Today’s shopper has retailers, suppliers and brand consultants continuously scratching their heads as they work feverishly to keep pace with escalating and changing expectations.
More than 300 business professionals attended the “Shop” conference at the University of Arkansas Center for Retailing Excellence on Thursday (May 16). A diverse speaker lineup shared their thoughts on finding and converting growth opportunities with shoppers.
One common theme during the day’s conference was the disruptive impact that social media and mobile technology has on how players in the retail space react. The other theme was that change is happening at warp speeds, and those embracing big data and digital technologies will likely survive for future generations.
Stephen Quinn, chief marketing officer for Walmart U.S, said when it comes to mobile, marketing dollars are often better spent creating applications that solve consumer problems, than in merely advertising a product or brand.
CREATIVE SOLUTIONS REQUIRED
He urged suppliers to collaborate with Wal-Mart and if they haven’t already done so, Quinn said get an RDK (Retail Development Growth Kit) which will help lay the groundwork for creative and collaborative solutions to consumer demands through the use of social and mobile media.
Fern Grant, executive vice president for Mars Advertising, challenged the retail sector and its supply chain to move beyond textbook shopper marketing 1.0 where retailers constantly trade marketshare often at the expense of margin erosion in the quest for low prices.
She said the 1.0 version is aimed at getting product on the shelf, and even keeping it on there with the hope of moving into other spaces as well. Her 2.0 version of shopper marketing includes suppliers and retailers working together to solve a consumer need.
“When you can provide a solution for the consumer’s needs, you no longer have to solely rely on price discounting,” Grant said.
David Marcotte, senior vice president of retail insights for Kantar Retail, urged retailers and suppliers to think outside the box in terms of interacting with potential consumers through gamification.
He said Cabella’s, a leading outdoor specialty chain, has done just that with several games, which was accomplished through outsourcing. Marcotte, said the retailer is reaching multiple age demographics with its gamification, which is also tied to coupons when certain levels are achieved.
“Gamification is a dynamic and exciting industry that brings together game mechanics and marketing to create engagement and solve problems,” noted the website of Gamification Corp.
Another gamification company, Gigya, says such solutions can build “user loyalty by incentivizing users with points, badges and special offers for performing positive actions on your site.”
VISUALIZING THE NUMBERS
Greg Silverman, CEO of Concentric, said big data is good, but can be limiting. He said numbers just for number’s sake can only take you so far. But the next wave of data is likely to include visualization.
“The digital visualization masters will be able to craft narratives that will add to the overall potential impact for big data,” he explained.
Silverman said when creative presentations work hand-in-hand with analytics, the outcome is near magical. He said big data is moving toward simulation in that companies will be able to plug the data into models that can allow for risk assessments to upsides and downsides.
Duncan McNaughton, chief merchandising and marketing officer at Walmart U.S., spoke to the group at the end of the day. He said points that resonated with him were the “what matters to me” mindset of today’s shopper.
“It’s not about the masses any longer, and we are a mass retailer, which is not going to change,” McNaughton said. “We will continue to meet our customers where they are as a multi-channel retailer that looks at data holistically, in real time, and we hope to convert that into strategies that help us sell more stuff.”
He said Wal-Mart is a good fast follower, but that isn’t good enough today.
“We have to be out in front of the curve, something we are working on nonstop,” he added.
McNaughton said the obvious question of the day was Wal-Mart’s first quarter earnings, which reflected a disappointing 1.2% decline in U.S. same-store sales – well below the company’s flat expectations.
He made no excuses for the missed estimate, but did explain several factors that played a role in the negative comps. As discussed in the company’s earnings report, he reiterated that weather played a huge role in softer sales as did the $9 billion in absent tax refunds processed this year by the Internal Revenue Service.
“We continue to see our customers struggling, and don’t expect any real relief for them in the coming quarters,” McNaughton said. “Food inflation was near 0% in the recent quarter, which also led to a slightly lower drop in total ticket sales.”