Consumers expect highly-personalized experiences when interacting with brands today—particularly if they’ve volunteered their time, money and personal information in exchange for them. But it’s what you do with that data that counts.

For first-party data-rich companies like DoorDash and e.l.f. Beauty, the key to leveraging consumer data to create exceptional brand experiences—while also adhering to privacy stipulations—is honoring that “implicit value exchange,” according to DoorDash CMO Kofi Amoo-Gottfried, who spoke on a panel at the POSSIBLE marketing conference in Miami last month.

The two companies have mined scores of data sets to fuel innovative marketing programs as creative solutions for their customers. For instance, the data insights team at DoorDash noticed that some consumers were ordering twice on the platform from different stores within a short period of time. So to solve the problem—and ultimately enhance the user experience—the brand created a new service called DoubleDash, which allows users to purchase items from nearby stores without the added service or delivery fee that incurs from multiple orders.

The advantage of having access to a trove of first-party data is that it’s actionable, which inspires marketers and their cross-functional teams to make decisions as close to real-time as possible. “We have something like 25 million monthly active users on our platform, so we have an enormous amount of first-party data,” Amoo-Gottfried said. “It’s coming right from the platform; it’s coming from behaviors.”

Another data point DoorDash is monitoring is communications to drivers, whom they refer to as “Dashers,” in real-time. “If a Dasher goes to a store and a store’s closed, we actually get a note,” Amoo-Gottfried explained. “But then how do we get the feedback from the Dasher that the store is closed? And in real-time, and take that store down and say, ‘this store’s closed, here are some other options that you have.’ We’re constantly learning as we go, from everything [in the app].”

First-Party Data Magic

Similarly, e.l.f. Beauty draws insights from its passionate community of loyalty members. “That’s where the first-party data magic really comes into play,” according to Ekta Chopra, the brand’s Chief Digital Officer, who spoke on the conference panel alongside the DoorDash CMO. “Our app has 1.2 million downloads, and 95 percent of our loyalty members love to shop in the app. So we learn how they like to shop, and which channel… As a brand that is in every single retailer, we don’t care where the consumer shops. But we do want to have that relationship with the consumer. The first-party data really allows us to do that.”

Honoring that relationship by providing an enhanced experience while adhering to data privacy regulations is critical, however. “The most fundamental thing is the implicit value exchange,” Amoo-Gottfried said. “How do we help use this data to actually create a better experience, and how do we ensure there are a ton of guardrails?” That translates to actively deciding not to use certain subsets of data if they don’t serve that purpose, he said. “There’s entire categories of things that we won’t target on, even though we might be aware of what they are, because we think it’s problematic to target on that identity factor… Get the things that you actually need and don’t touch the other stuff. We try to figure out which pieces are most predictive.”

Chopra agreed that the relationship between brand and consumer starts with trust, and that’s something she takes very seriously. “As marketing leaders, you have to pay attention to that, because one data leak is something that will really hurt your reputation, and especially as a public company, it becomes a bigger responsibility.”

Data Privacy Hacks

For marketers who are laser-focused on data privacy and compliance, Chopra has a few tips. First, she recommends working with your legal team to ensure there are data privacy considerations when crafting your data processing agreements (DPAs) with vendors. “Depending on how big you are and what kind of data you’re storing, it can get really complex,” she said. “So having that strong partnership with your legal team is important.”

Second, your cyber security policy should include a data privacy component to it and be right-sized appropriately—depending on the size of your customer base—so that you have adequate insurance in case any data leaks occur.

Third, consider the sensitivity of the data consumers are sharing with you and practice good data hygiene accordingly. “They’re giving you certain information that’s really private in some cases, depending on if you’re in the medical field—and beauty there’s some elements, too,” Chopra said. “You should know where that data is transferring in your ecosystem, whether it’s this system or that system. There are tools, of course, that can do that. But from a good data hygiene perspective, understanding that is super important.”

While companies seek to mine more and more consumer data, great responsibility comes with that exercise. “As you become bigger, of course you want more data… but you should also know that it adds a layer of complexity with private information,” Chopra said. Moreover, at a certain point you may be asked to delete it—and you need to be ready for that and have the tools in place to prove it, she said. “So when people do come in and do an audit, you can show it to them.”

The post How DoorDash and e.l.f. Beauty Leverage First-Party Data to Fuel Personalized Experiences appeared first on Chief Marketer.

Mobile shopping—and in particular mobile product discovery—is at the forefront of ecommerce sales through 2024, despite the fact that research suggests unsatisfactory shopping experiences on mobile devices are causing nearly one third of American adults to opt out of purchases. An article in Multichannel Merchant reviews key steps to improve mobile product discovery along the customer journey, from strategically differentiating omnichannel experiences to creating a hyper-personalized mobile experience.

Photo credit: camilo jimenez on Unsplash 

The post Three Ways to Drive More ROI From Your Mobile Experience appeared first on Chief Marketer.

According to a fan study conducted by Wasserman and the Drone Racing League, approximately 800 million people across the globe between the ages of 16 and 34 are enamored with technology, but not when it comes to traditional sports. However, this group still craves tech-driven competition, innovation, gaming and cryptocurrency.

Enter the “tech-setters,” the target demo the Drone Racing League has set its sights on. And if the impressive growth experienced over the past year is any indicator, it’s been pretty successful at it. We spoke with Drone Racing League CMO Anne Marie Gianutsos about the property’s explosive growth, the expanded partnership with the U.S. Air Force announced this week, how it engages fans on social and its plans to compete in the metaverse.

Chief Marketer: You expanded your partnership with the Air Force this week. How did that originally come about?

Drone Racing League CMO Anne Marie Gianutsos: Our partnership with the Air Force dates back to 2017. When you think about why it makes sense for drone racing and the Air Force to come together, we have shared values around technology and innovation. Specifically, we knew that we could help them discover and enlist some of the best minds in drone operations, drone development and aerospace engineering. We’ve renewed this partnership annually over the past five years, and this year we’re announcing a major expansion.

This is going to be the first time that we’ll feature U.S. Air Force gates within our real-life races. And these are custom-built gates that are professional racing zones. Then we add a virtual component by building those exact same branded gates into the DRL SIM game that’s available on Xbox, PlayStation, Steam and Epic Games. So, pilots at home can download the game and fly through those Air Force gates on their own time, on the same maps.

CM: Why does the Air Force see players as an appealing demo? What marketing channels and tactics are you using to reach them?

AMG: There is a lot of synergy between the Air Force, the military and our fan base. When you look at us compared to the general population, our U.S. fans on social are 23 times more likely to follow the Air Force. And they are 33 times more likely to follow U.S. military accounts across the board. We’ve actually had pilots who have raced with us after serving in the military. When we’ve studied it, close to 20 percent of our fan base has reported serving in active duty in the armed forces, which is a higher than the military backgrounds of fans of the big five sports.

So that’s military, armed forces-specific, but generally when we think about the demographic, we conducted a robust fan study globally with Wasserman, our research and insight agency. During this process, we discovered 800 million people around the world between the ages of 16 and 34 that are obsessed with technology, and they don’t follow traditional sports or esports. But they love tech-driven sports, like drone racing, innovation, gaming and crypto. It’s the ultimate audience for brand marketers, and we dub them the “tech-setters.”

So, other insights that you might find interesting about our fan base is that 70 percent of our fans don’t follow the big five sports, so right in line with that tech-setter audience. We have also studied our fan base to see how they view DRL partners. Sixty percent of our fans report that DRL helps these partners look more innovative.

CM: How does the mobile game that you created factor into your marketing?

AMG: We believe that DRL is a sport for everybody, and if you want to fly, it does take real skills. So our mobile game, and our gaming strategy overall, is to help level up drone skills. We have the DRL SIM video game, on those four platforms, but we also have the mobile units. We launched Drone Racing Arcade, which is a fun and free mobile game on iOS and Android. A big part of gaming and drone racing is that we invite our audience in and every year we open up a spot where someone can win a professional contract to fly in the league. We call that the SIM Tryout Tournament, and that launched this year on May 19th.

CM: What’s the crossover between the gaming audience and your specific audience?

AMG: In our global footprint, we have a huge component of gamers, people that like to play anything from your mobile, casual games all the way to competing professionally on console games. The gaming trend seems to be accelerating. When I look at this past year alone, we’ve added 50 percent more players year-over-year. We also are attracting people through monthly tournaments so that players can earn cash prizes on our mobile game. We’re going to be launching a military appreciation tournament on May 21st just in time for National Armed Forces Day.

CM: Let’s talk about social media. To what do you attribute your success and follower growth?

AMG: Almost 90 percent of our fan base is interested in creating digital content. We think about that as a digital storytelling native. We engage with our fans on social media in a number of different ways. One of the most prominent is that we stream our races on Twitter. Last season alone we saw record viewership, at over 80 million views. We engage with the greater community by featuring race highlights and also incredible FPV, which stands for first-person-view content, on Instagram. And then we do all sorts of fun things with our content on TikTok with overlaying, mash-ups, FPV and layering in all the trending sounds. That’s been a secret to our success and growing our following on TikTok to over 4 million fans.

CM: How do you incorporate live events into your marketing strategy?

AMG: Think about drone racing as blending the digital and the real. We compete drone racing in real life, in stadiums and palaces around the world. We bring a fleet of 600 drones to every in-real-life race. We compete in esports on our DRL simulator game. And this year we’re going be competing in the metaverse, which will be a more immersive digital experience, one where fans can help impact the experience that they have. It will be more of a two-way communication there versus in esports where you’re watching something that’s happening on a feed.

CM: Do you have any tips for marketers who are looking to grow their social media followings and try new platforms?

AMG: Being curious and doing your own research is always a great tip to start. Understanding how your particular content is going to resonate, because not all social platforms behave the same or have the same audiences. TikTok is definitely one for us, but it may not be for other brands. We also encourage brand marketers to get out of their comfort zone. Try out some of the things that are trending on the particular platform that you’re focused on, and study that platform for trends in virality. And then we also think it’s important to work with the influencers that are making an impact on the platform of your choice.

CM: How will players experience the metaverse?

AMG: We’re doing a bunch of things in the metaverse. Our title partner is Algorand, a leading blockchain in terms of speed and sustainability. In addition to the professional race in the metaverse that will be part of our upcoming championship season, we’re also building a play-to-own game on Algorand’s blockchain that will launch later this year. Think of it as a Mario Kart for drone racing. It’s going to be fun and enable people to play for free and also play to earn cryptocurrency.

CM: So all these different iterations of the league connect together.

AMG: Yes. We want to be the professional drone racing league across in-real-life, in virtual stimulation and in the metaverse. We really see this vision as creating a new era of sport that bridges all of these different experiences that fans expect right now.

CM: Do you have any advice for brands looking to get involved in the world of cryptocurrency?

AMG: It’s always so important to know your audience. Our audience is 41 times more likely than the general population to be into blockchain and cryptocurrencies. So that was a natural indicator for us to move into this space. But for others, I would say it starts with understanding your consumer’s current and potential relationship with crypto. And that will really be the cornerstone of their strategy. It’s about asking questions. Are they engaged? Do they own a crypto wallet? Are they familiar with blockchain and NFTs? And that will help to dictate the strategy that you’re going to need to take to get into the space.

Another thing I would say is that we should always be reviewing opportunities to meet our consumers’ expectations and adding value to their lives. So if you have an audience that’s perhaps less comfortable, you’re going to want to create experiences where blockchain is more in the back seat; at the Drone Racing League, we have people leaning in, so we can go to the leading-edge applications for cryptocurrency, like play-to-own games.

CM: Lastly, what are some trends that you think marketers should be watching right now?

AMG: First and foremost, brands should be asking themselves, what does Web3 mean to me? I’m obsessed with this. I think Web3 is going to be such an important catalyst for change in how we experience our brand relationships and how we interact with the world. In the sports world, there’s a very clear line between spectating the sport and having a hand in the creation of the sport. And I think that’s going be the delineation between Web2 experiences and Web3 experiences with sports, with the expectation moving into the co-creation space.

Another one that I would watch in marketing specifically would be thinking about how to create deeply personal experiences for your customer base. And that is going be enabled by cross-platform, audience measurement. I’m seeing huge advances in this space. Cloud is going to be an enabler of this, where we can finally start to identify who is interacting with us across every single platform. And then serving back an experience that is very smart and tailored to how people are interacting with our brand.

The post Marketers on Fire: Drone Racing League CMO Anne Marie Gianutsos on Social Engagement, U.S. Air Force Partnership and the Metaverse appeared first on Chief Marketer.

The Weather Company has access to a trove of first-party data, which gives it a distinct targeting advantage in a post-cookie world. But it’s also investing in AI technology—through IBM Watson Advertising—to create quality content; focusing on a subscription model; and deprioritizing revenue gained from short-term advertising within its apps in order to create a richer experience for consumers. Here’s a look at the strategy behind the brand’s recent decision to reduce its in-app ad footprint by 42 percent, according to a piece in AdExchanger, plus how the company is using AI to improve its subscription offering.

The post The Weather Company on Reducing In-App Advertising and Prioritizing Subscription Model With AI appeared first on Chief Marketer.

BlackBerry loyalists were dealt a blow earlier this year when the company ended support of its iconic smartphones. Once hailed as the preferred devices for business executives, heads of state and other fans of handheld physical keyboards, the beloved “crackberry” is now a relic of the past.

In actuality, the company has not manufactured the phones for several years now, and for the past six it has been licensing other companies to do so. Marketing the services that it provides today is quite a different exercise. Effectively pivoting from a hardware focus to a software one, the company now specializes in providing cybersecurity software and embedded operating systems within vehicles, with an eye on securing automobiles within smart cities of the future.

We spoke with BlackBerry CMO Mark Wilson about the company’s pivot, the significance of competitor analysis in today’s business market, the role that brand equity plays in product differentiation and how compelling content marketing can help B2B businesses cut through the clutter.

Chief Marketer: Let’s talk about pivoting towards not producing BlackBerry phones. Were you involved in the messaging for sunsetting the product? What were the challenges of conveying that to the public?

Mark Wilson, BlackBerry CMO: It’s been six years since we manufactured a phone. Instead, we’ve licensed our brand to other people to manufacture phones and use our software. We’ve pivoted our business model from being hardware-focused to software-focused. It’s changed dramatically in terms of how we build things or support things. So in that pivot from hardware to software, we knew we would eventually stop supporting devices that were seven, eight, nine, 10 years old. We wanted to delay that as long as possible out of respect for our customers. In time, we needed to make a financial decision around what that meant, so eventually we ended support for those devices. We worked with our carrier partners to make sure that those customers knew that it was coming and they had ample time to kind of get ready for it.

CM: How are you involved in creating smart cities?

MW: Long-term, we see the IOT market and the cybersecurity market converging around the smart city. Everybody has talked about smart cities, but not a lot of people are actually delivering something for a smart city. But once you have all the automobiles and traffic signals and everything connected, in a highly secure way, we think that’s actually a sweet spot. Everything going on in the Ukraine right now is a great example of why you need that. They need to be secured because people can begin to take down the national power grids. The value of a smart city can quickly be eroded if that’s not secure.

CM: What’s the process for securing automobiles in smart cities?

MW: If you look at those electric vehicles, there’s more software in those cars than there ever has been. I think on average, there are a hundred million lines of software code now written into the car. So as these cars become more software-based, and as the experience becomes more software-oriented, you want to make sure you’re securing all of those types of smart things that are connected into the infrastructure of a city.

Our software is also in the signaling lights within cities. There’s something called vehicle-to-vehicle—how a vehicle is talking to another vehicle, as well as the cloud. We have a major partnership with AWS in terms of providing that car-to-cloud connectivity. Once you’re showing how all of those things are connected, that’s how you’re going to start to deliver into the smart city.

CM: When do you anticipate this becoming a reality?

MW: Things like vehicle-to-vehicle you can experience today. A lot of that will be government standards in terms of when those things get rolled out. We see it as several years away. It’s coming, and sometimes these things move very rapidly. With autonomous vehicles, it’s starting, but it’ll be a groundswell effect. We think that that’ll accelerate much faster. How far out is that? It’s difficult to predict. And then how quickly does it gain mass adoption? All of those things are to be figured out.

CM: Your business is primarily B2B at this point. Who are your primary customers and how are you marketing your services to them?

MW: Our customers are the largest banks, governments and auto manufacturers. In addition, we have a big focus on the mid-market, and we do this particularly around cybersecurity. We have an AI prevention-first approach to cybersecurity. We use AI algorithms to identify things that are coming into your organization that look like malware or ransomware. And then we stop them from actually executing in the first place. That works well with mid-market clients that may not have security operation centers or 24/7 support. Instead, we’ll deliver that as a managed service.

CM: What channels do you use to market your products and services to customers?

MW: We look at the buyer’s journey and then we map how we reach buyers at different parts of the journey. We’ll advertise in business publications like the New York Times, Wall Street Journal or Washington Post. We’ll do digital advertising and a lot across search marketing. We do a lot through social—organic and paid social, a lot of earned media. It’s omnichannel in terms of how we’re going after the market. We do a lot of thought leadership. We publish threat research reports that get picked up in the news and that’s also shared with our customers.

CM: What tactics are working well for you right now?

MW: We do incredibly well with content marketing. I’ve seen content marketing evolve in my career, and I think it’s a great tactic. The hardest part for marketers doing content marketing is having something interesting to say. They might fall back and create content that is not that compelling, which I think is a huge mistake.

For BlackBerry, we lean into our threat reports. We’ve done things like uncovering hack-for-hire organizations where nation states would engage for-profit companies to execute hacking campaigns and social engineering campaigns, as well as private companies using hack-for-hire organizations to go after competitors. We have our own research team that identifies these exploits and vulnerabilities, threats and actors, and we basically package that up and then go out and tell the world about it.

We do something called Threat Thursdays, where every week we’re sharing new vulnerabilities out in the market. Some of them are really big, like exploits in the mobile space. Some things are small that are more bespoke in terms of tactics, but every week we’re publishing something new. On a longer-term basis, every quarter we come out with very extensive reports.

CM: Let’s talk about trends generally. Are there interesting or up-and-coming trends in B2B marketing that you have your eye on?

MW: The digitization of marketing has been a boon for so many marketers. And your ability to understand your market has never been better. It’s not new, because we’ve been focused on it, but it’s becoming more and more relevant every year. Our ability to understand trends based on more data coming in has only gotten better.

The other trend is something we lean into a lot: understanding your competitors. If you did a competitive study 10 years ago, you would probably hire a research firm and do it once a year to try and understand what’s happening in your market. Today, we understand what’s going on with our competitors on a weekly basis. We’re much smarter about understanding what our competitors are doing, what seems to be working for them, what doesn’t work for them. We’re much more mindful of having an outside-in perspective in B2B marketing. I see this trend only picking up.

CM: What excites you most about the marketing industry right now?

MW: What’s interesting about B2B is product differentiation. That cycle only gets more and more compressed. Years ago, you might have a product advantage for several releases. Now, you have product advantage for a release. The differentiation at that offer level is more difficult to maintain or extend. I think that brand becomes more valued in terms of where you see the differentiation. Your ability to provide that level of trust as an advisor or as a trusted solution, particularly in the markets we’re in, where privacy and security matters, that equation of trust means so much from a brand perspective.

There are things that you want to build more brand equity in. If we can move past it being a nebulous concept into something that’s more concrete, that makes it more of board conversation. All of this is getting to more quantification of marketing. And marketing becomes a more strategic conversation

CM: How should marketers think about measuring that brand equity?

MW: I would do it across three things. We measure our brand awareness, brand perception and brand preference. That’s at the highest level as it relates to brand. If you know awareness deeply, and your awareness relative to your competitors, and if you know perception and preference, you can begin to get an idea how valuable brand is in terms of creating pull in that journey. Are you just pushing opportunities through the funnel or are you pulling them through the funnel? Once you begin to quantify that you can start to be much smarter in terms of how you allocate your investments across push tactics as well as pull tactics.

CM: Where do you see the greatest opportunity for marketers today?

MW: There’s so much opportunity for marketers right now. A lot of it has to do with all the data that we have access to and how we use it. There are more things that we can do now that we never did. That competitive analysis example: any marketer who’s not doing that, it’s a huge missed opportunity. Of course, they need to know their value proposition and the best way to get their value proposition communicated out to the market. But there’s so much more richness that marketers can do beyond just that.

The post Brands on Fire: BlackBerry CMO on Pivot From Mobile Phones to B2B Cybersecurity appeared first on Chief Marketer.

Think Outside the App

Mobile apps are undoubtedly a key way to engage shoppers, but simply releasing an app won’t cut it. Consumers expect an omnichannel experience that produces a seamless shopping journey. Marketers should include promotion across all channels, including social, store signage, receipts, weekly promotions and others.

Beyond Physical Displays

In-store promotion using physical displays, through shelf positioning and compelling visual signage, remains a key tactic for retail marketers. Go a step further by incorporating mobile devices so that shoppers can use them to navigate the store aisles. Having access to shopping lists and data on purchasing decisions, for instance, can help marketers target consumers right on the mobile devices.

For more tips on mobile marketing strategies, including promoting private label products and prioritizing the user experience, read on in Multichannel Merchant.

The post Mobile Marketing Strategies: Four Common Mistakes to Avoid appeared first on Chief Marketer.

What’s more, users have to actively opt in to each individual app, and ATT forbids the use of workarounds such as fingerprinting. “It is more than a technical change,” says Gartner analyst Eric Schmitt. “It is a clear policy change from Apple.”

Gartner estimates that 56 percent of mobile phones in the U.S. are Apple devices. Among that majority of iOS users, experts anticipate average opt-in rates of just 20-30 percent. While your digital ads will still reach the app users who opt out, the lack of tracking data means they might not reach the targeted audience you want.

“The days of lights-out performance optimization are coming to a close,” Schmitt says. “One of the areas with greatest exposure is paid social campaigns. And if you have a lot of investment in performance marketing campaigns based on retargeting and look-alike targeting, those programs are really at risk.”

What’s a chief marketer to do? Schmitt offers a few suggestions:

* Make sure your team is upgrading software, updating pixels and data flows, and following other guidance from major platforms such as Facebook, Google and Instagram. Facebook, for instance, has implemented Aggregated Event Measurement (AEM) to help compensate for a lack of individual tracking data.

* Estimate the potential business impact. Review revenue, subscriptions and traffic previously and currently generated by performance-based marketing, as well as expenses related to the programs. Then create scenarios based on several potential opt-in rates. “Opt-in rates are really difficult to predict,” Schmitt notes. “They’re going to vary by app for sure. I think it’s possible that for social media apps they might creep up over time. If users start getting ads for things that aren’t relevant to them, they might say, ‘Okay, I’m cool with [being tracked]’ and opt in.”

Another thing to keep in mind is that ad prices might change. If less-effective targeting leads to a decline in advertisers, platforms could reduce prices. Then again, they might not. Right now, it’s impossible to predict.

* Consider pulling back on creative tests of digital ads. “Measurement is going to degrade,” Schmitt says. “There’s not enough data to test as many variables.”

* Be flexible regarding media commitments. Fluctuating opt-in rates and ever-changing publisher adjustments in response to ATT could cause performance to vary wildly month by month (or even week by week), so make sure your media plans can be tweaked as needed.

* Consider allocating some performance-marketing dollars to alternative channels. Content marketing, podcasts and Twitch are a few options you could test or expand your investment in. “I think there will be holdbacks for sure, and the potential for reallocation is there,” Schmitt says. “The challenge is there’s no alternative out there that offers comparable returns.”

* Keep the C-suite and other stakeholders informed of these changes and the possible effects on business. “The CMO is going to be in charge of not only managing change but also keeping the wheels on the car regarding marketing,” Schmitt says.

The post Apple’s App Tracking Transparency Requirements: What Marketers Need to Do Now appeared first on Chief Marketer.

Contactless Shopping

Contactless consumer experiences, including “buy online pickup in store” (BOPIS) and new payment options, have developed during the pandemic, adding more efficiency to shopping experiences. The challenge moving forward will be to implement technology that enables a smooth experience from back-end to front-end and considers inventory management, fulfillment and payment processing.

Subscriptions

Subscriptions are expedient and convenient for the consumer while allowing businesses to manage cash flow, predict demand and manage inventory. Moreover, delivering a quality customer experience at every interaction encourages retention.

SMS Messaging

Marketing to consumers through mobile devices is increasing. If your brand offers an SMS program, consider offering incentives on first orders, designing campaigns that are personalized and specific to text, and automating the process through a cloud-based marketing platform to allow for trigger messages.

For more on these marketing trends, read on in Multichannel Merchant.

The post Three Pandemic-Born Customer Experience Trends That Are Here to Stay appeared first on Chief Marketer.

Deal Day Spending

Many U.S. consumers have experienced economic hardship due to the pandemic. According to the report, 27 percent of U.S. shoppers surveyed indicated a slight or significant income reduction this year. But 73 percent will spend the same or more during blockbuster holiday events, like Black Friday, Amazon Prime Day and Cyber Monday. Overall, ecommerce holiday sales will grow by at least 19 percent.

Channels for Research

However, in terms of the channels consumers will use to research purchases, 43 percent of U.S. consumers surveyed said they will still browse in stores. The top channel for research was retailer websites (54 percent), with brand websites at 37 percent, catalog browsing at 31 percent, social media at 28 percent, TV commercials at 21 percent and personalized campaigns at 18 percent.

Brand Loyalty Challenged

Brand loyalty is proving to be more vulnerable this year, as consumers have tended to try new products and brands during the pandemic. McKinsey research shows that more than 60 percent of global consumers have tried a new shopping behavior since March, and 40 percent have shopped at a new retailer. When looking at the holiday shopping season specifically, just 11 percent of U.S. consumers will shop from the same retailers as they did last year.

Health and Safety

For those U.S. consumers intending to browse in-store, health and safety measures are top of mind. The most important measures are masks and barriers (40 percent), cleaning and sanitizing supplies (18 percent), one-way store aisles and special hours (13 percent), physical distancing (12 percent) and health checks upon entry (11 percent).

Early Shopping

In the face of limited availability, shipping delays and curbside pickup trends experienced in the spring, many U.S. shoppers are intending to make purchases earlier than last year, with 42 percent of U.S. consumers getting started in October or earlier.

Setting up for Success 

The reports suggests that there are four ways in which retail marketers can respond to the above trends and meet new consumer demands. First, motivate shoppers to buy early by creating early Black Friday events and sending consumers personalized communications to inspire purchases. Second, offer a higher level of convenience by providing multiple options to fulfill orders, from traditional home delivery to online to curbside. Offer digital support for growing ecommerce operations through enhancing digital storefronts and prioritizing the customer experience with online support, live chat and warehouse fulfillment. Finally, use consumer data to personalize and enhance the browsing experience online with product information, reviews and shopper preferences.

—

Following is a conversation about the report with Brian Ruwadi, Global Leader, Periscope by McKinsey and Senior Partner, McKinsey & Company, and Tamara Charm, Senior Expert, McKinsey & Company.

Chief Marketer: Was anything surprising to you about the trends outlined in the report?

Brian Ruwadi: There are a handful of things that are certainly different than they were in the past. The first is—and we saw this with our retail re-imagined COVID research—that consumers have tried a bunch of new CPG brands and also retail brands. We continue to see in our holiday research that folks are much less loyal than they were in the past to particular brands and plan to be through the holidays. One major theme here is how do retailers re-achieve this loyalty, and for consumers that have tried them for the first time or second time, how do they lock them in?

The second is this notion of retailers and consumers being worried about ensuring availability and trying to spread the consumer demand out through longer holiday events, Black Friday, et cetera, which appear to be even more important this year as consumers move to value. That has a two-point side to it. One is from an operational standpoint. If they’re going to move more product online before over the holiday season, how do they smooth out demand? And then, how do they work with their marketing partners to make sure they’re getting the demand from the consumer and getting it early?

Tamara Charm: I’m looking back to the start of COVID and what happened in terms of the digital surge, the shock to loyalty and the shift to value in essentials. We’re going to see the same thing play out in the holiday season. One note on the shock to loyalty: All folks’ routines have been disrupted and they are looking at online shopping more and to spend less and differently on value events. There’s going to be more and more of their spend up for grabs, and those who can give consumers what they want, when they want it and how they want it will win.

Chief Marketer: Following up on that, because brand loyalty is a clear issue, do you have suggestions on how marketers can either win back consumers or keep them as customers during this time?

Brian Ruwadi: Three thoughts are critical right now. First and foremost is personalization, particularly churn analytics, to understand who’s tried you for the first or second time and who has left you, and making sure you’re capitalizing on the new customers but also reaching out and pulling back in the customers that have left you and wandered to other brands over time. Second, we’ve seen a big rise in the importance of the omni-channel experience. The folks that have started with great omni-channel experiences or have invested heavily in building that experience are better set up for success and should be focused there.

The third is we’re seeing a big focus on the efficiency of the shopping experience. So, if you’re a consumer worried about COVID, you wouldn’t be able to get into the store, find what you need and get out quickly. Marketers should be thinking about how they create that in-store experience that allows them and the consumer to get in and out efficiently.

Tamara Charm: Folks are telling us that they’re not going to travel as much this holiday season and spend time with a smaller group of folks. So, what they want is likely to change. [It’s about] understanding what that will be, offering the right product to the right folks, upping the communication with them and being able to connect with consumers in all sorts of ways—not only in the store, but catalogs and social media.

Chief Marketer: It’s evident in the report that big deal shopping days are going to be more significant for consumers this year. Do you have any thoughts on how brands can balance those deal days with other avenues to purchase, such as in-store, in order to remain profitable?

Brian Ruwadi: The trick of all of this is going to be how you build a basket in an omni-channel environment. When you’re in the store, marketers and retailers know how to get people to buy. Not just the Black Friday sales, but also the rest of the basket and build it out to be something that’s actually meaningful and profitable. The ones that are going to win over the holiday season are the folks that are able to replicate to some degree that basket-building experience in the omni-channel and online shopping environment.

Tamara Charm: The other important thing to think about is that the big holiday events will no longer be one day. We’ve seen that Black Friday is expanding across many retailers and we know that consumers are looking to shop earlier. [It’s about] bringing the feeling of excitement and value into multiple mini-events, or something that’s connected over the course of November, so that consumers can participate without waiting for that one day.

Chief Marketer: In light of the pandemic lockdowns that vary by each region, how do you suggest marketers approach the constantly shifting situation?

Tamara Charm: One of the things that’s becoming more and more important is getting granular data—not only on what’s happening with your consumer, but what’s happening with infection rates and what’s happening with general shopping and out-of-home activity. Being able to understand that data and be agile and change quickly is increasingly a hallmark of those who are able to succeed in this environment.

Brian Ruwadi: To build on that, this notion of becoming radically more agile than we have in the past as retailers is a big deal in this environment where so much is unpredictable. I’ve been impressed with what many retailers have done over the past six or nine months to become more agile. But if you have a region lockdown over the holiday and your inventory is sitting in a store, now need to be able to market that inventory online to consumers or ship it somewhere else to be sold to a consumer. All of those agile capabilities are going to be critical during the holiday season.

Chief Marketer: According to the report, there are four areas that retail marketers should embrace to be successful this season. We talked about personalization. Any tactics that you would suggest when it comes to digital support for consumers?

Brian Ruwadi: The traditional shopping experience in a store over the holidays is browse, look and see, and feel. That gives consumers confidence in what they want to buy, whichever channel they buy it through. There’s a meaningful chunk of consumers who are now trying to do that through a digital experience, but not all retailers had historically invested in being able to test a product online as easily as many would like. When we did our retail re-imagined research, we saw a massive increase in the number of consumers who cared about product descriptions, product reviews, those types of things, so that they could actually feel confident in their purchase.

Tamara Charm: When we ask folks who is going to shift online, we do see Boomers telling us they’re going to shift at the same rate as younger consumers. So, you will likely have a lot of older consumers going online and digital for the holidays who are not used to that experience. Making sure that you are bringing the product to life digitally will be extra important—and the navigation around that, making it simple and easy to find.

Chief Marketer: Does that translate to creating a range of experiences to accommodate multiple generations?

Tamara Charm: The product description and the reviews are places consumers consistently tell us they go and they trust. Increasingly, virtual and augmented reality capabilities will be quite helpful in categories where getting a sense of the dimension of the product and the look and feel on you, in the case of apparel or cosmetics, will be increasingly important.

Brian Ruwadi: There’s also a point of understanding the different types of journeys that consumers are taking digitally. Are they there for one product and want to get in and out fast? Are they there and they want to browse? How do we create an experience, digitally, that allows them to have the in-store browsing experience online? Those are two very different journeys and require different types of capabilities online, or apps, or whatever it might be.

The post McKinsey Report: Navigating New Shopping Behaviors for Holiday Season During Pandemic appeared first on Chief Marketer.

Then COVID-19 erupted, putting a temporary halt to most brick-and-mortar retail and transforming it permanently going forward. During the second quarter of 2020, Momentum reports that 84 percent of consumers had moved to online shopping. What’s more, 37 percent of shoppers were having their groceries delivered to them—500 times what had been projected, Brown says.

Now, as consumers and retailers adjust to the new normal, a significant portion of those shoppers are returning to stores or looking forward to doing so. Momentum’s research shows that just 12 percent of shoppers who started using grocery delivery services in response to the pandemic planned to continue. In fact, grocery stores and supermarkets topped the list of public spaces consumers felt most comfortable returning to, cited by 78 percent of those surveyed. Parks were second (73 percent) and home-improvement stores third (68 percent). More than three-quarters of shoppers (79 percent) missed the tangibility of the in-person experience; even more (83 percent) missed the social aspect.

That said, digital channels will continue to be an important aspect of shopping—and shopper marketing—going forward. McKinsey & Company estimates that the number of consumers purchasing groceries online at least some of the time will have grown 41 percent post-COVID-19, with 38 percent more buying at least some household supplies and personal products online.

This increase in digital shopping presents an opportunity to reach and convert new audiences, just as the product shortages that occurred during the early weeks of the pandemic did. “People have been getting exposed to and getting experience with brands that are new to them because their usual brands were sold out,” says Colby Graff, GM, strategy and digital for Propac Agency. “Now is the opportunity for brands to bring joy and support to customers. The more value brands can deliver for them—not just monetary but also emotional—the better.”

To maximize that opportunity, brands and retailers should be channel-agnostic and home in on what most agree is the heart of shopper marketing: using data about shoppers’ behaviors and mindset to instigate changes in those behaviors. “Consumer advertising is about driving demand,” says Rich Butwinick, founder and president of Marketing Lab. “Shopper marketing is about driving conversion”—regardless of channel.

The Twin Tenets of Shopper Marketing 2.0: Convenience and Value

Until recently, convenience often came at the expense of value, and vice versa. Consumers had to pay extra for expedited delivery, for instance. But “the pandemic didn’t just cause a spike in the demand for immediacy,” says Lisa Norat, SVP, business leadership at HMT Associates. “It accelerated a need for convenience that shoppers will expect and demand forever.”

At the same time, the ensuing economic downturn has led consumers to seek out greater value to justify their purchases. “People are starting to be very mindful of spending, and that’s going to impact what is considered essential vs. what is considered a luxury,” notes Propac Agency’s Colby. “It comes down to the brands to communicate why their brand is essential.”

Delivering Convenience

Many consumers used to consider home delivery of groceries and other essentials a luxury. COVID-19, however, has made it a necessity—or at the very least, a necessary option for retailers to offer.

From February to mid-March alone, downloads of the Instacart app increased 218 percent, according to Statista. Target’s 2017 purchase of Instacart-rival Shipt now seems especially prescient. Not only does the retailer control the delivery platform, but it also owns the valuable consumer data. “The third-party delivery platforms such as Grizly and Instacart are collecting a ton of data,” says Marketing Lab’s Butwinick. “Who owns the customer could really be up for grabs.” He anticipates more retailers acquiring or developing their own delivery platforms.

Subscription boxes and auto refills/auto replenishment are other ways retailers and brands can deliver convenience. While subscriptions to non-essentials, such as beauty supplies and fashion, are expected to decline in response to the economic crunch, those to groceries, health and wellness items, and educational kids’ activities will likely hold steady, if not increase. Companies that promote these—such as Petco, which offers free delivery and rewards for those who opt for its Repeat Delivery—have managed to combine convenience and value.

Value Propositions

In a weak economy, price of course becomes more important in the buying decision. “People are more brand agnostic,” Graff says. “They’re more willing to buy store labels because the need is more critical than the want.”

Fortunately, slashing prices and offering ever-increasing discounts are not the only way to provide value that will convert shoppers into buyers. COVID-19 has brought cleanliness, safety and wellness to the forefront of many consumers’ minds; according to Ipsos, 62 percent of consumers would stop shopping from retailers that they felt were not adhering to health and safety best practices. Retailers that tout such practices, then, are promoting value without competing on price. So are CPG brands that highlight the high quality of their ingredients and materials: According to Momentum, 42 percent of shoppers surveyed during the pandemic said they chose a name-brand product over private label because “it uses better-quality ingredients,” making this the second most important factor. (“I trust the brand,” cited by 53 percent, was first.)

And regardless of the economy, there will always be consumers who prioritize intangibles, such as spending time with family. “This is an opportunity for CPG companies to come in and connect with consumers—offering recipes and suggestions for family movie night, for example,” says Graff, who sees storytelling as vital to communicating this type of value. “Brands sometimes think if they put a product on the shelf, shoppers will see it. But a store is a sea of brands, of products, so if you don’t have a true strong point of difference, you’re not going to win on that aisle. You have to come up with a program, you have to come up with the benefits. Endcaps, knockouts, they all help.”

Digital Messaging

Pre-COVID-19, the journey from online storytelling to in-store purchase could be fairly long, even with apps and mobile sites helping to bring digital storytelling into the store. Now that point of decision and point of transaction are both more likely to be digital than they had been, driving demand and driving conversion are more closely intertwined than ever. Social channels, blog posts, and digital recipes and service articles are just a click away from the point of purchase for an increasing number of consumers.

“If we can agree that shopper marketing’s impact is most effective within the context of shoppers making purchase decisions, and we can align on the fact that purchasing now occurs anywhere, anytime throughout the purchase journey and across any platform or device, then we can appreciate that shopper marketing initiatives are even more valuable today in reaching shoppers when they are most open to engaging in a branded dialogue,” Norat says. “This also highlights the importance of connected media to inform how and where to deliver a brand message to convert search into purchase.”

Five Essential Technologies for Retailers and Brands

* QR codes. Giants including Walmart along with smaller retailers such as Fairway use QR codes for contactless store checkout and pay-as-you-go. Nike stores use the codes to facilitate contactless pickup of items ordered online. EBay has tested shoppable storefront windows, where consumers can view products and then scan a QR code through the window to buy them. To boost in-store traffic post-COVID, Sephora placed QR codes on retail signage that shoppers could scan for a chance to win prizes. And of course myriad CPG brands use codes on their packages and advertisements to go into greater detail about ingredients, allergens, recipes and special offers than physical space allows.

* Augmented reality (AR). QR codes can also help deliver an AR experience. This could enhance a shoppable-storefront experience, enabling consumers to see how a dress hangs on a runway model or zoom in on product details. Ikea’s Place app is perhaps the best-known example of a brand using AR to improve the at-home shopping experience and, in turn, boost conversion and decrease returns: It lets users virtually place products in their homes to get a true sense of scale and see how well they’ll work with existing decor.

* Connected packaging. QR codes on boxes or labels that deliver AR or other types of value-added content are a type of connected packaging. NFC and RFID are other technologies that enable connected packaging—and can also provide the brand with data it can use to tailor marketing messages. For instance, when Kraft Singles introduced NFC packaging with retail partner Walmart in 2019, consumers who tapped the packages while in the store received recipes and a coupon; after they’d bought the product, they could unlock an entry to an instant-win contest.

* Digital shopping lists. Apps that minimize the amount of time spent in grocery stores or that simplify online ordering will only become more popular. Just about every major grocery retailer has an app that allows users to create, save and share lists as well as to apply digital coupons and arrange for pickup. The best retailer apps, as well as those from third parties that allow users to shop from multiple stores, include links between recipes and ingredients; some third-party digital list services also enable price comparisons and remind users when they might be running low on items. And in July 2020, Walmart, Yahoo Mail and Verizon Media partnered to create Groceries from Walmart, allowing users to shop for and purchase groceries direct from their email inbox. For CPG brands, ads in and sponsorships with these aids are the digital equivalent of shelf talkers and endcaps.

* Personalization. Website product recommendations based on consumer data and previous purchases are nothing new, but they’re gaining importance as a substitute for in-store assistance. Also gaining traction as a way of minimizing friction are online dynamic merchandising tools that use customer data and algorithms to serve personalized products and offers to visitors upon their arrival to a website. Retailers and brands can use this same data to personalize marketing emails, push notifications and other communications. Pampers, for one, offers a number of personalized tools on its website—a pregnancy calendar, due-date and weight-gain calculators—to gain useful consumer data while forming a relationship with users. Chatbots are another way to provide personalized service. While online retailers are increasing their adoption of the technology, most CPG brands have yet to do so, though Clairol is a notable exception. (Given the popularity of Butterball’s Turkey Talk-Line in November and December, not having an online chat function seems a miss.)

Best Practices of Shopper Marketing 2.0

* Promote multiple delivery options. The thinking used to be, “Make sure consumers can shop by whichever channel they want.” Now retailers need to add to that, “Be sure they can receive their orders by whichever method they want” including home delivery and curbside or in-store pickup. As well as communicating these options early in the funnel, retailers and brands need to be transparent and proactive about any snafus, delays or out-of-stocks.

* Allow shoppers to make it personal. Letting consumers choose how they want to receive their purchases is one way of offering personalization. Another is enabling them to customize their purchases. People might be more willing to order produce online if they can specify what color they want the bananas or how soft they want the tomatoes.

* Use data and digital technology to take advantage of physical proximity. “Proximity’s going to be a big deal,” says Momentum’s Brown. “If consumers are in a store or near a store, use push notifications or digital-connect shelves to deliver custom content.” Beyond prices and promotions, this content can highlight the unique selling propositions of brands or products.

* Spotlight newness. People grew bored during the weeks of sheltering in place, and even now most consumers are still limited in terms of diversionary options. Take inspiration from Oreo, which excels at regularly creating excitement about its brand by introducing new, unexpected flavors.

* Use content to differentiate your brand. Telling shoppers that your chips use potatoes grown by family-owned farms is one thing; printing codes on your packaging that enable consumers to learn more about the farm where the potatoes for their specific bag of chips, as Kettle Brand does, is another. The beauty of digital marketing is its variety of content options, from YouTube videos showing the pristine conditions of a company’s facilities to Instagram posts where influencers can show off products. And whereas print, broadcast and in-store assets require a significant lead time to produce, most digital assets can be turned around in a flash to respond to market changes.

* Make agility a priority. PepsiCo unveiled two D2C websites, PantryShop.com and Snack.com, just 30 days after conceiving of them. “We used to plan a year in advance,” says Brown. “Now the marketplace changes weekly. You have to be as digitally agile as possible.”

* Continue investing in shopper research and consumer data. “Now is the time to invest in shopper research in order to reveal and understand those changes and the behaviors that will have a long-term impact on the purchasing dynamics around your brand,” says Norat of HMT Associates.

The post Shopper Marketing in the Age of COVID: Great Changes, Great Opportunities appeared first on Chief Marketer.