SHOPPING IN INCREMENTS: THE FuTuRE OF ONLINE BEHAVIOR

Shopping in Increments:
The Future of Online
Behavior and Its
Implications for CMOs
Neil Dawson
VP, Chief Strategy Officer,
SapientNitro Europe
Neil leads the SapientNitro
“Future of Retail” Group.
Thanks to
Victoria O’Callaghan
Associate Marketing
Strategy & Analysis,
SapientNitro Europe
Phillip Bott
Associate Marketing
Strategy & Analysis,
SapientNitro Europe
Welcome to a new model of consumer behavior: “snackable consumption,”
a world in which people use smart devices to “shop in increments,” moving comfortably from one
digital destination to the next, grabbing bite-sized information such as prices about brands’ products
and services, often doing their research while multitasking. Snacking behavior – often discussed in the
context of content consumption – now extends far beyond content. Increasingly, we’re seeing this
behavior extend into three new areas: how people engage in social interaction, how they buy both
online and offline.
Changing Behavior
We see many signs that snackable consumption is the
norm: Smartphone users interact with their phones 150
times per day – that’s every six minutes. Seventy-nine
percent of 18-44 year olds have their smartphones with
them 22 hours per day, with the vast majority checking
their phone within 15 minutes of waking up (or indeed
when their phone wakes them up).
Furthermore, on social networks, small and frequent
online interactions are the rule. Smartphone users are
checking in to Facebook 14 times per day.
They’re engaging with brands through traditional
channels, but now, the majority of people are also
multiscreening: 60 percent of smartphone owners report
they’re likely to be using another device when watching
TV1 (and even more for tablet owners). The tools for
this new behavior is clearly established globally. We’re
now seeing studies reporting up to 73 percent global
smartphone penetration – at least among those who
already are online – in emerging markets.2
1
2
Fig. 1
U.S. Page Traffic By Hour and Device
10%
09%
08%
07%
06%
05%
04%
03%
02%
01%
00%
Source: comScore, January 2013
Consumers are moving comfortably between devices
throughout the day. In this environment, brands must
create whole experiences (content, e-commerce and
brand engagement) that can be consumed in “bite-sized”
chunks anytime, anywhere, through – and across – any
device combination.
Always Connected: How Smartphones and Social Keep Us Engaged. IDC, 2013.
For the study, Wave 7, the IPG Mediabrands agency surveyed people in 65 countries, including the UK, the US, India and China. It found that 73.4 percent own a
smartphone, up from 44.8 per cent just a year earlier. This is at the high end of SapientNitro’s estimates.
Shopping in Increments: The Future of Online Behavior and Its Implications for CMOs
And when consumers shop online, the average time
between adding a product to their cart and checking out
has grown 38 percent over the last five years, from 2
hours to 2.6 hours.
In this new consumer reality, many day-to-day activities
no longer need to be carefully planned. It is more natural
for people to find ways to fit things into gaps, delaying
activities until they have a moment and do several things
at once (watching TV and shopping, for instance). This
change in behavior challenges brands and marketers to
rebuild how and where their brands engage consumers,
and the systems and processes required to support
engagement. Not only do we now need to create
content which consumers can snack on, we need to
create whole experiences (content, e-commerce and
brand engagement) that can be consumed in “bitesized” chunks and can be accessed at any time, in
any location, on different devices and in multiple need
states. We need these experiences to work in the way
people do – adapting to context and need, consistently
across devices and presenting choices in the way with
which the distracted mind can deal.
When done well, overall engagement with a brand can
actually increase. For example, Nike’s use of sensors
and the Nike+ platforms3 means that although you
might only engage with Nike consciously once every
other day during a run – and perhaps only ephemerally
at that time – the brand remains with you and your daily
life for a period of years. When you’re ready to study and
evaluate your sport, Nike is the brand to which you turn.
Location and context emerges as particularly important.
An urban woman’s mindset around new shoes when she
sees an ad in a magazine in the office is very different to
when she thinks about new shoes when chatting with
friends, on a fashion blog or in the supermarket.
Impacts Across Your Customer’s Journey
Snackable consumption patterns tend to break down
classical definitions of the customer journey. In many
respects, the path from awareness, consideration
through purchase and support has been compressed,
as people buy quickly on the go. Yet in other ways, the
buying process is actually much longer and complex,
with significant new influences on the ultimate decision,
as customers seek advice from their social networks
(e.g. Pinterest), third-party information providers (e.g.
Trip Advisor) and on-site customer reviews.
Ultimately, the actual journey will vary by industry,
product and person, but it is likely significantly more
complex than in the past. In the retail environment,
we explore four specific need states along this new,
convoluted path to purchase.
Inspiration:
The ability to browse certain subjects and then
purchase based on what inspires the user.
Information:
Anything aimed at helping shoppers find and purchase
the right item for them, such as product reviews,
ratings and location.
Comparison:
Price comparison utilities that help shoppers to be sure
that they are getting the best deal.
Maximisation:
Coupons and reward schemes. Money is tighter for
many consumers, but we still expect the same level of
service we had before the recent recession.
Brands need to relate the moments when they focus on
products to their varying need states in different places
at different times.
3
For more information on the Nike+ Digital Platform, see “Evaluating Real-World Experience: A Study of Leading Brands” in this report.
Shopping in Increments: The Future of Online Behavior and Its Implications for CMOs
Fig. 2
Consumers are shopping in increments – connecting to brands throughout their life and locations in short bite-sized chunks.
As brands struggle with this new behavior, they are growing to recognize that they need a more intimate understanding of
people in different contexts along the shopper journey. Increasingly, marketers are using sensors, mobile phone studies
and shopping data to understand their customers’ journey from awareness through to purchase. Brands are then designing
experiences – anticipating short, non-linear interactions – for each of these contexts.
In this example, a women is shopping throughout her day. Her trip starts at her house, and touches on her commute into work
(thinking about new shoes and her plan for the day). She then spends 5 minutes at work to see if the nearest store has the shoes
in stock, walks to the store, shops for 20 minutes in the store, and then heads back to work.
Shopping in Increments: The Future of Online Behavior and Its Implications for CMOs
Inspiration
Information
Fresh Content from Great Sources
Snacking during the inspiration phase has increasingly
involved mobile services. For retail shoppers, bloggers
and mobile street-style discovery tools very much lead
the way – fitting in very well to busy young female
professionals’ commuting lives and snap purchase
judgments.
Local Discovery
Small bits of content – when available at key steps in the
journey (e.g., the Information phase) – can help shoppers
move forward with a purchase. Shoppers often need
specific information: for example, where they can buy
it, its provenance, product reviews or rating. When this
information is unavailable at key moments, the journey
can be stalled.
For example, young fashionistas can get inspiration
from world-wide streetstyle photographs while on
the move in the Pose app. They can also use Pose
to create collections and gather feedback from the
community of fashion-savvy friends on outfits they’re
not sure about, and they can use a tagging function to
find retailers with similar products.
Snackable inspiration leverages these social
interactions and the community to provide reassurance
to shoppers. This is massively important in segments
where it is difficult to experience a product prior to
purchase, such as personal care and beauty items, or
even travel and hospitality.
For example, a shopper can search for items across their
local high street using Udozi, so they can find out which
local retailer has it in stock, allowing them to purchase,
collect, and enjoy it immediately. Or indeed, if they
need something specific but don’t know where to look,
ShopStyle by PopSugar comes into its own. They type
a description and the app shows which stores stock
it. The purchase can then also be completed instantly
through the app. And because purchase decisions don’t
always hinge on the best value for money, Good Guide
helps shoppers to identify products and companies
that are safe, healthy and sustainable. After supplying
information, it also provides a list of alternatives.
Offering snackable inspiration for consumers is a
great way for a brand to more deeply engage a wider
audience, building an emotional connection that can
naturally lead to or actively nudge a purchase at the
relevant time.
Pose inspires female shoppers by collecting crowdsourced
photos and grouping those photos by events, outfits and
location. The platform enables rapid feedback on your own
looks and encourages you to provide feedback on others.
ShopStyle allows customers
to browse multiple brands
through one site, which
is mobile, tablet and web
optimized. Products are
shown by the latest trends,
hottest sales, or grouped
by occasion.
Local inventory information
is essential during the
information phase of
shopping. Udozi attempts
to deliver this information
in a timely manner to high
street shoppers.
Shopping in Increments: The Future of Online Behavior and Its Implications for CMOs
Comparison
Maximisation
Compressing the Sales Funnel
In addition to social tools, community and brand
engagement, consumers’ online and offline shopping
patterns are changing. To satisfy this new behavior,
retailers and third parties are developing tools to surface
content and drive conversion – ultimately shortening the
sales funnel.
Driving Repeat Sales with Analytics and Loyalty
Programs
The final step, maximisation, occurs as people seek to
get the best deal. Maximisation means that people are
ever more game to take part in coupons and reward
schemes – particularly those that are fun and fit around
how they shop.
For example, at the point of purchase many savvy
shoppers get that niggling feeling that they could get a
better deal, and, in that moment, balance convenience
and instant gratification with getting the best price or
deal. A purchase in progress can easily be abandoned
in the confusion, and that’s where price comparison
utilities help shoppers, either by completing the
transaction in that moment, or going elsewhere.
Where maximisation really comes into its own is when
big data is used to understand shopping behaviour
and identify unmet needs. The Tesco Clubcard applies
multiple segmentations to generate the 10 million
mailings the brand sends to households in the United
Kingdom. Each is unique, tailored to needs, lifestyle and
household shape -- effectively a segment size of one!
Offline retailers can use these techniques also to great
effect. For example, Guatemalan sneaker retailer Meat
Pack created a mobile app called Hijack, which activates
when customers walk into a competitor’s store. It offers
a discount that starts at 99 percent and counts down
by 1 percent every second while the customer races
to the Meat Pack store. Meat Pack has “hijacked” 600
customers in a week!
Understanding people’s needs for maximisation and
their specific shopping needs presents a range of
opportunities to apply insightful promotional campaigns
and tactics that will nudge consumer behaviour at
different points in the buying cycle.
With over 20 million
downloads through 2012,
ShopSavvy scans product
bar codes and finds online
and local-stores with
inventory. This simplifies
price comparison, and
ultimately makes buyers
more confident.
Amazon’s latest app’s
barcode scanner lets you
quickly compare prices,
add items to your wishlist
or buy using the Amazon
Prime two-day delivery
service and one-click
checkout.
One of the more creative examples of Maximisation, Meat
Pack takes price checking one step further and gives the
customers a limited amount of time (100 seconds) to get
from a competitors store to their own. The percentage
discount declines 1 percent every second.
Shopping in Increments: The Future of Online Behavior and Its Implications for CMOs
What’s Next
To respond to the snackable challenge, CMOs should focus on five areas:
1. Insight: CMOs need to understand consumer
behavior much more intimately than they do today. New
data is available to us in the form of the “digital exhaust”
of our mobile phones and the use of modern sensor
technology to wire people, products and environments.
By analysing this data in real time, we can develop
patterns and see dependencies that allow us to change
the future, not just look at the past.
For example, SapientNitro is currently running a
programme to develop a deep, intimate understanding
of how people buy today. Our initial study of 200 people
uses desktop and mobile technology to understand
what people are focused on in different contexts and
measures the emotional state and behaviour at different
stages of the shopper journey to gain insights not only
around the retail moment but also to fully understand
the process which led to it.
2. Storyscapes: A CMO needs to build a Storyscape4
of communications and experiences around a central
organising idea. The Storyscape delivers bite-sized
interactions and responds in real time to the snacking
consumer. It needs to work as a constant to and fro,
consistent across all channels, responding to individual
needs and mindsets, never reaching a dead end.
Cognitive science will help us frame experiences and
decisions in the right way for a snacking consumer.
book partner deals. Each interaction added to the overall
story and itinerary for each family, and each story added
to the overall story.
3. Digitising the Shopping Environment: We can no
longer distinguish between online and offline behavior.
People are comparing prices, checking reviews and
even ordering while in-store. They are just as likely to do
research, try demos and ask friends for advice at home
as they are to go to the store.
For example, our work with a major shoe manufacturer
has delivered breakthrough product-centric
experiences in-store. We developed interactive display
maps, inspirational video and product information onto
a digital representation of the person standing in front
of it. The experience is cut up into smaller chunks to
cater to the modern, distracted shopper with distinct
content designed to amplify, engage, attract, and
ultimately convert the shopper. Ultimately, we allow
people to participate in immersive brand experiences
at the point where the product and purchase is highest
in people’s minds.
4. Technology: You need the right technology
platform that can deliver the right bite-sized content
and experiences at the right time, in the right format. It
needs to be easy to use, manage and maintain so that it
enables rapid, fluid marketing at scale.
For example, our work with a major travel and
hospitality company invited today’s explorers to share
their own treasured memories. A compelling organising
idea inspired stories about families and their vacations.
Then, to inspire other families to book, a system for
sharing vacation stories and building customised
itineraries was created.
Each platform should be customised to very specific
brand and consumer needs. For example, our platform
at Chrysler, which operates as multiple brands across
different regions, is very different than a platform such
as one to support Ladbrokes, which is a single brand in
a single geography.
Each story was the sum of numerous smaller
interactions: from tales of exhausted kids and jubilant
parents, to a gamified 360-degree view vacation maker,
to a web-mapped customized itinerary with ready-to-
5. People: A different approach to marketing requires
new skill sets – publishing, technology, curation, social,
data, experimentation, and invention. A new generation
of marketers needs to be empowered to take brands
forward, to break old marketing models and create the
4
For more information on our Storyscaping approach, see “Connecting Brands and Consumers at the Intersection of Technology and Story: Storyscaping” at the beginning of
this book.
Shopping in Increments: The Future of Online Behavior and Its Implications for CMOs
sustainable brands of the future. Leading companies
are rethinking marketing global structures and skill
sets to allow them to succeed in this changing world.
From organisational design and digital maturity audits to
learning tools and content development, we are helping
them redefine the purpose and value of marketing and
delivering clear competitive advantage.
For example, for one major financial services company,
we helped re-imagine the organization by creating a job
called the “customer journey manager,” aligned to a
specific financial products (e.g. buy a new home, finance
a car, open a bank account). This realignment broke the
traditional silos of the organization to create a better
experience for customers and align responsibilities
of this role with that experience. Several years in, the
results have been quite positive.
Conclusion
We’re seeing a new type of consumer behavior, which
we’ve called Shopping in Increments. The penetration
of smartphones and the availability of mobile Internet
has created an environment which demands companies
innovate, and create shopping experiences which are
instinctive, bite-sized and adapt to context. Fulfilling
people’s “snacking” shopping desires requires a brand
reconsider most areas of their marketing mix.
In response, senior marketers are rethinking consumer
insights, digital storytelling, digitization of physical
environments and the role of technology and people.
Together, this shift in consumer behaviour, and the
creation of new platforms by marketers, is reshaping
the relationship between brands and customers. From
brand engagement, to social interactions with our
peers, to purchasing behavior, the connection between
brands and their current and potential customers will
never be the same.
The digital exhaust
of our devices (in
the form of data) is
enabling CMOs to
anticipate future
shopping patterns,
not just look at
the past.