffrey Seigel says the costs are too high for Kao Brands, which makes hair and skin-care products. "The pricing for it makes it difficult for us to get involved," he says. "I know it's out there. I know it's important. I just haven't been able to figure out how to leverage it for my business." David Teichner of Channel M is, not surprisingly, optimistic. "The cost of equipment is going to come down so much. Firms like ours are going to continue to learn ways to deliver more compelling content. The engagement and the effectiveness is so much higher. You're definitely going to see that grow." Susie Frausto, senior director of marketing for The Jel Sert Co., West Chicago, IL, does not believe digital signage will replace more traditional vehicles. "It's probably going to complement some programs," she says. Retailers and brands need to pick their spots, says CBS's Cargill. "If you have them all over the place, they just become wallpaper," she says. "If you have them in the right places, they can be effective. How you pay for them is going to continue to be a question. You need to be focused and in the right place. Otherwise, you're always going to be hard-pressed to beat the cost of cardboard." Teichner believes that tapping into mobile technology based on data gathered from in-store measurement will be a wave of the future. "There's a lot of messaging that certain vendors will want to deliver -- product information, coupons," he says. "You know it's my phone walking in there, and you already know what my likes are. By the time I walk in there, I already have that 10% off. Nobody's scratched the surface with it, but I think it's going to be pretty major." Future of Clean-Store Policies The issue of clean-store policies will continue to swing back and forth on a pendulum, Coca-Cola's Steve Hyland says. "If you say, 'there's no signage, we don't allow anything from brands,' it goes against the idea of creating a real impactful message at the point-of-sale," he says. "That whole balance of clean-store vs. effectiveness at the point-of-sale, retailers have to work with us. It's not one way or the other." "At one point, clean-store policies were the wave of the future," says Julie DeWolf of Sunkist Growers. "Now, I kind of feel like we're going in the opposite direction. If you have the right product, they're totally ignored. It's out there, it exists. It's something retailers use as an excuse when they're too busy to deal with something. Regardless of the policy, there are always exceptions if you have the right product at the right time." Clean-store policies shouldn't discourage the savvy shopper marketer, says Don Ladhoff of the PMA and Seismicom. "That is usually an early sign of a retailer trying to understand who they are, who their brand is," he says. "For the best practitioners of shopper marketing, the manufacturer can come in and mold the opportunity for a win-win collaboration of motivating the target shopper to buy that product and grow the category." Future of Retailer Collaboration Brand-retailer collaboration in the broader sense also will be an important concept going forward, says Mike Donabauer, global vice president of marketing, Wolverine Footwear Group, Rockford, MI. "Retailers are concerned about creating their own retail environments," he says. "We find ourselves with the same objective, often working more closely with our retail partners." PMA's Don Ladhoff says most retailers are "bullish" on collaboration and are reshaping their corporate structures to accommodate it. "Retailers are welcoming this sort of assistance because it's being seen as a win-win area," he says. "Rather than feeling that manufacturers are coming in with a one-sided agenda to push their latest products, to push their promotional needs, it's an area they can rally around and both focus on, growing the sales of the category." Collaborations will only work over time if they produce measurable results, Deloitte's Rob Holston says. "That's only going to get stronger, and it's going to become more demanding," he says. "Everyone's going to say they're happy to collaborate with you. The proof in the pudding is, what's the outcome?" "If we can prove to our retailers that the vehicle is driving profits, it's going to be an easy sell," says Rob Wallace, managing partner at Wallace Church, New York. "Without that kind of measure, stores are going to shy away from it. They're going to be respectful of that consumer who wants to get in and get out of the miles of aisles." "Shopper marketing is going to take [brand-retailer] collaboration to a whole new level. The guys who do proprietary research, that's the heartbeat of differentiation," says Chris Hoyt. "Here's how our consumers behave as shoppers in Walmart vs. Safeway -- those are going to be the guys retailers listen to." P-O-P 2020: Shopper Marketers Share Their Predictions We asked top shopper marketers to look into their respective crystal balls and tell us what they see shaping the field a decade from now. Here's what they told us: Herb Sorensen, TNS Sorensen "This effort to communicate with shoppers during the shopping process, by connecting electronically to the Internet and other communication media, is a dominant, driving theme that is not going away. It's going to move retailing, willy-nilly, one way or the other. There's a lot of people experimenting with this approach, whether it's kiosks, whether it's the person carrying their own PDA or cell phone, whether you're providing them with the device, or whatever. Ten years from now, everybody shopping in a store will be connected with that store, communication-wise." Chris Hoyt, Hoyt & Co. "When P.R.I.S.M. clicks in, brand people can really measure the impact of in-store activities against traditional forms of share-building. Shopper marketing has legs, it's inevitably going to grow. But it's going to take 10 years to really take hold." Susie Frausto, The Jel Sert Co. "The whole idea of targeted coupon shopping based on loyalty cards -- no one's quite figured that out yet, but they will. Making it more specific and more targeted is an exciting opportunity. It's marrying up certain data points and figuring out how to target certain consumers more." Mary DaRif, Sherwin-Williams "The biggest differences will be more digital displays and signage, less clutter and more collaboration between retailers and CPGs to create a cleaner and less confusing message to consumers. Environmental sustainability is not a fad, and all steps in the supply chain will be working to lessen their impact. Metrics are critical, because you can't understand and grow what you can't measure. And clean-store policies are what will be noticed by consumers and keep them coming back." Rob Wallace, Wallace Church "We've left the age of advertising, and we're deeply into the age of branding. There's a lot more opportunities. It takes a lot more creativity, it takes a lot more strategy. There's an over-proliferation of brands. The ones that will win will be the ones that stay true to the heart of the consumer." Thom Blischok, Information Resources Inc. "We are in unparalleled, uncharted waters, muddled by global markets, oil costs, commodity costs. That's what's predicating the idea that shopper marketing will help drive a different level of stickiness with the consumer. P-O-P generally is going to change to storytelling P-O-P. I see P-O-P being heavily driven by education: why it's better for me, how it helps me stretch my dollar, why this product is multi-functional."10 Years Ago. . . How'd We Do?Original Prediction: "There will be more consolidation of firms, with more offices across the country, and headquarters outside of New York and Chicago," says Steve Spetnagel, The Coca-Cola Co. "It's an industry that's been very Northern focused. ... I think you're going to see bigger players, and some of them will move their offices to my neck of the woods, down South and even out West."True: Display companies have emerged outside of the North, such as The Carlson Group in Oregon and Display Boys in California, both within the last 10 years. And with the rise of Walmart, a countless number of brands, agencies and display companies have headed south to Bentonville. Original Prediction: "You may see linkage to the Internet from the in-store P-O-P kiosk," says Randy Riley, Howard Marlboro Group. "You will learn about things and ... buy things that a given store doesn't have in stock. For example, if you are in a toy store and don't see a gym set you want, you'll be able to hook into a kiosk, download 20 other gym sets to your liking and choose one that will get shipped to the store or to your home." True: Internet kiosks are widely used to help sell out-of-stocks, sell add-on purchases or simply educate shoppers. Over the years, however, kiosks have become more advanced. They track customer information, act as bona fide shopping assistants by matching shirts with pants or pairing wine with cheese, and can report how fresh and safe the store's produce is. Original Prediction: "I think you'll see more quests for information," says Joe Ricci, Duracell International. "Retailers and brand marketers will try to find out more about their consumer, what triggers the buy, what makes them want to come back for more, or choose your brand over the other brand. Information is going to be the power." True: This is why Joe is on the payroll. Knowing about the shopper has become a beacon for the industry: Research companies have emerged to help brands track and better target their shoppers, and more and more brands seem to be creating shopper insights teams in their departments. Original Prediction: "The future of P-O-P and promotion is one-on-one customer marketing driven by new technology. ... Direct mail and in-store promotions will become much more individually oriented and customized to special interests," says Jan Rimmel, Hasbro. True: Shopper segmentation has become a focus in the industry. Brands and, primarily, retailers are using research to target specific customer segments. Best Buy, for example, targets an older male consumer they call "Buzz." Original Prediction: "Grocery store carts will be digitized with information screens," says Matt Borgard, Barton Beers Ltd. "Place your I.D. card in a slot on the cart. ... When it goes down certain aisles, it sends a signal to you where your favorite products are located and where you want to stop. ... The screen automatically adds up product prices and lists everything you are going to buy. The best part? ... Bring your card to a checkout counter, pay, and the order is electronically sent to a back warehouse. Just drive around back and everything is packed and loaded into your car." Didn't happen: While smart shopping carts, such as MediaCart, and technologies like handheld scanners that integrate with loyalty cards are here and now, they remain largely in test phases. Because of RFID, the potential still remains high, but debate over privacy issues and price has weighed down advancements. Original Prediction: "By the year 2000, 'moving holograms may approach customers as they enter a supermarket,' robotic clerks will be moving around stores, and store-wide scanners will monitor product movement in all parts of the store." Report by Backer Spielvodel Bates, a New York-based ad agency. Didn't happen: The 2002 film Minority Report is the closest thing to this prediction becoming true.

Future Vision: Predicting Retail Trends

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