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The Evolution of Circulars from Print to Digital
Todd Hale
SVP, Consumer & Shopper Insights
December 1, 2011
1
Today’s presenter
Todd Hale
SVP, Consumer & Shopper Insights, Nielsen
Todd Hale serves as Senior Vice President, Consumer & Shopper
Insights for The Nielsen Company. Appointed to this role in 1999,
Todd is responsible for creating thought leadership content and
delivering client and industry presentations. A frequently soughtafter industry and client speaker, Todd shares his insights on
consumer shopping, buying and media consumption behaviors and
attitudes to provide manufacturers and retailers with strategic
visions to facilitate brand, category and retail sales growth. Hale is
often quoted in the press and in numerous trade publications on
consumer trends.
Todd has more than 33 years of experience in the consumer
research industry, including 27 years with The Nielsen Company,
where he held various marketing and sales management positions
within advertising/product testing, advanced analytics and
consumer panel practice areas.
Prior to joining Nielsen in 1984, Todd was an executive with MRCA,
a U.S.-based consumer panel company.
Todd earned an MBA and a BA in Business from Wright State
University.
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
“There is a delicate balance in the shift from print to digital. All
customers will not migrate to the digital world at the same
rate. It will be important to test and learn to understand
overall acceptance in order to protect sales and profitability.”
- Erik Keptner AHOLD
“What makes the online circular exciting to our business is
less about rendering the existing circular on our website, but
rather having the circular in a digital feed that can be
published in different formats across multiple sites and
devices.”
- Kat Kozitza SUPERVALU
3
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Circulars help shoppers plan, but manufacturers & retailers
recognize additional digital benefits
1
2
Mfr & Paper
•Critical as pre-planner
•Slow, costly, & rigid
•¾ decisions made prior to store
•Will play a role for some time
•50% use to make lists
•Requires digital complements
•Savings & eating link to brands
3 Mfr & Digital
•Item/price shopping easy
Retail & Paper
•Less relevant as young grow up
Manufacturer
& Retailer
POV
4
Retail & Digital
•Far less costly
•Complements paper
•Multiple screens
•Requires overarching message
•Rethink promo cycle
•Inspires menu planning
•Dissects item / price
•Planning > list > shopping
•Data > Creative
4
Source: Joe DePetrillo, Nestle; Donald Smith, Family Dollar;
unidentified retailer
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Shoppers want paper deals now & in the future
Touch point expansion requires multi-faceted
marketing with consistent messaging
5
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
There is a better way to reach today’s diverse and
time-starved shopper
Digital allows shoppers to be selective!
*
SUNDAY MAY 15, 2011
Delivery Type
Pages
Full page ads & coupon
booklets *
102
Ad inserts *
262
Stuff in plastic bag
54
Grand Total
418
(not counting car ads, local specialty
stores, etc.)
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Online newspapers readership will likely match
paper in next few years
48%
47%
41%
42%
40%
34%
13%
31%
17%
9%
1998
2000
2002
2004
Read a Daily Newspaper
2006
2008
2010
2012
2014
2016
Read an Online Newspaper
7
Source: Pew Research Center
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Digital is officially pervasive
82%
93%
of Americans
online
of Americans with
mobile phones
25 hrs.
Avg online time
per month
19 Million
iPads sold to date
155 million
US Facebook users
130
Average Facebook
friends
8
Source: Online usage from Nielsen NetView panel - 5/2011; Mobile phone usage
The Evolution of Circulars
from Nielsen, 5/2011; iPad ownership from Apple 1Q financial report; Facebook data
from InsideFacebook.com
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
What Shoppers are Telling Us
How, why, when, & where about print and digital
9
Prefer paper, but digital is reaching many
100
90
Q: How often do you look at information
about the products & sales available at a
store from...?
80
70
60
50
40
30
20
10
0
Mailed
Paper
Home
News
paper
Paper
in-store
Retail
e-m
Store
site w/
computer
Social
Store
site w/
tablet
In
store
TV
Smart
phone
Digital
Print
% Ever
kiosk
% Weekly
% Ever
Source: Nielsen Homescan
% Weekly
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Latest technology lowest reach, but strong
weekly usage
How often do you look at sales &
product information from...?
Conversion from any
usage to weekly
Materials mailed to home
67%
Emails from retailers
67%
Newspaper
69%
Printed material in-store
38%
Store site using computer
37%
In-store kiosk
24%
In-store TV
21%
Social media
45%
Store site using tablet PC
35%
Smart or mobile phone
39%
Source: Nielsen Homescan
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Paper
Paper is most influential to store choice
Direct Mail
90
Newspapers
92
Digital
In-store
81
Store Website using Computer
71
Emails from retailers
70
Store Website using Tablet
34
In-store kiosks
Televisions in the store
50
Q: Influence where
you decide to shop?
27
Social media site
33
Smart phone or mobile phone
33
% ‘A lot’ & ‘Somewhat’
Source: Nielsen Homescan
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Paper
Print influences younger generation store choice;
Millennials more tech savvy
Gen X
Millenials
Direct Mail
92
Newspaper
91
In-store
79
Store Website using Computer
84
Digital
Emails from retailers
78
Store Website using Tablet
37
In-store kiosks
Televisions in the store
49
55
47
% ‘A lot’ & ‘Somewhat’
Q: Influence where you decide to shop?
Source: Nielsen Homescan
Q: Influence where
you decide to shop?
29
Social media site
Smart phone or mobile phone
70 total
33 total
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Paper
Asked about the future, 80%+ of consumers want
print; 70%+ want basic digital
Direct Mail
87
Newspaper
86
In-store
86
Store Website using Computer
75
Digital
Emails from retailers
72
Store Website using Tablet
59
In-store kiosks
43
Televisions in the store
42
Social media site
Smart phone or mobile phone
Q: Thinking about the
future, how would you
like to get information
from…?
37
31
% ‘A lot’ & ‘Somewhat’
Source: Nielsen Homescan
14
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Paper
Asked about future, younger generations want
information from all sources
Gen X
Millenials
Direct Mail
89
Newspaper
87
In-store
87
Store Website using Computer
86
Digital
Emails from retailers
81
Store Website using Tablet
54
In-store kiosks
Televisions in the store
70’s total
67 Q: Thinking about the
43
Social media site
53
Smart phone or Mobile phone
56
future, how would you
like to get information
from…?
30’s total
% ‘A lot’ & ‘Somewhat’
Q: Thinking about the future, how would you like to get information from…?
Source: Nielsen Homescan
15
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Leverage different behavior; paper drives deal
seekers to door; digital for more loyal shoppers
Much more dealing
with Paper
…but bigger
baskets
Digital fewer
trips…
135
121
112
105
98
91
% $ on Deal Index
Trips Per HH Index
Major PUSH Format
Newspaper Print
Basket Size Index
Major PULL Format
Website via Computer
All Outlet Purchasing Behavior of Circular Users vs. Non-Users by Format Used
Source: Nielsen Homescan
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The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Paper about value; new tech about info gathering
Shop Their List
Coupons
‘My’ items
Sales
News paper
#1
#3
#2
Paper at
home
#2
#3
#1
Retailer e-m
#1
Store site
(computer)
Store site
(tablet)
‘My’ item
info
Impulse
Any sale
Browse
#2
#2
New item
info
Other
#3
#1
#3
Compare
Store
Prices
#3
#2
#1
Social
#2
#3
#1
Kiosk
#2
#3
#1
Q: What are top ways you use information?
Source: Nielsen Homescan
17
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Grocery circulars must be sharp – twice weekly
reach as Mass & Drug; they’re hunting for deals
Percent looking at information about products & sales in the past
week from …?
70
36
35
24
Grocery
Mass
Discount
Drug
Clothing
20
Home
Impr
19
Dollar
16
Elec.
13
Club
11
C-store
7
Sports
18
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Across generations shoppers looking for price and
Market
convenience;
touch points and engagement vary
Structure
Traditional print
Status quo
Frugal
Online due to
mobility
challenges
Info. seekers
‘tweeners
Local prices
Open to digital
Personalization
Convenience
Reduce hassle
Personalization
Reduce waste
Q: Paint a picture about how you might get
information in the future …what kind of
information & impact it would have
Source: Nielsen Homescan & Quester Analytics
Corp savings
19
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
What shoppers are telling us
Paper
Digital
Very influential
across generations
Low reach but high weekly use
Requested for
near future
Loyal shopper tendencies
Leveraged by deal seekers
Find sales on ‘their’ items
Requested strongly by Millennials
Used for information gathering
Greater marketing & sales
potential
Your efforts must include both
Calls to
Action
Item / price remains the centerpiece
Leverage complementary strengths
20
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Optimizing
OptimizingPrint
Print
Getting the most out of print; it has a role
with consumers and shoppers
21
Printed circular response suffering; promotions
need to be more aggressive just to maintain
28%
27%
27%
26%
23%
20%
2005
2006
2007
2008
2009
2010
Print circular lifts
22
Source: Nielsen Scantrack
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Circulars combat losses due to channel blurring
Gains in lift
Losses in lift
69%
69%
56%
40%
34%
33%
31%
22%
16%
14%
14%
7%
Paper…
Facial…
Cereal
Diapers
Grocery Circular Lift
Margarines
Milk
23
2005
2010
Source: Nielsen Scantrack
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Maximize print by understanding who won the
week and how
Ad attributes
What
we did
Benchmark vs
strategic goals
Role of
Circular
Diagnose
segment
response
What
they did
Profit
Who Won the
Week?
Shopper
Dept by
Dept
Display
ID other
factors &
“score the store”
Online
24
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Printed circular ad principles
Do
Don’t
Advertise for broad appeal
Worry about page count
Deep discounts, but not
excessive
Advertise multiple
competing items
Compare lift by category
Use price multiples on new
items
Price multiples
Manage national brand ad
composition
Deal low penetration;
upside argument flawed
25
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Optimizing print
Key Points
& Other
Principles
Overall lifts declining
Categories trend differently
Page / ad count not a driver
National brand ad share is a driver
Price multiples work
Counteract overall lift decline
Calls to
Action
Shift ad space to categories with positive momentum
Advertise for broad appeal
26
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Digital
DigitalPrinciples
Principles
There is no choice
27
To be in the game, retailers must be in the
pre-consideration set
42%
% who use internet to decide where to shop
or what to buy at least once a month
(Food and Personal Care)
18%
% who would not buy without first
consulting online (Personal Care)
17%
% who would not buy without first
consulting online (Food)
28
Source: Nielsen Digital Path to Purchase Survey
May 2011
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
The virtues of digital advertising
Customized
screens
Consumer
sharing easy
High
engagement
Lower cost
potential
Target via
site & search
Environmentally
friendly
29
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Retailers interested in a consistent
set of issues
Gaining
online sales
Driving offline
sales through
retailers’ owned
assets
How to more
effectively
engage
shoppers
online
Gaining
incremental
offline sales
through
online
marketing
30
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Retailers must invest in efforts to get shoppers
visiting their sites
Few brick & mortar retailers get more than
20% of store shoppers to their site…
…but that those that visit sites spend
about 30% more in the store!
Source: Nielsen Homescan
31
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
If you’ve got dollars to invest in your website,
you should spend it on your online circular
Online circular visitors generally
spend more than average, but
current iteration of circular has
room for improvement
32
Source: Nielsen Online panel, April 2011
Nielsen custom analysis
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Digital execution has to solve shopper need,
not just replicate paper version
33
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Despite common high-tech attributes, retail digital
efforts lack mobile, social, and personalization
Differentiators
Source: Nielsen analysis
Minimum Stakes
34
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Walmart funneling people online with expanded
assortment and home delivery
35
Source: Walmart
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Target enables shoppers to design their own
digital view, create their lists, and share via social
36
Source: Target
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
It’s not just the national retailers that are innovating!
Drive thru solutions
Funneling shoppers online
37
Source: Company websites
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Walgreens has top tier attributes; ups ante with
camera-based mobile Rx refilling
Innovative Scan to Refill
38
Source: Walgreens
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Greater shopper engagement with circular as
retailers strive to be most ‘Liked’
39
Source: Whole Foods
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Greater shopper engagement with circular as
retailers link to “how to” videos
40
Source: Hy-Vee
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Aldi turns the page; improves technology
41
Source: Aldi
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
E-mail, social networking & in-store kiosks
engage shoppers with special offers
42
Source: Sam’s Club; Wall Street Journal
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Mobile apps put shoppers in control making
circulars part of a complete shopping experience
43
Source: Stop & Shop
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Walmart launches first iPad app &
improves smart phone app
New iPad App
• Touch-optimized shopping
• Browse My Store
• Extended inventory
Updated smartphone App
— Smart Shopping Lists &
QR Code Scanner Voice
• Budgeting tools
• Manufacturer’s coupons
• Product information
• Sharing
• Store Item Finder beta
44
Source: Walmart & iTunes
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Don’t assume that if you build it, they will come
45
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Online advertising critical to build shopper reach
for online assets
What we’ve learned:
1.
2.
3.
4.
Online display ads drive offline sales
ROI is generally > traditional media
Every campaign doesn’t work
Success driven by new shoppers, not > spending among existing
Unexposed to ad
Exposed to ad
46
Source: Nielsen Consumer Direct & NetEffect
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Don’t assume best offline segments are most
responsive to online ads
69%
49%
20%
31%
26%
5%
Segment A
Share of
Impressions
Segment C
Segment B
Share of
Incremental Sales
Source: Blinded custom Nielsen NetEffect analysis for
retailer client - Q2 2010
47
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Target intersecting consumers as they search
and as they share
Made it easy
to share
Target bought sponsored
link ad on this circular item
48
Source: Target
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Ongoing optimization secret to digital success
Post
campaign
ROI
analysis
Post
campaign
demo &
segment
ROI
analysis
Innovate
digital
circular
distribution
Ensure
desired
audience is
in sight
Ongoing
Optimization
Refine
promoted
items
Creative
pre-testing
49
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Digital mandates
Key Points
& Other
Principles
Consumers make more decisions prior to entering store
Majority of digital circulars mirror print
Few shoppers engaged with digital efforts
Strong offline segments not always strong online
Digital marketing in its infancy
Retailers must be part of pre-purchase consideration
Calls to
Action
Retailers must innovate digitally, particularly circular
Use digital ads to drive shoppers to digital assets
Invest in analytics of online shopper segments
Continuous optimization key to success
50
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Looking
around the
corner
51
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
What to expect
Paper
Paper remains in
mix
Online
Retailers have no choice but to keep
pace with digital migration
Print leaner &
more precise
Digital complexity cost of doing
business
Item / price exposure
remains important
Item price exposure still key, but not
enough
Expanded value
proposition
Retailers must build their own &
partner with deal aggregators
Sustainable differentiation possible via
digital engagement (customer history a
real plus)
Growth trajectory continues
52
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Digital personalizes coupon and circular, integrating
value added content – centered on the shopper
It’s all about me
53
Source: Safeway
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Commuter shopping takes new platform,
literally!
June 2011—A visual experiment in
mobile supermarket shopping has
done very well for Tesco in South
Korea. The number of new
registered members rose by 76%,
and online sales increased 130%
October 2011—P&G has set up
virtual stores in four of the busiest
subway stations in Prague (available
until end of 2011); P&G products have
90% shelf share in first month
54
Source: P&G Corporate Newsroom
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
“marching beyond the walls of tech into
retailing, advertising, publishing, movies, TV,
communications, and even finance”
“Bezos, Jobs, Zuckerberg, and Page look at the
business world and justifiably imagine all of it
funneling through their servers.”
Source: Fast Company
55
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
How will these companies enhance or
disrupt the future of your retail space?
56
Source: Fast Company
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Battle ensues – Walmart makes advances;
will a new line be drawn in online space?
“Walmart's store managers and
employees will get credit for
online sales from their territory,
just like sales in the store. That
will give them more reason to
promote Walmart.com, the new
iPad app, My Local Walmart
Facebook app, and …
refurbished iPhone app to the
140 million weekly in-store
shoppers.”
57
Source: Jack Neff, Ad Age & James Steinberg (photo)
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Once you’re back at your office…
Customer
Readiness
Organizational
Readiness
• Know your customer
• Digital goals
• What do they want from…?
• Resource support
• Printed circulars
• Executive support
• Online
• Continuous improvement support
58
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Q&A
Thank you for attending
•If you have follow-up questions or want more information, please
contact your Nielsen Professional Services Representative.
•If you are not a current Nielsen client, please contact us by phone
or email:
Phone: 800-553-3727
email: [email protected]
OR if you have any questions regarding the content of this webinar,
you can also contact:
Todd Hale, email: [email protected]
59
The Evolution of Circulars
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
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