Shoppers Reality at the Shelf

Having been the Architecture Leader at Procter & Gamble on the shopper and consumer virtualization platforms, I am thrilled to see that the statistics still hold true when you and I stand in front of the shelf to make the buy or not to buy decision.  My work was covered in AG Lafley's book "Game Changer" blogged here by friend and colleague Franz Dill.  Franz was instrumental in setting up the P&G Innovation Centers, now enabling P&G to be the leader in shopper and consumer insights to impact product development at the concept stage:

"In the Bases research, the biggest driver of new-product awareness in store was simply seeing the product on the shelf -- accounting for product awareness in 71% of cases where people cited the store. All the other tools marketers and retailers use to drive in-store awareness -- including off-shelf displays, retailer circulars, product demos, in-store media and samples, accounted for awareness in only 2% to 18% of those cases. In-store media and product demos both scored in the low single digits. That helps drive home the importance of packaging and signage, Mr. Twitty said."

States the article "This Upfront, P&G May Want to Boost Spend on Piggly Wiggly" here. 

Though AdAge's graph here from Nielsen showcases the impact of shopper based design, shopper driven marketing communication, shopper based package design, etc. see below a video from the Economist on the impact of TV on the shopper and the consumer.

World Retailing: Retail via eCommerce

In the Financial Times World Retailing this month, "Seamless service from clicks and bricks" talks about the growth of eCommerce driven retail, moving of luxury goods sales to the internet and their success, and a combination of clicks and bricks.

"Deloitte and Forrester, the technology and market research group, found that 40 per cent of retail sales in the US last year were influenced by the internet, with consumers either shopping online or using the internet to gather information on potential purchases."

Now the fun begins!  The five senses to be influenced available to a retailer in the retail store disappear on the web.  How does one create the right experience for the diversified, from the affluent to the lower middle class, to engage and convert them?  This is where pure analysis fails... for example, if a web shopper is recognized as liking red because they bought a red pen, does that imply they would also buy a red car, and a red shirt, and so on.  Insights into behaviors through aggregation can result in misfires and loosing the online shopper all together.  eCommerce retailers will need to move towards personalization - the market does not have but one true personalization player, one that can comprehend astronomically large coincidence points of the shopper and instantly connect the semantics to it, while providing this information at instantaneous speeds.

Current solutions can collect all the dots yet, as the article states, "But joining the dots takes time."  Most of the time the shopper has moved on or has been influenced by a different solution to their need.

eCommerce is also going to enable new entrants in the global market place as the "virtual shopper" can do shopping on the eCommerce "virtual shelf" from anywhere.  Like I said, now the fun begins!  Will the shopper and consumers be the winners in the end?

"As retailers rush to provide even better online shopping experiences for their core customers, they are also using the internet to procure new ones.

The next step for many is to use the internet to give them exposure overseas.

Next, the UK-based clothing chain, said last month that it was pulling back from expanding overseas through its own stores in favour of growth via the internet.

It has expanded its online operation to 36 countries and has been selling into the US via the internet since the middle of last year.

“Internationalising sales is a smart strategy,” says Mr Fitz- gerald. “With the internet, you can go into 20 new countries within a year. It is remarkable and you really can achieve that kind of scale if you prioritise and focus.”"

If you would like to read this and other articles in the World Retailing, download the complete file here.

World Retailing: It's all in the Data!

In the Financial Times World Retailing this month, "Good analysis and use of data can make all the difference" highlights the role of information technology from product manufacturing to in-market to consumption.

"“But what has changed since is that there is now a renewed focus on looking at where retailers make money, and that is in the store,” [Andy Park, industry leader for retail and consumer products for northern Europe at IBM] says."

What is interesting to note is "Retailers are still investing to improve the way they handle the last 50 metres of the logistics chain, from the stock room to the shelf."

The article does not fully touch on one of the most important piece, shopper data... data that has been collected for close on a decade, loyalty cards, credit cards, POS, etc.  Coarse grain segmentation with 10% to 90% hit or miss margins and marketing budget wastage may finally begin to be managed through not only statistical analysis, but making "sense" of the shopper decisions, i.e. the semantics of the shoppers actions or not.

"“There is a shift in focus to insight and not just measurement analytics, but to insights into the shoppers themselves,” says Renee Sang, who runs Accenture’s Customer Innovation Network.

“Price transparency is now a given, so retailers want to identify which customers are most likely to convert [to buyers]. Not all customers convert in the same way. For some it’s price, for others assortment, others service.”"

If you would like to read this and other articles in the World Retailing, download the complete file here.

No Secrets Anymore

Behram Mistree talks about his data mining and analytics experiment using Facebook while he was at MIT, transcript from CNN interview on CNN Newsroom below:

See video here. Note that the highlighted information below was removed from the video.

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VELSHI: Let's talk more about how your personal information can be used to find out things about you, particularly on a social networking site. Let's bring in the co-author from a M.I.T. study, getting his Ph.D at Stanford right now. And Carter Jurnegean (ph) is from Boston. Same study. He is now a software developer.

OK, guys, you -- used your study. Just let me know if this is clear. You went on Facebook, and basically from people's information on there, figured out their sexual orientation. Is that basically it?

BEHRAM MISTREE, M.I.T. STUDY AUTHOR: Yes, sir. Absolutely. In essence, what we were trying to test is the age-old adage, birds of a feather flock together and have it apply it to the digital age. And is our research showed that based on your friends online, we could infer information about you, whether you disclosed that information about yourself or not.

VELSHI: Carter, is that particularly scientific? Because I guess you could sort of figure it out when you look at things like that or figure out where somebody is from, based on where their largest concentration of friends is, or where they went to college, even if they didn't put that on. Were your findings sort of a mystery to you?

CARTER JERNIGAN, M.I.T. STUDY AUTHOR: Well, I mean, I think what was novel about our research is that we've really shown that this birds-of-a-feather phenomenon applies in online communities, even when people don't publicly disclose information. So, if your profile had basically no information and it was very bare bones, just by seeing who you're associated with, we could still learn certain significant information about you.

VELSHI: Let's take it beyond sexual orientation. Where else could you be vulnerable about people learning things you didn't feel like you wanted to have known on Facebook, for instance?

JERNIGAN: That's a great question --

MISTREE: Go ahead.

There's emerging work that's suggesting that similar information could be found based on -- about political affiliations, religious affiliations, income bracket, those kinds of things. So, there's nothing to suggest that this work is just specific to sexual orientation. In reality, for this type of network data, you could have lots of privacy risks associated across a gamut of different traits.

VELSHI: Carter, if I were gay, I may not want to say that on Facebook, but it may not matter to me if that information was out there. If I live in Atlanta, I may not say I'm from Atlanta, it may not matter that it gets there.

Where do you draw the line as to protect information you don't want out there? Should I be on Facebook if I don't want people to know where I live, where I shop, who my friends are or what my sexual orientation is? Is it just too much information to be able to protect yourself?

JERNIGAN: Right. And it's -- become very difficult to keep all of that information private. And so as part of our research, we were very interested in raising awareness in these sort of surprising risks with online privacy. So as I said, again, a lot of people think oh, well, our research doesn't apply, because, you know, I don't have any information on my own profile.

VELSHI: Right.

JERNIGAN: But again, we were really interested in raising awareness, even if you think you have done the best job you can do to keep information private, that may not be the case.

VELSHI: Behram, there's a quote in your study from Scott Abrams, the creator of Dilbert. I just want to share this with you. It says, "Let's say that someday, technology will allow anyone to find out every possible thing about my life. I can compensate by being so uninteresting to that nobody could survive the process of snooping on me without lapsing into a coma."

Is that really going to be the solution?

MISTREE: Perhaps it is. But just so that you know, even if you're very uninteresting to the average person, you're very interesting to different companies. So, there's a real financial incentive for these -- for lots of large companies to have information about for marketing and other types of purposes. So, whether or not you're very uninteresting to the average person, you're very interesting to, say, an advertiser.

VELSHI: Carter, any conclusions here about how we should behave online?

JERNIGAN: I think, really, being aware of the fact that any actions you take online, you know, can have unintended privacy consequences. And so, again, it's this awareness that we think is really important.

VELSHI: But you're not advocating that people don't put information in, you're just saying they should know what it is.

JURNIGAN: I mean, I think it's going to be up to each person's own decision. I think disconnecting yourself entirely from technology is going to have its own consequences, just as well as connecting yourself with technology has consequences. And so, you know, full disclosure and being fully aware is definitely a very good first step.

VELSHI: Great study, guys. We were chopping off little bits of this technology, privacy issue to try and understand it better. Thanks for helping us. Behran Mistree is one of the co-authors of the study and the other Carter Jernigan, joining me from Boston. Thanks, guys.

MISTREE: Thank you.

The "New" Old Market - Muslim Consumer

Having developed the focus on the Muslim Consumer at P&G at the highest level, it is interesting to see mainstream marketing and communication companies exploring new revenue streams in this consumer sector.  Astute P&G colleague Amer Almomen passes along WPP's thinking around the 1.6 billion consumer awaiting marketing messages, see article here.

Overall, the article shows the early approach to be exploratory while unburdened from cliches about Islam.  Yet, categorization (essential for agencies to develop processes) is nascent - to "touch" the "life" of the "boss" through messaging in the Islamic environment requires minds that have grown up in the environment, or development of large knowledge bases on behaviors created through engagement and intelligence extracted from them.  One such organization is Maktoob Research, recently acquired by Yahoo, see details here.

The Muslim Consumer's diversity from ethnic to economic to geographic is an exciting realm to delve into!  Good luck to all entrants!