Digital Shopper Marketing

Digital Shopper Marketing

What is Digital Shopper Marketing?

Digital Shopper Marketing (DSM) is a new term in the retail arena, but what does it actually mean? Essentially, DSM encompasses any and everything with a digital characteristic(s) that features, or can feature, in a shopper’s path to purchase.

The current DSM landscape is a transient and nebulous one, which is no wonder given that ‘Digital’, in this context, relates to both physical elements (e.g. PCs and touchscreens) and content elements (e.g. websites and blogs).

While a bulletproof definition is elusive, however, the DSM space is broadly seen to comprise the following: retailer and manufacturer websites and brand microsites; social media (e.g. Facebook, Twitter, Blogs, and Virals); mobile phones and SMS;

smartphones and their applications (‘Apps’); barcodes / RFID and associated scanning devices; digital coupons and loyalty cards; digital POS / signage / interfaces (e.g. in-store TV).

Given the breadth of this definition, it is no exaggeration to say that DSM can manifest almost anywhere i.e. in store, at home or on-the go, and almost any time i.e. before, during or after the actual purchase itself.

What are the benefits?

As DSM can play such an important role in influencing shoppers, the challenge for manufacturers and retailers is to understand and utilise it.

For these organisations, the benefits of DSM are obvious; it offers not only the opportunity to engage with the shopper,

“Essentially, DSM encompasses any and everything with a digital characteristic(s) that features, or can feature, in a shopper’s path to purchase. “

“DSM can manifest almost anywhere i.e. in store, at home or on-the go, and almost any time i.e. before, during or after the actual purchase itself.”

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Evolution Insights analyst David Oates explains why digital media is set to shape the world of shopper

marketing.

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but also to feature more prominently in their decision criteria.

However, considering its broad nature, it is easy to imagine that marketers are somewhat daunted by the prospect of including DSM within their remit, let alone trying to align it with company strategy.

So what does it mean for marketers? Any discussion of DSM should start with the internet, which is the linchpin of many DSM initiatives. As internet usage has continued to evolve over recent years, it is no longer sufficient for manufacturers and retailers to just ‘tart-up’ their websites and promotional microsites every few years. Natural engagement with such sites varies enormously, so to reach shoppers modern DSM techniques must instead adopt a more holistic view of the internet and its capabilities. For example, more savvy organisations are now using tools such as social media to work with their traditional channels in capturing and

channelling shoppers (e.g. the recent Cadbury Creme Egg and Kellogg’s Krave campaigns are both good examples). Social media Social media exists in an ever-increasing number of forms, from established Facebook, Blogs and Twitter to more recent developments like the location-based Gowalla and foursquare networks. While these social media formats differ, their relevance to DSM remains the same i.e. that they put consumers more in control of brands, allowing the former to ‘make or break’ the latter in a matter of hours. While this may represent an inconvenient truth for many marketers, successful organisations will be those that choose to target, feed and respond to social media and its many apostles. In future, good brand management will include aspects of social media that will help it to create new, and leverage existing, loyalty by capturing consumers (as “friends”, “fans-of” or “followers”) and turning them into shoppers.


“Any discussion of DSM should start with the internet, which is the linchpin of many DSM initiatives. ”

“But it is no longer sufficient for manufacturers and retailers to just ‘tart-up’ their websites and promotional microsites ”

“Successful organisations will be those that choose to target, feed and respond to social media and its many apostles..”

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Smartphones and loyalty Traditional retail marketing tools such as loyalty cards and discount coupons, are also relevant to DSM. For example, mobile and smart phones can circumvent the need for physical cards and coupons altogether, by displaying codes on-screen via SMS or ‘Apps’. Although these digital tools are currently at an early stage of development, it is easy to imagine that they have an inherent advantage due to their ease of retention, transfer and use. Certainly, early evidence points to usage/ redemption rates that are far higher than traditional alternatives. Digital signage Digital signage/ interfaces are another way in which retailers and brands can communicate with customers in store. Communications are targeted at shoppers when they are in ‘full shopping mode’, but successfully engaging shoppers who have such little dwell-time is challenging, as Tesco, Asda and Sainsbury’s have

all found to their detriment with their now aborted in-store TV offerings. These well publicised examples have caused many to think that the use of digital signage in retail was a false dawn but, if done right, the potential to use it across the retail space remains huge. An extension of digital signage in the retail environment is interactive interfaces, which include WiFi, projected displays, kiosks, and information points for product recommendations and promotions. Integration with mobile is also at the forefront of this branch of DSM, as exemplified by emerging smartphone scanning applications, which enable the user to perform on-the-spot price comparisons and/or product reviews. Ultimately, the challenge for digital signage is to actually enhance the shopper's in-store experience. As opposed to playing generic promotional videos on a loop, there are emerging opportunities to spotlight specific products and features, and to provide value-adding information


“Integration with mobile is also at the forefront of this branch of DSM, as exemplified by emerging smartphone scanning applications, which enable the user to perform on-the-spot price comparisons and/or product reviews.”

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to shoppers at the point of decision. Some initiatives even promise to go further by using way-finding technology to pinpoint specific individuals and engage them with tailored offers; but this is pie-in-the-sky thinking for the short-term and there are more obvious and attainable developments to expect in the coming years. For example, Walmart in the US created the ‘Smart Network’, which uses digital signage throughout stores to communicate relevant content to shoppers that can be tailored by store, screen, day and time. The Walmart example highlights that digital signage initiatives

have to be endorsed and then managed day-to-day by the retailer, which presents something of an obstacle for many manufacturers, particularly in countries where the retail environment is less radical than in the US.

Speaking more broadly, it is worth noting that retailers themselves are a media platform in their own right, offering brands an

opportunity to reach shoppers with digital signage, interactivity, websites links, free samples and sponsored content. The fact that digital signage, and DSM in general, can bring mutual benefits to retailers and manufacturers should act as an incentive for them to work together more closely.

Return on Investment

While retailers and manufacturers recognise the growing importance of DSM, some initiatives are easier to justify than others, which raises the tricky consideration of Return On Investment (ROI).

DSM has the capability to act as a powerful tool for determining ROI. For example, a mobile messaging service informing customers browsing store aisles could also provide useful information on sales conversion.

However, seeking ROI measurability for its own sake can be dangerous since firstly, not all measureable DSM


“Retailers themselves are a media platform in their own right, offering brands an opportunity to reach shoppers with digital signage, interactivity, websites links, free samples and sponsored content.”

“DSM has the capability to act as a powerful tool for determining ROI.”

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initiatives will be profitable and secondly, not all profitable initiatives will be measureable. This presents something of a Catch-22 situation, since most DSM programmes will only be sanctioned after a robust financial business case has been given.

In the heavily integrated world of DSM, it is difficult enough to disassociate the different elements, let alone to measure the extent to which they contribute to ROI.

For example, consider a shopper who first reads a product recommendation on a blog, then spots a microsite promotion linked to a Smartphone voucher that is only redeemable at Tesco, before downloading it, using it and telling five friends about it on Facebook. How do you measure the extent to which these different DSM elements contributed to the sale?

The answer is you can’t, but it doesn’t make any of the contributive elements any less valid, as they were all integral to engaging the shopper through the path-to-purchase.

A bottom up approach?

The holy grail for DSM is to be able to create content, measure it, interpret it, then change it accordingly, but because the pursuit of this ideal can introduce cold and hard-nosed ROI demands, it can also constrain innovation.

Perhaps a more subtle way of approaching DSM is to adopt a ‘bottom-up’ approach, which has shopper perceptions and needs at its core. The impact of this approach on building brands over time could still be measured, and would instead create a more strategic set of goals, as opposed to simply tactical ones.

It is no surprise that traditional consumer loyalty is fast becoming an old-fashioned concept. Consumers are more fickle than ever, given their increasingly hectic lifestyles and such a heavy bombardment of marketing messages and promotions. It will be interesting to see how retailers and manufacturers adapt to this constantly changing shopper behaviour and


“The holy grail for DSM is to be able to create content, measure it, interpret it, then change it accordingly

“Many DSM initiatives target digital savvy shoppers with an ‘innovator’ or ‘early adopter’ profile, but the potential of the remaining and largely untapped market is huge.”

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how they will go about harmonising their online and offline propositions,

because if they don’t assist the shopper, then someone else will.

Beyond early adopters

It is worthwhile remembering that shoppers are already using various digital technologies in their shopping practices.

Many DSM initiatives target digital savvy shoppers with an ‘innovator’ or ‘early adopter’ profile, but the potential of the remaining and largely untapped

market is huge. Engaging with these more traditional, less ‘techy’ shoppers is an even more acute challenge, but bears considerable attention since this segment still represents the majority.

Whatever DSM initiative is selected, the key is firstly to get it used by shoppers and secondly to make it influence their purchases accordingly. So, the question then becomes, what is the awareness of different DSM techniques, and which do, or would,

shoppers respond to and why?

In essence, shoppers will simply not respond to DSM initiatives unless they provide one fundamental thing: value. Value delivered via access to, or increased awareness of, new features / discounts, or by facilitating the ease of shopping.

In summary So to summarise, the challenge for manufacturers and retailers is to understand the role that DSM can play in communicating their brands and messages directly to shoppers. From ‘at-home’ to ‘in store’, the holy grail is to understand and control the key touch points that engage shoppers, build brand equity, develop relationships and, above all, drive an attractive return-on-investment.


Evolution Insights Ltd About Evolution Insights Evolution Insights is a research led consultancy specialising in shopper marketing. We deliver original research, analysis and insight into shopper motivations and behaviour for manufacturers, retailers and agencies. For more information please visit http://www.evolution-insights.com E-mail: [email protected] Tel: 0113 389 1038 Evolution Insights Ltd is a private limited company registered in the UK with registered number 07006001. Evolution Insights Ltd, Prospect House, 32 Sovereign Street, Leeds, West Yorkshire, LS1 4BJ. © Evolution Insights Ltd. All rights reserved.

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