Madison Ave Insights

Kroger Gets Its Fuel from Customer Rewards

Posted in Advertising, Digital, Marketing

Kroger has always been an innovator. It was the first store to combine meats and groceries under one roof, and the first grocery store to have its own bakery. Kroger pioneered the use of optical scanners in the checkout aisles and was one of the first grocery chains to open superstores, a move that has helped it weather competition from big box stores like Sam’s Club and Costco. That drive to innovate has helped make Kroger the nation’s largest grocery chain and the second largest retailer in the country after Walmart.

But, what has really driven Kroger’s recent success is its commitment to the customer experience, and particularly how well it has applied its customer loyalty program. Kroger launched its “Kroger Plus Card” program in 2003. In 2010, Kroger partnered with Shell gas stations allowing customers to redeem points earned on their Kroger Plus Cards for fuel. Well over two million customers use Kroger’s shopping app, which allows users to download coupons, sort coupons by relevance, sync coupons with their shopping lists, monitor their Kroger Plus reward points, and even refill prescriptions.

Last year, a study by Maritz Loyalty Marketing found that Kroger had the highest rated loyalty program in the grocery sector, with an overall satisfaction rate of eighty-three percent. In fact, ninety percent of register transactions are completed with a Kroger Plus card, and eighty-five percent of all United States households in markets where Kroger operates have a Kroger Plus card.

The Way I See It

  • As behemoths like Walmart and Amazon continue to gobble up market share – in everything from groceries to clothing to consumer electronics – I see more “traditional” retailers needing to double down on the customer experience in order to compete.
  • Successful competition is going to be increasingly dependent on maintaining an ongoing conversation with customers via the tools and channels they prefer, namely their mobile phones and social media.
  • Data – not just gathering it, but using it in novel and effective ways, and ways customers are comfortable with – may wind up being the biggest difference-maker for retailers.

The Way the Industry Sees It

I sat down with Natalie Ream, Vice President of Customer Communications & Marketing at Kroger to discuss customer service and customer loyalty programs as a way to differentiate.

 

Q
What’s made your Kroger Plus program so successful? What have you been able to tap into about the way customers like to use these programs that your competitors haven’t?
A
Our Plus Card program is successful simply because of our ability to deliver real value, and to uphold the trust that our customers place in us as it relates to their shopper data.  Through our shopper card program we are able to capture and analyze shopping behavior, and then apply the insights we gather to create offers, discounts, and recommendations that are meaningful and relevant.  We are very careful to protect our shoppers’ data and their privacy.  Our customers have come to expect us to know them better, and they tell us that they look forward to hearing from us!
Q
What’s the relationship between the Kroger shopping app and more traditional print coupons and circulars?  Will the app and social media eventually replace coupons delivered in the mail, by newspaper, or handed out at the checkout counter?
A
For more than ten years we have been perfecting our ability to deliver highly-relevant, personalized coupons for the products that our customers like and buy the most through our ‘Loyal Customer Mailings.’  We are now applying that expertise to the digital channel through our mobile app, which allows customers to sort digital coupons by relevance to them.  By applying real-time insight derived from their shopper profile, we can sort and deliver relevant offers based on what we know about a customer’s product preferences or lifestyle segment.  Because we have five generations of customers shopping with us – and because each generation and each customer is unique in terms of their preference for how we talk to them – our aim is to meet our customers and talk with them in the channel or channels that they prefer.
Q
What excites Kroger about the data it’s been able to collect via the app and the Kroger Plus program? What has the company discovered about customers, and how has that helped Kroger serve them better?
A
Our app lets consumers create an account that can be used to view our weekly ad, load coupons directly to their Plus Card, and to add those coupons and items from the ad directly to their cloud-based shopping list.  They can also refill prescriptions and manage their fuel points at gas stations.  The app includes a store locator and offers mobile-exclusive promotions.  We recently released an update that includes digital coupons and the weekly ad sorted by relevance to the user.  One of the most exciting things that we’ve discovered about customers through the Kroger app is its adoption rate and ranking.  We are thrilled with the organic growth we have seen since we launched, it consistently ranks in the top two percent of lifestyle apps on the app stores, and users give us a four-plus out of five rating and have downloaded more than one billion digital coupons!
Q
I’ve heard that Kroger is at least thinking about getting into the home delivery business.  How does that change your customer relationships?  Are there particular pitfalls or opportunities there?
A
We are always looking to meet customers’ needs and our customer first culture guides our business strategy.  In fact, we have had a home delivery operation in Denver for many years and we will continue exploring it as a model, although the economics are not yet sound enough to expand the service at this time.  One of the many reasons we are excited about our recent merger with Harris Teeter, an exceptional grocery brand in the Mid-Atlantic region, is to study their “click and collect” operation.  Our knowledge and insight will certainly help shape and inform any venture into e-commerce.
Q
What’s the coolest object in your office?
A
Other than my family photos that keep me grounded in what’s really important, I would have to say that the coolest object in my office is the replica of the actual ad that recognized and congratulates our team on being named to the Advertising Age “2013 Marketer A-List.”  The reason I think it’s so cool is two-fold:  As a relatively new marketing and loyalty organization that is essentially a full-service agency within a major grocery retailer, with less than thirty-six months functioning as such, we were recognized by Advertising Age for our work.  But it’s the mosaic of photos of each our customer Loyalty & Marketing Team members in the ad that serves to remind me what’s really cool – it’s the talented, passionate people on our team working together – across customer insights, marketing, creative, and media services – that are making retail marketing history and making a real difference in how we first listen, and then talk, to our customers.  We do believe it’s the start of a beautiful conversation!

Creativity is Poppin’ in New York’s The ADVERTISING Club

Posted in Advertising, Marketing

1896 was a big year – the first modern Olympic Games were held in Athens, Greece; the first x-ray was taken, and, of course, The ADVERTISING Club of New York was born. Located in the heart of Manhattan, The ADVERTISING Club is the industry’s premier venue for networking and creativity and professional development. As such, the club plays a vital role in cultivating advertising professionals of tomorrow and supporting the thought leaders of today.

While The ADVERTISING Club may be best known for the International Andy Awards, which recognize creativity and innovation in advertising around the world, it has garnered its most recent attention for its “I’mPART” initiative, which celebrates diversity within the advertising and marketing industry and works to recruit a wide variety of fresh young voices and talent to the business. That goal is embedded in last four letters of the name – Promote, Attract, Retain, and Train. I’mPART was recently featured in The New York Times, which celebrated I’mPART’s success in making the advertising industry more inclusive and more reflective of the diverse and increasingly global market it is trying to reach.

The Way I See It:

  • I see The ADVERTISING Club remaining an important pillar within the industry, and a symbiotic relationship forming between the older and younger generations. We will continue to see millennials mentoring the older generation on emerging technology and how to best implement it, and the older generation providing seasoned advice that only experience can provide.
  • I see The ADVERTISING Club playing a strong role in continuing change within the industry on the topic of diversity, not just from a race and ethnicity perspective, but a gender one as well.
  • I see The ADVERTISING Club paving the way for young people and creating a more inclusive industry.

The Way The Industry Sees It:

I sat down with Gina Grillo, President and Chief Executive Officer of The ADVERTISING Club of New York to discuss the impact the Club has on both the industry and the members.

 

 

Q
The ADVERTISING Club (The AD Club) of New York has been engrained within the industry since 1896, and encompasses thousands of industry professionals. In terms of membership, have you seen members you’ve attracted at a young age stay active within the Club throughout the duration of their career? What’s the longevity trajectory like?
A
Our membership of four thousand strong includes many legacy members who joined The AD Club as young professionals and have grown up and progressed in their career with us over the years. While the industry focuses on recruiting new talent, we see retention as just as big of an issue and believe it is critical to nurture talent after they have entered the field. Part of our mission as an organization is to support members along their career journey – as they move up the ranks – keeping them active both within the industry and within The AD Club. We also have a Young Professionals group that is designed to help advertising, marketing, and media professionals ages thirty and under grow to become tomorrow’s leaders. It is truly inspiring to see this ambitious, philanthropic, and outgoing group of future industry leaders develop themselves as professionals and people.
Q
It’s no secret that The ADVERTISING Club has a myriad of impressive initiatives. Are there any initiatives that the Club is especially proud of?
A
Advertising is about experimentation in communication. It is the business of inventing ideas to be discussed, debated, assessed, and adjusted daily. The AD Club exists to support this process through a number of initiatives around our core pillars – access, creativity, professional development, and diversity. We are proud of our efforts in all of these areas, but I am especially proud of our diversity initiative, i’mPART. It’s our belief that diversity of people, ideas, culture, and craft is a major driver of creativity and creates better work in our business. i’mPART is a fundraising effort that aims to raise awareness of the benefits of diversity and support the nation’s leading diversity programs.  i’mPART employs an acronym that represents the four pillars of the initiative – to Promote, Attract, Retain and Train diverse talent. It’s a movement to make diversity a priority and increase accountability for this issue through a ten-year-long benchmarking survey by PricewaterhouseCoopers (PwC), which will track the progress of diversity programs to ensure long-term success. We are committed to supporting diversity of thought and seek to inspire a diverse mindset in the advertising industry.
Q
What I find to be interesting about The ADVERTISING Club is that it acts as a hub for members of all different seniority levels to come together – ranging from high-power CMOs to junior staff members – what roles do members play?
A
The AD Club has always and will always serve as a resource for all advertising professionals at any age, level, or discipline. With this in mind, we have designed a variety of premiere training courses, speaker sessions, and workshops that unite a wide array of members. Our programs and events give members access to a network of thought leaders, the fuel for creativity, greater diversity, and the best training for professional development. Established leaders have the opportunity to come together to exchange ideas and best practices for business, while fresh faces can partake in the educational and mentorship programs we offer. The AD Club’s objective is to create connections between members from all corners of the industry. This diverse mix of experience is how we raise the bar for collaboration and creativity and ensure the industry is truly forward thinking.
Q
As they say, the future of tomorrow is in the hands of the youth of today. How can young people entering the advertising industry make a difference?
A
I believe the success of our industry directly correlates to the caliber of our talent, so the future lies in the hands of young professionals. They bring a new energy and passion for learning the industry that can both spark renewed interest among more senior professionals and introduce fresh ideas to the table. To make a difference in our industry, young people can invest in their professional development through courses and training. But, I believe mentorship is a critical part of career success, no matter how old you are. If young people can identify a mentor who provides candid advice and knows how to help nurture unique talents and skills, they will have a leg up in the industry. Today’s youth generation grew up with technology, and with a more diverse population than ever before. Through this upbringing, they hold a lot of power. They aren’t afraid to voice their opinions and make things, an attribute that will allow them to truly make an impact at a young age. We encourage young people to embrace and harness their own diverse ideas and backgrounds, and leverage them to make our industry better. Don’t hold back and throw yourselves into the business. There are more opportunities than ever to be heard.
Q
What is the coolest object in your office right now?
A
The coolest object would have to be the first ANDY award statue. 2014 marks the 50th anniversary of The ANDY Awards, a major milestone and yearlong celebration. The ANDYs have always recognized the brave process of creativity, and in their 50th year, we will unite the industry to celebrate the past five decades of advertising and usher in the future with a platform centered on bravery. Final judging took place in February in Shanghai, and it was an inspiring experience for our esteemed group of judges led by The 50th International ANDY Awards Chairman, David Droga. The ANDY is a good reminder of the transformative evolution of creativity and tech over the past fifty years and gives me hope for a better and braver future industry.

“New” Concerns Likely to Top FTC’s Interest This Year

Posted in Advertising, Marketing

There were significant changes in almost every aspect of the law relating to advertising, marketing and promotions in 2013, and Davis & Gilbert published a piece entitled, “2013 Lessons Learned and 2014 Practical Advice.” This piece explains and discuss what happened, and offer suggestions for advertisers and agencies to think about and address in 2014.

Over the next few weeks, I will share with you a few pieces I authored on the topics of: Environmental marketing, National Advertising Division of the Council of Better Business Bureaus rulings, and the Federal Trade Commission’s changes to its regulations and guidelines in.

Environmental marketing made a significant comeback in 2013. After years of diminished standing during the Great Recession, green issues were again on the minds of consumers, advertisers and regulators. Factors such as an improving economy and a seemingly endless series of “once-in-a-lifetime” weather events, as well as the release by the Federal Trade Commission (FTC) of its updated Green Guides in October 2012, all contributed to environmental impact being an increasing focus of marketing.

Regulators used the first full year of the new Green Guides to send a message to the marketplace that green marketing practices were very much on their radar. The FTC alone settled 14 separate enforcement actions based on what it considered to be misleading or deceptive environmental marketing claims. Green claims also were the focus of many state attorney general investigations, private litigations and industry self-regulatory actions over the last year.

Interestingly, although the updated Green Guides contain a lot of guidance about environmental issues never before covered, much of last year’s regulatory scrutiny involved more “traditional” green claims – such as degradability – for which guidance long had been provided by the FTC and that also had been the subject of many previous enforcement actions. In other words, regulators used 2013 to enforce long established principles of green marketing, meaning that 2014 likely will be the year regulatory scrutiny turns to “new” concerns, such as the FTC’s new “de facto” ban on unqualified general environmental marketing claims.

The Way I See it

In 2014, advertisers and agencies will need to:

  • Expect regulatory scrutiny and be especially cautious when making marketing claims about “new” environmental issues, including reductions in carbon emissions or the use of renewable energies; be specific and work closely with counsel early to ascertain how different claims might have to be qualified.
  • Understand that with green marketing, it is critical to consider the overall net impression of the ad so as to ensure it is not making claims – including through its visuals, use of third party seals or use of “green” trade names – that cannot be supported (e.g., an unqualified general environmental benefit claim).
  • Keep in mind that green claims often require a lot of qualifying and explanatory information to be properly understood, and merely referencing a website with details about the environmental claim is not acceptable to the FTC. Therefore, it is important to carefully consider the intended media and its limitations (e.g., social media, mobile marketing) when determining how, or even if, a certain environmental claim should be made.

Building the Entrepreneurs of Tomorrow: A Candid Discussion with the CEO of Venture for America, Andrew Yang

Posted in Digital, Social Media, Technology

Let’s say a senior at MIT is about to graduate with a double major in Computer Science and Comparative Media Studies. Career Services tells the student, “You can make six figures at a Manhattan consulting firm, or you can apply to ‘Venture for America.’ Oh, and if selected by Venture for America, you will be sent to a city in need of entrepreneurs. There you will make less than $40,000 a year working for a start-up.” Which would you choose as your first job?  Fortunately, in 2013, hundreds of America’s best and brightest college students chose the latter and applied for the seventy fellowships offered by Venture for America.

Venture for America is the brainchild of entrepreneur Andrew Yang. Yang saw the Ivy League-to-hedge fund/investment bank/consulting firm conveyor belt and thought, “What a waste of talent.” Venture for America re-allocates that talent to where it has the potential to do the most good. Specifically, start-up companies in mid-sized cities across the country that are trying to revitalize their local economies. Recent college graduates receive invaluable experience that they would likely not get at a large, established company, and the start-ups are provided with access to talent they otherwise probably would not have the resources to recruit.

Among the many interesting projects Venture for America has supported is “SocialProvidence,” a social media analytics and consulting company based in Rhode Island, that is supervised by executives from HavasPR, but is run day-to-day by two Venture for America fellows. One of SocialProvidence’s main selling points is that digital natives – like the two young men running the company – have a much more intuitive and accurate sense of what kinds of social media marketing techniques will be most effective.

The Way I See It

  • I see a growing intersection between start-up culture and community development. Some of that is driven by a consumer niche that wants to buy local products and have real relationships with the people whose businesses they patronize. But a lot of it is driven by the genuine desire of a certain class of entrepreneur to use their business as a way of building community.
  • I see a millennial generation that is really driven by a sense of connection. They want to feel like they belong to something bigger than themselves. Millennials are one of the reasons that community service has become such a big deal on college campuses. Venture for America has certainly tapped into that spirit.
  • I see entrepreneurship gaining in popularity among the youth of today, and not just in the sense of entrepreneur as business owner. But embracing the entrepreneurial spirit and building things, creating new ventures, and solving problems.

The Way the Industry Sees It

I sat down with Venture for America CEO, Andrew Yang, to discuss entrepreneurship and his upcoming book, Smart People Should Build Things.

 

Q
Before you started your own company, you were on the same Ivy League to                 law/finance/consulting path that you’re trying to knock your Venture for America Fellows out of. What shortcomings did you find in that path?
A
When I was graduating from college, law, finance, and consulting were the options that were presented to me – mainly because the consulting firms and financial services firms were recruiting heavily at Brown.  It just seemed natural to go down one of these paths on the road to success and prestige.  After becoming a corporate lawyer, I found that it wasn’t a great fit for me because of how narrow and specialized the role was, and that I didn’t enjoy acting as a document reader and deal facilitator.  These “prestige pathways” of finance, law and consulting, as I call them in the book, are still the options that are being presented to college seniors. The professional services firms have millions of dollars to spend recruiting talent on college campuses each year. The salaries and benefits that they can offer are certainly appealing. These kinds of resources are not available to early stage growth companies that are actually creating jobs in this country and are most in need of the nation’s best and brightest minds.
Q
Your last business was a test prep company. What did you see in the students you were working with that made you think that maybe they were open to a different kind of opportunity?
A
When I was at Manhattan GMAT, I met hundreds of bankers and consultants who were preparing to enroll in business school. Many of them seemed a little lost, like I had been when I realized I no longer wanted to be a lawyer. They would talk about wanting to make a real impact in an organization, and I think they were going to business school often to reset and seek that kind of opportunity.  Our young people want to build things; they just aren’t being presented with the choice to do so. I started Venture for America because I believe that if we provide the path to entrepreneurship to smart, enterprising young people, they will embrace it.  And early returns suggest that’s exactly what they’re doing.
Q
How have you been promoting the program to young people? Do social media platforms play a large role in getting the word out? What about the start-ups you’re trying to partner with?
A
We do promote Venture for America via social media such as Facebook, LinkedIn, Twitter, and Instagram. However, we have found that actually getting on college campuses and talking to students is the best way to get them interested and excited about Venture for America. In the first few months after I started Venture for America, I went to dozens of college campuses and spoke to groups that ranged from two to 200 people. Our team still does that today, though we generally have a better turnout than two people! Our current Fellows go back to their alma maters and talk about their experiences as well. Many of our best applicants have come from Fellow referrals.  We also have a corporate development team that travels the country to evaluate the opportunities in our partner cities. We look to partner with growth companies in a variety of sectors. Mainly, we are looking for organizations with exciting opportunities for a young person eager to learn the ins-and-outs of starting a business.  Oftentimes our local supporters and funders will introduce us to exciting startups that are eager to take on a Venture for America Fellow. There are so many great companies across our nation and in time, we hope to place Fellows in all of them.
Q
Tell us about your book, Smart People Should Build Things. What do you hope to achieve through the book that you haven’t been able to achieve through Venture for America?
A
My goal was to help people understand why what we’re building with Venture for America is important and worth supporting.  I didn’t come to this set of ideas overnight, it took over a decade and a series of experiences, including running a company that served thousands of ambitious young people.  I wanted to convey some of these experiences to others, so they could perhaps gain a similar perspective. Because I’m a 39-year old ex-lawyer, I wrote a book.  If I was one of the Fellows, it’d be a very cool and funny video.
Q
What is the coolest object in your office?
A
“Lin Lin, the Panda – our office stuffed-panda mascot – who is currently reading, Smart People Should Build Things!”

Marketers Predict Trends to Watch in 2014: Insights from Brown Shoe Company’s Chief Marketing Officer, Will Smith

Posted in Digital, Marketing, Mobile

Concluding the three part prediction series, I turn to Will Smith, Brown Shoe Company’s Chief Marketing Officer, to get his thoughts on what 2014 holds for the retail industry.

2014 Predictions within the Retail Industry and How They Have the Potential to Affect Marketing and Advertising, with Brown Shoe Company’s Chief Marketing Officer, Will Smith.

 

Q
What are your 2014 predictions within the retail industry and how do they have the potential to affect marketing and advertising?
A
One of the biggest trends we need to pay attention to as marketers is the increasingly savvy, mobile customer.  Where customers once got their product information from a newspaper, TV ad, or billboard, today it’s in the palm of their hand.  Mobile is becoming an essential part of Famous Footwear customers’ shopping experience.  They are on-the-go and demand convenience and access to the latest shopping trends as well as savings.  A significant percentage of visits to famous.com come via mobile devices, and we see this only continuing to increase in the future.  To that end, we recently launched a new mobile app that reinforces our goal of creating an “easy-to-shop” experience for our busy customer in our stores and online.

The new app provides our loyalty members instant access to the savings they earn through the Famous Footwear Rewards program.  They can see and redeem the points they’ve earned any time – this is a benefit exclusively for app users. Rewards members can also receive other exclusive offers via the app, gain more opportunities for bonus points, and easily plan and track purchases.

While there are exclusive benefits for Rewards members, Famous Footwear’s app gives all our mobile shoppers easy, convenient access to the shoe styles and brands that fit their lifestyles. As our consumers continue to rely more on their mobile devices, we’ll continue to look at features that will make the shopping experience easier for these busy families.

Bottom line, the customer expectation for immediate, easy access to information is only going to increase and marketers will need to stay on top of, or better yet, ahead of the curve in order to win.

Marketers Predict Trends to Watch in 2014: Insights from LPGA Chief Marketing Officer, Jon Podany

Posted in Advertising, Marketing, Mobile

Continuing with predictions on what the rest of 2014 will hold, I turn to Jon Podany, Chief Marketing Officer for the Ladies Professional Golf Association (LPGA), to get his thoughts.

The Way The Industry Sees It

2014 Predictions within the Sports Industry and How They Have the Potential to Affect Marketing and Advertising, with LPGA’s Chief Marketing Officer, Jon Podany.

 

Q
What are your 2014 predictions within the sports industry and how do they have the potential to affect marketing and advertising?
A
1) Increasingly global – We are certainly seeing this with the LPGA (we have eight different countries represented in the top fifteen players in the world), but I see it continuing in other sports as well. More games among the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), etc. are being played overseas, there are an increasing proportion of international players in sports, and the distribution of content continues to expand globally. The Sochi Winter Olympics and World Cup in Brazil will further highlight global sports this year.

2) Increasingly mobile – More and more sports content is consumed on mobile devices, whether it’s sports apps, social media or watching sports on mobile devices. Along with this, people are getting their information in shorter information bites (e.g., 140 characters on Twitter).

3) Increasingly user-generated content – Sports teams/leagues continue to seek new ways to tell their own story and produce their own content and are not relying solely on others. It started with NFL Network, MLB Network, and others, and has expanded to Big Ten Network, Pac 12 Network, Longhorn Network, social and digital media, etc. At the LPGA, we have hired a video producer – and may hire another in the coming year – to increase the amount of video content we distribute.

4) Increased focus on game day experiences – Ticket sales and full stadiums are very important to teams/leagues, and it has become increasingly difficult to fill stadiums due to HDTV and competition for people’s time. Sports teams/leagues have to continue to find ways to make game day an experience that is worth paying for (e.g., huge video boards, interactive seat experiences, other entertainment options, etc.).

Q
What’s the coolest thing in your office?
A
As far as the coolest thing in my office, I would have to say it’s a tie between the pictures I have of my wife, and I with Byron Nelson and Arnold Palmer. Two the finest gentlemen I’ve ever met and greatest ambassadors the game of golf has ever seen.

 

Marketers Predict Trends to Watch in 2014: Insights from Dunkin’ Brands® President, Global Marketing and Innovation, John Costello

Posted in Advertising, Marketing

It sure didn’t take long for 2014 to shift into high gear.

Little more than two weeks into the New Year, we’re already knee deep in stories with big implications for marketers in the retail sector (charged anything at Target lately?), sports marketing (the ruling on Alex Rodriguez’s suspension for the 2014 season), and the food services industry (with Hershey’s announcement of 3-D printed chocolate).  As Ron Burgundy would say: “That escalated quickly.”

With the news of early 2014 in mind, I reached out to some of the most knowledgeable marketers in those three sectors, and over the course of the next three weeks, I will share with you their predictions about what the rest of 2014 will hold for their industries, and how it might affect marketing and advertising. The series will kick off with John Costello, President of Global Marketing and Innovation for Dunkin’ Brands; followed by Jon Podany, Chief Marketing Officer for the Ladies Professional Golf Association (LPGA); and culminate with Will Smith, Chief Marketing Officer at the Brown Shoe Company. Of course, I couldn’t help asking about the coolest thing in their office, as well.

The Way The Industry Sees It

2014 Predictions within the Food Services Industry and How They Have the Potential to Affect Marketing and Advertising, with Dunkin’ Brands® President, Global Marketing and Innovation, John Costello

 

Q
What are your 2014 predictions within the food services industry and how do they have the potential to affect marketing and advertising?
A
1) The customer is evolving as Millennials, Hispanics, and healthier eaters are all growing in influence, spending, and power and as Baby Boomers move into retirement years.

2) Consumer confidence could improve, but will remain mixed as consumers deal with job insecurity, the complexity of the new health care laws, and concerns about government dysfunction.

3) Traditional meals and eating are giving way to: “I want to eat what I want, when I want, and where I want.”

4) Innovative food at a good value will be more important. People continue to look for interesting and differentiating food choices, but also want good value. Consumers don’t want cheap food; they want great, interesting food at a good value.

5) Consumer engagement is changing as people want to watch what they want to watch, when they want to watch, and where they want watch. I think the shifting media landscape will require focus against both old and new media. For example, while new media is booming, TV viewing is up compared to where it was a year ago.

6) Substance will replace hype as social media comes of age and leverages the power of a recommendation by a friend, which is the most powerful marketing tool. At the end of the day that is what social media has the power to harness.

7) Technology is changing the way we engage with consumers and delivers both functionality and value. For example, a mobile app can be used to pay, obtain coupons, find a store, research a product, look-up nutritional information, and share thoughts with friends.

8) Internet retailing will continue to grow as Millennials and Digital Natives begin to exert more buying power. Bricks and mortar stores can continue to thrive and survive by ensuring an in-store experience that is relevant, interesting, and entertaining. We used to go to the store because it was the only place to buy something. Now, we need a reason to go. If retailers give consumers a good reason to go to the store, people will continue to go there.

Q
What’s the coolest thing in your office?
A
The coolest thing in my office is a picture of a thirty-three inch Sea Run trout I caught in Tierra del Fuego, Patagonia. A close second is a photo of our senior leadership team and franchisee leaders pushing the buzzer at NASDAQ to launch our IPO in July of 2011.

 

Youth Marketing: How the Founder & CEO of Shop Jeen Builds a Customer Base

Posted in Advertising, Digital, Marketing

It seems youth marketing has always been a hot topic in the advertising world. As young people move from the “discovery” phase of their tween years to the “experimental phase” of young adulthood, they shift from being motivators of their parents’ buying habits to influential consumers in their own right. But today that demographic is extremely important. Not only are today’s young people the first true digital natives and harbingers of how digital media will influence how we all interact with brands, but also, as baby boomers age and their $400 billion in annual consumption slows, retail, food, and entertainment companies are counting on millennials to fill the gap.

One marketer that has been particularly successful in tapping the youth market is Erin Yogasundram, the twenty-one year old founder of Shop Jeen, an online boutique that sells everything from dollar packs of Ouija gum to $530 filigree sunglasses. Yogasundram launched Shop Jeen in March of 2012, while she was a junior at George Washington University (GWU). She started out with posting cell phone photos of new products to Instagram and filling orders out of her dorm room. The Instagram feed and the business were such an immediate hit that Yogasundram walked away from the remainder of her full-ride scholarship at GWU and moved to New York City, where Shop Jeen now has three offices, nine employees, and half a million Instagram followers.

The Way I See It

  • I see a retail industry increasingly focused on millennial and youth marketing. As baby boomers age, their $400 billion in annual consumer spending will fade. The world will turn to millennials to make up the difference.
  • I see a demographic increasingly inclined to shop at multi-brand retailers and to do their shopping online.  According to recent research by Piper Jaffray, roughly eighty percent of teens shop online. Piper Jaffray’s research also confirms millennials’ growing reliance on peer recommendations when making buying decisions.
  • I see a social media market in continued flux as young people gravitate toward new platforms; according to the latest semi-annual Pew survey on teens and social media. While Facebook still has the largest number of teen and millennial users and those users have their largest networks on Facebook, the percentage of teens citing it as their most important social network has fallen by half, from forty-two percent in the fall of 2012 to twenty-three percent in the fall of 2013. In that same period, the percentage of teens citing Instagram as their most important network doubled.

The Way the Industry Sees It

 

I sat down with Shop Jeen’s founder, Erin Yogasundram, to discuss her brand and how she uses social media to build a customer base.

 

Q
Where did your initial vision for Shop Jeen come from? What niche or need did you want to fill?
A
I started the company, junior year, in my dorm room at The George Washington University. I had worked a few internships in the fashion industry in high school as well as during my winter and summer breaks in college.  I was working three part time jobs in retail, and one day I thought, I could do this myself.  I have always been an entrepreneur, and for example I sold autographs online when I was twelve and owned a shoelace selling business in high school. While working retail, I found that I had a keen eye for what would sell well.  I was always suggesting new brands for the stores to carry and had an invisible hand in the buying process.  I had about $2,000 saved from working retail and blew it all on a Celine bag (the bag was very rare, and had a wait list process at the time).  I have always been a workaholic and never a bookworm, so I quickly realized I could have used that money to start a new venture for myself.  I then sold the Celine bag for $3,000, yielding a $1,000 profit!  I decided to pool my money into wholesale purchase orders to fund my new venture.  Initially the site was to be a hub for the “best of Etsy.”  Etsy was gaining popularity, but it was very difficult to navigate and find the good stuff.  I used my keen eye, combined that with my researching skills, and I was able to find the cream of the crop on Etsy.  I negotiated wholesale terms with the sellers on there – most of which did not know what wholesale even meant when I approached them – and Shop Jeen was born.  I coded the original website from trial and error CSS writing.  I sold on campus at every event possible.  And I slowly started bringing on more well-known brands to gain traction and reputation in the industry.  Though we do carry some of the same brands as Bloomingdales, Urban Outfitters, Hot Topic, Bergdorf Goodman, Nasty Gal, Spencer’s Gifts, and ASOS, our curation is what makes us unique. So unique, in fact, that those retailers would not normally be mentioned in the same sentence.
Q
What’s your curation process like? How do you decide what makes it on ShopJeen.com, and how have your decisions affected revenue?
A
Our Creative Director, Amelia Muqbel, and I work very closely to decide what products are sold, our marketing strategy, our social media voice, the look of our graphics, etc. Everything Shop Jeen stands for is a true representation of the two of us. Luckily, we somehow managed to find each other in this massive world. We share a very unique sense of style, thought-process, and outlook on the world, which is why we work so well together. I think our cohesive mindset comes across when you visit Shop Jeen.  We approach everything from a different angle than everyone else, and I’d say this has aided our success.  We quickly pull apart “competitors’” strategies and try to do the exact opposite.  It sounds crazy, but it’s been working! A lot of retailers are trying to mimic each other in order to come out on top, but if everyone is doing the same thing, how boring is that going to be for the consumer?

Peel back the curtains and read the rest of the Q&A here!

Changing How We Watch Changes How We Sell

Posted in Advertising, Digital, Media

In just a few short years, DVRs and video-on-demand have dramatically altered how television is watched. In 2006, fewer than two percent of households owned a DVR. Now, more than half do. The use of DVRs has changed along with market-growing penetration. Instead of just being time-shifters, many viewers are effectively becoming collectors, stockpiling so many shows on their DVRs that they don’t have time to watch them all. As a result, they’re also watching shows later, at a time when it’s convenient to them.

As The New York Times reported recently, this fall’s television season saw a surge of viewers watching shows four to seven days after the initial air-date. Broadcasters and cable networks typically base their ad prices on so-called C3 ratings or the amount of viewership over the course of three days of delayed viewing, and view those later impressions as effectively uncompensated.

The Way I See It

  • I see people spending A LOT of time in front of a screen. According to a recent survey from eMarketers, adults in the U.S. spend four hours and thirty-one minutes in front of a television and an additional five hours and sixteen minutes in front of a computer, tablet, or smartphone screen every day.
  • I see some doors opening while others close. While most viewers fast forward through at least some of the commercials on their DVRs and services like Dish’s AutoHop continue to proliferate, many networks are creating apps that allow viewers to easily access their favorite shows on their phones or using dynamic ad insertions to update ads embedded in shows viewers’ access through video-on-demand services.
  • I see a growing integration of TV and social media as viewers use tablets and smartphones to engage with friends or networks while watching TV.
  • I see the very meaning of “watching TV” changing as viewers increasingly access programs from a variety of devices. While televisions still dominate living room viewing, a recent survey by Motorola shows that most bedroom TV viewing now takes place on a tablet.

The Way the Industry Sees It

TargetCast has had great success as an agency helping its clients navigate these churning media waters.  I sat down with Audrey Siegel, TargetCast’s Agency President, to discuss how shifting viewing habits have changed how TV advertising is sold and used.

 

Q
A lot of the discussion around changing viewing habits has been focused on viewers being able to skip or fast-forward through commercials, or view ads later, because of delayed viewing. Are there other, more subtle trends in viewer behavior that are getting overshadowed by these larger issues? If so, do they represent opportunities?
A
It is certainly true that increased consumer control over multiple aspects of their viewing behavior has forever changed the medium at its core.  The ability to time-shift viewing is really the tip of the iceberg.  We must now add to time-shifting the viewer’s ability to platform shift, to actually change the location of their viewing as well as the time in which they view a particular program.  In effect, dayparts are becoming intensely personal; “my primetime” supplants generic primetime.  The language around the nature of the viewing experience – at-home, lean-back, me time – must now recognize mobile as well as multiscreen viewing.  All of this viewing, ultimately, will be wrapped in the cloak of digitized delivery, of both ads and programming, and will open up television advertising opportunities for addressable messaging and dynamic creative versioning.  This ultimately will make our most mass medium most personal, promising greater viewer engagement and potentially greater brand engagement as a result.
Q
How have changes in viewing habits altered our ability to track the effectiveness of the advertising that does get seen? What opportunities does that create?
A
Tracking the effectiveness of TV advertising has long been a promise unfulfilled.  We have settled for surrogates – such as program engagement, ad awareness, and commercial ratings – but in fact have not been able to directly connect television advertising with marketplace effectiveness in the most direct manner.  The increasing digitization of the video medium, as well as the multi-screen nature of program and ad delivery, brings us closer to the realization of effectiveness metrics.  In addition, as we build more complex multi-channel attribution tracking and modeling applications, we will better understand not only the effectiveness of one video channel, (television) but its impact on, and relationship with, other video elements (mobile, online) as well as other messaging channels (search, social).

Peel back the curtains and read the rest of the Q&A here!