Update On UK Shopper Sentiment

Posted on by
Reply

Retailers continue to give us an interesting picture of how consumers are thinking in the UK at the moment. The marketing experts at John Lewis have recovered from a terrible drop in sales in the first half of 2011, to post a reasonable result for the full year. In September the business reported a 55% drop in operating profits and attributed this to pressure on margins and increased expenses due to new store openings. After a bit of a recovery in the second half, the full year operating profits were down 20%. At the top line, comps were 0.6% down with online sales up 26%. The online figure is in line with the market, but it does show that the business is not being left behind by the e-commerce boom.

Flat sales probably reflect weak consumer confidence, but it will be interesting to watch data over the next few months. An alternative explanation could be that in the minds of shoppers the department store concept is showing its age. In the past the value of the never knowingly undersold tag emphasised good value and saved the store from the collapse in footfall that other department stores suffered from. If that value has been re-defined in the recession then John Lewis could be starting to become less relevant to shoppers. Although this is speculation at the moment, the money that they have had to invest in the NKU promise this year has been put at £24 million. In the worst case scenario this promise might become and expensive tactical stick for consumers to beat them up with and a strategic failure in that it no longer supports a viable positioning.

Meanwhile, over at sister brand Waitrose sales comps were 4% ahead. We have not been able to find a figure for their online sales growth so far. Operating profits were off 6% due to investments in new store openings and also pressure on margins as sales of Waitrose Essentials becomes a bigger part of the basket and Brand Price Match hits margins. This part of the business appears to be in more robust health and we should remind ourselves that Waitrose profitability is second in the UK only to Tesco.

These two brands are coming off the back of a few years of very successful growth, so we need to be cautious in reading too much into any drop in performance. However the unusual ownership model of the business means that the usual accountability and scrutiny does not apply here. Management are responsible to staff and not to shareholders and staff probably like things at John Lewis just the way that they are. This puts even more responsibility on management to make sure that they not left behind by a strategic shift in consumer attitudes.

Insight As A Replacement For Loyalty

Posted on by
Reply

I find the approach of Walmart outpost ASDA quite interesting. ASDA did not pile into the loyalty game in the last decade and therefore does not have the data to generate look at spending patterns and promotional responses that many of its rivals do. Rather than joining the game late, they seem to be taking a clever alternative approach by surveying a customer panel of almost 4000 shoppers. They call the survey Mumdex and they have just released some of the insight that it has offered them.

Apart from the fact that it is not a me too thing, there are several aspect of what they are doing that I like:

They are focusing on mothers as the primary shoppers and key influencers over grocery and clothes shopping in their store demographic. Having shopped in ASDA, that seems like a good move, with a lot of positive aspects and very little downside risk.

They are delving into social and lifestyle aspects of peoples lives, asking about holidays, savings, budgeting and access to finance. This will give them a richer customer insight than simple transaction details, no matter how often they are processed and combined.

The approach generates a sense of empathy with the target customer group and shows that on some levels, ASDA is interested in what they want from a shop and what interests them.

The marketing propositions of many of the supermarket groups in the UK have grown stale. Faced by a tough economy, most businesses have reverted to a lower prices strategy. This Mumdex approach offers ASDA the potential to exploit a value proposition that is similar but is altogether more three dimensional. As part of the program, they offer mums a budgeting service and they show them how they compared to the average in the UK. This gives them the data that loyalty cards offer, but it starts a dialogue that card statements never will.

By engaging in a broader dialogue with shoppers, the supemarket marketing team have the scope to develop more non-food products and services. If shoppers are struggling with savings, then the financial services opportunity is obvious, but there are likely to be other more hidden gems uncovered by this work.

Mumdex is never going to feature on Wikileaks and it will depend on strong execution to deliver results for ASDA and Walmart, but the concept is a clever one and it gives the marketing crew an opportunity to develop its brand in ways that would really make it stand apart from its rivals. And that is what great marketing is all about.

Consumer Sentiment Improves

Posted on by
Reply

We are constantly scanning the horizon for clues about how businesses and shoppers are feeling. Not only does this allow us to take a view about what are good and bad marketing investments at any time, but it allows us to make sure that our marketing campaigns and programs chime with the public mood. Nothing is more off-putting for buyers than to face advertising messages that are pessimistic or optimistic in a way that jars with their own view of the world.

This week there are two reports out in the UK that give a slightly conflicting view. Lloyds TSB have published their spending power report which indicates that consumers are £10 per month worse off when compared to the same month last year. With earnings fall in real terms and significant rises is utility bills, households are feeling the squeeze and there is less cash available for discretionary spending.

On the other hand, the Markit Household Finance Index shows that consumers are at their least downbeat about the economic outlook since 2010. The Markit survey is quite like the purchasing managers index, which they also produce. It measures expectations of future economic wellbeing as perceived by the household.

What this indicates is that while inflation is slowing and price rises are slowing, in many ways these have not yet fed into household budgets. People can see price drops in some parts of their spending and over several quarters that will boost their disposable income. However at present they are still worse off than they were 12 months ago. This is also in line with the forecast of Mervyn King, who said that this year would oscillate between growth and stagnation. Consumer sentiment might be improving, but the daily realities or earning drops and the threat of unemployment will never be far from people’s minds. It is unlikely that we will see any change in this outlook any time soon. In fact any chaos in Euro-land could weigh heavily on a fragile improvement in sentiment.

Social Media NewsFlash

Posted on by
Reply

There are three great stories breaking on this side of the pond this week concerning social media and each news story features a well known and successful brand.

McDonalds

Over the past few weeks McDonalds have been using Twitter to get people to use #McDonalds to share any great experiences they had or any stories about McDonalds. unfortunately the campaign was spotted by detractors, including animal rights group PETA and they started to use the campaign raise issues that they have with the companies policies and practices. Unhappy customers also chimed in with their views of the business. It was quickly clear that the campaign wasn’t working as intended and so it was pulled.

McDonalds is a big business that is doing very well at the moment. With UK sales up 8% in 2011, it clearly is giving customers what they want in the current climate. However businesses will always have their detractors and those people have a free hand in an open and unregulated medium.

Mars

Mars ran a campaign for Snickers on twitter which used celebrities to tweet out of character messages to catch the attention of their followers. Katie Price sent a tweet about debt problems in the Eurozone and Rio Ferdinand (soccer player) sent a message about knitting. This was followed by a tweet the read ‘You’re not you when you’re hungry @snickersUK#hungry#spon.

The tweets were criticised by followers because they thought that the accounts had been hacked. The ASA is now investigating whether the campaign was misleading by not stating explicitly that it was a promotion and whether the #spon tag was sufficient to indicate it was a marketing communication. The outcome could mark out new territory for the marketing use of social media in the UK.

O2

O2 recently had a data issue related to the leaking of customers mobile numbers to websites when users visited the sites by mobile web. The company first released the news on a blog and soon the number of customer enquiries started to build. The company decided to use Twitter to answer as many individual queries as possible to minimise the concern to customers and they used a tool called CoTweet to do this. They had so many queries that they exceeded the number of tweets that Twitter allows anyone to send in one day. Even so it seems like a wise use of the technology to quell the concerns of customers and to nip this problem in the bud.

There are a number of conclusions that you might draw from these stories. The first would have to be how much we are all still learning about how to use social media for marketing purposes and how experimental even the simplest sounding campaign is. There is also an indication of a basic resistance to anyone who tries to hijack or even manipulate a conversation in social media. you have to have a well thought through basis for believing that you can lead the thread to where you want it to go. Also we see the power of the medium to give people the information that they want fast, bypassing traditional media sources. The view that the regulators take on the Twitter campaigns will be watched with interest, but personally I would not want to be in the regulators shoes. Social media marketing people want as much freedom as possible, politicians want as much control over the medium as possible and the general public want different things at different times. this will not be a quick debate.

UK Retail Market Performance Confused

Posted on by
1

It is not difficult to be puzzled about the performance of the UK retail market in December 2011. A headline in one of the national papers reads ‘Retail sales Dazzle in December’, while at the same time, Morrisons report flat sales (0.7% comps) for the period. Morrisons has been a poster child for the sector since management changes a few quarters ago, and yet this does not look like a dazzling performance. Some sectors are clearly in difficulty. Game reported UK and Ireland sales down over 13% and woes at HMV continue as they have for most of last year. However the overall figures for food are said to be a driver of the 2.2% growth achieved on a like for like basis. To decide whether this means a return to growth for the sector it is worth looking at the results in detail.

The commentary from Morrisons is that it had more customers coming to stores, but that the customer were spending less. This decrease in spend was a combination of volume – one item less per basket, and value as consumers cut back. To support this management said that champagne sales were down while sparkling wine sales were up. This does in seem in line with the anecdotal evidence and with commentary across the economy.

You also need to strip out other factors when looking at the results. Our lead retail marketing consultant points to three other factors not generally looked at in the press coverage of the figures:

1 The rise of online shopping

Online sales were up 18% in the period. Against a background of shoppers cutting back, this can only mean that stores are losing out to e-commerce. Although this does not always affect food sales as much as other categories, it will play a part.

2 The weather

Last year we had a lot of disruption due to snow in December and that did impact food sales in that period. The mild weather in 2011 will have flattered its sales data.

3 Sales days

The way that Christmas fell this year was very helpful for retailers, with an Christmas Eve on a Saturday when most people as off work. This gave retailers another selling day and this will have also boosted sales.

When you strip out these one-off factors, then the growth rate of 2.2% looks encouraging, but more on trend with the rest of the second half of 2011. So the picture is likely to remain one of constrained consumer spending, continued discounting and bargain hunting and the relentless growth of online shopping at the expense of traditional channels.

Marketing Trends in 2012

Posted on by
Reply

The backdrop for 2012 will be a pretty depressing economic picture with rising marketing trends 2012unemployment, consumer caution and low levels of investment. While this will colour most of the business and marketing planning in the coming year, there will be opportunities for growth for businesses of all sizes that are nimble enough to stop them and take action. Three global business trends that we think offer growth opportunities are:

The Rise Of The Chinese Consumer

Looking at the TV pictures of the crowds who swamped stores in London and New York for the sales, you cannot fail to notice the number of bargain hunters from China that are around looking for a deal on luxury items. As China continues to prosper its middle and upper classes will travel more and they will be looking for spending outlets. We note that some of the major hotel chains are starting to cater for the eating tastes of Chinese people and we see this as something that will continue with Chinese signage and other tailoring to cater to the needs of this segment. Advertising that can reach these buyers will also be in demand, along with personal services in the areas of shopping and translation that will make their journeys smoother.

Segmentation of Social Networking

 Most social networking at the moment is carried out on a small number of hubs. As the market grows and matures, we see a larger demand for more specialised and focused networks. Already in areas such as eating and shopping there are sites where people can send info about what they are eating, menu choices and reviews of individual dishes to others who are interested. Other sites allow people to look into the shopping bags of others, presumably out of more than idle curiosity. We see the rise of these focused and objective driven social hubs as an important opportunity in 2012 and we believe that the social networking landscape will shift considerably through the year.

The Rise of CheapTech

As markets in Brazil, China and India develop there have been some interesting developments in affordable transport (Tata) and PCs. We see this as a trend that will continue in several markets and we view it as something that could be a powerful engine of economic growth. Not only will it open up new market segments, but our marketing consultants see it developing new production know-how. If you can produce a PC in India for $35 then you need a very lean process. Transfer that process to other markets and prices would be expected to fall. Also buyers in the West will re-evaluate their own prices when they see these products on sale much cheaper in developing economies.

As always trying to predict emerging trends is not easy. It is also not very useful unless it forces you to think about things that you may need to do to respond to changes. The changes themselves may not take place exactly as we predict, but that markets will change is certain. All the team at Level 3 wish you every success in the new year.

Link Analysis For SEO

Posted on by
Reply

The importance of inbound links to help a page rank for a phrase in the search engines has been well established and it does not have to be explainSEO link analysised to most business people. How many links do you need to jump competitors a few spots in Google? Actually that is not too difficult for an experienced internet marketing consultant to figure out. Assuming that the SEO has already been working on the site, then any on page work will already have been done and any technical problems will have been sorted out.

The it is simply a matter of analysing the quality if the links coming into the competitors page and how many of those links contain the phrase in the anchor text of the link. Up until recently SEOs have had a wonderful free tool to help them do this in the shape of the Yahoo site explorer. However, as Bing and Yahoo have merged their advertising operations, Yahoo no longer provides the explorer tool and Bing now only shows you information about your own site and not about your competition. Hence the bigger SEO operations have an advantage as they have paid tools that can give them the information.

So what can smaller internet marketing businesses do? Well there are a number of alternatives:

SEO Moz has the open site explorer tool. This is a very effective tool but it has limitations if you do not subscribe and pay a monthly fee. You are only allowed 10 searches per day to any IP and any serious IM will soon run out. There are also limits on the information that they give about each link.

You can also go to link diagnosis for the same information. For best results you need to download their Firefox addon before you start any research. The tool is slower to use than the open site explorer, but it returns a comprehensive report with enough information for a full analysis. There may be limits on the amount of times you can use the tool per day, but I have not come across any yet and I have used it 20+ times.

Another powerful alternative is ahrefs. Again there is a free version, but there is a daily limit on use which is too limiting for an IM professional. If you like this tool your best option is to subscribe to the service and pay the monthly fee.

The best option of all would be for Yahoo to reinstate the site explorer service, but it is hard to see what incentive they have to keep offering something which does not generate any revenue. In fact all it does is help SEOs who are trying to rank on their competitors site. Meanwhile these are some useful tools to keep smaller search engine professionals in operation until they can upgrade to payed services.

Landing Page Optimisation

Posted on by
Reply

Having spent my career in direct marketing rather that the branding side of marketing I always assume that top marketing professionals have the same view as me. So I am surprised when the branding crew dismiss the attritional methods that I consider as best practice in favor of more usability or editorial quality. However there is one place where the direct marketer always holds sway and that is the landing page. On landers there is only one concern – conversion. Everything else is a side issue. Once you understand this focus on one concern your job becomes simple. So why are there so many bad landing pages out there? Here is a simple guide to the issues that you need to consider when optimising a landing page for conversions.

The first step is to be really clear in your mind why someone should buy from this page and not from someone else. You should also be clear why they should take this action now. You then need to transfer this clarity into your headline on the page. It must grab the readers attention, tell them the benefits of reading the page and it must promise a simple and immediate solution to their problem.

The text of the page should do a number of things:

  • It should tell a story – narrative is so much easier to read than factual text
  • It should establish trust – be an expert or be someone that the reader will like
  • It should explain why someone should buy from you
  • It should appeal to emotions rather than logic

To make the text easy to read it should be in a good size font and it should be broken up into 3-4 line paragraphs. Add images where possible to compliment the points being made in the text.

Any good lander needs lots of proof. That usually comes from testimonials and comments from current users. It can also come from trusted organisations who have tested or approved your product. The amount of proof that you will need will vary from sector to sector and also with the price point of what you are selling. Delivering testimonials by video or by audio is a very good way of building credibility with consumers.

Regular and varied calls to action are need throughout any good landing pages. you may have spent hours creating the page, but a certain number of people just want to buy the product rather than read your masterpiece, so give them the opportunity to do so and take their cash. Use text links, product images and banners as calls to action to maximise clicks and sales.

Emphasise how simple it is to order your product and how buyers can have their solution implemented quickly. This gives buyers a reason to act now and to go ahead and make a purchase. A good sales page will balance this sales pressure with a continuing personal narrative that keeps the personal trust high. This part of the lander will also include trust symbols and more proof to reassure waverers.

This is by no means an exhaustive list of everything that goes into a great landing page, but so many of them leave out even these basics that it is a good starting point for people who are putting them together.

On Page SEO – A Standard Checklist

Posted on by
Reply

Being organised is a key factor in succeeding in SEO. Good rankings come from well planned hard work and so SEO suits a particular type of personality. One of the paradoxes of working in this area is that because the technology is constantly developing you have to keep up to date with regular changes. But if you follow every new trend you quickly loose the structure in your approach and your work becomes less effective. Some internet marketing forums are so busy that you must wonder when these people get time to do any practical internet marketing.

There is so much focus these days on link building and link indexing that I have fallen into the trap of paying less attention to on-page SEO – optimising the content of your web pages to ensure that the search engines know what your content is about. This week I have started and experiment on 3 sites. I have reduced back-linking on them to ‘background levels’ and I have improved their on page SEO to see what impact that has on their rankings. Each of the sites is more than three years old and they all rank for their keywords on the first page of Google, so any movement upwards should only be due to any changes that I make if the same effect is seen in all three sites.

Here is the checklist that I used for my on page SEO work:

Keyword is in the page Title
Keyword is in the description and keywords meta tags
Keyword is in the H1 headline
Keyword is in the first sentence
Keyword is bolded in the page text
Keyword is in italics in the page text
Keyword is in the H2 headline
Keyword is in an image ‘alt’ text
Keyword is the anchor text in a back-link
Keyword is in the last paragraph of text

These are the ten elements that I have used for each keyword. A lot is written about keyword density on pages and what percentage the keyword phrase should be at. Personally I don’t pay any attention to exact percentages. I just make sure that the phrase is sprinkled around the page text so that it looks natural to both human readers and to search engines.

I will watch the results over the next few weeks and I will report any conclusions that I come to. If you have other on page factors that you change, feel free to add them in the comments.

What is Ethical Shopping?

Posted on by
1

I have been a fan of the Fair Trade concept since I first came across it. In several roles I have had dealings with some of the people behind the idea and they have been great to deal with. But research just publicised by an Australian academic has cast some doubt about the effectiveness of the Fair Trade brand in getting consumers to buy according to their beliefs.

Dr Maxwell Winchester is based in the Victoria University School of International Business and he has been carrying out research into the ethical shopping habits of UK shoppers. He chose the UK because it is the largest fiar trade market in the world and the survey covered 8,000 shoppers. An aim of the survey was to find out if shoppers were more loyal to fair trade brands because of what they stood for.

His results showed that even where buyers talked about a strong commitment to ethical shopping choices, the reality was that they often chose big brand alternatives. “A majority of consumers will confess to having strong ethical attitudes and practices including boycotting, but the reality of their actual behavior was shown to be otherwise,” Dr Winchester said. “Consumers are not taking their ethical concerns to the checkout.” So what does this mean for our understanding of the purchasing behaviour of shoppers?

The first conclusion you could choose to make is that ethics are important in brand choice and that what the big brands have done is that they have raised their ethical standards to such an extent that they can compete with fair trade brands. This conclusion has a number of weaknesses. Firstly most big brands have not dedicated a lot of air time to communicating any new ethical initiatives. In fact I would bet that most shoppers would be as sceptical as ever about the CSR of multinationals like Nestle. Secondly, there is no evidence in the study that shoppers were making ethical purchases deliberately. The story of the research is that people said one thing and did another.

This leads us to the alternative conclusion that ethical brands area a nice concept, but they become less important when it comes to brand choice. Perhaps ethics is a go/no go choice. Once you decide to include non fair trade products in your basket, then the choice of brands becomes about other things. As few shoppers appear to make their basket exclusively fair trade then the implication is that brand managers of fair trade products need to build their brands to compete on the other dimension that the big brands focus on.

That this means that the ethical aspect of the product becomes a ‘nice to have’ dimension in most cases will go against the convictions of the owners of these brands, but as any marketing consultant will tell you “you can’t change the market”.