Bricks imitate clicks imitate bricks to catch attention, wallet share of omnichannel shopper
According to research, ownership of smartphones and tablets in particular have grown rapidly over the past couple of years, and that has created a multi-headed omnichannel hydra of a customer who retailers across all channels are desperately trying to appease.
A Pew Research Center study released in September 2012 found that since May 2011, the share of U.S. adults who owned a smartphone grew from 35% to 45%, and among those ages 18 years to 29 years, the figure had already reached 66%. At the same time, the percentage of people using their smartphones to browse the Internet grew to 55%, including 17% who used them for most browsing. "My smartphone is a PC; my laptop is a PC; my tablet is a PC," PricewaterhouseCoopers director of retail and consumer practice Jerry Blaesing told DSN.
Smartphones are but one facet of omnichannel marketing by retailers, but they’re growing in importance. "Now you’ve got a culture that’s been conditioned on getting instant access to everything, particularly as you skew younger," Dan McKone, a partner in the retail and consumer goods practice L.E.K. Consulting, told DSN. "Generation Y wants instant access to information and transactions, and the iPhone and Galaxy have made that easy. Retailers are realizing they can’t just have a conversation through a traditional channel — they’ve got to have a multifaceted communication with their customers."
It all boils down to convenience, which 28% of shoppers in a recent PwC survey cited as a principal reason behind shopping online. That’s why same-day delivery has grown in importance among online retailers. In March, Google began piloting Google Shopping Express, allowing residents of the San Francisco Bay area to order items online from off the shelves of nearby retailers, including Walgreens, Target and Raley’s, and have them delivered to their homes. Another online retailer, Shutl, launched in March in New York, San Francisco and Chicago, and allows omnichannel retailers to offer delivery of online orders within a one-hour window of choice.
Also in March, CVS launched an app for the Apple iPad that features a 3-D "virtual store," allowing customers to access pharmacy services, the ExtraCare loyalty card program, the photo center, Minute Clinic and departments where they can shop.
In the April issue of Costco Connections magazine, Costco Wholesale debuted more than 50 digital watermarks in articles and ads. The transparent watermarks are embedded on the page and allow the magazine’s 8.6 million readers to scan them; view product information, videos and store information; and make purchases after downloading Digimarc’s app.
All this focus on omnichannel means changes in the way things happen in the physical store. "A lot of people say the website needs to look like the store, but I think the store needs to look like your website," Blaesing said.
Hointer, a men’s jeans store in Seattle founded by a former supply chain and fulfillment executive from Amazon, has already taken this route: Customers scan QR codes on tags and go to a dressing room to try the jeans on. If they don’t want them, they can drop them in a chute that automatically removes them from their digital "shopping cart."
Understanding the Hispanic-American consumer
With the steady accumulation of purchasing power attributed to the Hispanic-American community, marketers more and more are targeting Latinos. Here’s why: the Hispanic-American population numbers more than 54 million today, with a total buying power of $1 trillion — expected to reach $1.5 trillion in the next two years — and 1.8 million households generating incomes greater than $100,000. DSN called in Reny Diaz, director of client engagement for Nielsen, for additional perspective about the Hispanic-American opportunity.
Reaching this audience requires significant investment, but if a brand is large enough and/or it particularly resonates with the Latino shopper the return can be huge, Diaz told DSN.
For the full audio Q&A, click here.
‘Culture shop’: Targeting the Latino customer
The Hispanic opportunity represents a "new American reality," noted Roberto Ruiz, SVP strategy and insights for Univision Communications, last month at the Consumer Healthcare Products Association’s Annual Executive Conference. Hispanic-Americans aren’t assimilating into the American melting pot. "We’re hearing people say they are ‘200% individuals’ in our focus groups," Ruiz said. "100% American and 100% Latino."
By the end of 2012, approximately 54.5 million Hispanic-Americans were living in the United States — about 20% of the total U.S. population; in the next generation, that number will reach 30%.
Reaching this heterogenic population has become less about the language and more about addressing the culture "in a way that’s sincere and respectful," noted Doug Stukenborg, Target divisional merchandise manager for pharmacy, OTC and optical. "It can’t be done in some … corner office. A diverse marketplace needs to be embraced across an entire organization, from the boardroom to the sales floor."
In stores that target the Latino shopper, Target looks for a mix of brands familiar to customers from their country of origin, as well as U.S. brands that over-index among Hispanics. "It’s a balance of bringing in those key items that we need to have in order to be relevant [with the Hispanic consumer], but also really thinking about what does she care about as a consumer. Some of the unique items we bring in … may not be performing at levels that would normally keep them on the shelf, but … it creates the right impression that helps her understand we’re a store for her."
For CPG manufacturers, making sure their message breaks through may mean duplicating marketing efforts. "This is not only a valuable consumer … but also one very new to messaging," said Reny Diaz, Nielsen director client engagement. "Fifty-seven percent of viewers of a Spanish broadcast aren’t reached [with] English [messaging]."