yellowwood engager 2012

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A closer look at the role of brand engagement in driving purchase decision amongst SA female household shoppers

Engager™ Shopper Deep-dive: August 2012

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Shopper marketing is rapidly encroaching on traditional media budgets

Source: Global Advertising Forecast from Strategy Analytics, February 2012

With an estimated 5% annual growth rate in advertising spend globally, digital and shopper marketing are rapidly encroaching on the budgets of traditional media

… and within this, shopper marketing is rapidly closing the gap at an estimated 21% annual growth rate expected in 2012

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With this shift in investment in mind, we need to ensure that our marketers are well-equipped for success

We have used the power of Engager and the collective insight of Yellowwood to demonstrate the need for marketers to critically evaluate their approach to shopper marketing. One size does not fit all and a shotgun approach will not yield the desired results.

Shopper marketing shifts the focus from product- to shopper-led marketing - decisions need to be driven by shopper-specific insight and behaviours.

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There is more thought and preparation going into shopping today than ever before

A convention-challenging finding by Campbell’s research suggests that 80% of grocery brand decisions are made before shoppers even get to the store. Their research identified the importance of purpose, context and proximity to consumption all being critical influencers of the purchase decision.

www.retailwire.com, 8 August 2011

A longitudinal study of shopper attitudes and behaviours in the USA indicates that recessionary behaviour has stuck… more consumers pre-plan purchases, stick to their lists and compare prices before they reach the store than ever before. And even though the recession is formally over, this behaviour continues to drive much of mainstream shopper behaviour in 2012.

Symphony IRI MarketPulse Surveys 2011/2012

http://www.retailwire.com/

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There is more thought and preparation going into shopping today than ever before

A convention-challenging finding by Campbell’s research suggests that 80% of grocery brand decisions are made before shoppers even get to the store. Their research identified the importance of purpose, context and proximity to consumption all being critical influencers of the purchase decision.

www.retailwire.com, 8 August 2011

A longitudinal study of shopper attitudes and behaviours in the USA indicates that recessionary behaviour has stuck… more consumers pre-plan purchases, stick to their lists and compare prices before they reach the store than ever before. And even though the recession is formally over, this behaviour continues to drive much of mainstream shopper behaviour in 2012.

Symphony IRI MarketPulse Surveys 2011/2012

Shopper marketing is not just about what happens in the store at POP, but requires a comprehensive approach to engagement along the full purchase journey.

http://www.retailwire.com/

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CASE STUDY: Kraft’s iFood Assistant closes the loop by accompanying the shopper along the whole journey

Source: Shoppernewsblog.com, August 2012

Although the intent is to drive Kraft sales, the app is focusedon the shopper and uses a combination of technology solutions (geo-location, QR codes, integration into social media for peer reviews etc.) to create a very engaging experience.

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Some of the leading trends affecting shopper behaviour

Requires collaboration between retailer and manufacturer to create a memorable and appealing shopper experience - driving footfall & brand preference

Increase in quick trip shopping patterns, facilitated by increased access to convenience stores in SA – exemplified by WW Food (Convenience stores accounted for US$1.4 bn revenue in SA, 2009)

Massive increase in access to smartphones & Internet changing the way that South Africans shop… Online shopping valued at ~ZAR2bn in 2010, with 30% growth projections compared to 7% for traditional retailwww.southafrica.info

In a bid to try & disrupt habitual shopping, more and more retailers are offering shoppers solution ideas.. Be that in the form of recipes, “dinner tonight” ideas or home improvement solutions, this is a great way to introduce shoppers to new brands & products

Leading online shopper activities are price comparisons & product information sourcing. Who needs a retail/brand apps when you have Google? Content, payment & auto-replenishment aps will be the future winners

To counter this, brands need to focus on innovation that adds real consumer value (quality convenience, health & wellness are the current drive areas) to avoid the discounting trap

Source: Desk research, various articles and reports

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The highest number of retailers in the Top 20 listing amongst countries surveyed in 2011

TAKE ACTION:

Ensure you are engaging your shoppers at critical moments of truth, with the rightinfluencers.

Understanding the customer journey –how different segments make decisions, the influencers of those decisions & drivers of engagement – is a critical component for future success.

Then we can plan where we need to be and when, with what tools, offers or experience to engage the shopper

In 2012, we have done a deep-dive into shopper behaviour and the role of brand engagement in driving decisions…

…is a research tool

to help evaluate the depth and drivers of engagement with

your brands

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There are 9 pillars that contribute to the

Brand Engagement framework

I would talk, review

& pass the brand

on to others

I want to actively

engage with this

brand

I would not switch

away from this

brand

I value & commit

to this brand

I am familiar &

have experience

with this brand

I understand what

the brand offers &

stands for

I believe the brand

will deliver on its

promises

I identify with the

brand’s proposition

I see, hear & trust

others using the

brand

Brand engagement

18The sample is demographically representative of the SA online consumer market - drawn from a reputable consumer panel.

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According to AMPS 2011…

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For the purposes of our survey, we…

Disproportionate amount of influence over the household purchase decisions

More flexibility in their monthly grocery spend – although still price conscious, there is room to manoeuvre in what they choose to buy

With the rapid growth in internet access through smart phones, this is the future market who will be shopping and engaging online

Large South African consumer panel, drawn from all regions and demographics within our target audience

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6 everyday grocery categories were used to help inform our shopper insights

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…and a total of 60 leading brands across the 6 categories were included

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Brand rankings based on Engager Index

Fatti’s & Moni’s135

Tastic 143

Knorr 134

Albany 129

Royco 129

Sasko 123

Blue Ribbon118

Ace 113

Iwisa 110

Surprise 108

All Gold 139

KOO 141

Crosse &

Blackwell139Lucky Star 127

Wellington’s119

All Joy 110

John West 110

Heinz 109

Rhodes 108

Farm Girl 98

Flora 131

Clover 133

Danone 129

Parmalat 126

Rama 125

Stork 125

Ever Fresh 116

Dairybelle 114

Fair Cape 105

Bonnita 102

Dettol 151

Vaseline 152

Dove 147

Johnson & Johnson

147Aquafresh 146

Nivea 144

Lux 141

Colgate 138

Dawn 129

Mentadent P126

Handy Andy145

Sunlight 148

Sta Soft 143

Domestos 136

Jik 135

Omo 130

Mr Muscle 128

Vanish 126

Skip 115

Bioclassic 105

I&J 129

McCain 139

Rainbow 121

Sea Harvest118

Harvest Time114Nature’s Garden

114Today 114

County Fair 107

Fry’s 101

Dr Oetker 93

5 Key Shopper Themes Investigated

1. Why is brand engagement important when considering shopper behaviour?

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Brand engagement sets the context for our shopper marketing plans

In categories where product efficacy is important, brand engagement is higher… where products are ingredients or there is lower risk in trial, brand

choice is less important & engagement is lower.

GLOBAL AVERAGE=100

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Looking beyond traditional brand measurements, brand engagement gives us stronger prediction abilities than historical behaviour

.636

.671

.695

.707

.692

.855

Correlation analysis, significant at p < 0.01

The correlation between future purchase intent and brand engagement is significantly stronger than the correlation between historical buying behaviour and purchase intent

2. So what drives brand engagement amongst SA female shoppers?

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The power of emotional brand connections sits at the heart of the most engaging brands

Driver analysis, using the top performing brands per category as benchmarks

Consistently, across all categories, the emotional connection between the consumer & her brand is key in driving engagement

ConnectionAdvocacyUnderstandingIntegrity

ConnectionAdvocacyExperienceIntegrity

ConnectionIntegrityUnderstandingAdvocacy

ConnectionIntegrityAdvocacyUnderstanding

ConnectionIntegrityAdvocacyUnderstanding

ConnectionRelevanceUnderstandingIntegrity

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…whereas our challenger brands have a more rational relationship dynamic

Driver analysis, using the top performing brands per category as benchmarks

Shoppers have rationalised their purchase decision and actively defend it

ConvictionUnderstandingAdvocacyConnection

ConvictionConnectionUnderstandingAdvocacy

ConvictionAdvocacyUnderstandingConnection

ConvictionCommitmentUnderstandingConnection

ConvictionUnderstandingCommitmentAdvocacy

ConvictionAdvocacyUnderstandingCommitment

Relevance and integrity: Unilever runs a range of “Brands in Action” initiatives that combine tangible customer benefits with smart business goals

Combining the need to reduce the carbon footprint of the Sunlight brand with tangible socio-economic benefits to the customer, the Sunlight Solar initiative in Durban is a great example of extended, impactful brand relevance

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Advocacy: Peer reviews are common practice in the travel industry - Clover uses this feature on their website to drive product trail

Across 22 forms of advertising “recommendations from people you know” Is by far the most trustworthy advertisingSource for women surveyed in emerging (82%) countries, followed by branded websites (60%, emerging countries)…

Nielsen Women of Tomorrow Study, 2011

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Emotion: Social media provide the ideal platform for building emotional connections, allowing shoppers to express themselves

Pinterest stats for 2011Topics include: Cooking and baking, home décor and fashion amongst others Monthly page views: 421 million Unique visitors: 3.3 million

“Brands that enhance the quality of emotional connections between consumers will benefit greatly in 2012. The desire For self expression in the home and especially in the kitchen is the key for many shoppers who want to their personal Style to shine. Content that empowers shoppers together With the expanding smartphone usage and lifestyle sites Such as pinterest and will be setting new standards for Self expression.”

Thelaunchblog.com/2012 digital and mobile shopper marketing trend: Self expression, January 2012

3. How do in-store touch points impact on brand engagement?

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Engaged shoppers are more likely to see and respond to your in-store activity

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A virtuous cycle…

engaged shoppers notice your in-store

activity more, affirming their decisions at point

of purchaseOr wasted effort…

Disengaged customers are less likely to even notice you, never mind respond to your in store messaging

Shopper marketing is more than retail activation

It needs to take into consideration the fact that many decisions are made or influenced by factors outside of the store… consumption occasions, predisposition to brands, shopping time etc. In store promotions may sway undecided consumers, but it is not going to drive engaging relationships.

4. How important is participation really?

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Participation is an important, although often under-utilised element, in growing brand engagement in the SA market

A statistically significant contributor to building brand engagement, there is latent potential in harnessing participation opportunities to build your brand.

** Correlation analysis, all values are significant at p < 0.01

McCain .542

Dr Oetker .479

Sunlight .491

BioClassic .544

KOO .544

Farmer Girl .589

Clover .554

Bonnita .566

Tastic .533

Surprise .585

Vaseline .480

Mentadent P .516

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High engagement brands see a correspondingly higher level of participation across platforms

Category engagement

Actively

participated

Facebook

Twitter

Website

Call centr

e

Competiti

on

Coupons in

store

Promoters

in store

Panel

participant

H 42% • • • • • • •

H 36% • • • • •

M 36% • • • • • • •

M 33% • • • • • • •

L 25% • • • •

M 23% • • • • • • • •

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…whereas lower engagement brands have less active participation from shoppers

Category Engagement

Actively

participated

Facebook

Twitter

Website

Call centr

e

Competiti

on

Coupons in

store

Promoters

in store

Panel

participant

H 34% • • • • • • • •

H 30% • • • • •

M 27% • • • •

M 23% • • • • • •

M 18% • • • •

L 15% • •

5. Breaking through habitual

buying behaviour

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The role and impact of in-store shopper marketing is influenced by the level of category and brand engagement

The POPAI Shopper Engagement Study 2012 identified in-store visual displays as being key to influencing decisions at POP

The study found that 1 in 6 purchases in lower brand engagement categories (pet food, dishwashing soap, pickles etc.) were made when a display was present in store

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Shoppers in lower engagement categories are more vulnerable to in-store activity

It’s easy to create a sense of ambivalence and get shoppers to reconsider their purchase in low engagement categories.

But the implications of this are quite different, depending on whether you are a brand with high or low engagement within these categories.

*Drive change = at least 25% claiming would change brand for this**Drive ambivalence = at least 50% claiming would consider a brand change for this

2-for-1 dealValue combo pack

Extra quantity for free item, value pack & charitable donations

Fee itemValue PackIn-store sampling

Extra quantity for free, % discount & charitable donation

Just about any in-store activity is likely to affect ambivalence


2-for-1 dealValue combo packFree item


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Shoppers in higher engagement categories are less susceptible to competitor in-store activity

*Drive change = at least 25% claiming would change brand for this**Drive ambivalence = at least 50% claiming would consider a brand change for this

In categories driven by efficacy, in-store activity and discounting alone won’t create a sustainable change in behaviour

Value pack Two for the price of oneExtra quantity

Nothing overtly strong enoughTo drive ambivalence

Two for the price of oneValue pack

Charitable donationFree item

Implications for building brands amongst shoppers

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1. Consider your shopper insights programme and ensure that you have predictive measures, not just retrospective views

2. Category context is key to defining the right shopper marketing strategy for you

3. Understanding the level of pre-purchase engagement of your brand is key to developing appropriate shopper marketing strategies

4. Retail marketing ROI is heavily influenced by the pre-existing brand relationships – protecting your brand from competitor noise requires strong pre-purchase engagement

5. There is untapped potential in brand participation – both in enhancing brand engagement, but also in encouraging shoppers to bring you into their worlds

Key take-outs

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Thought starters for Shopper Marketing in SA:What to consider if you are…

Operating in a low engagement category

Operating in a high engagement category

• In-store activity is key to driving ambivalence

• Need to find non-price based mechanisms that don’t erode brand value, for enticing trial in-store - shoppers are open to persuasion at POP

• Identify ways in which to build emotive connections with shoppers, not just the traditional functional focus of low engagement categories

• Pre- & post-purchase brand building yields greater shopper marketing ROI as they are more likely to see & respond to your in-store messages

• In-store activity helps to reinforce positive brand associations and reduce vulnerability to pricing sensitivity & competitor activity at POP

• Digital platforms provide ideal opportunities to engage and socialise with shoppers, who are more open to brand messaging and sharing your brand with others

Build your brand holistically – shopper marketing has the ability to extend and enhance brand engagement, but you need a pre-existing relationship with your

shoppers to optimise ROI

Thank you for your time… If you would like to know what EngagerTM can do for your brand, we’d love to chat:[email protected]@askYellowwood

mailto:[email protected]

yellowwood engager 2012

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