Digital and Mobile Disrupt Traditional Shopping Path

Latest Trend Report Examines How Search, Social Media and Mobile Can Direct Consumers

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Remember the funnel?

Just follow the sequential steps along the path to purchase -- awareness, engagement, discovery, investigation, selection -- follow, follow, follow, follow … Then Dorothy got a smartphone, and the digital possibilities forever changed the yellow brick road.

The funnel no longer accurately reflects a marketer's intentions, or a shopper's behaviors. Marketers and retailers today are attempting to reconstruct the path to purchase from the random intersections of time and place, as shoppers check their laptops, smartphones, tablets and freestanding inserts in the Sunday paper.

In this second issue in our quarterly series, Ad Age Insights explores how marketers can employ search, social and mobile marketing in shopper marketing efforts.

Dynamism defies metaphor. In a useful but imperfect construct, Ad Age Insights' second-quarter trend report, "Shopper Marketing: Search, Social, Mobile," organizes these intersections into three interconnected categories: search, social and mobile.

Shoppers are the surest beneficiaries of the digitally convoluted path to purchase. Along the way, they can discover the hard-to-find trifecta of retail: price, selection and service.

Digital challenged a tacit contract in mass retailing. Shoppers accepted a lower level of customer service in exchange for lower prices. Many shoppers probably would have liked a store associate to remember their style preferences and sizes -- they just didn't want to have to pay for it. And with digital, they don't have to -- not in cash, anyway.

In the renewed contract, shoppers trade some personal information for product recommendations that brand manufacturers and retailers affordably supply using complex algorithms. Online, selection is almost unlimited, and transparency drives down price.

Digital holds potential benefits for brand manufacturers and retailers, too. But realization of those benefits is not automatic. It requires that brands and retailers assist shoppers along the path, and at every step get to know each shopper personally.

Lack of anonymity enables brand manufacturers and retailers to build shopper loyalty and identify opportunities to align their commercial objectives with the needs of the shopper. A recognized shopper may be less susceptible to a private label than an anonymous consumer and more likely to respond to a recommendation.

No single initiative or "shiny object" will by itself convert the magic of digital into a sustainable advantage. That change happens over time, as organizations collaborate internally and with their business partners in an effort to understand and serve the shopper.

"We believe that digital shopper marketing is really relevant because it uses a mix of digital and traditional touch points to improve shoppers' decisions, improve the lives of shoppers and help them understand what they need to know to make the best purchase possible," said Dina Howell, recently appointed CEO of Saatchi X and a shopper-marketing pioneer during her 22-year marketing career at Procter & Gamble.

Digital has removed the mirror from the focus-group wall. The online exchange of information and opinions between retailer, brand and shopper now can be direct, ongoing and even face-to-face.

"In the old world, we were talking about standard Newtonian physics. There was a path to purchase," said Matt Anderson, a Booz & Co. partner heading digital in e-commerce, mobile and social.

"In this new world, it's a little more like quantum mechanics. The path to purchase in shopping may suddenly evolve -- it isn't a traditional path. How do I find pockets that are flaring up, where suddenly people are shopping or in purchase mode and no indicators said they were there?"

"There is no more linear behavior," said Google Retail Industry Director Dan Schock. A Google study published in February of this year asked respondents to describe the various ways they shopped during the 2010 holiday period. Sometimes, the path to purchase was straightforward: 51% said they had visited and purchased at a store; 45% answered that they had researched and purchased online.

But individuals also varied their shopping patterns: 35% researched online and went to a store to purchase; 21% researched online, visited a store to check out products and then returned online to purchase; and 14% first visited a store and then purchased online.

"Marketers and retailers realize that it's not just the last click that influenced the purchase," Mr. Schock said. "But maybe a visit to the store or the search that they did two weeks ago."

Ken Schept is a freelance writer who specializes in articles and reports about retailing and marketing.
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