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New vs. Old Technology. Which Will Win?

A New Look at Shopper-Marketing Tools Finds Which Are the Real Deal at Delivering Deals

By Published on .

Technologies -- from location-aware mobile apps and social media to QR codes and interactive signage -- are enabling marketers to create value in myriad new ways. They're also raising new questions.

Which of these tools actually create the greatest impact on consumers and in what combination? Will the highest-potential technologies gain sufficient penetration to deliver the results marketers require?

Arc Worldwide worked with Harvard Business School to study usage of 36 different tools encountered during the purchase process -- ranging from the newest technologies such as handheld scanners, mobile couponing and social buying (e.g. Groupon, Living Social) to traditional newspaper inserts, sales, and in-store offers.

We mapped these behaviors against two variables: penetration (percentage used at least once per year) and momentum (a measure of enthusiasm for the tool and future usage intent). In this study we utilized the most basic form of value -- monetary value -- because of its simplicity, universal appeal, and relevance in this period of economic uncertainty.

We focused on how shoppers look for a deal and decide if "the get" was worth "the give."

So how did technology-based tools stack up versus traditional in delivering deals? Exceedingly well.

Behavioral Archetypes chart

High-momentum technologies such as social-buying tools generated strong shopper interest and demonstrated the power to change shopper behavior in the long term. General usage of social media for discounts followed close behind.

In-store technologies didn't fare as well. These include coupon-kiosks, QR codes, handheld scanners and programs that require multiple purchases from the same parent company. These efforts displayed low-to-average penetration and low momentum (10%-25%). This is partly due to a lack of availability of the technology in the market, and therefore familiarity. More than 70% of respondents did not have sufficient access to, or awareness of , in-store technologies.

The other reason some technologies did poorly is because users just didn't see the value in them. That's the case for interactive-touchscreen digital signage. Apparently, the get isn't worth the give. That doesn't necessarily mean failure. The lesson is that marketers still need to figure out how to make these tools more relevant if they are going to be ultimately adopted.

Now, let's look at the defending champions of value: traditional shopping tools. All boast high penetration -- some close to 100%, not surprising given how long they've been around. What is surprising is that many -- but not all -- exhibit medium-to-high momentum. The behaviors that lead in momentum were traditionally advertised sales, waiting for items to be on sale before making a purchase, and stocking up when an regularly purchased item was discounted.

Some tried-and-true techniques, however, are experiencing diminishing enthusiasm. Clipping coupons from newspapers, going to a discount retailer, and mailing in rebates for purchased products display low momentum (20%-30%). These tools will need to undergo changes if they're going to continue to meet consumer expectations, and clearly represent an opening for more technologically advanced solutions to deliver.

Some may wonder if the passion for technology corresponds to age skews, with younger audiences more receptive and older consumers sticking to the traditional. Our study showed otherwise, with no dramatic age differences in usage. Penetration and, more importantly, momentum across age groups were similar, showing that the notion that young people don't use traditional tools, while older people reject technology is just that -- a notion.

The lesson for marketers is that this isn't a zero-sum game. Marketing that creates real value for consumers will require implementing traditional tools and techniques due to their large penetration and momentum, but technology presents real, definable opportunities and will absolutely grow within the mix.

The real opportunity for technology, however, is that it has the power to create many more types of value than the simply monetary. Experience, access, personalization, connection and social good are but a few of the types of value today's technologies can effectively deliver. Even simple utility, such as being able to find a clean restroom via Charmin's SitOrSquat mobile app, represents an opportunity to demonstrate technology's power to create unexpected value in consumers' daily lives.

Wherever one falls along the technological divide, one thing is clear. As marketers enjoy and contend with ever-multiplying options to create consumer engagement, the understanding of value in all of its forms will only become more critical.

ABOUT THE AUTHOR
William Rosen is North America president and chief creative officer at Arc Worldwide, the marketing services arm of Leo Burnett Group. He may be reached at william.rosen@arcww.com.

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