Seems they weren’t the tips of Christmas trees.

If you were hoping for festive largesse from your friends, co-workers or customers, sorry, not this holiday season. And if you’re in the gift-selling business, times are still going to be tight.

The latest Holiday Forecast Consumer Behavior Report from PriceGrabber.com finds that this holiday season consumers will NOT be buying Christmas goodies for:

• Acquaintances, 57%
• Co-workers, 53%
• Service providers (eg parking attendant, housekeeper), 44%
• Extended family (sorry auntie), 42%
• Friends, 31%

Other Holiday Trends from the PriceGrabber.com survey of 2,018 online consumers, conducted from Sept. 24, 2009 to Oct. 12, 2009:

• Consumers are using more money-saving techniques
  More than ever, comparison shopping is on the forefront of consumers’ minds, with 70 percent of consumers doing more research and comparison shopping online, compared with 38 percent last year. And fifty percent of consumers are planning to shop at discount or outlet stores this year, while only 43 percent did so last year.
• Consumers are cutting back
  Fifty-three percent of consumers are planning to spend less than they did last year. Of the consumers who are planning to spend less this year, 48 percent reveal that one of the reasons that they are spending less is due to an increase in prices (necessities, gas, etc.), 45 percent cite lack of confidence in the economy, and 38 percent indicate making less money as a reason for spending less.
• Shopping starts earlier to ease the impact of holiday spending
  In past years, Black Friday (the day after Thanksgiving) has been the unofficial start of the holiday shopping season. This year, consumers are planning to start their holiday shopping long before Black Friday, with 22 percent of consumers starting their holiday shopping in October and 29 percent starting in November.
• Gift lists are trimmed down to manage budgets
  When it comes to holiday spending this year, 36 percent of consumers expect to spend between $100 and $499, 28 percent plan to spend $500 to $999, and 30 percent anticipate a holiday spend of $1,000 or more.

More on Green Shoots and Holiday Trends in our November newsletter.

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“Why won’t they let me in to play?” he wonders.

TMW, a British integrated marketing agency, wondered the same thing. As TMW’s Darran Snatchfold noted in an interview with Brand Republic:

The failure of a sizeable chunk of campaigns to gain any traction in Social Media highlights our continuing struggle in this (formerly) new frontier.  Our biggest challenge – how to ingratiate brands to audiences in a media where the risk of being an unwelcomed intruder looms large. The answer lies not in what we can build in terms of techno-wizardry, but in what we should build according to good old fashioned user mindsets and needs in this space.

Already, much is known about what people do in social media and what roles they play. Much less is known of the underlying reasons why.  If we know the answer to that, we can understand how we can introduce enduring value and make the contact with our brand far more rewarding.

To answer this question TMW identified 16 reasons why people might use the various Social Media channels (from networks to online gaming) grouped into 6 key themes:

• DISCOVERY – for self-development or to learn from others
• ALTRUISM – to help others make the right decision or become involved in the brand’s product decision
• SOCIAL – to connect to the like minded, reinforce tribal identity or gain a sense of belonging
• FAME – for personal notoriety or to challenge their ability against others
• ESCAPISM – for entertainment and an escape from the daily routine
• EXPRESSION – as an outlet for their imagination or expression of personal identity

They then asked an omnibus research panel why they used Social Media. Darran reported back:

The study suggests the strongest motivator to spend time in Social Media comes from DISCOVERY and in particular the ability to learn other people’s point of view (true for 70% of active users).  However the ego-centric FAME drivers cannot be ignored, with 31% admitting a degree of enjoyment from being seen to be doing well in life by others – explaining the breed of aggressive network builders on Facebook.

Perhaps the most encouraging finding for brands is that 60% enjoy the opportunity to input into companies about their products or services. This is an open invite from nearly two-thirds of users to involve them in your brand decisions through the likes of community forums and FAQs.

The least surprising finding was that men think differently from women.  For women the strongest value seems to come from SOCIAL factors (especially staying in touch with existing friends). For men it’s more about DISCOVERY.  FAME and the ability to get their opinion heard by a wider audience is a greater motivator for men, EXPRESSION and having an outlet for their imagination more so for women.

Does age play a part?

Those who have grown up with Social Media (18-24 year olds) gain greater pleasure from expressing their individuality and building their notoriety (FAME) than their older peers.  Brands should therefore look to provide the platform for them to be heard and to compete, just as Adidas achieved with their 2007 Predator and Tunit Myspace campaign.

Whereas, for 35-44 year olds ALTRUISM and DISCOVERY motivations are particularly strong.  The clearest opportunity for brands is therefore to provide the tools to help them learn and allow them to help others make the right choice.

What are your recommendations for brands?

Firstly, understanding what drives your particular audience to create, contribute or spectate should inspire every strategy and is the key to unlocking the value exchange in Social Media.  Ask the question of your customers or target audience and build a solution around the answer.

Secondly, explore the full spectrum of ways to deliver value according to identified user needs.  It seems all brands are looking to either entertain or to connect audiences in Social Media.  If everyone is doing the same it becomes very difficult for any single brand to be heard amongst the noise.

Thirdly, get in touch dsnatchfold@tmw.co.uk This e-mail address is being protected from spambots. You need JavaScript enabled to view it to find out more about the findings and their implications for today’s marketers.

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Forrester Research says (2008) 71 percent of online shoppers seek out product reviews written by other customers before they buy.

Google’s retail industry director John McAteer says (2009) that the volume of reviews is crucial for increasing conversions, with 20 the magic number, at which point the product becomes more attractive and inspires further reviews.

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As you might imagine, such clustering, while convenient for the customer, made life extremely competitive for the retailer. When a new shipment of ivory arrived from North Africa the ivory merchants would cry out loudly to passersby, proclaiming the merits of their particular offerings. Bustling, noisy and chaotic.

Inevitably, those merchants who understood and developed a long-term relationship with their customers – so that they could minimize having to shout out all the time to gain attention – were the most likely to prosper. Which households needed and could afford new linens from Egypt or spices from Syria? Which Athenians had just bought new slaves and needed extra stores? Send a runner to connect with the customer. Call it the earliest beginnings of the CRM process.

The drive to understand the customer continues. In April 2007 the Economist Intelligence Unit conducted an online survey of 180 senior global executives from the retail industry, querying respondents on their current and planned strategies to understand and anticipate customer needs. The resulting data has been captured in a special report sponsored by SAP, “Intelligent Merchandising: Creating a Unique Shopping Experience”.

To customers bombarded with so many products and experiences, it’s the brave retailer who can claim to offer anything unique by way of merchandising or customer service. So just how do retailers try to hook customers with fresh, unusual and relevant shopping experiences?

The Economist Intelligence Unit started with customer loyalty, asking about the single technique most used by retailers to identify and understand their best customers. The most-cited results:

• 40% Tracking of purchasing records through loyalty cards (recency, frequency, monetary value)
• 26% Formal use of surveys/questionnaires at point-of-sale (POS)
• 15% Analysis of participation in incentive contests and programmes (eg, promotions)
• 9% Analysis of dispute resolution (eg, returns, pricing errors)

To all intents and purposes, though the labels may be different and the technology a little more advanced, these are the same CRM techniques used instinctively by those long-departed Greek merchants to identify their most-favoured households.

There’s nothing much new in the “encouraging customer loyalty” toolkit either. Loyalty-enhancing strategies used by more than half the respondents were introducing new products (63%), local store activities (56%) and targeted discounts for specific customers (52%).

Other popular loyalty-focused initiatives included:

• 48% Incentive programmes for repeat purchases at the POS (eg, cards, clubs)
• 37% Off-site incentive programmes for repeat purchasers (eg, rewards, discounts)
• 29% Follow-up phone calls to customers after significant purchases
• 41% Customised promotions based on past purchases
• 42% “Special customer only” events and promotions
• 46% Targeted advance notification for sales and promotions
• 19% Special e-mail discount codes for best customers

Once again, the methodology may have changed but the customer service principles remain eternal.

Measurement
Communicating is one thing, but measuring the success of that communication is another. The Economist Intelligence Unit asked respondents what measures they use to track the success of promotions. The top two responses were somewhat intuitive indicators—customer satisfaction (55%) and customer retention (52%)—while the eminently measurable sales per square meter of retail space/week (40%) offered a strong statistical counterpoint.

In-store traffic (31%) and customer opinions (31%) are still perceived as important indicators, emphasising the heavy reliance that executives place on sales staff. This dependence on the lowest-paid member of the retail organisation as a reliable observer of customer behaviour is a conundrum of contemporary retailing.

Despite the number of advanced data collection technologies available, the sales associate is still the retail organisation’s number-one ambassador and data collector, so the acquisition, training and retention of appropriate help is a critical element in the strategy of any successful merchant. Just can’t get good slaves.

Winners & Losers
The Intelligent Merchandising report even goes beyond the numbers, drawing on the cumulative statistics to create fascinating profiles of retailing winners and losers.

Merchandising Leaders:

• Create trends
• Lead their customers
• Push the envelope in product development
• Cold heartedly kill the dogs
• Encourage responsible risk
• Expect a great deal
• Strive relentlessly
• Have swagger and bravado

Tired merchandisers, on the other hand:

• Wait for customers to accept trends
• Merchandise based on history
• Rely on line extensions
• Are risk averse in product development
• Focus on the fact that most products fail
• Make excuses for the dogs
• Carry too many unproductive SKUs

If you want to find out more about CRM techniques in Ancient Greece, may we recommend a visit to your local library. More up-to-date customer service insights, however, can be found in the Intelligent Merchandising report, which we share with subscribers to MARKETING RAG.

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• Benefits and not features.
• Promises you make – so make them with care.
• The promises they want personally fulfilled.
• Your credibility – or don’t buy if you ain’t got it.
• Solutions to their problems.
• You, your employees, your service department.
• Wealth, success, security, love, acceptance.
• Your guarantee, reputation and good name.
• Other people’s opinions of your business.
• Expectations based on your marketing.
• Believable claims, not simply honest claims.
• Hope for their own and their company’s future.
• Brand names rather than unknown names.
• The consistency they’ve seen you exhibit.
• The stature of the media in which you market.
• Value – which is not the same as price.
• Selection – and often the best of your selection.
• Freedom from risk – guaranteed by your warranty.
• Acceptance by others of your goods and services.
• Convenience in buying, paying and lots more.
• Respect for their own ideas and personality.
• Your identity as conveyed by your marketing.
• Clarity – if they don’t understand, they don’t buy.
• Style – the kind that fits their own style.
• Honesty – one dishonest word means theere’s no sale.
• Comfort – offerings that fit their comfort zone.
• Success – your success, which can lead to theirs.
• Good taste – and they know it from bad taste.

Marketing works when it reassures prospects into becoming customers.

Does yours?

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“Shoppers don’t waste energy on everyday decisions,” said Manjima Khandelwal, senior vice president, Nielsen Customized Research. “To simplify their lives, shoppers are often in grab-and-go mode, reaching for the brands they usually buy without reading the label or checking the price.”

The key to reaching shoppers lies in understanding that auto-pilot mode can get disrupted by external stimuli such as advertising, buzz, new offers, price and promotions. When this happens, shoppers re-evaluate their decisions; they look at alternatives and consider new offers. Nielsen calls these disruptions Delta Moments and it is at these times that marketers have a brief window of opportunity.

Auto-pilot and Delta Moment dynamics vary significantly across Categories. A seemingly great strategy in one Category can fail to connect in other Categories. Marketers could be way off the mark by failing to read the ‘body language and mindset’ of shoppers.

Nielsen’s study, which reviewed consumer shopping behavior across 30 food categories, found that consumers adopt one of four different “shopping modes” as they cruise the supermarket aisles. Key characteristics of the shopping modes – auto-pilot, variety-seeking, buzz or bargain hunting – are:

Auto-pilot
In auto-pilot, or grab-and-go mode, shoppers are making everyday, habitual decisions driven by brand choices and they are usually not in the market to try anything new. Items such as coffee, cereal, cheese, margarine and mayonnaise are purchased in auto-pilot mode. For example, Nielsen’s research found that shoppers were quite particular about their coffee, choosing the same caffeine fix, flavor and coffee experience.

“The implication for marketers in auto-pilot categories is that if you are a leader, avoid radical changes to your brand message or packaging,” said Deepak Varma, senior vice president, Nielsen Customized Research. “Otherwise you may risk disrupting habitual behaviour driving brand choice in your favor.”

Variety-Seeking
In the variety-seeking mode, shoppers are browsing shelves actively and on the lookout for new tastes as well as interesting product innovations or products offering “surprise” in their role as household chef.

“Consumers seem to get bored with the same choices in certain categories,” said Varma. “We found shoppers on the lookout for a change of pace when shopping in the frozen food and cold cereal aisles, as well as for biscuits, salad dressings and chewing gum. In this context, customers’ decisions to purchase products were greatly influenced by informative and exciting packaging.”

Buzz
Energy and sports drinks, chocolate, ready-to-drink teas and yogurt drinks fall in the buzz-activated category. “Shoppers are most likely to be influenced by catchy advertising, new product introductions and the original packaging that leaps off the shelves and grabs interest and attention,” said Khandelwal.

Bargain-Hunting
Bargain-hunted categories are driven purely by price comparison and promotions. “Consumers in this shopping mode are on a mission and the mission is savings,” said Varma. Canned Tuna, Canned Tomatoes, Canned Fruit and Pasta Sauce all languish in this category, according to the study.

Beware Over-Promotion
Nielsen’s research revealed that even though some product categories are not bargain-driven, manufacturers continually offer in-store deals and promotions, resulting in some categories to be over-promoted.

“Consumers choosing sports drinks aren’t looking for a bargain,” said Khandelwal. “In-store deals for these products go largely unnoticed. Marketers would be better off redirecting their wasted promo dollars to investing in advertising and new product introductions.”

Omega Rules OK

“I always buy brand X …unless guests are coming!”
“I buy the cheapest brand on special, as long as it’s not X!”
“Brand 2 works for my family, but if Y is on special, I buy that!”

Underlying repetitive purchase patterns are a set of cognitive decision rules – the ‘programme’ behind ‘auto-pilot’ purchasing.  Nielsen (quick to brand such things) call these Omega Rules – the mental check-lists that keep consumers on-track and help them decide between alternatives.

Often these rules are quite mundane (e.g., pack shape) or social (e.g., acceptable to friends) and don’t represent deep emotional commitment to the brand.  Brand leaders need to understand Omega Rules as they provide guidance on key marketing tactics that will reinforce the habits that give them leadership.

Recent advances in cognitive psychology have revealed that although consumers have 10,000 brands in their heads, they waste little time thinking about them.  Instead, they evolve simple rules to navigate through the world of brands.  These rules tend to be simple, few in number and rather hierarchical. They can be rational or emotion based, and once they have been developed the consumer is on ‘auto-pilot’ when placed in a buying situation. Auto-pilot mode remains in force until interrupted by an external stimulus, a Delta Moment.

Delta Moments are different for different segments and at different stages; they’re ‘moments of change’ when habits are most likely to be reviewed, and they vary in their impact depending on the disruptive nature of the causative event.

At Delta Moments, consumers re-evaluate their habitual decisions and either:

• Re-validate their rules
• Change their rules

Omega Rules and Delta Moments apply to online marketing as well. Auto-pilot mode is clearly in evidence when web users head to their regular destinations online, less likely to try out new websites unless disrupted by Delta Moments.

The challenge for emarketers trying to get noticed online:

• Understand how habits are formed in their particular category;
• Identify the key criteria underlying ‘auto-pilot’ habits; and
• Develop a range of Delta Moment triggers and motivators that will lead to change.

Easy, right?

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