To Reach Shoppers, Move Beyond Print Circulars

Retailers: Use Digital Channels to Connect With Your Target Buyers

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Retailers have made great strides in getting closer to their customers and sloughing off the weight of the 19th-century retail model of product and merchandising centricity. Retail giants such as Best Buy and Target in the U.S., as well as Tesco and Boots in the U.K., show how far the industry has come in embracing data- and insight-driven customer intimacy.

But despite these strides, many retailers are still playing catch-up in addressing the rapid fragmentation in media and tapping into the power of digital. With few exceptions, most are still addicted to the heady narcotic of promotional free-standing inserts, sinisterly delivered through rapidly dissolving print and newspaper media channels.

Take the particularly revealing case of retailers' stock in trade: younger, more free-spending consumers for whom shopping is a top priority. The media disconnect between consumption and share of ad expenditures for them is startling. According to data from Forrester and TNS Media Intelligence, as of 2006, print and newspapers made up only 10% of the Gen Y media diet -- yet commanded 41% of marketers' advertising expenses. By contrast, the web represented 36% of young people's media consumption, yet commanded only 6% of media spending.

FSI dependency is admittedly a hard habit to kick: Retail merchants and their suppliers have been hooked on them for ages, and circulars indeed do drive retail sales -- for now. But as with the waning influence of the 30-second spot, the incremental economic gains associated with circulars is in decline because fewer people -- especially younger people -- spend Sunday morning with a cup of coffee and the Sunday paper, a prime FSI distribution channel.

Make the shift
When you consider the impact this is already having with the next generation of buyers -- those Gen Y kids who account for a full quarter of the U.S. population and who influence $200 billion in annual spending -- it's imperative for retailers to shift spending from newspapers to digital channels to better meet these consumers where they live.

That said, what's the best way to accomplish this? You can't just advocate the "go-digital" advice without having a framework for getting there, especially given how fragmented digital media itself has become. To best "go digital," retailers should embrace a philosophy we call People-First Media: an idea-centric approach that focuses on engaging and connecting with consumers across channels and over time to earn their attention by creating relevant, valuable and motivating experiences. Rather than responding opportunistically to the latest emerging media fad, this approach takes rational and emotional consumer insight as its cornerstone and activates an insight-driven idea across the media landscape by understanding how each channel taps into three fundamental consumer behavioral drivers. We've captured them along three primary dimensions.

This framework is resilient in the face of next-generation emerging media: The trends around filter widgetization still fit within the category of personalization; meme trackers and metaverses align with socialization; distributed brand experiences and content channels are new incarnations of publicizing.

By reallocating marketing spending to better align with consumption habits -- which implies weaning yourself off an over-reliance on print-based FSI promotional tactics -- and embracing the idea-centric framework outlined above, retailers can more effectively respond to the seismic shifts unfolding in the media landscape, setting a new standard for the ways in which their brands connect with consumers.

Steps for going digital

An idea-centric approach that focuses on engaging and connecting with consumers across channels over time to earn their attention
1. PERSONALIZE
This reflects the need today's consumers have to filter and customize content and experiences based on their unique predispositions -- for example, RSS feeds and start pages -- as well as to access content and experiences when and where they desire (mobile, search and other time/place-shifting mechanisms such as video on demand and podcasts).
2. SOCIALIZE
Illustrations 1 & 2 by Tom Nullens
This captures the interest in community, sharing and collaboration (social networking, blogs, viral activity and gaming).
3. PUBLICIZE
This recognizes the importance of information and entertainment distribution through wider-reach brand sites and portals and their integration with traditional offline media channels such as broadcast TV.
Torrence Boone is president of Digitas, Boston, and helps lead the agency's Retail and consumer package-goods practice areas.
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