Direct Connect With Brand Promotions
The national brands are making direct connections with customers, and that is changing the way promotions are being structured as well.
The most sweeping changes taking place in national brand promotions these days don’t involve more money, more commercials, or even more coupons.
They involve the way the brands are finding their consumers, and rather than sending their message through traditional mediums such as TV or newspapers, they are connecting to their consumers the moment they decide to shop.
“The other huge thing that’s changed in the last three years, perhaps, is a greater acknowledgement that what’s happening in the store is often at least part of a larger path to purchase,” says Bill Schober, managing director of content and editorial at the Skokie, Ill.-based Path to Purchase Institute. “It doesn’t mean that everything has to be integrated, but when you talk about the path starting at the zero moment of truth, that’s deciding at home to go shopping, so you go online and typically look for coupons, or occasionally a special recipe.
“That’s a zero moment, but it depends on the individual shopper. Maybe they’re using mobile apps, or a Kraft meal planner, or if they’re open to email suggestions from some of the more powerful brands, maybe advertising on a Safeway site or on a couponing site. The rules of showing up have changed so much.”
And because those connections between CPG companies and consumers are being made more directly, and earlier, in the decision-making process, the way the promotions are structured has changed as well.
“Promotions have become much more integrated with the marketing mix, rather than stand-alone offers,” says Bruce Levinson, vice president of brand strategy at Anthem Worldwide in New York. “CPGs are becoming more familiar with social media, and many brands are successfully engaging consumers in activities, events, or maybe just a simple game, that leads to an offer.
There is a higher level of involvement with the consumer, and integration with the overall brand communications effort.”
Those changes have come about as more national brands are able to gather more detailed information on their shoppers than ever before. That has made targeted campaigns and offers more prevalent, Schober says.
“There are many definitions of shopper marketing, but a big one … is getting under the skin of that particular chain’s shopper profiles,” he says. “There are specific elements or special targets you can identify within that chain. The days of one-size-fits-all are long gone.”
In part, that data has come from items such as loyalty cards that allow companies to mine buying habits. It’s also come from online methods, whether that includes direct email campaigns that customers click through for coupons or recipes, or the coupons themselves, where companies can track downloaded offers rather than waiting until the coupon is redeemed at the checkout line to discover whether the promotion was effective.
“Brands have more direct consumer access — and it should be noted that consumers have more direct access to brands — allowing a more natural dialogue not just about price, but about brand values, cultural themes, even in some cases politics,” Levinson says. “On a more tactical level, brands are mining shopper data to tailor messages aimed at driving purchase behavior among specific groups at key decision points.”
Although direct contact is changing the way brands promote their products, the lingering effects of the recession still are being felt, as well. Whether that means finding a value-based connection with the customer, or more closely tracking the national brand’s finances, saving money remains a major focus for CPGs today, Schober says.
“I do think that brands have come to realize that A, if shopper marketing means anything, it means getting more from your trade dollars being spent,” Schober says. “Brands are spending more time thinking about doing stuff in stores rather than just throwing stuff out there.”
One of those tactics that has found success, Schober says, is meal solutions.
“Brands are saying they want to get more activity out of the money they’re spending in the store. So meal solutions are seen as a good idea to participate in wherever you can,” he says. “It’s making the chain happy and really, unless you are bolting something crazy into the package, it’s a sensible statement to the shopper.”
Levinson says that value remains a focus, but that it is not the overwhelming factor that it was three or four years ago.
“Price promotions will always play a role for brands, but the promotional intensity — frequency and depth of discount — appears to be reduced from the height of the recession,” he says. “Still, most U.S. consumers are shopping on a budget and are certainly more aware of their financial circumstances than they were several years ago. Consumers are making tradeoffs between brands or categories that they will spend on and those they will opt to save on. Brands need to win the hearts and minds of consumers to access their wallets, giving them a reason to purchase beyond a hot price point.”
And for many national brands today, Levinson says that means trying to push shoppers off value-tier products and back to higher-priced offerings.
“Three or four years ago, we were in the depths of the recession, and nearly every brand was focused on delivering a value message, or an offer designed to keep consumers in the franchise,” he says. “Now, that still exists, but there is much more focus on trading consumers back up to higher-priced offerings, advanced benefits and more.”
Schober says the perfect tool for national brands to reach their consumers might be the one in their hands.
“Walking up and down the aisle with a smartphone that’s tied to your loyalty card, suggesting things that are important to you and not just general junk,” he says. “And private label markets have a big opportunity there because they have the most direct access to the data. But in any event, the smartphone could become the most powerful in-store merchandising tool we’ve seen. But we’re a long way from that.”
By reaching out to their consumers one-on-one, Schober says national brands have their best chance to change their promotional strategies for the future rather than relying on the campaigns of the past.
“The brands have to get their research and findings converted into usable insights, but that’s a lot of work,” he says. “It’s probably less about ‘Wow, let’s do this display!’ than it is to fine-tuning the messaging. They’re not afraid to micro target for this chain, for this target audience. They’re making some subtle targeting decisions.”