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Showrooming Grows and Brick-and-Mortar Retailers Cringe

best buy showroomingIn recent years, the term “showrooming” has taken on a negative meaning for brick-and-mortar retailers as more and more consumers visit physical stores to research products but then go online to purchase those products at a lower price.

Some consumers even visit a brick-and-mortar retailer with their mobile devices to price check products in the store and through online sellers. They can instantly purchase the item they want based on their showrooming research from the online seller with the best price before they even leave the store.

What’s a brick-and-mortar retailer to do?

According to research from Gartner and Placed (a mobile analytics company), showrooming is poised to become a much bigger problem, as you can see in the infographic published by AdWeek below. Here are a few highlights to get you thinking:

  • 60% of consumers deliberately visited a brick-and-mortar store to gather information on a product while knowing they planned to buy that product from another outlet.
  • 90% of consumers who showroomed a product at a brick-and-mortar retail location did not purchase the item from that retailer online.
  • The top five stores that consumers are likely to visit before going online to purchase the products they showroomed at a brick-and-mortar location are: Bed Bath & Beyond, PetSmart, Toys ‘R Us, Best Buy, and Sears.

The top reasons consumer cited for showrooming are:

  1. Better prices online
  2. The store was out of stock
  3. The store didn’t carry the product
  4. Online shopping is more convenient/free shipping

showrooming infographic

The challenge for retailers is finding a way to increase in-store sales. So far, retailers have fought back with price-matching, faster checkout, same day free shipping on orders placed from the brick-and-mortar store, and in-store wi-fi access that enables mobile scanning so consumers can instantly purchase popular items and have them shipped to their homes for free. Each of these tactics aims to help consumers get the lowest price and bypass the checkout line.

For brick-and-mortar retailers, it’s more important than ever to have the right products stocked at the right prices. Bargain hunting and comparison shopping is at consumers’ fingertips, so retailers need to make sure consumers can get what they want, when they want it. If brick-and-mortar retailers fail, those consumers will head directly to Amazon or another online retailer to make their purchases.

What do you think?

Image: Alton Jefferson II

Consumers Cannot Identify Olympics Brand Sponsors

london olympics 2012Test Becoming a brand sponsor of the Olympic Games is an expensive investment, and that investment doesn’t usually lead to an immediate uptick in sales. Instead, Olympics sponsorship typically delivers more long-term value in terms of increased brand awareness and reputation.

In fact, it could be argued that employees get more excited about Olympic Games sponsorships (and clients who often get free tickets to Olympics events thanks to those sponsorships) than consumers. Results from a Toluna Global Omnibus Survey revealed that most consumers in the United States don’t know which brands are sponsors of the Olympic Games.

In a survey of 1,034 U.S. consumers during the week of July 15, 2012 (just days before the 2012 Olympic Games started in London), most respondents could not correctly identify the sponsors of the upcoming 2012 Games. Here are the brands identified as sponsors by the survey respondents:

  • Coca-Cola: Identified by 47% of respondents
  • VISA: Identified by 41% of respondents
  • McDonald’s: identified by 40% of respondents
  • Nike: identified by 37% of respondents (note: Nike is not an Olympics sponsor)
  • Pepsi: identified by 28% of respondents (note: Pepsi is not an Olympics sponsor)
  • Adidas: identified by 24% of respondents
  • P&G: identified by 21% of respondents
  • Samsung: identified by 19% of respondents
  • Burger King: identified by 19% of respondents (note: Burger King is not an Olympics sponsor)
  • GE: identified by 18% of respondents
  • British Air: identified by 17% of respondents
  • UPS: identified by 17% of respondents
  • Google: identified by 16% of respondents (note: Google is not an Olympics sponsor)
  • BMW: identified by 13% of respondents
  • BP: identified by 11% of respondents
  • Continental: identified by 8% of respondents (note: Continental is not an Olympics sponsor)
  • Cadbury: identified by 7% of respondents

Interestingly, when survey respondents were asked how each brand’s sponsorship of the Olympic Games made them feel about the brand, respondents indicated that the sponsorship made them feel more positively about the brand. This applied for all brands, including the brands that respondents erroneously thought were sponsors of the Olympic Games such as Google.

There are a couple of things to learn about this survey results. First, Olympics sponsorship does boost goodwill toward brands. Second, well-known brands that consumers expect to be associated with the Olympics in some way benefit from the event without investing in expensive official sponsorship. Placing some relevant ads, tapping into consumers’ emotions related to the Games, and keeping the brand top-of-mind can deliver similar results. For example, Advertising Age references a Nike campaign called “Find Your Greatness” that launched on the opening day of the Olympic Games in London. It’s a perfect way to merge the Nike brand promise with a current event (the Olympics) without investing hundreds of millions of dollars in sponsoring the Games.

What do you think of Olympic Games brand sponsorship? Is it worth the investment? Leave a comment and share your thoughts.

Image: Peter Burgess

How Consumers Use Social Media in Purchase Decisions

online searchMost brand marketers still invest more of their marketing budgets in traditional marketing activities than they do on social media marketing activities. Even digital marketing budgets are skewed more heavily towards traditional online marketing activities than they are towards social media marketing activities. According to new research from Radius Global Market Research, this is a good strategy.

The study found that consumers are much more likely to get information and share information via traditional online channels than social media channels. In fact, traditional online channels were used 50% of the time or more depending on the category of the product or service being researched for possible purchase.

Don’t count social media out though. The study found that social media influences anywhere from 9% to 39% of purchase decisions depending on the category of the product or service being researched.

As you might expect, big ticket purchases and emotional purchases are the ones that drive consumers to seek out online information before they make their purchase decisions. Consumers seek out online information most frequently for:

  1. Travel purchases = 76%
  2. Electronics purchases = 73%
  3. Automobile purchases = 67%
  4. Baby care equipment purchases = 66%
  5. Household appliances purchases = 64%

Social networking sites were consulted most often for:

  1. Baby care equipment purchases (39%)
  2. Electronics purchases = 35%
  3. Automobile purchases = 28%
  4. Toys and games purchases = 25%
  5. Household appliances purchases = 23%

Also as you might expect, the survey found that consumers of all products and services across all categories are more likely to search for information online before they make a purchase than they are to share information about their purchase or their experience with the product or service after they’ve purchased it.

However, Radius Global Market Research found two categories where consumers are more likely to seek out information and share information after they’ve made a purchase than they are to gather information before they make the purchase — personal care and makeup products. Also, people who purchase smartphones are nearly as likely to share and search for information after they make their purchase as they are to seek information online before or during the purchase process.

The Radius Global Market Research study results are based on a survey of a sample of its internet panel of consumers from the United States, United Kingdom, Canada, Europe, Australia, and Scandinavia.

What do you think? Any surprises in this data that will affect your brand marketing spending?

Image: Carl Dwyer

Don’t Redefine Market Segments, Redefine Market Segment Perceptions

college classroom desksThe market segments that existed 20 years ago have changed significantly with the spread of wireless devices, instant communication, instant access to information, and instant gratification. The parameters used to define college students, teens, and twenty-something market segments have seen some of the biggest changes, and those changes have led to significant misperceptions about the people in those segments.

This is something that Mike Poznansky learned first-hand during his seven years with Red Bull where he led the brand’s college program (he left the company recently to start his own agency, Neato). In an interview with AdWeek, Mike shares some insights that every brand manager should read. Rather than suggesting that marketers should rely on redefining market segments to stay relevant and boost ROI, he suggests that marketers should redefine their perceptions of market segments, particularly the college student segment.

When asked what misperceptions are causing brands to falter with the college student segment, Mike explained:

“[It’s a misperception] that a [brand] ambassador program is the lifeblood of a college marketing program, or that all your focus should be on getting your brand and your product on campus. To color that in, just a fraction of the college experience takes place on campus. Most students don’t even live there. Most of their spending isn’t happening there. So, some brands are just frankly investing way too much money on the wrong things. You really need a comprehensive approach. You’re not going to achieve everything through one vertical.”

Integrated marketing is the key to success across market segments these days, and getting a better understanding of the people within those market segments in 2013 is critically important. Mike explains that college students affect more purchase decisions than ever as parents seek out their help in finding information about products and services online. He also notes that college students are the future power consumers, so investing the time, money, and resources into better understanding this new generation of hyper-connected consumers who don’t remember any other way to live than connected to their mobile devices 24/7.

Consider the market segmentation you’ve done to maximize your brand marketing efforts. Do you really understand the people within each of those segments in 2013, or is part of your “understanding” based on outdated misperceptions? People have changed, and your understanding of your market segments has to evolve to keep up with them. The “traditional” college student buyer persona is anything but traditional these days.

What do you think? Leave a comment and share your thoughts

Image: Tiffany Szerpicki

Shifting 15% of TV Ad Budget to Online Leads to Higher Reach and Brand Recall

calculationA new study by the Interactive Advertising Bureau (IAB) and Nielsen provides strong evidence that shifting television advertising dollars to online advertising drives positive results.

In “A Comprehensive Picture of Digital Video and TV Advertising: Viewing, Budget Share Shift and Effectiveness,” it is reported that a 15% shift in media spending away from television and toward online drives increases in brand recall, reach, and the effectiveness of that reach.

Furthermore, combining online advertising with television advertising drove even better results. Online video ads that run before television ads lead to a 33% increase in brand recall over television advertising alone. Online display ads that run before television ads drive a 25% increase in brand recall. In other words, timing your media buys so consumers see your messages online before they see them on television is an important piece of the puzzle when it comes to increasing returns on your advertising investments.

Some of the key findings from the study include:

  • When 15% of ad spend is shifted to digital from television, consumer packaged goods brands (CPG) experienced a 3.4% increase in reach.
  • When 15% of ad spend is shifted to digital from television, non-CPG brands experienced a 6.2% increase in reach.
  • When 15% of ad spend is shifted to digital from television, brands experienced more reach at lower costs per point ($63.0K vs. $67.6K) and CPMs decreased ($12.31 vs. $13.82).

The report also reveals statistics specific to online video advertising that can help media buyers make the right choices for brand advertising. For example, ads shown during full-episode online video content generated a 39% higher brand recall than ads shown during full-episode programs on television. In fact, digital ads shown during both short-form video and full-episode video content drove higher brand recall, general recall, message recall, and ad likability than television ads.

And despite what you might think, ad receptivity is quite good no matter when an ad is played with online video content. Here are the overall findings related to online video ad receptivity:

  • The average streaming video viewer watches ads for 20 seconds. The average completion rate for these ads is 87%.
  • Mid-roll ads generate the highest completion rates (99% for short-form video and 89% for long-form/full-episode video).
  • Pre-roll ads generate the second highest completion rates (79% for short-form video and 81% for long-form/full-episode video).
  • Post-roll ads generate the lowest completion rates (71% for short-form video and 79% for long-form/full-episode video).

You can follow the link to view the complete report, which makes a compelling case for shifting up to 15% of your media buying budget from television to online, particularly online video, and for modifying the timing of your ad runs.

Image: Ayhan Yildiz

3 out of 4 of the Top 100 Brands Have Active Google+ Pages

google plus circlesGoogle+ has finally secured its foothold in top brands’ social media marketing strategies, and when coupled with Google’s YouTube, Google has become a strong player in the world of social media.

That’s according to the January 2013 SocialShare report from BrightEdge which tracks social adoption and trends among the Brandz top 100 global brands.

Brands and Google+

The SocialShare report reveals that Google+ has experienced a 94% growth rate among the top 100 brands during 2012, and today, 75% of the top 100 brands have active Google+ profiles with a total of 20.9 million followers. However, it’s important to point out that 78% of those fans (16.3 million followers) are following the top 10 brands. The top 10 breakdown includes four car brands, two technology brands, one retail brand, and two food and beverage brands as follows:

  1. H&M = 2.49 million followers
  2. BMW = 2.22 million followers
  3. Mercedes-Benz = 2.04 million followers
  4. Nissan = 1.95 million followers
  5. Google = 1.90 million followers
  6. Porsche = 1.79 million followers
  7. Red Bull = 1.53 million followers
  8. Samsung = 913,000 followers
  9. Starbucks = 843,000 followers
  10. Coca-Cola= 724,000 followers

One of the most important takeaways for brand marketers to learn from this report is that 25% of brands link to Google+ on their website home pages, and 20% of brands have their Google+ pages show up in search engine results (up from zero in 2011). The report authors explain, “As brands continue to attract Google+ followers, these [brand Google+] pages look set to become a mainstay of search results.”

The importance of becoming active on Google+ and linking your content via Google properties, particularly Google+, cannot be understated in 2013. As more and more Google+ pages turn up at the top of search results pages, consumers will start to expect to see them there. Brands that aren’t there and fail to meet consumers’ expectations could lose opportunities.

Brands and YouTube

The SocialShare report also shows an 87% brand adoption rate for Google’s YouTube among the top 100 brands. In total, those brands’ videos received 3.15 billion views in 2012 and have a total of 5.1 million subscribers. Google has made changes in recent months that link Google search, Google+, and YouTube even more closely together, so YouTube should be high on every brand’s social media priority list in 2013.

Two brands are really leading the way on YouTube — Google with 718,000 views and 1.12 subscribers and Red Bull with 535,000 views and 1.41 subscribers. Far behind in third place based on video views is Samsung with 160,000 views. In terms of subscribers, Apple takes the third spot with 964,000 subscribers, but subscribers nosedive after that. Nintendo ranks fourth for YouTube subscribers but has just 190,000 subscribers.

Of the top 100 brands, following are the 10 with the most YouTube views:

  1. Google = 718.4 million views
  2. Red Bull = 535.5 million views
  3. Samsung = 160.2 million views
  4. Nokia = 139.2 million views
  5. Coca-Cola = 135.0 million views
  6. Apple = 103.3 million views
  7. Disney = 83.6 million views
  8. Nintendo = 78.6 million views
  9. Pepsi = 66.2 million views
  10. VISA = 66.2 million views

Consistent growth for Google+ throughout 2012 and Google’s efforts to fully integrate its products to benefit search results ( as well as its social search initiatives) make it clear that Google+ has become a strategic imperative for brands.

You can follow the link at the beginning of the article to download the complete SocialShare January 2013 report from BrightEdge.

Image: Fabrizio Van Marciano