Marketing To The Evolving Shopper - FMI

MARKETINGTOTHEEVOLVINGSHOPPER

JamieLaRueTheKellogg®Company

CraigElstonTheIntegerGroup®

11thMay2010,LasVegas

ABOUTUS

The Kellogg Company is the world’s leading producer of cereal and a leading producer of convenience foods including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and veggie foods.

The Integer Group is one of America’s largest promotional, retail and shopper marketing agencies and a key member of the TBWA Marketing Services portfolio. The Integer Group resides at the Intersection of Branding and Selling™ and creates strategic marketing solutions for clients in categories that include beverage, packaged goods, telecommunications, fast food, home and shelter, and power sports.

Photo:TheKellogg®Company

OURTOPICSFORTODAY

1  Howsheischanging

–  Componentsofvalue–  Twomeaningsofconvenience

2  OpportuniVesthispresents

3  AframeworkforthinkingalongaPathtoPurchase

OurStudies

UsedfactoranalysistoidenVfytheunderlyingdimensionsofstorechoice:ValueandConvenience

TrendandmonitoroverVme

EvaluatetherelaVveimpactofthein‐storeenvironmentandshoppingaidsonstorechoiceandpurchases

THEANALYSIS

UsingtheproductPost-Tail™ Purchase

moment

Retail

Browsing,comparing,researching

andselecVngitems

Pre-Tail™ Entering a store or

Web site

Research,wordofmouth,trial

THESHOPPERCONTINUUM™

= points of action, behaviors

TheComponentsofValue1

THECOMPONENTSOFVALUE

•  Offersthelowesteverydayprices

•  Providesthebestmixofpriceandquality

•  AplacewithfantasVccustomerservice

•  Carrieshigh‐qualitybrands

•  IsastorebrandItrust

•  Allowsmetosaveasmuchmoneyaspossible

CONCERNSABOUTVALUE

BUYINGPRIVATELABELS

Source: The Checkout 2009, 2010; The Integer Group and M/A/R/C Research

ATTITUDESABOUTNATIONALBRANDS

Agree strongly Agree

APRIL 2010

SEPT 2009

TwoMeaningsofConvenience2

LOCATIONISADECLININGMEANING

•  Close‐byandconvenient

•  Nearhomeorwork

IN‐STOREEASEISGROWING

•  CarriesthingsIneed

•  EasyformetofindthethingsIneed

•  Quickcheckout

•  Takescreditanddebitcards

•  Easytoreturnproducts

•  Hasaloyaltyprogram

N = 1,122 ??? Source: The Checkout 2009, 2010; The Integer Group & M/A/R/C Research

CONVENIENCE≠NEARBY

Pre‐Tail™

Usingtheproduct

Retail

Post‐Tail™

EnteringastoreorWebsite

Purchasemoment

andselecVngitems

WHO’SPICKINGUPONTHIS?

Bigretailers:15mparking,store‐in‐a‐store,self‐checkout

Photo:TheIntegerGroup®

Photo:TheKellogg®Company

Smallretailers:Orderatpump,freeWiFi,drive‐throughs

Photo:warnout

Manufacturers:On‐linetools,mealsoluVonapps,RedboxDVDs,picnicpacks

Partners:Cartmanufacturers,cardissuers,coupons,apps

Photos:Cabco™

Photo:iTunes

Photo:TheIntegerGroup®Photo:iTunes

Visa:“Lunch”

Pre‐Tail™

Usingtheproduct

Retail

Post‐Tail™

EnteringastoreorWebsite

Purchasemoment

Browsing,comparing,

researching&selecVngitems

Photos:iTunes

Convenience–OvercomingShoppingHassles

HASSLES:THEFASTESTWAYTOFAIL

•  Asdecisionsgetmorecomplex,fuseswillgetshorter

•  Shopperswillleavestores,categories,orbrandsiftheirfusesgetlit

•  Brandscanwinbusinessbypre‐empVngthosehasslesandsmoothingouttheshoppingprocess

FourCommonRetailHassles

HASSLE1:LACKOFSERVICE

LonglinesdestroysaVsfacVon

Grocery Club MassDrugHome OfficeSupply Department

MinutesinLine Avg.

Imp. Electronics

Extremely

Somewhat

Notvery/Notatall

Source: The Checkout 2009; The Integer Group and M/A/R/C Research

HASSLE1:LACKOFSERVICE

Longlinesdiscouragefuturetrips

Istopgoingaltogether

IonlygotopickupspecificitemsIcan’tfind

elsewhere

IavoidthestoreatallVmes

Source: The Checkout 2009; The Integer Group and M/A/R/C Research

AVOIDTHELINE

Self‐checkoutisonlyonepossiblesoluVon

Photo:MobileContentToday

AVOIDTHELINE

Self‐checkoutisonyonepossiblesoluVon

Deliverthroughbrandede‐commerce

AVOIDTHELINE

Self‐checkoutisonlyonepossiblesoluVon

Deliverthroughbrandede‐commerce

Orthirdparty

Featuredproductsneedtobeinstockandaccuratelypriced

%VisiVngStoreLessDuetoAvailabilityIssues

ElectronicsOfficeSupplyDepartmentHomeImp.

DrugMass

GroceryClub

36%35%34%

28%26%

22%19%18%

%VisiVngStoreLessDuetoIncorrectPricing

30%26%26%

22%22%21%

19%24%

HASSLES2and3:STOCKANDPRICE

HASSLE4:UNCLEANLINESSANDCLUTTER

Source:2009NACSEmergingOpportuniVesinConvenienceRetail

0% 10% 20% 30% 40% 50% 60% 70%

Theaisle/storewasdirty

IalwayspurchasewhatIgotothestorelookingfor

Theaislewasconfusing/disorganized

Theaislewastoocrowded/toomanypeopleintheaisle

Icouldn’tfindthespecificbrandIwaslookingfor

Icouldn’tfindtheexactitem,productorsizeIwaslookingfor

ThepricewasmorethanIwantedtopay

0% 20% 40% 60% 80%

Over35%wouldwalkoutbecauseofpoorcleanlinessandcluqer

WHYSHOPPERSLEAVEAISLESEMPTY‐HANDED

OVERCOMINGHASSLES

ThinkfromtheperspecVveoftheShopper

Keepthingsclean

AidthenavigaVon

Buildupontheneedforconvenience

Photos:ISMI,TheIntegerGroup®,PlanetRetailLtd

WE’VECOVERED

1  Howsheischanging

–  Componentsofvalue–  Twomeaningsofconvenience

2  OpportuniVesthispresents

3  AframeworkforthinkingalongthePathtoPurchase–TheShopperConVnuum™

UsingtheproductPost-Tail™ Purchase

moment

Retail

andselecVngitems

Pre-Tail™ Entering a store or

Web site

= points of action, behaviors

LONG‐TERMQUESTIONS

1  Willthevaluefactorgroworleveloff?

2  HowwillconvenienceexpectaVonsevolve?3  Howfixedormutableareshoppingstyles?4  Towhatextentwilltechnologyaffecthabits?

5  WhatimpactwillmulV‐plasormexperienceshave?

QUESTIONS?

CraigElstonSVP,Insight&Strategy

TheIntegerGroup®+1.303.393.3474

celston@integer.com

JamieLaRueSeniorDirector,ShopperMarkeVng

TheKellogg®Company+1.269.66.7230

james.larue@kellogg.com

Download or subscribe to our presentations, white papers, and editions of The Checkout at

www.shopperculture.com

Marketing To The Evolving Shopper - FMI

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