"Moments of Truth" and White Lies

Ever since P&G "discovered" how important retail presence is aka "1st Moment of Truth (FMOT)" a few years ago, the rest of the world seems enraptured with "moments of truth" nomenclature.  It is almost as if the world of  "in-store" marketing did not exist until a giant light bulb illuminated the sky over Cincinnati.  But this has really come to a head recently..

A few years ago Google one-downed P&G by introducing the term "Zero Moment of Truth (ZMOT)", meaning you need to get all your ducks in a row on the internet and search, way before customers come to the store (or web site) to purchase.  Here is the link to learn about ZMOT:

http://www.zeromomentoftruth.com/ 

Then recently Joel Rubinson talked about minus one moment of truth ... oh my!

http://blog.joelrubinson.net/2011/07/what-is-missing-from-moments-of-truth-marketing/

And recently Campbell USA touted new research of theirs which says (and I quote from CPGMatters)

New research from the Campbell Soup Company proves instead that shoppers make 80% of their decisions to fill a specific food-consumption mission before they enter a supermarket. This is true for mainstream, center-store categories with recognizable brands such as soups and shelf-stable juices

I haven't seen this research, so obviously I can't knowledgeably comment beyond saying that I doubt very much 80% of "mainstream center-store categories" consumers decide before they go into the store what specific product(s) they will buy, and ACTUALLY buy it(them) ... just ... doesn't ... happen.

All of these discussions are of course relevant and interesting. But they get my dander up, because I consider them all little white lies.  They either don't address, don't admit, or skirt around the fact, that the product with the better in-store position (however that is defined at that moment at that buying point) is much more likely to be purchased than all the other products there. If your product, or your display, or your Shopper Marketing programme isn't there, or visible, all the prework you have done is USELESS.

It's as if marketers are baseball batters now and should be doing more research to see what the pitcher throws with a 3 and 1 count with 2 out situation.  Doesn't matter, if it means you take your eye off the ball. And marketers don't have their eye on the ball.  What marketers should be concentrating on is getting their in-store batting average above .500 ... that's right you've got a 50-50 chance of having your promotion executed properly.

Ponder that truth for a moment . 

"Make It So" ... Un Shopper Marketing

Not many shoppers in Chain "M" were ever well exposed to this unit

At Foreknowledge, we are heavily involved in helping our clients monitor the implementation at retail of their Shopper Marketing programmes.  We tell them where it is, where it isn't, is it implemented properly, timing, all the basic nuts and bolts that have to be in place in order for the shopper to actually be exposed to the programme that has involved so much thought, time, and money to develop. Despite several decades in this business, I continue to be astounded at the naivité of many manufacturers.  Since they have developed the programme and paid very good money to the retail organization to implement it, just like Captain Jean-Luc Picard, some feel all they have to do next is say "Make it so".

Ahhh ... actually, no ... it takes more than that to ensure compliance. A lot more. Retail organizations, as technologically savvy and as supply chain sophisticated as they claim (and we assume and expect them) to be, on the shop floor are very human driven , or not driven as the case may be.

Let me share with you a brief case history.  This example, from a couple of years ago, is NOT a client of ours.  But it was a major Shopper Marketing initiative from a top selling brand.  So major, in fact, that the brand's top competitor (our client) wanted to measure its implementation.

This brand's promotion involved a very heavy payment to a major Drug organization for prominent placement opposite the pharmacist's counter of a large display unit, complete with brochures and other product information, also tied in to TV ads. The display was to be up for a 6-month period.

Some time after this programme had ended, I ran into a senior sales executive at this firm, and we got around to discussing this particular promotion. "How successful was it?" I asked. "Not very", he replied. "Didn't seem to get a lot of traction".

What he apparently inexplicably didn't realize, and what I and his competition did know, was that the promotion, as well thought out as it was, was never going to get traction. Why not? Simply because it never really happened. We monitored its retail exposure 3 times over 5 months.  It never got more than 40% distribution in that time. Above all,  not in the high volume "A" stores.

if you would like to see what we do visit our web site www.foreknowledge.ca

Whither FreshCo?

There hasn't been a whole lot of news and discussion lately on Sobey's progress in converting its Price Chopper stores into its new banner FreshCo. FreshCo was launched in May 2010 with an initial conversion of 8 Price Choppers in Brampton and Mississauga, ON.

As a review for those who may be unfamiliar, Sobey's with its 87 Price Choppers, was running a distant 3rd in the "limited assortment" grocery channel in Ontario, behind Loblaws Inc no frills (with 155 stores) and Métro Inc food Basic$ (with 118 stores). The word on the street was that Price Chopper's profit margin was negligible.  And the "limited assortment" or "hard discount" sector as it is sometimes called, accounts for a huge and growing, portion of the Ontario grocery business.  Over the past 2 years, with the launch of Walmart Supercentres, the grocery landscape has become uber competitive. So Sobey's had to take some corrective action. 


The conceptual positioning behind FreshCo seems based on 5 pillars

-- more "fresh" selling space (produce, meat, seafood, deli, local bakery)
-- more ethnic (international food sections)
-- cleaner appearance (white fixtures), more open
-- still "hard discount" (but probably a little less)
-- better assortment tailoring to neighbourhood demographics

To date there now have been 49 Price Chopper conversions, and the feedback from all that I have personally seen and read has generally been quite favourable. However, Sobeys President Bill McEwan recently stated "We're very pleased with the top line ... The bottom line associated with these stores are not what we had anticipated but they are what we were prepared for".

So profitability is lagging expectations, but apparently the die is cast, and conversions will continue.

if you would like to see what we do visit our web site www.foreknowledge.ca

Target's Entry into Canada

Much of the retail discussion here in Canada the past week or so, has been Target's official announcement of its future Canadian launch.  Mind you, according to the news release, they won't be here until 2013, giving Walmart 2 years to improve and fine tune their preparations.  I'm betting Supercentres are going to continue to be developed at an even faster pace.

The financials are also a bit mind boggling.  Target is paying $ 1.825 billion (Cdn) for (up to) 220 Zellers'  leases ... not actual real estate, just leases.  That's averagely $8.3 million per location, to be able to lease the space.  Somewhat offsetting that number presumably would be Zellers subleasing back the space until the conversion begins.  Target also says it will spend over $1 billion  remodeling and renovating 100-150 stores in 2013-2014 to make them Targets.  Let's call it 125 stores.  That's $8 million per store to renovate.


That's somewhere around $16 million/store to get into business here.  A big investment, and giving Walmart (and Canadian Tire) a 2 year heads up.

Here is Target's press release:



http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1515822&highlight=

and here's Target's CEO (Gregg Steinhafel) explaining it to Canadian Press.

http://www.theglobeandmail.com/report-on-business/video/target-boss-outlines-canadian-vision/article1869859/?from=1868308

Makes me wonder ...

if you would like to see what we do visit our web site www.foreknowledge.ca

In-Store TV ... still a work in progess

An interesting article today in Advertising Age, discussing the lack of progress of  promotion via "in-store TV".
  
See here:  http://adage.com/article?article_id=146257 

Of particular interest to me was the tortoise-like rollout of the Walmart TV Network, which when it was launched 2 years ago, gave every impression of being a killer application of in-store advertising.  Several potential reasons were given for the tardiness, but to my mind, and beyond the Walmart situation, the 2 key elements to overcome are:

- the high cost of wiring a store
- the messages need to do the job in 3 to 7 seconds

... one factor boosts the costs, the other affects results/revenue

Clearly this new medium has bigger challenges than originally forecast, and even in a captive "network" like Walmart, it's no lay down.

         if you would like to see what we do visit our web site www.foreknowledge.ca

The ground is beginning to shake ...

 Traditional marketing theory tells us that the purchase is the successful outcome of consumer-directed messages that create awareness which begets interest, desire, and action.

What happens when that is wrong?  What does marketing do when it STARTS with the purchase?

So wrote blogger Joel Rubinson a couple of months ago
http://blog.joelrubinson.net/2010/07/what-if-it-all-starts-with-the-purchase/

Joel is more than "just" a blogger on market research, of course. Beyond having his own market research consultancy, he is also Chief Research Officer for the ARF (Advertising Research Foundation).  With a "bent" for advertising if you will and his background in consumer research, his several posts on the sales impact of in-store conditions may be a further eye-opener for more traditional (i.e. advertising focused) marketers.  In this particular post he goes on to say

... based on shopper insights research I have conducted, I believe that, for grocery products, over half of first-time purchases are unplanned; in fact, the shopper might not even have been aware of the product before buying it.  In those cases, it all STARTS with the purchase and ENDS with awareness.  The purchase funnel is totally flipped.

The traditional ground really began to shake, of course, back in 2005 when P&G (usually North America's largest major media advertiser) was featured in a front page article in the Wall Street Journal about P&G's "First Moment of Truth" (shoppers making their buying decision in 3-7 seconds in the store) and the growing emphasis FMOT was playing on the marketing of its products.  While this isn't news for many people, for others to have P&G seemingly acknowledge that advertising wasn't the biggest factor in the consumer's final buying decision was a shocker. 

It's a slow process, but marketing mankind does evolve.

if you would like to see what we do visit our web site www.foreknowledge.ca

Update to Last Post on Loblaws

The link to the Halifax Chronicle Herald in the last post now requires registering and a password.  Here is a copy of the article.  Hope it is readable.