The advent of smartphones have changed the way advertisers induce shoppers to buy
In the 2013 edition of marketing magazine The Hub’s annual shopper marketing excellence awards, The Hub Top 20, Procter & Gamble regained top spot after being ousted by Unilever and Nestle in previous years. Since then, P&G has stayed at number one, with The Hub explaining the company’s excellence as such:
They are committed across the company to the discipline (of shopper marketing); they are prepared to invest in it, have the best understanding and knowledge of consumer and shopper needs and motivations, and demonstrate the greatest commitment to really partner with retailers — to truly reinvent categories.
For those unfamiliar to marketing terms, it begs the question: What is shopper marketing?
“Shopper marketing is about having a better store design and marketing materials to get the shopper to make a purchase,” explains John Steere of Nomadz Media. “In-store shopper marketing is more active. It is designed in a more engaging, call-to-action fashion. Because you are in the store and you have your wallet, you are ready to make a purchase.
“Shoppers are on missions. They have needs and wants. They make decisions, selections, and de-selections regarding products and brands. They are characters who have their own stories. Making these stories yours—that is shopper marketing.”
Moments of truth
Shopper marketing, with which P&G are often credited as its inventor, revolves around two “moments of truth”: the first moment of truth (FMOT) is when a consumer chooses one brand over another; and the second moment of truth (SMOT), which takes place when the consumer uses the products and decides if he likes it and will buy it again.
The precursor to these two moments of truth is the stimulus, which can be anything – often an advertisement – that first made the consumer aware of a certain brand or product. Taken together, these three elements make up the three-stage mental model of marketing.
With the rise of the internet, there is a fourth stage: the zero moment of truth (ZMOT).
“These days, the average consumer goes to 10.4 sources to research a product before deciding what to buy,” Steere explains, referring to consumers’ practice of searching online for reviews and comparisons. “This fourth step in the marketing mental model emerged with social media, which is highly relevant and influential. Between the stimulus and the FMOT, is the ZMOT.
"People don’t go shopping anymore because with mobile we never stop shopping."
“The SMOT in the ‘old’ three-step mental marketing model becomes – through sharing – a future customer’s ZMOT as prior customer experience. ZMOT could comprise search and display ads, content, social netwoks, reviews and ratings. This new mental model is what marketers need to pay attention to in order to gain a competitive advantage in today’s marketplace,” Steere advises.
He goes on to observe, “Nowadays we shop 24/7. The shopping experience extends to outside the store now. Digital shopper marketing focuses more on what’s happening around the digital space as it relates to shopping.”
The power of mobile
Because potential shoppers now have multiple options to compare and purchase online, the traditional path to purchase – from the time that a person is aware of a product, to having the desire to buy, to the point of purchase – is more of a decision web rather than a decision tree, says Steere. A big reason for that shift is the advent of smartphones.
“People don’t go shopping anymore because with mobile we never stop shopping,” Steere says. “Mobile allows us access to information on products on a more convenient basis. Smartphones are becoming the ultimate shopping companion.
“Google’s search engine will rank higher websites that are mobile-enabled. The bigger story is that the more you can get people to start shopping on their mobile phone, the more Google can starting placing ads. I see a lot of this in Korea and Japan, North America and Europe. The same should be coming to Southeast Asia soon.”
Steere adds, “In Asia, mobile marketing is very relevant – the region has the highest penetration of smartphones in the world. 82% of mobile ads are effective, but 79% of merchants do not have mobile-optimised sites.”
Serving the right advertisements to the right consumer can be complicated given the vast amount of data mobile phones generate. From age, income level, education, gender, and sexual orientation, highly specific targeted advertisements are possible. Programmatic advertising (previously explained in this Perspectives@SMU article) and big data enable advertisers to do so, but Steere emphasises it is more than just convincing people to buy.
“Marketers can target people not just based on their buying objectives but their shopping and purchase behaviour i.e. tracking you when you are looking to buy stuff,” explains Steere. “For example, online shopping cart abandonment is a big issue with brands. When you are shopping online and you put something in your cart but you do not check it out, that scares brands because you were willing to buy something and then you stop.
“One of the top reasons is due to add-on prices that the shopper did not expect to be added on at checkout. So some companies try to build in costs into the final price, or encourage you to buy more to get shipping for free.”
Creating “omni-channel” advertising
According to Deere, the trends in and towards digital shopper marketing are clear. With millenials preferring to consume media on YouTube and other online platforms, more advertising will be done online.
However, advertisers have yet to fully appreciate the need to deliver an online experience that is consistent with their other channels. In Steere’s words, it’s about delievering an “omni-channel” experience instead of a “multi-channel” one.
“Multi-channel encompasses all the different channels – online, offline, convenience store, supermarket, hypermarket, websites, ads…promoting brands that we might want to buy. However, these channels are disconnected,” Steere warns.
“An omni-channel experience is an integrated experience. The marketer’s holy grail is to get to an experience that is seamless (same experience across channels or device, and a positive experience). Each piece of the customer’s experience should be consistent and complementary. One break in the omni-channel experience, such as customer service, can break the brand—a brand is only as strong as its weakest link.”
He concludes, “Brands are recognising that millennials find it important how the brand communicates with the public and the environmental responsibility it has. There is also the new concept of co-creation - consumers tell the brand what it can or cannot do, and not just accept what they are sold. Privacy is becoming less of a concern for new generations; they know it is just part of life.”
John Steere was the speaker at the SMU Centre for Marketing Excellence Speaker Series talk, “Digital Shopper Marketing: Current trends and the future of shopper marketing” held on September 10, 2015.
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