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Leveraging game-based technology to engage shoppers, drive loyalty

BY Michael Johnsen

CHICAGO — What helps build loyalty, but is not considered a loyalty program? What is fun, exciting and rewarding, and at the same time strategic, planned and designed to drive trips and/or purchases?

Gamification. It’s the latest buzzword among brand marketers, and it’s gaining traction as early adopters begin to revolutionize the way customer engagement is done.

The reasons behind gamification are simple. It not only engages the consumer, it derives a commitment from the consumer; it not only engenders loyalty, it creates brand advocates; and gamified consumers not only become repeat purchasers, they also act as billboards for the brand.

Why gamify?
“It’s a way to use technology a lot of times on a very personal level,” noted Scott Shamberg, SVP growth and emerging commerce at TPN, during a breakout session at the 2013 Shopper Marketing Expo here, on Oct. 10. “You can customize the program to meet the insights you already have about your target,” he said. “You can match those insights with game mechanics to drive further engagement.”

Successful gamification strategies are based on five strategies: a value exchange, acknowledgement, “bragability,” the utilization of mobile, and social networks and status. “At its core, you tap into this idea of everybody wanting their 15 minutes of fame,” Shamberg said. “That’s what Facebook, to an extent, tapped into.”

How do you gamify?
More and more, gamification is becoming an industry in and of itself, and the options available to marketers are akin to buying a home: build a gamification platform from the ground up, buy a currently-existing platform and customize it to the brand, or rent a gamification platform.

Each of the strategies has its own pros and cons, noted Sarah Ortman, senior group manager of consumer and shopper promotions for Clorox. “[For example], the pro of building your own customer gaming experience is you get exactly what you want,” she said. “The challenge is there is a lot of planning and resourcing. And there is investment and risk that’s inherent,” she added. Building from the ground up also could take the most time to bring the program to market.

Buying a pre-existing platform and customizing the experience may be more cost-effective and also represents a faster turnaround to market. However, the experience may not be fully customizable.

Finally, renting represents the fastest speed to market, but the brand doesn’t own the community or experience. An example of a successful rental experience is Target’s partnership with Shopkick. Target wanted to reward its loyal guests during the entire shopping process, as well as further engage them in store and at shelf, Ortman noted. Target partnered with Shopkick and rewarded its guests with “kicks” for browsing products online, visiting select stores or participating in “scan missions” in which participants have to scan certain products at shelf. Those “kicks” can then be used toward the purchase of gift cards. Shopkick’s game-centric platform further enhanced the shopping experience, Ortman noted.

For those marketers serious about deploying a gamification platform, Shamberg and Ortman shared a list of the eight questions every marketer should ask before taking the next step:

  1. Is the gamification initiative grounded in insights and strategies?
  2. Do you have the right team in place to support and sustain it once you build it?
  3. Do you have an existing loyalty base you are engaging? If not, do you know the audience size that would indicate success and how you would reach them?
  4. Do you know the investment level you are willing to commit to creation and maintenance?
  5. Are you equipped with the technology and prepared to respond to the pace of change?
  6. Have you defined success metrics?
  7. Do you have a clearly defined payoff for the consumer and the brand?
  8. Does your customer purchase online or in-store? How does this program support this behavior?

For more DSN coverage from the Shopper Marketing Expo, visit DrugStoreNews.com/Shopper-Marketing-Expo.

 

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NRF: Holiday spending to increase even as shoppers cut budgets

BY Dan Berthiaume

WASHINGTON, D.C. — Consumers will take a conservative approach to spending this holiday season. According to NRF’s holiday consumer spending survey conducted by Prosper Insights & Analytics, the average holiday shopper will spend $737.95 on gifts, decor, greeting cards and more, 2% less than the $752.24 they actually spent last year. Despite this reduction in individual holiday budgets, NRF is forecasting holiday sales will increase 3.9% to $602.1 billion. NRF defines the holiday season as sales in the months of November and December and forecasts holiday sales growth each year based on U.S. Commerce Department data, such as previous months retail sales, the housing market and employment. NRF’s consumer spending surveys are not a part of the forecast model.

For the first time, NRF asked holiday shoppers if the political gridlock in Washington around U.S. fiscal concerns would affect their holiday spending plans. On average, 29% of respondents said the situation would somewhat or very likely affect their spending plans. Nearly one-third (32.7%) of those between the ages of 55 and 64 said political gridlock in Washington was somewhat or very likely to affect their spending, the highest percent among all age groups surveyed.

When asked specifically about the overall state of the economy and how it would affect their spending plans, more than half (51%) of consumers said the economy would in some way impact how they spend this holiday season. Specifically, 79.5% plan to spend less overall, looking to cut corners and tighten budgets where they can.

Other noteworthy results include:

  • 57% of shoppers will buy gifts for themselves, down from 59% last year.
  • Total spending on holiday decor will reach $6.8 billion.
  • 4-in-10 Americans will begin shopping before Halloween.
  • More than half of consumers (51.5%) will shop online, with the average person completing 39.5% of holiday shopping online, up from 38.8% last year.
  • Online holiday sales will grow 13% to 15% to as high as $82 billion.
  • 53.8% of smartphone owners and 63.2% of tablet owners will use their devices to make purchases, comparison shop and look up prices.
  • 6-in-10 Americans say they’d most like to receive gift cards.
  • 35.6% of respondents said the most important factor in deciding where to shop are offers for sales and discounts, along with 16.4% who say the most important factor is selection of merchandise and 13.6% who say it’s quality of merchandise. Around 3.4% rate free shipping or shipping promotions as the most important factor, up from 2.9% last year.

 

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Walmart’s omnichannel vision drives its small format growth

BY Mike Troy

BENTONVILLE, Ark. — Walmart will be opening more small stores next year and beyond as the company pursues a vision of omnichannel retailing that it contends no other company is capable of executing.

Walmart U.S. president and CEO Bill Simon on Tuesday morning shared a message of physical and digital convergence involving an acceleration of smaller format stores and continued advancement of the retailer’s digital capabilities. He suggested multiple times during his presentation that the company has reached an inflection point in terms of building a next generation retail enterprise.

According to Simon, Walmart’s capital budget for domestic purposes next year will range between $5.8 billion and $6.3 billion, resulting in the addition of between 235 and 265 stores — including between 120 and 150 small format stores, versus 115 this year — encompassing between 19 million and 21 million sq. ft.

If Walmart finds itself at the upper end of that range of possibilities this time next year it will be a modest increase in domestic expansion at a potentially lower cost as Simon said Walmart has reduced store opening costs by 15%.

During the current fiscal year, which ends in late January, Walmart said it will spend between $6 billion and $6.5 billion to open a total of 245 stores encompassing 18 million sq. ft., above the company’s earlier forecast which called for spending of $5.5 billion and $6 billion 220 to 240 units and 15 million to 17 million sq. ft.

The expanding base of small stores coupled with more than 3,000 supercenters give Walmart multiple points of access to offer shoppers a highly integrated experience that no other retailer can touch, according to Simon.

 

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