Revolutionizing Your Marketing Strategy With Behavioral Economics. Re-Think Your Shopper Strategy

Transcription

1 Revolutionizing Your Marketing Strategy With Behavioral Economics Re-Think Your Shopper Strategy 1

2 2

3 2017 Was a Very Good Year for Behavioral Economics 3

4 But Momentum Has Been Building for Some Time. 4

5 Behavioral Economics is the Study of How People Really Make Decisions 5

6 and We ve Been Thinking About Its Implications. System 1 vs. System 2 Predictably Irrational Nudging Behavioral Change 6

7 To Navigate a World of Overwhelming Choice 7

8 We Use Two Systems of Thinking System 1 System 2 INTUITIVE Automatic & Fast (What We See & Feel) COGNITIVE Deliberate & Slow (What We Think) 8

9 System 1 in the Advertising World is Emotion 9

10 and System 1 in the Shopper World is De-Selection. 10

11 Which Creates the Gap Between What Shoppers Say & Do. What Shoppers Do What Shoppers Say In the Store, Shopping is Driven By System 1 (What They See & Feel) When Asked, Shoppers Talk About System 2 (Features, Benefits, etc.) 11

12 Real life purchase decisions are Overwhelmingly Behavioural (Rather than Rational ) Greatly influenced by Context (How Choices are Arranged) How Do People Really Shop? Driven by what is Seen, Recognized & Easily Shop-able 12

13 This Knowledge Shapes Our Approach to Shopper Insights + 13

14 and We Regularly See the Impact In-Store. (Driving Category Growth) Driving Category Upgrade & Growing Market Share in the Philippines. 14

15 Why is Behavioral Economics So Intriguing? The Potential to Change Behavior At Modest Cost + 15

16 Yet Most Shopper Frameworks are Rooted in System 2 Linear Thinking Lack of Context Rationalization 16

17 To Uncover De-Selection, We Need to Observe Behavior Toy Shopping: Age De-Selection A parent shopping for a preschool child consistently uses age on pack for de-selection before going to the preschool part of the aisle and finally choosing a product 17

18 and Uncover the Gap Between What People Say & Do. Claimed Decision Process Observed Decision Process Brand Equity Scan Brand Blocks Benefits Value Compare Prices Preference Read Sub-Brands Read Claims Style 18

19 To Uncover De-Selection, We Need to Observe Behavior Mobile Eye-Tracking of Shopper Journeys 19

20 and Deeply Understand the Shopping Process. 20

21 Replenish & Browse Profile: The Digital Shopper Journey Types in specific product name into search function Or browses by category / brand I like to browse by category because it reminds me of what I need and I can see other things I m interested in Reviews other suggested products Browses products looking at product images / descriptions Reviews products previously seen in store / discussed with family or friends START Opens Google -> types in preferred website Uses product images to recognise previously bought products and adds to basket I wanted something to volumise my eyelashes, so I was looking out for that word Yeah, I was seeing what else I needed to get to qualify for the deal Reviews products that qualify for any offers END Reviews products in basket, ensuring happy with selections, removing any that either do not qualify for offer or considered not necessary for now 21

22 To Predict Behavior, We Need Shopping Context PRS IN VIVO ShopperLabs 22

23 and To Test New Ideas on Shelf. Control Test % Pick-Up % Buying Drawing More Attention to a Product Range Drives Pick-Up & Purchase 23

24 To Predict Behavior, We Need Shopping Context PRS IN VIVO Mock Sites 25

25 Yet Most New Product Research is Based on Concept Statements. VS. Extended Exposure Lack of Context Rationalization 26

26 An 85% NPD Failure Rate! 27

27 Re-Thinking New Product Development VS. Moving Away from Concepts Towards Pack-Cepts & Competitive Shelves 28

28 Re-Thinking NPD: Four Big Ideas Moving Away from Concept Statements To an Integrated 3-in-1 Approach Streamlining the NPD Process Making It Less Linear & More Holistic Combining Pack Testing & STM Using e-commerce for NPD Testing 29

29 PackCept Online Screener Gives shopper and pack the crucial role it will have in reality (Pack is touchpoint #1 for New Products) Shopper Mindset Flash Exposure Persuasion Power Rational Evaluation of Pack Rational Evaluation of Concept What are shoppers looking for when shopping the category? In a quick decision making process, what story is the pack telling? Crucial for NPD! Does the execution deliver a distinctive & credible enough benefit to break habits and drive trial? Rationally, what benefit is perceived by consumers? What is the aesthetic profile? How does it compare vs competition? In absolute and vs. the expectations generated by the pack what is liked / disliked? What impact vs pack only? SHOPPER SYSTEM 1 BEHAVIORAL COMPREHENSIVE HOLISTIC Understanding what shoppers decision hierarchy for the category Immediate understanding before rational eval in order to anticipate executional problems Understand choice within competitive context / (not absolute purchase intent) To dig deep into the perception of the packaging execution What are the most compelling elements of the concept and check if the pack served them well Note: Incidence of 25+ or higher for category users. 30

30 Applying Behavioral Economics to Re-Think Shopper Insights. System 1 vs. System 2 Predictably Irrational Nudging Behavioral Change 31