The Changing Path to Purchase: It's implications for eCommerce, in-store and consumer engagement

Editor's Notes

• #3: When I was a kid in the 60s, I lived in Cleveland in a 1200 square foot house, eight feet from my neighbor.  We used to talk about the Cleveland Indians and Browns with a string-and-cup phone across the driveway. 
• #4: At the end of our street was a butcher shop. A bakery. A hardware store. Probably not that different from the street many of you grew up on. Everything I thought I needed, right within my reach. Just a short walk down the street.
• #5: Then, in the 70s came the malls. The little stores put up a fight, but most disappearedonly to return behind the glass storefronts in these cities within cities. Again, different, but in a different way. Now, more stuff than I could ever imagine was clustered together in a place that required a little drive. More stores to choose --only after just a little more travel.
• #6: Today, the change continues. The malls are replaced by lifestyle centers, little artificial towns created to let old boomers like me re-connect with our wives (and our youth) and start spending again. They've taken all the shops from the mall, made them look like old towns -- and they make us walk outside again. We're a funny lot, humans. What was old is new again. Actually, the story continues and gets curiouser and curiouser.
• #7: Now, at the same time we see a growth in lifestyle centers we also see the growth of internet retailing. Now, in addition to getting most of what we need in a Stepford town, we can get everything else, including things we didn't even know existed, on the internet. And in some cases, we can get it today.It's funny for me to talk about internet retailing and malls in the same speech. When I started my first internet start up -- a company called DigiKnow -- in 1995, the experts actually predicted that the big thing on the web would be internet malls -- where various companies could create websites and have traffic driven to them through a common portal -- much the way a traditional mall works. It wasn't a bad idea; it just didn’t consider that different people shop in different ways.
• #8:  Of course this is the way it was. We’ve all seen this in our college marketing text books, or some variation of it.“If we just make the customer aware of our product and its features, they’ll see it, try it, buy it and we’ll retire to Las Vegas.”
• #9: Here’s another look at that path, from the view of a television retailer from 1976.TV breaks. Customer looks in circulars for TV ads. Goes to the library to read consumer reports and maybe talks to friends on his bowling team. Goes to the appliance store. Stares at the wall of TVs. Orders the one he settles on. It’s delivered in 2 weeks. Hide clicker from his wife.
• #10: This is more like it.Your customer’s (or your customer’s customer) path to purchase, or life, is about as linear as a spool of barbed wire.They’re constantly looking for opportunities. For inspiration. For entertainment. For stuff.Their purchases can be driven by something as simple and practical as a broken television or as emotional as the power of “my TV’s not as cool as Billy’s and he and my buddies are coming over for the big game.” In this case, the guy sees an ad for the new 848 inch 3-D smellovision TV, goes to his phone or PC to do a search for details and reviews. He reaches out to friends on Facebook or Twitter for their opinions or to comment on the spot. Then he takes that information and looks for where the TV is available. Maybe visits a store. Does a little show rooming. Checks his smart phone for last minute deals. Considers the effort to save $2.59. Buys the TV and takes it home or has it delivered same day. Installs it. Takes a picture and posts it to Facebook. Tweets the pic. Posts it to Instragram. Makes a video on how to install it and posts it to YouTube. They he completes a post-buy survey and receives emails from the retailer on products that go with his new smellovision.As our friends from Forrester say, they’re always on. Always addressable.
• #11: But what does addressable mean?If we go back again to the old days, people got up in the morning, read the paper.Went to work and listened to the radio in the car. Came home from work and watched the 6 o'clock news and a few sitcoms from 6-9 on NBC, CBC, ABC.
• #12: Now they’ve got a lot more options. In my car alone, I have AM, FM, XM, a CD player (whatever that's for) a smartphone with web access, sms... OnStar And if the variety doesn't kill you, consider this: different consumer groups use these technologies differently
• #13: Look at the a variation here. Gen Y over indexes for all social behaviors.
• #14: Gen Y 23-31Gen X 32-45Boomers 46-66Here we have Forrester’s mobile ladder which can be read much like the social ladder. Those at the top of the ladder are most engaged with their mobile devices. They are accessing the web, visiting social networks, and consuming news and other information on a weekly basis. Those at the bottom of the ladder do not even own a mobile device.Based on this ladder we know that mobile is a key channel for reaching Gen Y and Gen X. Both generations over index for using their phones for web access, info-seeking, entertainment, etc. Boomers, on the other hand, are less likely to engage with our brand or retailers using their phones
• #15: And the differences continue. Again, I’ve highlighted the differences between older boomers and Gen Y, but you can see how this might affect a media plan.
• #16: Again, with mobile the differences are substantial. I show this because the consumer today is not just shopping in different ways, in different places and using lots more technology. They’re even using all of the technologies differently.
• #17: Oh, and they’re not just using all of these technologies discretely either. They’re using them together.How many of you watch TV with your laptop open? Or your smartphone? How many of you have Shazamed a TV spot?
• #18: You may have seen this before on TV spots. Shazam is a relatively new technology that leverages the millennial’s always on persona, a love of music and technology. In the case of Troy-bilt, we’re using this technology to extend the value of our television effort, using the spot’s music to trigger a landing page with even more information.
• #19: And, to bring all this close to home with you all… 65% of consumers have used mobile in the retail environment. Can you say show-rooming?And technology in store is about to get even more complicated.
• #20: You’ll see more and more use of QR and jag tagsNFC is about to explode, with more smartphones having the readers built inAnd smart phones will get smarter with greater image recognitionMobile couponing is also going to explode, especially with the introduction of MOBEAM, which will render an image in-store scanners can pick up
• #21: It all makes sense, because today’s consumer doesn’t live a standard, linear life.Just look at the differences here. (Or, for you parents out there, you may be living this…)
• #22: And the differences don’t stop there. With all there technologies. With all there options. They’re also a lot more active in the whole thing. No longer do consumer just sit there and listen to you passively. Of course all of this is a good news/bad news story for all of you out there. Whether you're a manufacturer or a distributor or a retailer, you've got to be thinking “Holy cow, it was bad enough when I had to create great products, packaging, POS and trade ads... Now I've got to ‘engage.’ Now I’ve got to learn about big data.”I said there was good news... And before I get there I want to remind you about the paradigm shift I mentioned above. The next step, as we go from retail located close to people to retail aggregated to draw customers to retail aggregated on the Internet… is the shift from mass marketing to engagement marketing. Before only you had the megaphone. You did all the talking.
• #24: Which takes us back to the path to purchase.That old linear path is dead.The new one(s) are created by the user, not by you or your brand.On this path, he or she makes his way through the steps we need to sell them something, but they do so on their terms - in ways that are influenced by their passions, their use of technology, their friends and family and influences.
• #25: This all means that if you’re going to join the consumer on his or her path to purchase, it’s not about messages. It’s about engagement. And engagement requires that you get to know your customer. It requires that you find a value exchange.
• #26: Of course, Google figured all this out, as did Amazon. Others like Lowes are starting to get it in a big way as they begin to occupy engagement real estate in addition to physical real estate. Google figured out that information is the currency that connects all the ways people shop: that’s their engagement. Amazon figured out how powerful the concept of “now” is: that’s where they engage. And Lowes and others engage by leveraging the power of big data – data their customers need and they need. It’s a perfect value exchange. You scratch my back; I’ll scratch yours. Brands are starting to get it too. And we’ve got just a couple of examples here. Some are my agency’s clients. Others are just brands we admire.
• #28: Let’s take a look at Troy-Bilt. High engagement category. People think a long time before they buy a lawn tractor, because they only do it every 7-10 years. So they need lots of information. Lots of guidance. They’ve got to be helped along the path to purchase with lots of information, lots of content, lots of platforms.At the center. The web. Product information. Tips, How tos…
• #29: Facebook. Big role in community building and engaging with consumers at various points along their path to purchase and beyond.
• #30: And we extend the TV even further, with pre-roll web video. An interactive experience that gives the brand awareness and consumer engagement opportunities – and gives the consumer ways to conduct private research on their own terms.
• #31: Video gets heavy use by Troy-Bilt. Here they leverage YouTube with a library of video assets designed to carry branding and deep information, for that consumer who is farther down the path to purchase.
• #32: Social outreach and community engagement is also part of a consumer’s makeup, and some brands like Troy-Bilt have an opportunity to engage with and support consumers in these kinds of activities.
• #33: Email is still a major player in the marketing mix. And Troy-Bilt uses it to stay connected with customers with information, offers, and cross selling opportunities.
• #34: On the other end of the spectrum of involvement is Goo Gone.Everyone loves Goo Gone. (How many people have a bottle under their sink?)But not everyone wants to take forever to ponder its purchase. How do you engage with consumers in this situation?
• #35: As we started to get to know this consumer, we discovered they weren’t necessarily passionate and involved with our product, but they could be if we showed them how it could enable their passions.So rather than talk about the product features/benefits (like what might have been done in the 80s) we isolated some key uses of the product and identified folks who were passionate about that. And we made sure those people had huge followings on Twitter, Facebook and blogs. Basically, we found the place where the product intersected with users’ passions.
• #36: As people are searching for solutions to problems, we delivered it in an entertaining, engaging way by highlighting the problems not the product. And t hen Goo Gone provided places where these people could share and amplify.
• #38: Last year, my Agency did a review of what was then the very new MyLowes platform for HomeChannel News. We were impressed then, but it’s just gotten better.What started with a relatively simple concept: track your purchases so you can remember your stuff and evolved into a 24/7 customer organization community – for the consumer. For Lowes, it’s a gold mine of information.How did they decide to create myLowes? I admit, I’m not exactly sure—they’re not a client – but I’m guessing it started with a question: What could we do that would connect consumers with us more than just offer the products they need? What value could we deliver?Then, I’m guessing they did a deep dive into who their customer was. What pains they had. What challenges. What passions. And I’m also guessing they had the benefit of some big research tools, like the tools we use with our clients. Forrester,Iconoculture,MRI… tools that help them define and segment their audiences, how they make their decisions, how they travel on their path to purchase.
• #39: But how do you as a retailer, or a manufacturer or a distributor, with more modest budgets, meet the challenges of all this change. Of all the differences?I’d like to leave you with a few tips:
• #40: Get Social. You’ve heard it a thousand times, but a Facebook page is key to understanding customers today. The more friends you have, the more your can learn with simple tools like Facebook Graph Search. And from a b2b stand point, Linkedin is key. If you’ve got a meeting with a buyer, at the very least do a simple LinkedIn search. Find out where they went to school, who’s connect to them that you might know. Plus, there are about 20 free social media analytics tools you can use to find out who’s talking about you, where, and facilitate your easy outreach.Talk to your customers. Ask them what they’re doing these days. Ask them what they read, what they’re listening to. Get to know them as people, not just users of your products. Use simple tools like 4Q for measuring online experience satisfaction, SurveyMonkey for general surveys on just about anything you choose, Mailchimp for reaching out to your loyal customers and ask them what they think.Use search. Google, YouTube can tell you a lot about how people use your products or products like yours. And finally, make a value exchange.
• #41: The value-based approach will help you to determineWho you should engage with,What you need to offer,When you can interact with your audience,Where those interactions will be most effective,How you should craft or frame those interactions,Why – what you can expect in return
• #42: And that value exchange begins with understanding what your customer might find valuable. Information. Entertainment. A connection. An opportunity to express themselves… Free stuff.
• #43: But also looking at what they might provide in return. Time and attention. Recall. Brand preference. Trial. Loyalty. Advocacy.
• #44: If you do these things, particularly getting to know the value exchange concept, you’ll come to know your customers better. You’ll even begin to see more clearly the relationships your distributor has with your retailers or your retailers have with the ultimate customer. You’ll see over and over that how customers come to know you is less and less about what you “tell them” and more and more about how you intersect with the things they care about. And this new path to purchase will become clearer and clearer to you