Evolution of Circular Webinar Presentation

The Evolution of Circulars from Print to Digital Todd Hale SVP, Consumer & Shopper Insights December 1, 2011... The Evolution of Circulars Today’s presenter Todd Hale SVP, Consumer & Sh

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The Evolution of Circulars from Print to Digital

Todd Hale

SVP, Consumer & Shopper Insights

December 1, 2011

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The Evolution of Circulars

Today’s presenter

Todd Hale

SVP, Consumer & Shopper Insights, Nielsen

Todd Hale serves as Senior Vice President, Consumer & Shopper

Insights for The Nielsen Company Appointed to this role in 1999, Todd is responsible for creating thought leadership content and

delivering client and industry presentations A frequently after industry and client speaker, Todd shares his insights on consumer shopping, buying and media consumption behaviors and attitudes to provide manufacturers and retailers with strategic visions to facilitate brand, category and retail sales growth Hale is often quoted in the press and in numerous trade publications on consumer trends

sought-Todd has more than 33 years of experience in the consumer research industry, including 27 years with The Nielsen Company, where he held various marketing and sales management positions within advertising/product testing, advanced analytics and

consumer panel practice areas

Prior to joining Nielsen in 1984, Todd was an executive with MRCA,

a U.S.-based consumer panel company

Todd earned an MBA and a BA in Business from Wright State University.

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“There is a delicate balance in the shift from print to digital All

customers will not migrate to the digital world at the same

rate It will be important to test and learn to understand overall

acceptance in order to protect sales and profitability.”

- Erik Keptner AHOLD

“What makes the online circular exciting to our business is

devices ”

- Kat Kozitza SUPERVALU

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Circulars help shoppers plan, but manufacturers & retailers

recognize additional digital benefits

Mfr & Paper

• Critical as pre-planner

• ¾ decisions made prior to store

• 50% use to make lists

• Savings & eating link to brands

Retail & Paper

• Slow, costly, & rigid

• Will play a role for some time

• Requires digital complements

• Less relevant as young grow up

Mfr & Digital

• Item/price shopping easy

• Complements paper

• Requires overarching message

• Inspires menu planning

• Planning > list > shopping

Retail & Digital

• Far less costly

• Multiple screens

• Rethink promo cycle

• Dissects item / price

• Data > Creative

Manufacturer

& Retailer POV

Source: Joe DePetrillo, Nestle; Donald Smith, Family Dollar;

unidentified retailer

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Shoppers want paper deals now & in the future

Touch point expansion requires multi-faceted

marketing with consistent messaging

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There is a better way to reach today’s diverse and time-starved shopper

Digital allows shoppers to be selective !

SUNDAY MAY 15, 2011

*

Full page ads & coupon

Grand Total (not counting car ads, local specialty 418

stores, etc.)

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Online newspapers readership will likely match

paper in next few years

Source: Pew Research Center

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Digital is officially pervasive

Source: Online usage from Nielsen NetView panel - 5/2011; Mobile phone usage

from Nielsen, 5/2011; iPad ownership from Apple 1Q financial report; Facebook data

from InsideFacebook.com

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What Shoppers are Telling Us

How, why, when, & where about print and digital

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Prefer paper, but digital is reaching many

Q: How often do you look at information about the products & sales available at a store from ?

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Latest technology lowest reach, but strong

weekly usage

How often do you look at sales &

Materials mailed to home 67%

Emails from retailers 67%

Printed material in-store 38%

Store site using computer 37%

Store site using tablet PC 35%

Smart or mobile phone 39%

Source: Nielsen Homescan

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% ‘A lot’ & ‘Somewhat’

Paper is most influential to store choice

Q: Influence where you decide to shop?

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Print influences younger generation store choice;

Millennials more tech savvy

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Asked about the future, 80%+ of consumers want

print; 70%+ want basic digital

Q: Thinking about the future, how would you like to get information from…?

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Asked about future, younger generations want

information from all sources

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Leverage different behavior; paper drives deal

seekers to door; digital for more loyal shoppers

All Outlet Purchasing Behavior of Circular Users vs Non-Users by Format Used

Major PUSH Format

Newspaper Print

Major PULL Format

Website via Computer

…but bigger baskets

Digital fewer trips…

Much more dealing

with Paper

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Paper about value; new tech about info gathering

Shop Their List

Q: What are top ways you use information?

Coupons ‘My’ items Sales ‘My’ item info Any sale Browse New item info Compare Store

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Grocery circulars must be sharp – twice weekly

reach as Mass & Drug; they’re hunting for deals

Percent looking at information about products & sales in the past

week from …?

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Info seekers Local prices Personalization Reduce hassle Reduce waste Corp savings

Across generations shoppers looking for price and convenience; touch points and engagement vary

Q: Paint a picture about how you might get information in the future …what kind of information & impact it would have

Source: Nielsen Homescan & Quester Analytics

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What shoppers are telling us

Leveraged by deal seekers

Find sales on ‘their’ items

Digital

Low reach but high weekly use

Requested strongly by Millennials

Loyal shopper tendencies

Used for information gathering

Greater marketing & sales potential

Your efforts must include both

Item / price remains the centerpiece

Leverage complementary strengths

Calls to Action

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Optimizing Print

Getting the most out of print; it has a role

with consumers and shoppers

Optimizing Print

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Printed circular response suffering; promotions

need to be more aggressive just to maintain

Print circular lifts

Source: Nielsen Scantrack

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Circulars combat losses due to channel blurring

Losses in lift Gains in lift

Grocery Circular Lift

Source: Nielsen Scantrack

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Benchmark vs

strategic goals

Ad attributes

Maximize print by understanding who won the

week and how

ID other factors &

“score the store”

Shopper

Online

Display

Dept by Dept

What they did

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Printed circular ad principles

Do

Advertise for broad appeal

Deep discounts, but not excessive

Compare lift by category

Use price multiples on new items

Deal low penetration;

upside argument flawed

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Optimizing print

Overall lifts declining

Categories trend differently

Page / ad count not a driver

National brand ad share is a driver

Price multiples work

Key Points

& Other

Principles

Counteract overall lift decline

Shift ad space to categories with positive momentum

Advertise for broad appeal

Calls to

Action

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Digital Principles

There is no choice

Digital Principles

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To be in the game, retailers must be in the

pre-consideration set

42%

18%

17%

% who use internet to decide where to shop

or what to buy at least once a month (Food and Personal Care)

% who would not buy without first consulting online (Personal Care)

% who would not buy without first consulting online (Food)

Source: Nielsen Digital Path to Purchase Survey

May 2011

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The virtues of digital advertising

Customized screens

High engagement

Target via site & search

Consumer sharing easy

Lower cost potential

Environmentally friendly

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Retailers interested in a consistent

set of issues

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Retailers must invest in efforts to get shoppers

visiting their sites

Few brick & mortar retailers get more than

20% of store shoppers to their site…

…but that those that visit sites spend about 30% more in the store!

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If you’ve got dollars to invest in your website,

you should spend it on your online circular

Online circular visitors generally spend more than average, but current iteration of circular has room for improvement

Source: Nielsen Online panel, April 2011

Nielsen custom analysis

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Digital execution has to solve shopper need,

not just replicate paper version

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Despite common high-tech attributes, retail digital efforts lack mobile, social, and personalization

Minimum Stakes Differentiators

Source: Nielsen analysis

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Walmart funneling people online with expanded

assortment and home delivery

Source: Walmart

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Target enables shoppers to design their own

digital view, create their lists, and share via social

Source: Target

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Funneling shoppers online Drive thru solutions

It’s not just the national retailers that are innovating!

Source: Company websites

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Walgreens has top tier attributes; ups ante with

camera-based mobile Rx refilling

Innovative Scan to Refill

Source: Walgreens

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Greater shopper engagement with circular as

retailers strive to be most ‘Liked’

Source: Whole Foods

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Greater shopper engagement with circular as

retailers link to “how to” videos

Source: Hy-Vee

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Aldi turns the page; improves technology

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E-mail, social networking & in-store kiosks

engage shoppers with special offers

Source: Sam’s Club; Wall Street Journal The Evolution of Circulars

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Mobile apps put shoppers in control making

circulars part of a complete shopping experience

Source: Stop & Shop

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New iPad App

• Touch-optimized shopping

• Browse My Store

• Extended inventory

Updated smartphone App —

Smart Shopping Lists &

QR Code Scanner Voice

• Budgeting tools

• Manufacturer’s coupons

• Product information

• Sharing

• Store Item Finder beta

Walmart launches first iPad app &

improves smart phone app

Source: Walmart & iTunes

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Don’t assume that if you build it, they will come

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Online advertising critical to build shopper reach

for online assets

Exposed to ad Unexposed to ad

Source: Nielsen Consumer Direct & NetEffect

What we’ve learned:

1 Online display ads drive offline sales

2 ROI is generally > traditional media

3 Every campaign doesn’t work

4 Success driven by new shoppers, not > spending among existing

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