Beautiful Vision

October 6, 2010

Presentation Summary

Speaking at the Center for Retailing Conference in Arkansas, Kevin Roberts provides insights on shopper engagement, price and consumer behavior – includes client examples from Procter & Gamble’s Tide and Miller High Life.


Beautiful vision

It’s fantastic to be back speaking here at the University of Arkansas, where I last spoke three years ago. I am honored that I get to be the warm-up act for Bob McDonald, President and CEO of Procter & Gamble, and Bill Simon, President and CEO of Walmart, and to talk to the retail leaders of today and tomorrow.

And tomorrow really is today, it’s the end of NEW and the advent of NOW. Moore’s Law still applies, but techno-dazzle is giving way to true value delivered at warp speed.

The Age of Now is the “instant everything”, “always on”, “do it for me”, continuous moment of truth – when care and customize happens right here, right now.

Consumers have been rocked by a VUCA world. It’s Volatile, Uncertain, Complex, and Ambiguous.

Nothing is certain in VUCA, except for one thing. America is unstoppable, America will rise, America the irresistible force of nature.

America is being renewed right now by the new generation of radical optimists, inspirers who define VUCA as Vibrant, Unreal, Crazy and Astounding.

I have 3 ideas to help all of us get to this astounding future first.

IDEA #1 – BRING BACK THE FUN  

Shopping is a trillion dollar global event, an excitement machine, and as assortment gets the green light from Bentonville, excitement is revving in the supply lines.

The rules of engaging with shoppers have got tougher.

The supply-side stakes have gone north:

  • Consumers have limitless choices and channels.
  • Consumers are getting the best deals in history and expectation is dramatically intensifying.
  • Consumers have zero tolerance for inflated pricing in an emerging transparency.
  • Consumers live in a Participation Economy not in an Attention Economy.
  • Only 3 questions matter: Do I want to see it again? Do I want to share it? Do I want to improve it?

In this Participation Economy, marketing is dead. It’s no longer about creating demand and satisfying it – it’s about creating a movement. And it’s no longer about traditional ROI – return on investment – it’s about ROI 2010: Return on Involvement. Creating experiences and helping improve people’s lives is core equity today. It’s not about “product as hero” anymore.

Take Miller High Life, the beer for the honest guy. In 2009, we made a one-second SuperBowl ad for Miller High Life that had such a strong response that it made a mockery of the multimillion dollar campaigns mounted by the big guys.

For 2010 Super Bowl, at a time of economic distress, Miller High Life wanted to do something for the honest guy, like hard working small business owners. So, they produced an ad that focused on four local stores:

  • Del’s Barber shop in Escondido, CA
  • Loretta’s Authentic Pralines in New Orleans
  • Bizarre Guitar & Drum in Phoenix, AZ
  • Tim’s Baseball card shop in Chicago.

These four people were all over the news. Impressions in media like the New York TimesCNN, and Sports Business Daily were over 65 million.

Sales were up 2.8% in the four weeks leading up to the big game – 140,000 more cases of beer. If a beer is up 0.5% for the year that’s considered significant growth.

Most importantly, the campaign inspired surge in consumer involvement. MillerHighLife.com had 450,000 unique visitors over three weeks and Facebook fans jumped by more than 9,600.

And of course business went through the roof for the small businesses – up 300% for Bizarre Guitar and Tim’s Baseball Card Shop got a 400% bump.

Tide is a great example of creating experiences and involvement in the most empathetic way imaginable. Tide Loads of Hope was created in 2005 to provide clean clothes for those affected by Hurricane Katrina. The idea was to help these victims solve one simple problem in the wake of utter catastrophe: cleaning their clothes.

A truck full of energy-efficient washers rolled into New Orleans, and the Tide team helped wash, dry, and fold the clothes of Katrina victims. Since inception, LOH has built upon its work in New Orleans by cleaning clothes in California, Iowa, Louisiana, Texas, North Dakota, Georgia, and Kentucky.

The idea went global in the past 12 months. Loads of Hope has reached the Philippines, Saudi Arabia, Haiti, Hungary and Pakistan. In each instance, we have helped P&G customize a program to best suit the local environment and needs of the people.  For example, in Haiti the team partnered with Frigidaire to supply washers, dryers, and Tide Coldwater to hospitals.

Since 2005 the program has washed tens of thousands of loads of laundry for thousands of families, sold millions of Loads of Hope Vintage tees (all profits go to the cause) and millions of Loads of Hope bottles. What a Lovemark!

Focus on price is important, but it’s not enough. She wants best price – and she wants to feel good about the product and to feel uniquely understood, and tell everyone.

No matter what anyone tells you, emotion is the vital part of any purchase, even in a dollar store. Down market and up, we all have hopes, dreams, pride and imagination. We all decide with emotion.

The emotion key is what unlocks premiums, margins and magic. Reason leads to conclusions, emotion to action.

Just as marketing is dead, so are brands. Brands have become commodities. What comes after brands is what we call Lovemarks.

  • Brands are owned by management, marketers and stockholders. Lovemarks are owned by the people who love them. Trader Joe got in there.
  • Brands are built on Respect. Lovemarks are created out of Respect and Love.
  • Brands build Loyalty for a Reason. Lovemarks inspire Loyalty Beyond Reason. Beyond Attribute, Benefit, Range, Price. Loyalty Beyond Recession.
  • Great brands were irreplaceable. Lovemarks are irresistible.

Every future relationship starts somewhere on this axis.

Love Respect Axis Lovemarks

 

  • Low Respect. Low Love. Commodities, basic convenience, “Park, pay and your way”.
  • High Love. Low Respect. The creative zone of “NEW”, “NOW”, “GONE”. Promotions, pop-up stores, deep discounts, MySpace…
  • High Respect. Low love. “e-r” words: faster, bigger … cheaper. Bland land. Price wars fought on performance, respect and trust.
  • High Love and High Respect. Lovemarks, deep emotional participation.

Brands have performance, reputation and trust. Lovemarks have mystery, sensuality, intimacy.

Retail won’t be decided by big vs. small or fast vs. slow. Slow is dead. Big is no longer a barrier to entry – online leveled the play field. The contest today is intimacy versus ignorance.

Just 6% of retail transactions happen online, but 50% are affected by web research. Influence her search to shelf, helping her research at home and creating intimacy wherever she is, whenever she wants. The store is king, no inspiration or impulse in the store, things go sideways.

Get to know your customers intimately. You can’t data mine your way into people’s affections. It takes the small touch, the perfect gesture.

  • Intimacy is why local bookstores and vinyl record shops are mushrooming, as Amazon combine-harvests its way through brick and mortar.
  • Intimacy is why boutiques are growing, and the big box is shrinking, why small high-design stores matter.
  • Intimacy is knowing that low-income moms are just as digitally literate as trust-fund mums. In India and China, Mom’s cell phone is her computer.
  • Intimacy is a shopping list on my phone that maps where the item is in the store.

And magical sensorial experience! From paycheck to paycheck to diamonds to pearls, all people love dreams and icons, stories and surprises, sensory explosions.

  • The Disney Store lets kids conjure up princesses in magical mirrors, and follow trails of pixie dust.
  • P&G Productions and Wal-mart, with NBC, are breaking ground again in original entertainment, as movie makers for their brands. Long form is good, but a story well told can sometimes only take 5 seconds.

IDEA #2 – SELL TIMELESS TRUTH

Winning is about deep understanding of consumer behavior by brand, shopping occasion, and retail format.

It’s about stirring timeless human truths to change behavior.

Take some examples:

1. There’s no virtue without vice

The more we want to do good, the more we want to do bad!! Dexter is an extreme example.

If vitamins are on the end-cap, don’t put more health foods next to them. Put M&Ms on the sidekick! Now that’s an adjacency.

Wherever you stock virtue, give’m vice. Shoppers will buy more because they want a reward for being good.

Put salad next to french fries, you sell 20% more fries.

What’s more, individuals with most self-control are most indulgent! Give her the wicked reward she deserves.

This works across the board. When the economy goes down, Leonard Lauder gets out his famed “Lipstick Index”. Lipstick sales go up as we reward ourselves with little affordable pleasures.

2. People search for satisfaction, and ONLINE they are searching to buy!!  

When people search online for something, we know they will buy 20% more in the basket in store, so dominating that search space is a must.

Online is not about socializing equity, but inspiring buying momentum. People come into brands through occasions, and they are searching to buy in two clicks, not join communities. Most brand sites, you can’t buy!!

Consumers are “always on”, but most brands aren’t. Check your “always on” strategy is activated Show me that “buy now!” button.

3. People are what they are  

Buying momentum is about getting on her list, so show her “what else?” when she is looking.

If she is buying a disposable razor she’ll fill the basket with that trigger’s regimen, so with disposable goes hair & body wash not skin creams. A five blade guy is a different beast. He’ll will go for pre-shave, separate body wash, conditioner

Hit those purchase triggers. “If you bought that, you could buy this!” Amazon nails this, brand sites don’t.

Another truth is that parents want to be cool.

Revelation leads you to new ideas, and ideas are the currency of the future. We live in the Age of the Idea, and the unreasonable power of ideas will set you free.

An idea can be something entirely original or a game-changing iteration one degree different to where you are right now.

The trick is to Fail Fast, Learn fast, Fix fast. Creatively, it’s ten bets versus one big bet, and it’s who dares wins:

  • Hyundai is trying out pragmatic prestige.
  • I like Wal-mart’s free delivery of online purchases to urban Fedex locations  .
  • WholeFoods released an interactive map showing customers exactly where their food comes from.

In the Age of Now, getting things done is not enough. You have to make things happen.

IDEA #3 – LIGHT THE SPACE

Inspiration happens all the time, and the path to purchase is not linear. It’s a dream space, an always on, multi-screen wonderland of seamless touch points.

A Four Square coupon to my phone at shelf changes the game, de-selection at shelf.

Just ask kids today, who don’t ask “why”? They ask “why not?” Kids today have a one-word equity. It’s not “revolution”, “rebellion”, even “money”. It’s “creativity.”

The job overall is to fill the dream space with light. P&G calls this Purpose-inspired, Benefit driven.

People want to be part of something bigger than themselves. Martin Luther King did not say “I have a mission statement.”

Purpose-inspired, benefit driven requires an inside-out strategy of four words that your people should throb with.

  1. Responsibility
  2. Learning
  3. Recognition
  4. Joy.

The Participation Economy is not Green. It’s TRUE BLUE.

  • Green is about fear. True Blue is about optimism. Martin Luther King did not say “I have a nightmare.”
  • Green is about obligations. True Blue is about opportunity.
  • Green asks “What’s to be done?” True Blue asks: “What can I do?”
  • Green is just about the environment. TRUE BLUE fuses economic, social, cultural and environmental sustainability.

This is a about DOT, do one thing, then DAT, do another.

The world needs all of us.

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