April 25th, 2011

In-Store Sales Begin at Home

The Wall Street Journal

Determined to find the best deals, more shoppers are researching their grocery lists online before going to the store. For marketers, that means big changes in how and when they tempt consumers to buy.

In-store marketing—the practice of trying to influence consumers’ buying decisions as they shop—traditionally consisted of flashy product displays, special promotions at the end of the aisle and attention-grabbing packaging on the shelf.

“No more,” says Dina Howell, chief executive of Saatchi & Saatchi X, an in-store marketing unit of Publicis Groupe SA. “This isn’t just about cardboard displays anymore—you need to accommodate the way shoppers behave now, and that means online and in stores.”

It’s well known that consumers research expensive products like electronics online, but coming out of the recession, consumers are more scrupulous about researching their everyday products such as diapers and detergent, too. More than a fifth of them also research food and beverages, nearly a third research pet products and 39% research baby products, even though they ultimately tend to buy those products in stores, according to WSL Strategic Retail, a consulting firm.

That has led retailers and brands to target customers via blogs, social-media sites such as Facebook and Twitter and campaigns on retail sites, in addition to in-store campaigns.

Ms. Howell argues that consumers’ careful research means the shopping trip now begins long before the shopper enters the store, so store-focused marketers have to move their efforts forward.

Three years ago, just 10% of Saatchi X’s in-store marketing projects included an online component, but now “almost 100% do,” she says. Likewise, nearly 20% of the firm’s revenue comes from digital work, up from less than 5% three years ago.

A 2010 campaign for Procter & Gamble Co.’s new CoverGirl “Smoky Eye Look” makeup kit illustrates the more complex route marketers are taking.

To drum up hype for the product launch online, P&G, with Saatchi X, shipped the packs of mascara, eyeliner and eye shadow to makeup bloggers before they were available in stores. The “Makeup Master” kit also included application instructions, blogging tips, product photographs and a CoverGirl-emblazoned director’s chair.

Inside stores, CoverGirl drew attention to its kits with live product demonstrations, its co-branded print ads with Wal-Mart Stores Inc. and cardboard trays that carried the kits on the shelf while highlighting the product’s features.

After a purchase, shoppers were encouraged via Facebook and other online campaigns to write a review of the product, thus spreading the word to more customers researching makeup online.

The digital shift is a particular challenge for food and household-product companies, which typically aren’t as advanced online as their electronics and apparel counterparts. They have been deterred by the cost of shipping bulky but low-value items like paper towels, detergent and canned soup, especially given the ubiquity of brick-and-mortar stores selling the products for about the same price.

In the weeks leading up to this year’s Super Bowl, Saatchi X created a campaign to promote PepsiCo Inc.’s Pepsi beverages and Frito-Lay foods at Walgreen Co. stores. Customers received weekly co-branded emails containing Pepsi and Frito-Lay promotions and Walgreens’ coupons. Facebook promotions, online ads and text messages also directed shoppers to the deals, while inside Walgreens stores Pepsi and Frito-Lay products used displays, fliers and in-store radio to tout the specials, too.

“It was a successful campaign both in our stores and online,” a Walgreen spokesman said.

Some 62% of shoppers say they search for deals online for at least half of their shopping trips, according to a survey by consulting firm Booz & Co. and trade group Grocery Manufacturers Association.

“It’s become a matter of, ‘I need six things, who has the best price on them?’ “ says Candace Corlett, president of WSL Strategic Retail. “It takes 90 seconds to research that online, and that’s how shoppers choose the store where they shop.” Ms. Corlett says consumers’ increased shopping research is driven by improving technology and a more scrupulous shopper. About 80% of women say they pay more attention to price on “just about everything,” says Ms. Corlett, citing a WSL shopper survey from last year. That’s up from 64% in 2008, she says.

Google Inc.’s user queries for local searches (like store locations), coupons, recipes and product reviews have doubled or tripled year on year, says Kevin Kells, Google’s national industry director for consumer-product companies. “Those are just proxies for this more informed, more sophisticated shopper,” he says. “The shopper is saying ‘I can’t really afford to be wrong.’ “

Wal-Mart is banking on the trend to accelerate. Lately, it has made its online circulars more user-friendly. It is also developing ways to offer more customizable circulars online, based on a shopper’s interests or needs. “If you don’t have a pet, your circular won’t need to include pet stuff,” says Stephen Quinn, chief marketing officer of Wal-Mart.

The retailer has also broadened its use of Facebook and other social media sites. “Over time people will use these [online] tools much in the way they’ve used media or word of mouth,” says Mr. Quinn.

Read more: http://online.wsj.com/article/SB10001424052748703907004576279253672899290.html

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