Has the internet changed the nature of the way shopping occurs in stores these days? more
To a society fascinated with the process of buying and consumption, a great retail experience should be of significant importance; yet despite the fact that 90% of dollars are spent “in store,” the media are crowded with stories and analysis of “online experience” but scant mention is made of the ways in which we can improve the “in-store” experience for consumers.
When it comes to brand loyalty, Todd Morris, a Senior VP of Catalina Marketing says in his AdAge Article “Forget the old B-school nostrum that 20% of customers account for 80% of sales: It’s a gross overstatement even for mass-market package-goods brands. Only 2.5% of consumers account for 80% of sales for the average package-goods brand, according to a yearlong study of more than 1,300 brands and 54 million shoppers by Catalina Marketing, operator of the Checkout Coupon system”
In the case of Iams pet food, the 1% of consumers who account for 80% of volume spend $93 a year on the brand. And the 1.2% of shoppers who account for 80% of Budweiser sales buy a whopping $170 worth of Bud annually. Why is that??
It is because there is no way for brands to communicate directly to consumers in a retail store – where 70% of the purchase decisions are made!
What brands/manufacturers need is a mechanism to capture in-store shopping behavior and thereby quantify the reach of the in-store audience, much like the television channel knows viewership demographic or the internet captures session-metrics. Once this is done, brand manufacturers have a platform to deliver targeted in-store marketing messages that influence buying decisions as they are about to happen. What I would like to call “Presence Marketing”
Using Active RFID with a combination of mobile technology is the appropriate platform to enable Presence Marketing. A loyalty or credit card embedded with Active RFID technology would allow a card carrying customer to be identified the moment they enter a retail store. This would be done with the permission of the customer on an opt-in basis to address any privacy concerns. Active RFID technology would also allow the capture mechanism of the in-store “session metrics” – the browsing pattern of a shopper analogous to the navigation pattern in an on-line e-commerce site. And the delivery mechanism for brand communication would be the mobile platform.
Presence Marketing together with Social Networking could also heighten the effectiveness of brand communication within a store.
Here is how it would work at a department store. When a card-carrying customer enters the department store a brand-specific communication is sent to the mobile phone. Note, this does not include a promo or a coupon. It is meant to direct the customer to a brand display. Example “See the new ImPulse Premium Denim Casual Sportswear.” If the customer visits the ImPulse section a promo/coupon is sent to the customer. On the social networking side, this event causes the customer’s brand affinity score to increment. If the brand affinity score increases beyond a certain threshold then they are a candidate for being a “brand influencer” and the brand company is notified of this. The brand-affinity score would be a new dimension in the social graph connecting people with similar brand interests and enable word of mouth marketing.
The benefits of this approach to Presence Marketing for the brand company would be an increase in basket size through effective in-store branded communication, and any word-of-mouth marketing through brand influencers. For the retailer this would result in increased co-op marketing dollars, and increased same-store sales derived from effective brand marketing.
One closing thought I got from Mike Wittenstien “In my opinion 90% of marketing dollars are wasted. Why? Because we have to communicate to people who have no interest in a particular product or service when it is mentioned to them.” Presence Marketing allows for targeted in-store marketing to a desired target. Furthermore, the true value of Presence Marketing is that the targeted marketing happens when purchase decisions are about to be made – at the shelf!
What’s your view? We would love to know …
