Shopper Marketing for E-Commerce
Lesson One: Setting the Stage Contents
Acknowledgements 3 Introduction 4 A Concept Long in the Pipeline 5 Why We’re Here: Technology Changes 6 Why We’re Here: Demographic Changes 7 Why We’re Here: Pervasive Usage 8 Why We’re Here: CPG Usage 9 Why We’re Here: Shoppers Already Are 10 Why We’re Here: Your Future Depends on it 11 Size of the Prize: Shopper Trends 12 Size of the Prize: Beyond Sales 13 Key Definition: E-commerce 14 Key Definition: M-commerce 15 Key Definition: Omnichannel 16 DSM ≠ E-commerce 17 But It’s Not DSM or E-commerce 18 It’s DSM and E-commerce 19 E-commerce Fundamentals 20 What’s Next? 21
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3 We'll kick off the course by Setting the Stage for all the information and all the discussion that will follow. We'll begin by simply explaining why we're all here conducting a course on Shopper Marketing for E-commerce — looking at the changes in the marketplace … and in society … that have driven a surge in e-commerce activity over the last few years — especially in regard to packaged goods.
We'll then look at some topics that will help us better understand the potential opportunity that's out there because the obvious opportunity that product manufacturers might see at the moment is vastly different than the almost guaranteed opportunity that awaits them in in the future. And the shift is happening far too quickly for companies to hedge their bets any longer.
We'll spend a little time running through some Key Terms & Definitions just to make sure we're all on the same page.
And then we'll start looking at the critical issue of Digital Shopper Marketing vs. E-commerce, what and where the differences are and, more importantly, where the areas of commonality and points of intersection exist.
Title of the book 4 So let's begin with a little bit of history. The launch of Amazon.com in 1995 is often viewed as the unofficial start of e-commerce, even though there were retail marketplaces on the early Internet Service Providers like AOL and Prodigy and commercial transactions even before that.
And here’s a little trivia for you. Peapod, the online grocer owned by the same Ahold USA that operates the Stop & Shop and Giant supermarket chains, has been around longer than Amazon — so long, in fact, that they originally had to provide dial-up modems for their customers because so few of them actually had Internet access yet.
But for all intents and purposes we can claim that the birth of e-commerce took place in 1995 with the launch of Amazon. Because it really wasn’t until Amazon came along that anyone really began to take notice.
E-commerce in general, and even Amazon in particular, was originally considered to be inconsequential to retail overall, so non-threatening that retailers like Barnes & Noble and Target originally used Amazon as their e-commerce “supplier.” Target was still using them as recently as 2011.
And even though it was eating up product categories like books and consumer electronics for years, Amazon wasn’t considered a legitimate threat in the CPG space until the early 2010s, and it only really started worrying traditional retailers when it began expanding the AmazonFresh home delivery service in 2013. So the impact that it's had on the industry in just a few years is pretty incredible, and we'll be be breaking that down in detail in Lesson 4.
5 But in many ways, the concept of e-commerce was a little bit ahead of its time, because online shopping and buying didn't catch on until most of the shopper barriers — security, reliability, simplicity, convenience — were either actually eliminated through technology or were at least eliminated perception-wise. It took awhile for online shopping to truly become easier than visiting a brick-and-mortar store in the minds of most consumers.
So on this page you see some of the key advancements in technology that made this happen. • In 1993 the introduction of a graphic user interface made the internet appealing and accessible to the mainstream population after years of being the domain of scientists, professors, government agencies and computer geeks. • One year later Yahoo! launched, becoming the first widely popular search engine (soon to be overtaken by Google of course), and the new information age began. • Then Amazon arriving as the first well-known e-tailer, first as a specialty store dealing only in books and music. • And then we fast-forward 12 years to the arrival of the iPhone, which began turning mobile phones into pocket computers. • One year later came the App Store and a variety of shopping-enhancing tools and services. • Fast-forward to 2013 when mobile transaction technologies start freeing consumers up from such “antiquated” notions as wallets and plastic credit cards • And then along came Amazon Dash in 2015 to make the notion of mobile wallets seems antiquated and literally simplify the act of shopping down to a simple, single click of a button.
6 And of course we had to wait for consumer awareness and acceptance to catch up with the technology. Even 10 years ago, a lot of consumers were very cautious about providing much personal information on the Internet. Today, many of us have our credit card information saved on dozens of websites and we almost never think twice about it.
Now adoption progressed steadily but somewhat slowly until the Millennials came of age, the first inherently digital generation. And then it wasn't just digital activity that became pervasive, but mobile activity.
Millennials now are the largest generation worldwide: 1.8 billon of 7 billion. And in a couple more years they'll will be earning more then the Boomer generation that has dominated the consumer marketplace for so long. Millennials have become the key shopper demographic, and they are totally comfortable with e-commerce.
7 And so the bottom line is that e-commerce is now pervasive. It has reached 90% penetration among U.S. consumers. And while it's still only 7.3% of total retail sales, you can see that it's growing at a much faster rate than overall sales.
And the retail industry experienced a real watershed moment in 2015, when 102 million U.S. consumers shopped in brick and mortar stores over the Thanksgiving Weekend — and 103 million shopped online.
8 This growth now is also having a major impact on CPG, a marketplace that long thought it would never need to worry about e-commerce because people would never take the trouble to go online and buy toilet paper or shampoo or cereal and especially not fresh vegetables or frozen food. That would just be silly, right? Actually, no, and now as you see here the majority of growth in packaged goods sales over the next few years is also expected to come through e-commerce.
9 And so all those myths about e-commerce that were held for so long have all been shattered, especially when it comes to the packaged goods arena.
It’s only for young people. Yes, Millennials are leading the charge, but they're not the only generation that's shopping for groceries online, as this age breakdown from MyWebGrocer shows. • It’s only for certain categories. Truth is, if people buy it, they'll buy it online. Some more than others, for sure. But everything is fair game. • Online grocery shopping isn’t worth the effort. This one may have been true for many people years ago, but with home delivery no longer requiring people to wait by the kitchen door all day long and especially with curbside pickup a growing option, online grocery shopping can be a very convenient option. • They definitely won’t buy fresh food. This one may have held true longer than the others. But the barrier has been broken here as well, and many online shoppers are now perfectly content to let someone at the store select fresh food for them.
10 And so to explain why you're here in the simplest but most dramatic terms. It's because your future depends on succeeding at e-commerce. Because the same marketing levers that drive e-commerce also have a significant impact on offline sales, and that's a topic will be discussing several times during the course.
11 A recent survey from Field Agent found that one out of every five visits to a retailer’s website is followed by a visit to the physical store ON THE SAME DAY to buy an item that was viewed online. So it's clear that the size of the prize is much bigger than the 1 or 2 or 3% of brand sales that you might currently be generating directly through e-commerce.
12 E-commerce activity also impacts shopping behavior even more broadly to cover brand awareness and purchase consideration — two key pieces of the traditional purchase funnel that often aren't considered to be the job of shopper marketing. And so again the marketing levers that effectively drive e-commerce have a much broader, much deeper impact.
13 So before we go any further, let's nail down exactly what we're talking about here. This is the definition of e-commerce that we'll be using to drive the course:
E-commerce is any "Activity that enables shoppers to buy products or services via the Internet using various electronic devices."
That’s pretty straightforward, right. In fact, it;s very close to the definition that you’d find in Merriam-Webster’s dictionary. Oh, and just for the record, the "e" does stand for "electronic," even though you'll likely never hear that again.
At the bottom of this page we have an important consideration for consumer product manufacturers as they delve into this definition. And it speaks to that full impact of shopper marketing for e-commerce that I mentioned a few slides ago. The convergence of sales and marketing activities that for decades have been treated as two separate functions. Why? Because e-commerce eliminates the wide gap between consumer and shopper that has always existed, the gap between the onset of a consumer's need and the completion of a purchase to fulfill that need. The traditional purchase funnel is still there, but now a shopper can get from start to finish in the time it takes to click a button. And so shopper marketing for e- commerce needs to fulfill the traditional roles of both sales and marketing. Greg and Angela will be adding to this formula later on, but thought we'd mention it here at the start.
14 Now I'll just take a minute to mention M-commerce, mobile commerce, which simply enough is:
Activity that enables consumers to buy products or services via the Internet using smartphones or other mobile devices.
We really won’t spend any time in this course covering mobile commerce as a separate thing, although the device that a shopper uses has major implications on the way you develop and present content and the types of shopping functionality that need to be provided. And there already is evidence that mobile will soon become the dominant method for conducting e-commerce transactions. Drilling down into those kinds of nuances would require another course. So for the purposes of this course, it’s all e-commerce.
15 Next is a term that gets used in a lot of different ways in reference to a lot of different activities. But we'll present a basic, meat and potatoes definition here.
Omnichannel is the practice of selling products and services through any and all available sales channels including brick-and-mortar stores, websites, mobile services, direct mail and call centers.
We’re not going to worry too much about omnichannel in this course either, although this is a CRITICAL consideration for both retailers and brand marketers as they build out their capabilities. We WILL spend some time on this topic in the last lesson when we talk about the future.
16 Our last chore for this lesson is to nail down the distinction between digital shopper marketing and e-commerce. Now of course there are operational, logistical aspects of e-commerce that don’t overlap with shopper marketing. But nearly all of the customer-facing aspects of e-commerce do, as we already started discussing.
Unilever's Doug Straton, who's been a thought leader in this area for a long time, simplified the difference a couple of years ago in a Shopper Marketing magazine article: “E-commerce is getting them to buy. Digital shopper marketing is moving them further down the purchase funnel.”
17 But the distinction between the two is largely left over from a time when e- commerce involved a completely different segment of retail activity.
If you consider that Digital Shopper Marketing is designed to ultimately drive conversion, then DSM and e-commerce are inextricable. And the discipline of shopper marketing is just as applicable for driving e-commerce sales as it is for driving brick-and-mortar sales. You can’t make the same mistake that’s often been made in the traditional brick-and-mortar world, where we marketed to consumers over HERE and sold products to them through retail OVER THERE.
So it’s not a case of digital shopper marketing OR e-commerce …
18 It's digital shopper marketing and e-commerce. Because there’s always the potential to drive an immediate sale — in addition to whatever other objectives you might have for your marketing. And as we've said, so much of the content that has to be developed for e-commerce purposes is also driving trips and sales for brick- and-mortar stores.
Understanding when, where and why to focus on one or the other is important. Sometimes it’s obvious: if you’re dealing with Soap.com or Peapod.com, you pretty much know what the end goal is. But it's a different story if you're dealing with Walmart.com or even Amazon.com, as we'll see.
Mondelez acknowledged this last year when it announced that it would add a direct-sales component to ALL of its digital marketing activity — not just DSM. Here's the explanation from Mondelez chief e-commerce officer BONNIN BAH. “We’re looking at converting all our media investments into buying opportunities for consumers by driving e-commerce transactions at key retailer websites." The basic idea here is to never waste an opportunity to close the sale.
19 Let's take a look at it this way. Success in e-commerce demands that your organization develop effective strategies in the five areas of this pyramid, in ascending order. • Basic Content • Assortment • Availability • Findability • Engaging Content
We'll be covering each of these later in the course. Here, I just wanted to point out that shopper marketing can be applied to almost every aspect of effective e- commerce to improve your ability to engage with shoppers, whether they'll be making a purchase online right away or in a store sometime in the future.
Source: Clavis Insight/Path to Purchase Institute 20 Thank you for sampling the first lesson of Shopper Marketing for E-Commerce.
This is just merely an introduction to the outstanding content featured in our E-
Commerce course. Other topics include:
• Lesson 2: Impact on Shopper Behavior
• Lesson 3: Impact on Retailing & Retailers
• Lesson 4: Winning with Amazon
• Lesson 5: Winning with Other E-tailers
• Lesson 6: Winning with Multi-Channel Retailers
• Lesson 7: Shopper Marketing for E-Commerce
• Lesson 8: Key Consideration for
Organizational Success
• Lesson 9: Key Considerations for
Marketing Success
• Lesson 10: Future Considerations
• Case Studies
To purchase the entire online course, visit: http://p2plu.learnercommunity.com/products/1044/shopper-marketing-for-e- commerce-sm-303-online?sectionId=0bc1e54f-0801-438d-b115-b18592c4ac1f
Questions? Reach out to Stacey Bobby at [email protected] or
773-992-4423 21