As at-home coffee retailer Nespresso is proving, customers want to love what they buy.
Branded filters cost a pretty penny, but the potential for exposure is huge.
Snapchat filters are not-so-slowly becoming the way Millennials prefer to communicate (at least, for fun). While older generations might find the filters silly, some retailers are capitalizing on their potential––that is, the fact that so many Millennials are exposed to them on a daily basis.
Snapchat filters use special effects to turn selfies (both still and video) into an animated image of the user’s choosing, such as a cat, a dog or a cowboy. The “snaps” disappear in 24 hours. Several celebrities––particularly those admired by Millennials––are avid Snapchat users, and whether they know it or not, many act as advertisers for brands via the products visible in their Snapchats.
So, what’s involved for a brand to deliberately capitalize on Snapchat’s momentum? Basically, three things: investment, strategy and archives. Let’s take a look:
1. Investment. Sponsored Snapchat filters are supposedly worth around $750,000 per filter for holidays. Weekday filters are around $500,000. You might be wondering which brands would ever invest that kind of capital for a simple filter. Fox Studios did for “The Peanuts Movie” around the Halloween time period, as did Gatorade during the Super Bowl.
2. Strategy. Remember that snaps go away in 24 hours, which understandably undermines the huge price tag. It’s a huge reason that the branded filter has to be done right. Think humor, impact and the capability to create buzz, but without being over-the-top or too “in your face.” The filter should relate to the brand without being overtly focused on the product. A toothpaste brand, for instance, could produce a filter where users brush their teeth to a sparkling sheen. The goal is to make users forget the content is branded at all––in other words, a seamless experience.
3. Preservation. In just 24 hours after it’s posted, a Snapchat photo or video is gone. But your branded content can be preserved via a compilation video of various users interacting with the filter. If it’s good enough (and funny enough), the compilation video will be shared on other social media platforms, even further expanding exposure.
Last May, Snapchat co-founder and CEO Evan Spiegel estimated the company’s daily active users at 100 million. More than 65 million of them, he said, send photos or videos to friends daily. Millennials absolutely love their Snapchat, and though it’s not an easy task for brands to take advantage of this particular medium, the dividends could be huge.
The future for social media and marketing is optimistic, but doubts remain
For marketers, social media could almost feel like a godsend. Consumers across all demographics have embraced Facebook, Snapchat, Twitter and a multitude of other platforms. Social media offers a unique, personalized, “friendlier” way to reach consumers––but does it actually work? Does it convert to sales? The general consensus is rosy, but not without critique.
Optimism comes into play when one considers how ubiquitous smartphones have become. More than 70 percent of women over the age of 18 have a smartphone, according to a recent report by Blackhawk Engagement Solutions. The primary use? Social media. As for dollars, more than $12 billion of the $69 billion spent in e-commerce during the 2015 holiday season was transacted via smartphones. That’s almost 60 percent more than those figures in 2014’s holiday season.
Impressive numbers, but in reality, social media’s influence whittles down to very little, says Jason Goldberg, SVP of commerce and content practice at Razorfish. A “buy” button embedded on Pinterest sites for major brands likely generates somewhere around 10 units of sales, he said. Engagement rates are similar for Snapchat and Twitter.
Point being, social media simply isn’t a huge driver when it comes to conversion––at least, not generally speaking. Some niche markets have seen success thanks to buyable pins on Pinterest, such as Madesmith, an online handmade goods marketplace, and Daily Chic, an online apparel retailer.
Part of the issue––aside from social media predominantly being a means of socializing––is that shopping on mobile typically isn’t as easy as on desktop. Consumers generally feel comfortable browsing, researching and comparing price points on mobile, but when it comes time to buy, they prefer the desktop experience.
However, that doesn’t undermine the power of social media to increase brand awareness among consumers, as well as market to them in a more personalized way. Rodney Mason, GVP of marketing at Blackhawk Engagement Solutions, predicts 2016 will be a big year for social media––that is, if brands can get on board and shift their thinking to align more closely with the mindset of the average consumer, who is firmly planted in the social media landscape.
According to a study by Blackhawk, 55 percent of consumers lean on social media to become educated on products, sales and marketplace happenings. Social media also allows consumers to have “conversations” with brands, as demonstrated by Babies “R” Us’ #BabysFirstKiss campaign, which encouraged consumers to post photos of a New Year’s kiss with their babies. This allowed users a chance to share part of their lives––a main draw of of social in the first place––while also getting the word out about Babies “R” Us.
Capitalizing on user-generated content is one way brands can continue the conversation on social media and generate content that resonates with other consumers. Another way is customer service, which also works to humanize a brand.
It seems we’re at the beginning of how social media plays with marketing, and 2016 will be a formative year.
Findings from SXSW Interactive
This year’s SXSW Interactive, which took place in March, featured all the usual high-tech suspects, from automated driver-less cars to VR headsets. There was also buzz about better ways to reach today’s set of consumers, bringing a focus to marketing that’s been somewhat absent in the past. And this year, one group got a lot of attention: Generation Z.
Who are Gen Zers? They’re people born after 1995 (or loosely in that age range). The most current generation (in fact, they’re still being born today), Gen Z follows Millennials. Some are teenagers, which puts them in a prime spot for marketers to analyze how their behaviors are forming.
Here are 10 things to note about Generation Z, based on information shared at SXSW.
1. Email is outdated. Gen Zers are three times more likely to open a chat message they’re alerted to via a push notification. They largely feel email is an outdated manner of communication.
2. If it’s not on social media, it didn’t happen. Material items are of less importance to Gen Zers than experiences they can post on Snapchat, Instagram and other social media platforms. Don’t be deceived, though – brands still matter, they just have less influence.
3. They’re diverse. This is the most ethnically diverse generation in our nation’s history. Almost 50 percent of Generation Z is made up of ethnic minorities, says Jaclyn Suzuki, Ziba Design’s creative director.
4. They experiment with who they are. It’s not uncommon for a Gen Zer to have several online personalities, bucking the traditional idea of individual identity. Some will have embarked on three different career paths before they’re 30, according to Suzuki.
5. Privacy has a new meaning. Gen Zers prefer to be reached through private forums as opposed to “loudspeaker” media such as Twitter and Facebook, says Jaclyn Ling, Kik’s director of fashion and retail services.
6. Mobile, mobile, mobile. Gen Zers as consumers are more likely by a factor of two to prefer shopping on a mobile device compared to an average Millennial, says Anna Fieler, Popsugar’s executive VP of marketing.
7. Move over, traditional movie stars. This generation prefers “real” celebrities made famous by Snapchat or YouTube. Only one traditional movie star – Jennifer Lawrence – made the list of top 10 influencers according to Generation Zers.
8. At attention…but not for long. The attention span of Gen Zers is estimated to be only eight seconds. (Millennials come in at 12 seconds.)
9. YouTube is in. A typical Gen Zer watches between two and four hours of YouTube a day, compared to less than an hour of traditional TV. They’re two times more likely to utilize YouTube than Millennials, and they also don’t use Facebook nearly as much.
10. They co-exist. This generation doesn’t define itself as doggedly by gender. Shepherd Laughlin, director of trend forecasting for JWT Intelligence, says 48 percent of Gen Z identifies as strictly heterosexual, whereas 65 percent of Millennials say the same. Gen Zers are also more likely to purchase clothes designed for the opposite gender, and they more strongly believe that societal diversity can exist in both race and religion.
For a retailer, the concept of “best practices” presents a double-edged sword. Sure, certain behaviors, actions and patterns have a long history of success in the greater marketplace, and it might seem simply foolish to consider experimenting with the unconventional.
But the modern-day shopper isn’t the consumer of years past, when many best practices were established. Thanks to mobile and other instantaneous influences, the behaviors of today’s consumer are proving to challenge retailers. The ability to shop anywhere and anytime is forcing marketers to ask tough questions that they haven’t had to face––perhaps ever. The courage to seek answers, though, is what will set great retailers ahead of mere good ones.
Good retailers might be doing OK today––they might be profitable and operating steadily. But the real question is, are they prepared for the challenges of the future? What are they doing now to ensure success later? Are they focused on the customer, or focused on themselves and the success to date of their current business? To become too comfortable with today’s status quo is a dangerous disposition for any brand.
In other words, self-examination and critical self-appraisal are absolutely essential for long-term success. This is especially true for high-level executives, who might be too busy looking inward at the brand rather than looking outward at the greater market, including trends and disrupters that could potentially become threats. Too much internal focus can also lead executives to fall prey to self-love; that is, failing to see where a brand could use improvement.
Examples of this can be seen in big-box stores that focused solely on the product side of the business. This was the model of retail before the 21st century––an intense, even singular focus purchasing, margins and brick-and-mortar stores. A successful model for big-box retail, but when disruptors came on the scene, things changed (for a glaring example, think Netflix vs. Blockbuster).
Many of these ideas are rooted in behavioral psychology, and especially in habits. We develop habits because they work for us, but only as long as the environment remains relatively stable. Retail today is changing very quickly, particularly the way consumers shop. Generally speaking, habits don’t really have a place in retail anymore.
Here are five ways to avoid falling prey to becoming stuck in yesterday’s landscape.
1. Visit stores. Get out of the office (where it’s easy to focus almost exclusively on what you’re doing correctly) and do a reality check. What’s happening in the stores, the place where the consumers are?
2. Talk to customers. Get the real scoop from who’s shopping around, not what back-patters might be telling you.
3. Get in touch with millennials. Executives typically don’t fall into their own consumer demographic. That’s OK, but it’s important to talk with millennials to really understand their path to purchase.
4. Seek out a different perspective. Individuals in senior management tend to be similar among themselves––same age, ethnicity and often, point of view. This can preclude them from asking new questions and examining different perspectives, which could provide a game-changing direction for the business to evolve.
5. Challenge all the time. Don’t assume the status quo is the correct course of action. Even if something seems obvious, try to find a different solution––if only for the practice of doing so. Because one thing is for certain: somebody else is.
Here’s an important message for teen apparel retailers: mobile, mobile, mobile.
With millennials and teens spending more than 80 hours a month on mobile devices, brands like American Eagle, Abercrombie & Fitch, Aéropostale and more have hobbled to catch up to innovation in mobile retail––a sector that resulted in $35 billion in sales in the U.S. last year.
Now, these brands are rushing to either enter the mobile landscape altogether or at least shift their mobile strategy in an effort to remain relevant. These changes include everything from building online purchase capabilities to creating edited music playlists on mobile apps. And mobile consumerism is growing––according to Accenture, 40 percent of consumers last year used their phones to execute product searches, a 4 percent increase from 2014.
Re-purposing a retailer’s desktop site to mobile is not an ideal solution, but it’s what many retailers aimed at teens have done, said Julie Ask, VP and principal analyst for e-business and channel strategy at Forrester Research. What does an ideal solution look like? It blends the brick-and-mortar customer experience with the mobile experience, creating a cohesive, seamless brand that provides a 360-degree view for the consumer. Effective, yes––but also expensive, and few brands have committed to fully investing.
Retailers who have been more forward-thinking with mobile strategy include Sephora, Target and Home Depot, who among other efforts have rewarded customers with mobile coupons to be used in stores. Sephora even created a virtual feature for customers to “try on” different shades of lipstick within their popular app.
Mobile endeavors might be easier for retailers who don’t do business almost exclusively with teens, a fickle demographic that’s choosy about which apps to download (and thus relinquish prized phone storage space to). According to a recent RetailMeNot report, 73 percent of shoppers have two or fewer retail apps on their phone. This might be the case because consumers expect a fairly significant tradeoff if they download an app––in other words, they’d like to get something back from the brand.
Some teen retailers, such as Aéropostale (who recently said 13 percent of its corporate staff will be laid off after the brand reported two consecutive years of losses), rely on a simplified, pared-down version of the desktop site for mobile. Abercrombie’s mobile experience feels a little bit more tailored, with thoughtful additions like an easily located playlist on its own tab. American Eagle’s mobile effort seems to be the most advanced––it even includes a barcode scanner for consumers to use in-store.
These tools and tricks might be nice, but ultimately, they’re bells and whistles that don’t actively contribute to strongly differentiating the brand, which is really the point of mobile entirely. As teen brands move forward, they’d be wise to step up investments in mobile and take a more comprehensive approach to weave in social media, the physical store experience, and customizable features.
Though millennials are the most coveted segment, retailers shouldn’t overlook the 50-plus crowd
For all the buzz surrounding how aggressively advertisers are pursuing their most-coveted market, millennials, one might be surprised to learn that for the first time in history, consumers over the age of 50 comprise the majority of all consumer spending. According to recent information released by the U.S. Consumer Expenditure Survey, the over-50 set accounts for 51 percent of spending.
Though 2015 marks the year that millennials became the largest adult demographic, consumers over 50 control 70 percent of the country’s wealth. During the holiday season, this means they’ll likely spend more than their kids. The study found that the over-50 segment is responsible for about 57 percent of “big ticket” purchases and gifts, such as new cars.
Consumers older than 50 also––perhaps not surprisingly––account for most of the country’s spending on health and insurance, 63 and 68 percent respectively.
While it might be tempting to assume that the over-50 crowd tends to be less technologically inclined, the report suggests that this isn’t the case at all. The demographic is increasingly relying on mobile, including social media––research shows that more than 15 percent of them spend 11 or more hours a week on Facebook. It’s also estimated that consumers older than 55 are among the most rapidly growing segment to use mobile devices. Additionally, according to the AARP, 40 percent of that organization’s site traffic is derived from mobile.
Unlike many millennials, adults older than 50 are also still immersed in print, and they spend considerable time going to movies and watching TV. For advertisers, this means that reaching this demographic isn’t difficult, as they’re actively involved with several forms of media.
The messaging within the media is also reflecting a changing demographic. Although the average 50-plus consumer is still value-oriented––regularly searching for discounts, deals and seasonal sales––they’re also engaged in life, they’re staying physically active, and they generally maintain a positive outlook about aging.
Despite the emerging trend toward mobile, the over-50 demographic hasn’t abandoned the brick-and-mortar shopping experience. Offline retail accounts for more than 90 percent of the country’s commerce, and even behemoth online brands such as Amazon are considering establishing a transactional presence in the physical world. Adults older than 50 still enjoy the in-person shopping experience, as evidenced by Walmart, who gained 5.7 million customers over 50 in the past three years alone. This represents eight times the growth of the retailer’s younger customers.
Driving sales takes a backseat to building brand awareness––with the ultimate goal of conversation in mind
To drive sales or to raise brand awareness is the great debate of many advertisers. When it comes to online commerce’s relationship to marketing, the strong preference has historically been to focus on the hard sell––both Facebook and Google have invested heavily in that strategy. The mobile app Snapchat, though, is taking a different approach, allowing marketers to take a purer look at increasing consumer awareness.
This approach, however, doesn’t accomplish much in terms of customer-driven metrics and analytics, which might prove a challenge for Proctor & Gamble. The company is in the midst of a CoverGirl campaign touting a limited-edition Star Wars collection, and it’s using Snapchat as a central marketing tool.
While raising brand awareness was one of two objectives P&G had for the ad run, the other was––of course––to sell actual product. The CoverGirl collection, a Star Wars-themed makeup line, is available only at Ulta’s brick-and-mortar stores. The challenge, then, was to drive young millennial consumers to the store, and Snapchat was viewed as the perfect marriage of building brand familiarity while remaining relevant to the target base.
Though using the app to sell product was not its primary purpose, Snapchat also threw in geo-targeting, a tool valuable to P&G. Geo-filters were incorporated into most of the nearly 870 Ulta stores selling the Star Wars product. If a customer within a fixed proximity to the store posted a Snapchat photo or video to their feed, the app was able to lay a branded filter over the post. Anyone the post was shared with through Snapchat would see the limited-edition cosmetics, in addition to CoverGirl and Ulta branding.
What’s different about this marketing approach is that it doesn’t rely on historical data or typical patterns of customer behavior. It looks more to inspiring the consumer to seek out something they see and like. But the method is only truly valuable to a brand if, at some point, it drives sales––and with Snapchat, there’s no way for brands to know whether sales (and even increased traffic in stores) are a result of the app.
Snapchat provided P&G three metrics for the CoverGirl campaign: how many views the ads got, how many times users incorporated the branded overlay, and how many times users swiped to see the branded filter as opposed to how often users actually used it.
It remains to be seen whether the Snapchat collaboration will prove successful for P&G. According to brand representatives, though, this campaign was both more cost-efficient and more impactful than a similarly themed Hunger Games campaign in 2013, which ran TV spots and included a branded Tumblr.
But a combination of both is most effective in influencing the two most sought-after demographics
It’s no secret that millennials and Hispanics are commonly regarded as the most highly coveted segment when it comes to marketing, and Facebook has been doggedly pursuing marketers’ TV dollars to reach these two groups. While the results have been mixed, the social behemoth is now presenting statistics from Nielsen that suggest Facebook is a more effective way to influence them than TV.
The report, conducted using Nielsen’s Homescan group of consumers and audience-measurement devices, concludes that buying only Facebook ads results in a wider reach to each subset than purchasing ads on the top 10 TV networks combined. However, the study shows that a mix of Facebook ads and TV spots reaches more people in both segments. Facebook shared these findings with marketers in September during Advertising Week presentations.
The reasons for brands going hard after both millennials and Hispanics vary. For one thing, they’re two of the fastest-growing demographics. They’re also often comprised of households with children, which makes them prime targets for brands that sell packaged goods to stock everything from the medicine cabinet to the pantry. These segments are also closely connected to their devices and, in turn, social media.
Additionally, millennials and Hispanics are more brand-conscious than other segments of the population. They’re also more willing to change brands more often, with 57 percent of millennials stating they like browsing new stores and products, and 44 percent of Hispanics reporting they enjoy the variety that comes with switching brands.
These demographics also report interest in trying new or different types of cuisines. They’re more likely than other segments to buy online, and they also spend more time researching products online before they purchase. Half of millennials surveyed said they find out about new products from channels outside the actual store.
Using TV only (and considering the top 10 most-watched networks only), the study found that in a typical month, 16.3 percent of Hispanics in the United States are reached, compared to the 17.5 percent who are reached using only Facebook. Comparably, 12.2 percent of millennials are reached using only TV, compared to 14.2 percent who are reached using only Facebook.
A much larger percentage of millennials and Hispanics––69.3 and 61.2, respectively––can be reached using both TV and Facebook, the report said. The audience who sees only Facebook ads accounted for $2.6 billion of millennials’ spending on packaged goods, and $3.9 billion of Hispanics’ spending on packaged goods in the first half of 2015.
Users generally spend under five hours a week looking at Facebook. While they spend almost 28 hours watching TV, that figure is a sharp reduction from baby boomers, who watch TV for 47 hours per week, says Nielsen.
Recent survey suggests that information put out there through social media can be leveraged as a reliable merchandise planning tool.
Social media is the gateway to the consumer mentality — it not only is a way to observe communication in its purest form, but it’s a tool used to truly see what consumers are like in their day-to-day life.
More and more retailers are using social media behind the scenes to get a better handle on their target market. According to a recent study released by Boston Retail Partners, retailers are taking social media to the next level by using it to deliver products consumers want in a flawless shopping experience. Boston Retail Partner’s 2015 Merchandise Planning and Allocation Benchmark Survey uncovered various opportunities for retailers to enhance their business process and use technology to optimize merchandise planning and execution. According to the survey, nearly 39-percent of retailers use social media to facilitate planning within product development, which is a 550-percent increase over 2013’s social media analytics.
Merchandise planning is key to a successful campaign or promotion. In order for a product to sell, it needs to be put out into the market in the right place and at the right time. Monitoring social media networks and using the information that is already out there gives retailers insight for planning successfully. Social media doesn’t give them the ability to read consumers’ minds, but it does allow retailers to foresee what trends are to come.
While some retailers have been relying on basic tools like spreadsheets to keep track of their merchandise planning, more and more retailers are using predictive analytics to optimize merchandise planning processes.
What this means is that by utilizing information put out there through social media, retailers are better able to predict what consumers are going to buy. This allows them to plan inventory numbers accordingly so they can ensure that they have the appropriate amount of a specific product. While this method is relatively new, many are finding that it’s more reliable than comparing year-to-year numbers, as shopping trends change so rapidly.
Another way that retailers are using social media, is to communicate inventory numbers to consumers. This convenience is not only appreciated, but generates more feelings of trust between retailers and consumers.
Photo by Sean MacAntee – via Flickr