CPG suppliers, retailers run technology gauntlet to influence shoppers

CPG manufacturers and retailers may have thought their greatest challenge was persuading consumers to buy their brands and shop in their stores. However, they’re increasingly running a technology gauntlet to reach consumers. And there’s still so much they need to figure out about how the influence of their messages expand or contract based on the ways consumers receive them, and the contexts in which they see and hear them. Consumers’ shopping plans and actual shopping experiences could change drastically as a result of technology, say Todd Hale and George Wishart of Nielsen. If, for example, media diversification and proliferation continue, marketers could expect feature ads as we know them to disappear over the next five years, they said in a newly issued report. “Coupons will go paperless and coupon delivery will occur in-store and in-aisle—literally at the point of purchase. Shoppers will deploy mobile devices to seek out and ‘pull down’ messages ranging from recipes to promotions as they shop the store,” described Hale and Wishart.

CPG manufacturers and retailers may have thought their greatest challenge was persuading consumers to buy their brands and shop in their stores.

However, they’re increasingly running a technology gauntlet to reach consumers. And there’s still so much they need to figure out about how the influence of their messages expand or contract based on the ways consumers receive them, and the contexts in which they see and hear them.

Consumers’ shopping plans and actual shopping experiences could change drastically as a result of technology, say Todd Hale and George Wishart of Nielsen.

If, for example, media diversification and proliferation continue, marketers could expect feature ads as we know them to disappear over the next five years, they said in a newly issued report. “Coupons will go paperless and coupon delivery will occur in-store and in-aisle—literally at the point of purchase. Shoppers will deploy mobile devices to seek out and ‘pull down’ messages ranging from recipes to promotions as they shop the store,” described Hale and Wishart.

As people walk store aisles, the ones hungry for recipe ideas or product recommendations could text or “tweet” friends, and visit “foodie” social media sites and blogs for inspiration, they added. The two predicted that traditional ad formats would yield to the immediacy and brevity of vehicles like Twitter tweets, which enjoy the boost of enhanced credibility from peer group product champions.

Meanwhile, the recession has made coupons an increasing ingredient of the shopping plan, at least in the short term.  Manufacturer-driven coupon redemption in the United States surged nearly 10% in the fourth quarter of 2008, they said, citing Inmar CMS Promotion Services.

That contributed to more than 35% of dollar sales at food, drug and mass merchandiser stores being sold on promotion in the U.S. during the 12 months ended February 2009, Nielsen determined. This accounted for some $133 billion of sales, excluding coupons. Inmar said that while manufacturer FSI coupons represent roughly 80% of redemptions, manufacturer online coupons comprise the fastest-growing subset.?

Technology has insinuated itself into the shopping process both before and during the physical store visit.

But another form of technology—the online initiative—comprises an increasingly acceptable, even desirable, way to connect with consumers. 

In a recent U.S. study, Nielsen measured more than 200 digital ad campaigns for CPG brands which averaged a 32% sales increase, $1.1 million hike in short term incremental retail sales, 157% return on investment, 18% boost in penetration, and 14% surge in the buying rate, Hale and Wishart described: “Impressive results all, signaling the strength and potential of visually exciting, content-rich, interactive digital media—such as web sites with games, e-cards, activities, videos, commercials, recipes, ring tones, personalized planners, and clubs that include special discounts and reminders.”

They urged that retailers “hone their electronic marketing chops quickly. Waiting in the wings to take a bite out of brick-and-mortar grocery sales are two companies that excel at marketing online and are hungry to expand into food: Amazon and AOL.”  ?