In the final installment of our three-part series on the challenges facing CPG marketers today and strategies to stay competitive, we address how to cut through advertising noise with personalized offers.
Challenge: Mass Messaging of Offers Can Make Consumers Tune Out
Consumers are bombarded with more brand promotions and ads than ever before, but they’re also more savvy at avoiding unwanted ads and skilled at tuning out the deluge of messaging. The average adult now spends 12 hours and 7 minutes a day consuming media, according to eMarketer. Yet a study by media usage firm Media Dynamics found that the number of ads that are impactful enough to be remembered has all but stagnated. That’s less true if an ad meets an immediate need or delivers a personalized promotion.
Solution: Make Offers Personalized, Relevant and Perfectly Timed
A buy-one-get-one offer for ice cream on a cold day? One dollar off dog food for a consumer that doesn’t have a pet? Such generic offers won’t set a brand apart. With digital coupons, CPG marketers don’t have to rely on blanketing all potential customers with the same promotions. Instead, they can tap into data-driven marketing tools to better time and personalize promotions—factoring in everything from future purchase intent to past shopping behavior, from the weather to the time of day, from location to store inventory. These are ads people crave: 62% of shoppers want digital coupons for brands they already buy sent to their smartphones, and 73% of millennial shoppers download paperless coupons in the store, as they shop.
Personalization cuts through the advertising clutter and can drive sales and shape purchasing habits. “Imagine running a $1 off national promotion for laundry detergent,” says Dave Johnson, VP of sales for shopper marketing at Quotient. “Now imagine targeting lapsed shoppers—who used to buy detergent every month but haven’t made a purchase in the past three months—and offering them $2 off. And targeting loyal shoppers who buy the smaller size detergent with a promotion for the larger size bottle. And targeting loyal customers not with detergent promotions but dryer sheet offers.” With digital coupons, it’s easy to achieve national scale combined with that fine-tuned segmentation. And the result isn’t only a one-time lift but a lasting shift in consumer shopping habits.
“In a recent study, we saw newspaper coupons are typically used in a few days and so retailers and brands see an immediate spike,” says Johnson. “Digital has a longer tail to it, delivering more volume sold over the month.” That can be a boon for CPG companies and retailers when it comes to managing inventory—and capturing consumers who might not have a need for a product within a few days of a printed FSI’s run.
While analog tactics are the status quo, the data clearly shows that shoppers favor digital coupons. “Adoption on the consumer side is remarkable — we’re talking 100% increase, year over year,” says Johnson, referencing Quotient’s digital paperless coupon usage growth from Q1 2016 to Q1 2017. And as more CPG marketers track the ROI of investing in 1:1 digital relationships, that status quo will inevitably shift.
Want to learn more? Check out the other parts of the series:
- Building Direct Digital Relationships by Influencing Shoppers’ Micro-Moments (Part 1)
- Building Direct Shopper Relationships with Digital Promotions and Media (Part 2)
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