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Loyalty in The New Age of the Shopper

Richard NicollMD MENA Saatchi & Saatchi X

Shopper marketing fundamentals

CONSUMER MODE

Future-Focused

Reflective

SHOPPER MODE

In the Moment

On-Task

Source: Booz & Company Fall 2009 Survey of Consumer Spending and Shopping Behavior. Sample size n = 2,010

Shopper2.016%

Loyalists16%

Dealhunters21%

Laggards17%

• Greatest tendency to buy online across categories

• Price sensitive, with little brand or format loyalty

• High coupon usage

• Lowest average age

• Least likely to change brands or retail format

• Conducts both online research and purchase

• Highly skewed to men

• Highly price sensitive and heavy coupon users

• Low brand or format loyalty

• Lowest income

Channelsurfers20%

• Hunt for brands they love

• Likely to switch retailer to find brands at best prices

• Highest household income and education

• Low online engagement

• Lowest coupon usage

• Low brands or format switching

• Skewed female

• Oldest average age

Onlinewindowshoppers11%

• High research, but less likely to purchase online

• Modest price sensitivity and brand switching

• Highest proportion of home owners

Consumer Segment Profiles

57% of shoppers will switch channel or retailer if they find

better value

43% of shoppers are retailer loyal

Shoppers have become less loyal to retailers and channel

Now it’s a bigger and more complexconversation

1997 2005 20152010 2011

SocialCommerce

Online

In-store

Mobile

In-store In-store In-store In-store

Online Online

Mobile

SocialCommerce

Online

Mobile

We’ve been classically trained,but now we’re in a jazz ageRishad Tobaccowala, Chief Innovation Officer, Publicis

In the New age of the Shopper

Less loyalty than beforeMore choice than ever

Saatchi & Saatchi X

Shoppers can search out the best deals anywhere, even in front of shelf

In the New age of the Shopper

The power is shifting, from retailers and brands to Shoppers

BRANDS ARE OVER

A Lovemark isa product, service or entity

that inspiresloyalty beyond reason

3 Principles to win in the New Age of the Shopper

1 MAKE IT PERSONAL,MAKE IT RELEVANT

Make it about

In the New age of the Shopper

Don’t Start with technologyStart with the Shopper

In the New age of the Shopper

Shoppers are moving seamlessly between technologies, environments and communities to achieve their tasks

Saatchi & Saatchi X

Best Buy

In the New age of the Shopper

Brands that win loyalty, will be those who are truly loved for improving their customers lives

2 PROVOKE, DISRUPT, GET EMOTIONAL

In the New age of the Shopper

Reason leads to conclusionEmotion leads to action

27

“I've learned that people will forget what you said,people will forgetwhat you did,but people will never forget how you made them feel.”

Maya Angelou

In the New age of the Shopper

Brands that win loyalty, will be those who use emotion to overcome purchase barriers

3 BELIEVE IN THE TRUTH

In the New age of the Shopper

Things have changedThings have stayed the same

The mass market model we know is broken

McKinsey’s see a future where TV advertising in 2011 will be one-third as effective as it was in 1990

TV is forecast to be only 74% of US ad spend in 2011, from 90% in 1990

The digital revolution is transformingmarketing, entertainment and technology everywhere

CHANGE

In the New age of the Shopper

BUT…we should remember that people have been going shopping for thousands of years, not just to fulfill basic needs, but to participate in a shared experience with fellow human beings

In the New age of the Shopper

Brands that win loyalty, will be those who understand and harness the real power of human nature

In the New age of the Shopper

1. Make it personal. Start with the Shopper, they have the Power

2. Provoke Emotion, it will lead to action… and Sales

3. Harness the power of human nature. It remains constant in a changing world

Saatchi & Saatchi XAt the Heart of Shopping since 1997

Thank you

Richard.nicoll@saatchime.com