There is a lot more know-how here, a lot more creativity. So, I think what India is doing here is quite exciting. Some of the organised retail markets are picking up tips from traditional retail. For instance, one can now get rice flour made in a food bazaar. So, it's an interesting and fascinating thing about the India as opposed to some other markets. The US has completely lost this connection between the old and the new.
Jim Lucas, Executive Vice-President & Director Shopper Marketing Division, DraftFCB, has helped retailers, manufacturers, and service providers motivate shoppers through value-added experiences. An acknowledged founder of the science of retail ecology, Lucas is internationally recognised as an experienced marketer and leading retail expert. He has more than two decades of experience and he and his team have designed consumer based retail strategies for retailers, manufacturers and service providers. Lucas is a leading authority on the science of understanding how consumers interact with brands and how they behave in retail environments.
In conversation with exchange4media's Jagadeesh Krishnamurthy, Lucas shares his mantra for success in in-store branding, shopper marketing and understanding consumer behaviour.
Q. Please share with us some of the methods like brand activation employed by advertisers in international markets to promote their products in a retail environment.
Retail activation can be broken down into three different parts – pre-shopping experience, shopping experience and post-shopping experience. I think what we are starting to see is that it is limited by your imagination and probably your budgets. You might do an event at the mall, near the mall or even away from the mall. It acts as a pretty cost-effective medium and is also a good vehicle for promotion of these brands.
Q. Do you feel that in-store LCD displays like Wal-Mart TV does the job 'very well' for its advertisers?
We have been looking at the in-store medium closely now. I wouldn't call it in-store television. The reason is, it gets you to think about it in the wrong way. So, what happens is that people re-purpose ads and start to put it in there. What we have observed firstly is that people don't have much time to look at them, and secondly, when people are doing in-store mediums, they put it up near ceilings where people do not generally look as they are pushing their carts and shopping. We are starting to see dynamic advertising and even tailor messaging to different part of the stores. Hence, if you do not look at it as in-store television and tailor the messaging according to aisles, then it is much more powerful.
Q. Measurement has been a debatable subject for all forms of advertising and marketing. What are the tools available internationally for this medium?
There are lots of tools being used to measure shopper marketing in international markets. It starts with basic things like sales. And I think we see it translate into a couple of things. You just try to see what kind of things translate into sales and then you will get some of the more sophisticated tools like 'units per thousand transactions', etc. If I say, here are the numbers of units of laundry detergents per thousand transactions, it will start telling me more about the category, and then I can look into specific brands in the category. We are using sales figures, but we are using it in a different manner than what it has been used in the past. In some of the markets like China, we are measuring using off-takes. In between, we have also tried to measure people going down the aisle using sensor buddy, close circuit cameras and even RFID tags.
Q. Please tell us more about the shopping division of Draft FCB. What are the kinds of activities that this division operates in?
There are two basic kinds of activities that we do, one is shopper insights. A shopper is different from a consumer, and a shopper is a consumer when he is in the shopping mood. I think it is one thing to be using a product and consuming the product, and another thing to be shopping for it. We have seen that there is enough difference in the mindset and we want to ensure that we focus on how the shopper approaches things. So, we do a lot of work inside the stores. We know that a lot of time the buying decision takes place unconsciously and subconsciously, so we want to make sure that we understand the behaviour and the thought process. Sometimes the insights are something as simple as, “somebody has got to paint a room”. I can tell them how to paint the room and all the things they need, but a better thing to do is to get inspired by how to colour the room. So, you try to get what people are longing for, and the shoppers' needs.
The second thing is to implement someone's insights or strategies inside the store. So, sometimes what we have done is revamp the store or come up with a way to call up a few products or maybe even redo an entire aisle or departments inside a store. In some cases, we have revamped entire retail stores complete with the layout or the navigations systems.
Q. In your experience in this space, can you point out some clutter breaking communication that has stood out among the lot?
I thought one of the most interesting ones was the Gillette Fusion Campaign. This product was designed for the stores. They picked orange because they have shelf PoP in the store. They had something like 150,000 to 200,000 product displayed in the US, while typically a brand has only 20,000. I remember seeing it everywhere, across all stores. So I feel they have done the best job. I think that a major portion of their budget went for shopper marketing or BTL marketing.
Q. In recent times we have seen a huge influx of LCD screens, and static and digital signages in stores and malls. Do you think it is adding to the visual clutter?
It is a problem we face. If I just put up a lot of clutter inside there, I will be just throwing a lot of information at the consumer, and many of those would be irrelevant to him. What we have to ensure in these environments is that we communicate with the consumers only the relevant information as their attention span is decreasing and they are becoming more marketing resistant. Hence, we are trying to provide relevant information to them and avoid clutter at the same time. The 2-3 things that we are trying to do to provide more relevance and benefit to shoppers include educating them, make finding things in the store easier, and inspire them. It's kind of like taking an Aspirin or vitamins – if you take one, it is good, and if you take two instead of one because you think it is better, that's probably not going to work. So, we don't want to overwhelm the shopper and denigrate the shopping experience.
Q. Finally, what will be your single piece of advice to advertisers and retailers who have to capture the consumer's attention in less than 5 seconds?
Five seconds is probably generous. What we try to do is get two out of the three acts right. First one is to attract the shopper, which I think is the easiest one to do. The second part is to engage the shopper in a meaningful way. The third is of course, to sell. Therefore, 'attract', 'interact' and 'act' is the winning combination to make a sale.
Q. So, do you think that niche formats like music and others are the way forward in a market like India?
I think that some of the niche ones would probably continue to do well. If you take the example of what I call a 'lifestyle entertainment store', which used to be a book store, it now has CDs and DVDs along with books. And, I feel that is the kind of thing that is going to emerge. What's interesting is that these new forms of partially entertaining and partially retail format would be popular. Think about an Apple Store. An Apple Store, which sells all kinds of Apple products, you can go to buy the product, check out the products, go there for concerts and even take classes. So, I think that these stores start off as 'stores', but they change over time to go beyond what they sell. Bookstores, as we call them, are becoming gathering places where university students are sitting together; now also have coffee shops in them. Consumer electronics is another major category that is starting to emerge. In times to come, these small stores and even malls will continue to develop as 'lifestyle development centers'.
Q. How do you view the growing retail market in India, especially at a time when malls are springing up everywhere?
It is an interesting market, and there is so much new stuff happening here. People talk about the fact that there is not a lot of organised retail. But, the interesting fact is that malls have started to develop in a big way and lots of areas are also going to develop in a pretty good way. Department stores are one of those areas which are under-developed and we see a lot of opportunities in that space. Even the kiranas are going to be interesting as they have understood that they have to evolve to survive along with the westernised stores. The transit that we are seeing now with the malls, I think, will not continue with more hyper marts, but will see a lot more experimentation with new formats. I think even the big players will have to deploy newer formats to continue here. What will be interesting to see is what would be the nature of that. There will be big and small stores. But who these small stores are and how they operate would probably change. And, I think we will see a lot more formats continue to emerge. Even as we speak, domestic players like Reliance are beginning to adopt format stores. Probably, we will see some formats go by the wayside and some grow well. And that is something that would be interesting to watch.
Q. What is the kind of money poured into this by manufacturers and others in this domain?
It's a difficult one to answer. In the US, shopper marketing is one of the fastest growing areas in marketing right now in terms of growth. It is sometimes difficult to quantify as there are different activities undertaken within the store as well as outside the store to drive traffic inside the store. It is a $16-20 billion industry in the US. But, we also need to see the growth in other markets as well. Since brand manufacturers have seen a lot of fragmentation in the medium shoppers marketing is one of the ways they can target the buyers. Brands are looking at the store as an important market ingredient. So, you can say we will see money shifting towards that direction. Another initiative being undertaken in the US is a project called 'PRISM', which aims to make stores a measured medium in the US by 2008.
Q. How would you rate the Indian market vis-a-vis the US market and other parts of the world?
A couple of things – on the face of it you can say that India is one step away from organised retail. But I feel we are misreading the figures here – organised retail here may constitute 3-5 per cent of the total market, but if you look at it, India has a very long and rich tradition in terms of visual merchandising. Look at the textile markets or fruit markets, for example, a lot of innovations take place here. So, there is a lot of, what we call, intellectual capital, a lot of experience, history and tradition to draw upon. And I think that's one of the things that's a little bit different than the rest of the world. That is why perhaps the 3-5 per cent organised retail figure is somewhat misleading.
There is a lot more know-how here, a lot more creativity. So, I think what India is doing here is quite exciting. Some of the organised retail markets are picking up tips from traditional retail. For instance, one can now get rice flour made in a food bazaar. So, it's an interesting and fascinating thing about the India as opposed to some other markets. The US has completely lost this connection between the old and the new.
Q. You have been working in the retail sector for many years now. What led to this interest in this sector?
Initially during my graduation days, I studied a lot about human behaviour, which involved a lot of work in the neighbourhood and with retail. I think that is why I got attracted to this. One of the more interesting developments was in the mid-90s, when they found ways to do behavioural consumer research. Once we started to understand consumer behavioural insight, the retail environment became a big part of it, because a lot of behaviour is unconscious. So, when you interview people, there are some of those things that you just don't find out. The ability to get some of this retail behavioural knowledge in conjunction with some of the philosophies and perceptions was a good experience that attracted me further.