Quirk's Blog

Mobile marketing tips and trends for the Summer Olympic season

Editor’s note:Margie Kupfer is vice president, marketing at marketing firm 3Cinteractive (3C), Boca Raton, Fla.

Gold Medal Engraved With 2016 Resting On Blue RibbonEvery four years the world turns its attention to a single arena where the best of the best compete for gold. The 2016 Summer Olympics are just around the corner and athletes and fans alike can hardly wait for the historic games to begin. But while the athletes are competing for medals, brands are competing for consumers’ attention and business.

When an event as colossal as the Olympics takes place, it gives brands all over the world a chance to flex their marketing muscle. As mobile usage continues to surge, brands that capitalize on this channel in their marketing efforts will reach and capture new and existing customers directly in the most effective way.

Many that profit the most out of the Olympic Games take advantage of the seasonality of the events, and typically include clothing, travel/airline, consumer goods, entertainment, athletic stores and retailers. As an example of an Olympics seasonal strategy, Kellogg included mobile calls-to-action on cereal boxes including Apple Jacks that promoted its “From great starts comes great things” campaign, which incorporated 11 different Olympic and Paralympic athletes and hopefuls.

The cereal maker established the **Start dial code and integrated into its Olympic sponsorship, which was promoted with a CTA on the cereal boxes. When consumers called **Start, a voice recording of former Olympic athlete Kristi Yamaguchi answered the call and Kellogg made a donation of one breakfast to a child in need.

As marketers gear up to take advantage of the Olympic spirit, here are some tips to bring home a winning strategy:

1. Make it mobile first: take advantage of the mobile traffic

Because the Olympic Games are an international event, it will be imperative for brands to have a mobile-specific strategy, as many fans will likely be traveling to see their team compete or keenly watching from afar. Fans will want to have all of the latest updates on their favorite teams and athletes, which means watching games, checking scores and reading about athletes and teams on their mobile devices. The Olympic Committee has created its own mobile app that allows users to learn more about the history of the Olympics, learn about athletes as well as link to official sponsors. Brands will want to take advantage of the elevated mobile usage by offering special promotions exclusively to mobile users.

2. Make it social: social media sharing broadens visibility

Mobile devices are made for information and experience-sharing. Consumers love to share their photos, memories and experiences. Make your promotions more impactful by giving them sharing power. Sharing promotions through social media can give your brand more visibility and make it fun. Create a hashtag that incorporates both the brand and the Olympics and encourage customers to share it. Take advantage of the traffic on popular hashtags, capitalize on any trending stories and have a strategy to be able be part of these conversations. Some will disappear quickly so be prepared.

3. Make it count: timing is everything

Timing can play an important role in the success of a mobile marketing campaign. The Summer Olympics only last 17 days, which means marketers need to pay attention to when they launch their efforts. Brands can do things like offer specific promotions at the start of a game or competition, or offer a promotion when a specific team wins. The great thing about the Olympics is that there is so much going on at once that marketers can get creative with their timing within the campaign.

Also, be responsive – there is limited “shelf life” to these events – don’t wait a day or two to capitalize on an opportunity. Lastly, consider time zone changes between when the actual events occur, and when you want to send mobile communications back to viewers in each of the four continental time zones.

4. Make a connection: connect current trends to promotional offers

Staying on top of current trends is key to making a successful campaign. Aside from the obvious option of offering specials on red, white or blue products to represent Team USA at the Olympics, try to get more creative with your mobile marketing. Throughout the Olympic Games there will be events that make more of an impact to fans than others. Take advantage of that by offering promotions that coincide with those events. For example, if Team USA wins the Gold in women’s gymnastics, a brand could send an SMS message that says, “To receive 10 percent off your next purchase, text #USAGOLD to …” Staying on top of the latest trends and news will make a brand more relevant with consumers.

Brands that think strategically about their use of mobile during the summer will be the ones that come out ahead with higher engagement, stronger customer connections and increased revenues at the end of the season.

Posted in Advertising Research, Brand and Image Research, Consumer Research, Marketing Best Practices, Shopper Insights | Comment

It’s time for your readout to impact business decisions

Editor’s note: Sean Campbell is CEO of market research firm Cascade Insights, Portland, Ore., and host of the B2B Market Research Podcast. This is an edited version of a piece that originally appeared here under the title, “Blow up the readout.”

How often have you sat through a long, dry readout and wondered, “When is this going to end?” After a presentation, how often do you realize you spent the whole meeting answering e-mails? After the readout, how often do you have a new list of actions to consider?

Unfortunately, I’ll bet you answered these questions “often,” “frequently” and “next to never.”

Old Way or New WayTo address this problem, let’s start with the basics. A readout is not simply a presentation of research findings. It’s the time when you have the most opportunity to impact business decisions.

Often, senior-level stakeholders will participate in the research effort for the first time during the readout. These are the folks with the power to make the business changes you’re advocating, so the readout is exceedingly important to get right. That’s actually an advantage. Your audience will arrive at the readout interested to know what you did and what you found out.

On the downside, your audience probably won’t read the findings deck in advance without some nudging. I realize that many researchers feel uncomfortable implying that reading the deck before the readout is mandatory. Usually, that results in a team of stakeholders sitting through a lecture when they would rather have a discussion.

You don’t have to live with this set of circumstances though. There is a way to get your stakeholders to read the findings deck before the readout. Simply explain the benefits of doing so and stick to it.

Leaders make cost/benefit trade-offs all the time. If they don’t play ball, reschedule the readout. This suggestion may make you nervous but think about it. Meetings are rescheduled all of the time. Why waste a chance to show that all that money spent on the research was worth it?

Make it clear that you’re starting your readout from an expectation that people have already read the deck. Establish that you will begin the meeting under the assumption that your stakeholders know what’s been researched and understand the basics of the methodology used. That way, the readout can be used as a discussion of the most actionable outcomes from the research. That’s a much more productive session than a recitation of the findings deck.

This readout model may spook you but consider how successfully schools have been using a similar model: flipped classrooms.

The flipped classroom model reverses the traditional arrangement of lecture followed by homework assignments. In the flipped model, the homework is what would traditionally be seen as lecture material. Students are expected to read and/or review video-based lectures on their own time. The in-class time is focused on applying the material through exercises, projects or discussions.

This is almost the complete opposite of traditional education models. In the recent past, students were told what they needed to know in lecture and then they did their homework at home in an effort to apply it. This led to legions of fourth-graders trying to do long division at the dinner table long into the evening. While this worked out alright for some students, it didn’t work for every learning style.

In corporate America, we’ve got the same problem.

The beauty of the flipped classroom is that it rewards learning through engagement rather than simply rewarding passive listening. We can apply these lessons to readouts for market research projects as well.

The traditional readout assumes that information dissemination is the primary goal of the readout. This traditional model assumes that discussion happens mostly outside of the readout, in the hallway and via e-mail. The problem with this model is that the discussion about the implications of the research and how it should be used happens after the researchers have left the room or the building. Frankly, that’s crazy. The researchers have done the work and have a valuable perspective to add- especially if they know the industry and have a sector focus.

For this reason, I strongly advocate a flipped readout – stakeholders read the deck on their own time and come to the readout prepared to discuss what to do with the findings. Everyone is in for a more interesting hour this way, and your stakeholders get a bigger bang for their research budget buck.

Here are a few tips to successfully flip your readout:

  1. Share the findings deck in advance. In addition, include a tracking beacon in your e-mail so you’ll know if it’s been opened or not before stakeholders attend the readout. If no one opens the deck, push back the meeting until they have a chance to. You could also use a service like Attach.io to share the deck so that you know exactly which portions of the deck were engaged with the most, whether it was read in advance of the meeting, etc.
  2. Pre-record the findings presentation. Share the recording with stakeholders a week or so before the discussion. This will ensure that stakeholders come to the readout prepared to discuss what to do with the research findings.

 

To summarize, the benefits of flipping the readout are:

  • Better engagement with stakeholders. It’s much more fun to hash out solutions to problems than to be lectured.
  • A quicker path to decision-making. When stakeholders are required to review the findings deck prior to the meeting, you can focus on decisions to impact in the readout. Otherwise, these important discussions, if they happen at all, depend on the right hallway or Slack channel at the right time.
  • Better use of stakeholder time. Let that hour you have with all of the stakeholders present be one where they engage with each other, your team and the research vendor. That’s a more worthwhile use of time than a lecture.

 

A flipped readout is relatively painless to implement and yields hugely positive results. The only reason it isn’t more widely adopted is inertia. Change is hard but if the education sector can do it, so can corporate America. Don’t do your readouts the way everyone else has done it for years. It’s time to make a change.

 

Posted in Market Research Best Practices, Market Research Findings, Market Research Techniques | Comment

Mini cheat sheet: How to talk to Millennials

Editor’s note: Lisa Boughton is director of market research firm Angelfish, Cheltenham, U.K. This is an edited version of a post that originally appeared here under the title, “Speaking to Millennials in their language – the struggle is real!”

Chat bubblesWe’re surrounded by new phrases, words, and ideas that reflect the Millennial culture. Whether you’re hearing them on TV, in advertising or from your own kids, you know what the language of Millennials sounds like – but do you know what it means? To effectively conduct qualitative market research in today’s world, it’s important to know what the Millennial generation is saying and what they mean. So check out the cheat sheet below to learn more about how Millennials express themselves and what it means to your research.

Millennials and qualitative market research

This influential group of young people boasts spending power that, according to Accenture, will reach £1 trillion before 2020, so needless to say brands are extremely eager to reach them. But qualitative market research agencies aren’t completely sure how to communicate with them, as they have proved to be an elusive group in market research.

As they are so digitally empowered the effective development of market research online communities will certainly be key in communicating with them and encouraging them to engage more with market research studies. Mobile ethnography is also a method that can appeal to this generation’s desire to use digital technology as a part of their everyday lives.

How Millennials talk – and why

While most people in the Millennial generation are perfectly capable of speaking like anybody else, many of them have also adopted a new kind of language. It came with the advent of social media and texting, where messages tend to be written quickly, in short bursts.

That’s why Millennials began communicating with a mix of shorthand, conjoined words and abbreviations that better allowed them to get their meaning across in fewer words. Linguistic creativity and cultural references are hallmarks of this language, where some phrases have even been born simply due to a popular meme or a mistake on social media that people found funny and co-opted.

Learning their language

The Millennial language is constantly evolving, and if you want to reach them, you will have to make an effort to understand how they communicate, what they respond to and to keep up the changes. They also tend to be suspicious of obvious “sales-y” tactics and prefer to be approached in a more casual way. Clever, entertaining messaging with a sense of humor can make a big impact and encourage them to share with their friends.

This demographic are the perfect participants for market research online communities due to their experience with technological advancements.

Posted in Consumer Research, Millennials | Comment

Wearables and the mobile wallet revolution

Editor’s note: Abe Vinjamuri is a payment-tech and e-commerce project lead, strategist at market research firm Chadwick Martin Bailey, Boston. This is an edited version of a post that originally appeared here under the title, “New study: How wearables will drive the mobile wallet revolution.”

Man Using Contactless Payment App On Smart Watch In StoreEvery year we hear bold new predictions about mobile wallet, and every year those predictions fall flat. So, with some trepidation, I ask: is this the year when mobile payments finally take off? A lot of pieces of the puzzle are finally in place:

  • NFC and tokenization have been accepted as the standard for payment tech (QR is fighting a losing battle, although some heavyweights still back it).
  • Networks (Visa, MasterCard, etc.) have managed to co-opt the mobile revolution and avoid the threat of disruption.
  • Credit card providers see the opportunity to drive growth.
  • EMV (chip and PIN) standards have forced retailers to upgrade payment terminals, which are now NFC enabled.
  • Mobile service providers have given up their bid to control the payments business.
  • And most importantly, consumers are increasingly comfortable with the idea of using smartphones to pay for purchases – they are at a similar point in the adoption curve as they were with online payments a decade and half ago.

 

So, yes, mobile payments will grow in the next 12-18 months. And smartphones will continue to drive that growth.  But the big news is that mobile wallets are poised to get a major boost from the proliferation of wearables. In our latest Consumer Pulse study, we surveyed nearly 2,000 smartphone owners about mobile wallets and wearables awareness and habits. Here are a few of the key takeaways:

You want to put that chip where?

Formerly confined to fitness trackers, and to some extent smartwatches, wearables are still emerging for the average consumer. Currently, about 60 percent of the market is at least somewhat familiar with wearables in the generic sense. And with the pace of technology, this is a low barrier.  A new product that fulfills a need (perceived or not) can gain attention in the flash of a Snapchat.

As the wearables category broadens to include trackers, shirts, bands and other devices that are an extension of the wearer, mobile payments are a natural offshoot. In fact, beyond table stakes (battery life, pedometers, etc.) 40 percent of likely wearable buyers want built-in mobile wallet functionality. Our data shows that wearable and mobile wallet adoption is symbiotic in nature. A majority of those looking to buy wearables say having mobile wallet functionality would bring them closer to the purchase decision. And a similar majority say they would use mobile wallets a lot more if it were a part of their wearable functionality. Looks like a win-win.

Good news for smartphone makers

Although at present wearables are primarily associated with fitness trackers (smartwatches are perceived a bit differently, though that line is blurring really fast); many see wearables as an extension of the smartphone category and expect smartphone brands to lead the wearables march. While the top players are as expected – Apple and Samsung – the door is still wide open for a variety of players like Google, Microsoft, Fitbit, Sony, Nike and LG.  And perhaps the best news is that, in general, buyers expect highly functional wearables to cost between $175 – $275. Of course, there are always those who are willing to splurge north of $400.

What about payment companies?

In all this excitement around wearables and mobile payments we can’t forget the critical role of payment companies. As mentioned previously, networks and credit card companies have a critical role to play. At the moment, usage data indicates two things: one, usage of credit cards in a mobile first world mimic that in the physical world – card usage behavior (primary card, share of wallet) has not changed. Checking accounts, debit cards, PayPal have a large presence on mobile wallets. We continue to maintain that mobile payments present an opportunity to shake up some of the existing stalemates in the industry and at present it seems like no single player has a decisive advantage.

What does this mean?

Depending on how narrow or widely mobile payments are defined, the trillion+ dollar industry is fluid at the moment, with everyone trying to get a large piece of the pie. From a purely consumer-centric perspective, the barriers are lifting, the options are expanding and before you know it a majority of consumers will have access to mobile wallets through smartphones or wearables. The key to winning them over will be to make the experience natural and seamless.

The day someone can put together an experience where my jogging shirt tells me to run faster between miles five and seven and then pays for my smoothie is the day wearables would truly achieve their potential. I’m betting that the day is not far away.

Posted in Business and Product Development, Consumer Research, Customer Satisfaction, Market Research Findings, New Product Research, Product Research, Shopper Insights | Comment

Before MR, surveys made for fun parlor games

Editor’s note: Mike Boehm is director of communications for MFour Mobile Research, Orange County, Calif. This is an edited version of a post that originally appeared here under the title, “The first surveys were just for fun.”

Young Victorian ladies dressed in the Aesthetic mannerThere’s a fascinating article in the New Yorker about the original user experience for survey-takers. It shows how a form of survey was in circulation long before the advent of formal market-research questionnaires in the early 1900s – and that it was done just for fun, as a kind of parlor game. Some very famous names played along during the 1800s, providing intriguing information about themselves.

New Yorker contributor Evan Kindley traces how people began passing around “confession albums” to friends and acquaintances, containing a series of questions about themselves and their views on life:

A fashionable parlor game originating among the Victorian literate classes, the “confession album,” presented a formulaic set of queries on each page: “What is your distinguishing characteristic,” for instance, or “What virtue do you most esteem?” The album’s owner would pass the volume around among her friends, collecting their comments as a kind of souvenir…”

Among those who obliged, Kindley writes, were Karl Marx, Impressionist painter Paul Cezanne, Oscar Wilde (author of The Importance of Being Earnest and The Picture of Dorian Gray) and Sir Arthur Conan Doyle, the creator of Sherlock Holmes.

Kindley focuses particularly on a questionnaire filled out in 1886 by a 14-year-old Marcel Proust, who would grow up to be a leading pioneer of literary modernism with In Search of Lost Time, his epic series of seven novels published between 1913 and 1927.

“The Proust Questionnaire,” as it came to be known, resurfaced publicly in 1924, by which time Proust was two years dead, and very famous. His answers as a teenager were thought to foreshadow attitudes and ideas that were the germ of his great literary career and its themes.

Kindley, a Los Angeles writer who will delve further into the phenomenon in an upcoming book called “Questionnaire,” notes that the Proust Questionnaire’s renown gave rise to the common pop culture practice of publishing questionnaires filled out by famous people, including Vanity Fair magazine’s ongoing “Proust Questionnaire” feature.

Of course, the questionnaires that market researchers create and analyze are no parlor game. They’re finely-honed tools for collecting consumer data to inform business decisions that can affect a company’s fortunes and reverberate throughout the economy.

Still, I enjoy the thought that our enterprise is at least partly rooted in something done strictly for the fun of it. In the case of Proust, the parlor game produced answers that generated what we in market research always strive for: useful insights.

 

Posted in Market Research Humor, Market Research in the News, Survey Development | Comment

3 ways consumers are changing health and wellness

Editor’s note: Jon Berry is a vice president and consultant at research firm GfK Consumer Life,New York, N.Y. This is an edited version of a post that originally appeared here under the title, “Three consumer forces propelling change in health and wellness.”

Rescue a dog, rescue yourself. Take a digital Sabbath. Exercise: it’s good for the brain. Know your farmer. Go local. Consumer wisdom seems to be continually refreshing these days in health and wellness, with a growing focus on holistic health.

Female athlete operating smart watchRegardless of what you think of the science, it’s the reality you’re going to be researching and marketing to if you’re in the health and wellness industry. And that applies to a growing number of categories, from Rx and OTC drugs, to food and diet, consumer electronics, apparel, pets and cars. Practically every industry is in the health and wellness category today, as cure, prevention or problem.

New research from GfK Consumer Life, which I recently presented, suggests the opportunities and challenges will only increase in the coming years.

The forces driving change

Beyond trends you’ve heard of, like changing demographics and the cost of health care, these changes are being propelled by three distinct forces you probably weren’t aware of that we see in our research:

  • A motivated consumer. To say consumers today are involved in health and wellness is an understatement. Good health is Number 1 in Americans’ definition of “the good life.” Health is the Number 1 thing they would change in their lives. Two in three consumers actively look for products and services that help them lead a healthy life. Three of their four top priorities for self-improvement involve their health.
  • Shifting values. Consumer values are moving with a force that we have not seen in almost a decade. The values coming to the forefront are the kind that accelerate change. Among the three rising most: creativity – +8 ranks globally and +11 ranks in the U.S. since 2011 among 50 tracked values; open-mindedness – +8 ranks globally and +7 ranks in the U.S. since 2011; and knowledge – +5 ranks globally and +4 ranks in the U.S. The bottom line: Consumers are looking for smart, creative solutions to help them live a healthy life.
  • Hunger for innovation. Across categories we see consumers gravitating to new ideas in health and wellness. Some are reactions to the marketplace status quo – for example, six in 10 consumers worry that antibacterial products kill good bacteria as well as bad. Others are technological: our latest surveys show that interest in fitness brands and apps continues to grow despite their well-documented problems, like data reliability (e.g. my fitness app recently mapped me running across the Central Park reservoir).

The most intriguing shifts we see, though, are in attitudes. For trend researchers, these are stop-in-our-tracks, light-bulb moments. When attitudes shift, desires emerge. The result is white space for new products for the next three, five, 10 years and beyond.

Consumers aging differently

We’re seeing this kind of space opening now in aging. It’s not just that populations are aging –more than one in five Americans (67 million people) are now 60 or older, and that will grow in the next 20 years to 27 percent (99 million). People are aging differently. Increasingly, consumers see aging as an individual experience. Growing numbers reject the notion you can put an age on when “old” begins, saying it “varies too much.” Large numbers are turning away from the idea that you have to look as young as possible.

Most intriguing, they’re becoming students of aging. Three in four Americans tell us they want to age better than their parents and learn from their mistakes. Half tell us they’re buying products that will help them in their health or appearance as they get older.

And here’s the interesting thing. It’s not just older consumers. More than eight in 10 Millennials feel our culture is “obsessed” with looking young; 73 percent hope to age better than their parents; and 46 percent are buying products to age smarter.

Consumers, in sum, are motivated. They’re looking for smart, creative innovation. How will you respond?

 

Posted in Behavioral Research, Brand and Image Research, Business and Product Development, Consumer Psychology, Consumer Research, Customer Satisfaction, Health Care Research, Lifecycle/Lifestyle Research, Market Research Findings, Millennials, Shopper Insights | Comment

Steps utility brands must take to engage next-gen users

Editor’s note: Tim Veitengruber is a director in the energy division of research firm Market Strategies International, Detroit, Mich. This is an edited version of a post that originally appeared here under the title, “Utilities must evolve for next gen energy users.”

It’s going to be hard to wow next-gen energy users. They are more socially conscious and not nearly as loyal or trusting as their parents and grandparents when it comes to products, services and brands. And more than ever before, the technology people use and the content they engage with really defines them as individuals and members of a larger social community. The platform for the future of the electricity industry is taking shape now, and it’s squarely focused on how utilities adapt, evolve and transform to meet the expectations placed on their doorstep by Millennials and even Generation Z. Is your brand ready?

As a colleague in our Telecommunications division wrote just a few years ago, Millennials are the first generation to have grown up entirely with the Internet at their fingertips. They are smartphone aficionados, meaning that if there isn’t an app for them to get what they want in an instant, then they may not even pay attention. They are also content junkies, expecting brands to present them with lightning fast, relevant, valuable and reliable information in a visually appealing and easy-to-digest format.

Cool, convenient, cheap and …

When it comes to gearing products and services to consumers these days, I have read that it comes down to three key things: cool, convenient and cheap. I propose adding another criterion – cooperative. For example, companies need to personalize content and information and make it shareable with others for it to have the desired effect for all those involved – the desired effect being that a company will become a trusted source of information by making it easier for customers to understand how their actions and activities impact their bottom line. Only then may customers be motivated enough to share their learnings and experiences with their own social networks.

The need to understand what drives younger consumers has led to increasingly cool and valuable tools that improve our lives, entertain us and help us communicate more effectively. I’m not a Millennial (I have two children who are in Generation Z), but I would be lost without my apps. I very rarely interact with any of my service providers’ employees and almost exclusively rely on their apps and Web sites to pay my bills and address questions or problems. When it comes to my energy utility specifically, I probably spend about one minute each month managing my bill via its app, so over a year’s time (barring any service interruptions), I’m spending no more than 15 minutes interacting with them. That doesn’t give my utility much opportunity to tell me about products and services that could improve my life, help me save money or become more energy efficient.  In fact, based on the findings of our Residential Utility Trusted Brand & Customer Engagement study, about 60 percent of customers nationally are interested in online tools to help you proactively manage energy usage, but only 25 percent of customers are aware of their utility offering this type of option.

Apps, apps and more apps

I recently noticed a pop-up on my Pandora music player for a new app from my local energy provider.  I was curious, so I loaded it on my phone. The primary selling point is that it goes beyond billing payment and outage reporting to provide me with insights about my family’s energy usage, including the ability to compare current and past usage, set high usage alerts and budgets, complete energy saving challenges and access other useful information on how to save energy. After playing around with it for a bit and introducing it to my family (not surprisingly, my kids thought it was pretty interesting), I can envision a time when we regularly spend time looking at trend graphics of our household’s daily, weekly and monthly usage of energy.

Electricity insight_Veitengruber

Following the blueprint for marketing to Millennials, the information seems cool and convenient, and it is cheap since the app is free, but does it meet the cooperative criterion?  Let’s see. It offers personalized energy usage and push text notifications (that can be shared with others) to help customers manage against their targets. The app, which has been downloaded by more than 50,000 customers, is helping people actively save on their energy usage based on online feedback, social media posts and sharing. Given those points, the app certainly qualifies as cooperative. These kinds of apps, along with the proliferation of advanced digital meters, may someday allow utilities and customers to accomplish far more working together than they have been able to previously, particularly when it comes to the personalization and sharing of useful and valuable information.

To be truly cooperative, energy utilities will need to fully leverage multi-channel communications to identify and proactively inform consumers of what they can expect from these advancements – including the short- and long-term benefits that will improve the overall customer experience and make our lives better. So, there is a lot of work to do in meeting consumer demand. As someone who has personally checked off a couple of boxes in the engagement process already, energy utilities need to provide the necessary platform to answer, “Now what?”

 

Posted in Brand and Image Research, Consumer Research, Customer Satisfaction, Product Research | 1 Comment

Testing the waters of international markets

Editor’s note: Bryan Pearson is president, LoyaltyOne at Alliance Data, Canada. This is an edited version of a post that was originally featured in Forbes and also appeared here under the title, “Expanding retail overseas: 3 lessons from Best Buy, Walmart and Home Depot.

So you want to sell in Eurasia? Just remember, planting a flag does not guarantee a market will grow.

3d shopping cart on an earth globeJust ask Best Buy, Home Depot, Walmart or Target. All of these major retailers tested the waters of international markets over recent years and retreated, having failed to appreciate the nuances of consumer preferences, whether they involved store sizes or price points.

Yet U.S. retailers continue to leap borders. One in five global merchants that expanded overseas in 2015 was a U.S. company, according to the May 2016 retail report by CBRE Research, How Global Is the Business of Retail? Of the 51 countries those U.S. merchants targeted, most were in Europe and Asia.

There’s little doubt many of these merchants are learning the ropes along the way. The smarter ones take their pointers from the failures of others or the successes of seasoned global organizations.

Having traveled for retail research extensively in Europe and Asia, I’ve observed a few key factors that could benefit many retailers. The following are the top three, with examples.

Making it work means working local: Many merchants make the mistake of relying on U.S.-based management teams to oversee international expansions, and on domestic company data and models. Foreign markets have broadly different shopping patterns, however, and a tailored customer experience is not so easily imported. In South Korea, Walmart ignored (or failed to recognize) the local inclination to purchase smaller packages or the competitive power of established rivals. Its stores did not appeal to shoppers either – customers needed to use ladders to access the upper shelves of its higher-than-average racks, and the exposed pipes in the ceilings were a put-off.

Home Depot made a similar foundational error in China back in 2006 when it overlooked the fact that in such developing countries, doing it yourself is seen as a sign of poverty. The country’s aspirational consumers preferred to hire out such work, and Home Depot shuttered its last China stores in 2012, taking an after-tax charge of $160 million.

Alternatively, when Ikea expanded into China, it studied almost 8,300 people in eight cities just to capture their morning routines. Ikea used this research to create behavior-specific products, such as a self-standing mirror equipped with hooks for jewelry and clothing, which made preparation easier.

Don’t underestimate the value of price: Target really stepped in it when it entered Canada with product price points that were higher than those in the United States. Canadian shoppers, familiar with Target from visits to its domestic stores, noticed the disparity and shut their wallets. Walmart, meanwhile, was forced to raise its food prices in Germany back in 2003 after the country’s highest court ruled its low-cost pricing model undermined competition.

Hitting relevant price points requires more than price parity, however; it requires an in-depth understanding of a particular market’s household budget – and what that market is willing to pay for. Also note that what is priced as a steal in one market may be a fortune in another. An 11-ounce bottle of Coca-Cola will cost 22 percent more in France than Germany, for example, while a pair of Nike running shoes is about the same.

Know your products: Often companies retreat from new markets simply because they fail to understand merchandising basics. The products, formats and brands that excel in the United States, even major products such as Tide, may mean nothing to shoppers in foreign markets.

In 2011, the electronics chain Best Buy closed nine namesake stores in China after five years of misreading customer priorities there. Best Buy opened U.S.-style stores with U.S-type products, including espresso makers, while the Chinese preferred more practical items – more washing machines, fewer sound systems. “We were stupid and arrogant,” David Deno, Best Buy’s former Asia chief, told The Wall Street Journal in 2012. Similarly, Best Buy retreated from Europe in 2011 after customers eschewed its big box formats and TV advertising, which featured American accents.

One way retailers can attract positive consumer attention in new markets is by offering private-label or other products that are exclusive to that chain. However, before doing so retailers should be careful the market has an appetite for these products or services. Test and learn.

In the end, we may see more of what recently happened with Lowe’s expansion into Canada: The need to acquire a large local player to create scale, local knowledge and a platform on which to build a new best practice approach that blends the best of both worlds.

 

Posted in Behavioral Research, Brand and Image Research, Business and Product Development, Consumer Psychology, Consumer Research, Customer Satisfaction, Retailing, Shopper Insights | Comment

Maintaining the effectiveness of product placement as it evolves

Editor’s note: Annette Brady is V.P., publisher development for CivicScience, Pittsburgh-based research firm. This is an edited version of a post that originally appeared here under the title, “Does product placement influence purchase of the product?”

While watching Saturday Night Live, I thought I was watching a skit with Bobby Moynihan. By the time I realized I was actually watching a paid commercial, or as it is being called: a “blended skit,” using SNL talent to promote a brand, I had already watched the whole thing. It was for Pizza Hut. Smart! Recently, NBC’s Saturday Night Live, announced that it was planning to reduce the number of ads by 30 percent next season but will be increasing the number of “branded sketches.”

Commercials are often looked upon as an interruption, mostly because they are not entertaining or engaging. We are now in a culture where we live stream programs or watch them via our DVRs, so we can skip the commercials. If networks will be reducing the total number of commercials they air, we can expect to see product placement become much more prevalent in mainstream broadcasts.

The question: Is it effective for the brands who choose to use it as a means to reach consumers and influence their purchases?

We asked over 2,300 respondents how they felt about product placement within TV shows or movies and if it influenced their purchases. Forty-seven percent of people don’t mind it. Great! But only 2 percent of them say that product placement influences their purchases, while 45 percent say it doesn’t. Nineteen percent don’t like product placement and view it negatively. And 33 percent say they don’t notice product placement at all in the shows or movies they watch.

Figure 1

Twenty-nine percent of the people who answered with, “I don’t mind. It tends to influence my purchases” are under the age of 18, and 64 percent are women. It will be important to pay attention to this younger generation, the iGeneration, as it grows in both size and influence.

With an overwhelming lead, 45 percent of people say they don’t mind product placement but it doesn’t influence their purchases. (It is possible that people may be subconsciously influenced.)

Here are some interesting insights about these consumers:

  • 50/50 split between men and women.
  • Most are Millennials and Gen Xers (32 percent are 18-34, 36 percent are 35-54).
  • They are more likely to watch CNN for most of their TV news.
  • They prefer to drive compact cars.
  • They closely follow the NHL (lots of product placement here).
  • They are more likely to go to the movies at least once a month. This would indicate that they have a better chance of being exposed to the product placement in movies.
  • They are more likely to own an e-reader.
  • They watch CBS more than other networks.
  • They are more inclined to tell others about new brands and technology.
  • Thirty-five percent of these respondents say that style and quality of products cause them to be brand loyal.
  • They are more likely to watch TV.

 

The 19 percent of people who have a negative impression of product placement are more likely to be college graduates. These folks are also more likely to read the nutritional information of their groceries. Fifty-four percent are men, 46 percent live in the suburbs and 48 percent don’t have children. Twenty-two percent are under the age of 25, 20 percent are 25-to-34, 31 percent are 35-to-54 and 27 percent are over 55.

For the people who answered, “I don’t really notice product placement,” our research shows they are less likely to watch television programs online and are less likely to go to the movies. They are also less likely to own an e-reader. Most notably, those that chose this response are most influenced by ads they see on TV!

Let’s dig into product placement using the show The Voice and placement of Starbucks cups on the set of the show as an example. First, I crossed the question, “How much do you like the show The Voice?” with the brand placement question. Over half of the people who “love or like” the show do not mind product placement, but it doesn’t influence their purchases. Almost half of the people who don’t like the show don’t like product placement and feel it cheapens and disrupts their viewing experience. Since The Voice does a lot of product placement (Starbucks, Nissan, etc.) it makes you wonder if there might be a correlation with why they don’t like the show … a topic for another blog.

Let’s also look at the result of crossing the question, “How much do you like The Voice?” with favorability of drinking Starbucks. I was surprised to see that people who are fans of the show have a higher un-favorability rating of Starbucks at almost double what their favorability is. I was equally surprised to see that the people who are not fans of the show like to drink Starbucks more than those who liked the show.
Remember what I said at the earlier about the possibility of people being subconsciously influenced? This may indicate one of two things: they are but in a negative way, or it actually supports that they don’t mind product placement but it doesn’t influence their purchase decisions.

As networks make adjustments to cut back on the commercial loads for a better consumer experience, they must also balance that with delivering an ROI for advertisers. Based on the findings of the research, the products being placed within programs are getting noticed. Great for branding! But, it is not influencing consumers’ purchases. Brands need to either also use very creative commercials to tell their story in order to build on branding, or they need to create a promotional tie-in and encourage a call to action. Here’s a contest suggestion for The Voice and perhaps, Pepsi. Call it, “Be Original” – Millennial consumers post a picture of themselves sitting in a red chair holding the new Pepsi 1893 can, with #TheVoicePepsi1893. This automatically registers them to win a trip to the final live show of The Voice where they can take a picture in an official red chair and can post it to social media. To further encourage sales, everyone who posts could also get a bounce-back coupon for the new Pepsi 1893.

Either way, the end result must be an increase in sales otherwise, what’s the point?

Posted in Advertising Research, Consumer Research, Market Research Findings, Shopper Insights | 1 Comment

Using scarcity techniques to increase online sales

Editor’s note: Phillip Adcock is the founder and managing director of the shopper research agency Shopping Behaviour Xplained, U.K.

Scarcity marketing uses our innate fear of shortage to boost sales. This is especially evident in-store near Christmas – think of the rush of parents desperate for the latest toy craze for their kids. But what are the reasons behind it?

We are evolutionary tuned to fear shortages. As hunter-gatherers, food was often scarce so we would feast when it was available, followed by long periods of famine. Those same impulses are triggered when we see that a product we are considering is scarce, even if the product has no nutritional value. Our needs as 21st-century consumers have changed and we are now tuned to need consumer goods just as we need nutrition.

As we are afraid of losing out, we will be instinctively drawn to a sales display if it is half-empty, as it presents the potential to miss out. Under the influence of scarcity, we make purchasing decisions more quickly and with less forethought.

Who commonly uses scarcity techniques?

Many different brick-and-mortar stores use scarcity techniques to increase their sales.

Starbucks uses seasonal drinks as a scarcity product. If it was possible to buy a pumpkin spice latte year round, it is likely that sales of the product would go down. As it is only in-store at certain times of the year, fans of the flavor are more likely to purchase when it’s available due to the seasonal scarcity.

Amazon uses scarcity techniques online to increase sales and increase impulse buying. The “x amount left” counter on the product page can drive buyers to make a purchase they were considering in case they miss out. eBay uses the same technique with buy-it-now sellers, as well as pitting buyers up against one another in auctions.

Types and effect of scarcity techniques

Stopwatch - last minuteThere are two different scarcity techniques and they can be used in a variety of ways, depending on the product that is on offer.

First, there is the limited day offer, where a sale price or product is available for a set number of days. This may also be tied in with other offers or promotional accompanying gifts. Similar to this is the holiday special (e.g. Christmas, Valentines or Black Friday) or the seasonal sale (which may last for a few days or several months). Many brands have seasonal products that are discontinued after the seasonal period.

Then there is the limited quantity sale. This can range from a one-off (a piece of art) to a limited run (depending on audience size this could be anywhere from 10 to several thousand items). This is even more effective if there are emotional sales techniques at play, such as the need to buy an in-demand Christmas present for a child.

There is also the tactic of adding an “inform me when it’s back in stock” function. This is a good way to gauge how big the potential re-release market is, as well as combating the frustration of shoppers who missed out. This is the chance to give them the chance to order the new product before it is re-released, motivating them to purchase immediately.

What benefits can scarcity techniques have in online stores?

Even though shoppers spend less when shopping online than they do in-store, scarcity techniques have the potential to increase purchases. Whether it’s a limited-time offer or a limited-edition offer, it can persuade shoppers who are unsure to make the purchase.

Even on products that cannot physically run out, such as e-books, a time limit on their availability at a certain price increases sales. Many shoppers will also wait until it is almost the end of a sale period to purchase. The number of purchases tends to be highest on the final day of the sale.

Limited time offers can also be a boost during quiet periods. If January has historically been a month of low sales, a limited-time offer in January is likely to boost sales.

More value is attached to scarce products such as art prints. Numbered prints are more expensive than regular prints because there is a limited number. Signed numbered prints are even more limited. Signed numbered prints by an artist who has died will be the rarest and most sought after because there is a final, finite quantity.

We value products that are scarce

The recent limited-edition Father’s Day record pressings in the U.K. are a good example of unintentional scarcity. Pink vinyl pressings of The Jam’s Sound Affects LP were created as a limited-edition father’s day gift promotion. Rather than being a father’s day gift, these were quickly bought out by The Jam fans, who often drove to several Tesco outlets trying to find them.

In a recent experiment, it was proved that we value products more highly if we perceive them to be scarce. This is most evident if the scarcity is due to high demand by other consumers. This social proof gives an impression of added quality to products.

Scarcity technique case study: Kickstarter campaigns

Kickstarter is one of the most efficient users of scarcity techniques. There are several in play with each campaign.

The first way in which Kickstarter uses scarcity technique is by putting a time limit on each project. This has a dual function. It encourages the poster to promote the project as much as possible to receive funding in time. It also provides a time limit for project contributors.

The second way is through scarcity. Each project comes with different rewards of limited quantities, depending on the amount donated. While some projects may have slightly pointless rewards for small sums (such as a thank you e-mail) this is often the chance to buy the product at a cheaper price.

The risks of improperly applied scarcity techniques

It might be tempting to add “three left” to your product sales pages but your scarcity marketing needs to line up with your product quantity. Shoppers may return to a page, only to see the same stock number again – in some cases after buying the product. This will lead to customer distrust and dissatisfaction.

If you want to make scarcity techniques part of your ongoing strategy, make sure the strategy matches your products. The strategy works if you produce a limited run of t-shirts every month, or if a different product is at a sale price for a month.

A prime example of this not working can be seen in many soft furnishing companies where sofas are constantly on sale. Customers are aware that the before prices are often false or only applied for a short period in an obscure location.

If you are selling limited runs online, make sure that your sales system is up to scratch. Shoppers shouldn’t be able to add products to their basket if they have already sold out. There is nothing more frustrating than to have appeared to acquire a rare, limited-run item only to be told that it isn’t available on checkout. This will cause the customer to stop trusting you and make complaints – and online customers aren’t shy about sharing their frustrations with others via Twitter and Facebook.

Scarcity techniques can be a great way to increase sales but should be handled with caution.

Posted in Behavioral Research, Consumer Research, Market Research Findings | Comment