Live Blog Day 1 from the Innovation & Marketing Summit

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July 18, 2011

By Gus Venditto

SBD Exclusive from the Innovation & Marketing Summit

July 18, 2011, 10:40 AM CDT. The delegates began arriving early this morning at the O'Hare Intercontinental Hotel. Over 250 people are expected for the first Store Brands Decisions Innovation & Marketing Summit. And, in spite of a heat wave outdoors, conditions appear perfect for an excellent event.

10:55 AM. The conference room is standing room ony a few minutes before John B. Mahaffie's The Future Consumer workshop begins.

11:05 AM.  Alan Meyerson of Group 360 introduces futurist John Mahaffie who starts by explaining "I come to this as an outsider... but one who looks very closely at consumer packaging" and "I hope you will find what I have to say helpful to your work."

11:10 AM Mahaffie shows a photo of a 102-square foot home and says that in 2025 these are likely to become common "even though it wouldn't fit even half of my possessions." Concerns about carbon footprint and energy resources will be a factor in people's decisions. A "forced frugality" will lead people to look for ways to enjoy life with fewer resources. He shows a chart that illustrates as GNP and Per Capita income grows, people first achieve "economic gains" but then focus on personal well-being, turning away from "more stuff" to "quality of life" and "less stuff."

What this means is that as we move from "consumer" to "post-consumer" what you sell should be more about authenticity and "how the product adds to quality of life."

11:30 AM "The Measured Life": there is a sense emerging among consumers that they are able to measure their own lives, which means they are trying to understand their own preferences. People are making decisions about "what matters in my life" and putting effort into understanding what matters in their life. What it means: you should be showing the consumer you recognize who he is and how your product fits into their life style. Consumers will be evaluating purchases to decide whether the product works for them, aligns with their values and fits in with their lifestyle. An example: many people believe they have wheat allergies because they crave bread, and they seek out gluten-free products.

11:45 AM "Livetime brand loyalty?"  The expanding media cycle means more people are aware of new products and the increase in new product introduction means people are evaluating whether new products work better. The result is that people have moved from brand loyal to brand fickle. You will be able to win over consumers to your products but it will be hard to keep them. People will make decisions about what to try based on trust; if they trust the store, they will be willing to trust what the store offers.

 11:55 AM. We are not far from cameras in phones being able to recognize products. This will lead to what Mahaffie calls "free range shopping." The consumer will have technology in hand to shop anywhere they are. When they are out in the world, anything they see that they want, they can buy.

1:00 PM. John Failla, President and Editorial Director of Store Brands Decisions, presenting the web site's view of the market. The question he's always asked is whether store brands in the US market can achieve the market dominance that UK retailers have. Yes, we can do that, but there are challenges. A key question is whether the industry can achieve a consumer-focused model where brand owners, manufacturers and service provides are all aligned for growth. Only if all sides are working together can they realize this opportunity.

 1:20 PM. Joe Ennen, Senior Vice President Consumer Brands, Safeway. First, "I want to explain what we're not going to do"... "We're not trying to emulate CPG in a retail environment." Trying to bring the best of CPG to a retail environment. Looking at the opportunity: Total store brands sales are $57 billion. 63% of consumers frequently buy store brands. Yet, even though 70 percent of  shoppers say private labels are as good or better than national brands, private label has only 23.5 percent of sales. Why is there a gap? You can learn from Europe. Primary lesson is that product quality there is irrefutable and there is absolute consistency across categories. How do you do that? One part of the solution is to have a CPG mindset, with total focus on the brand and commitment to its success. Part of the answer is to have talented CPG marketers driving the category. and you have retailers looking at consumer needs across the store.

1:40 PM. Ennen believes retail brand quality needs to be "beyond question." Too often, retailers "de-couple" what their retail brand stands for from the product brand. The shopper doesn't get it. A bad private label experience in one category at one retailer can kill opportunities for all retailers, not just for that category, but for other categories as well. To do well, "LOVE your brand."

 1:50 PM. John Failla introduces the next speaker by saying that when the Summit's board of advisors talk about who should speak at the event, one name came up repeatedly: Sohrab Vossoughi.  His presentation focuses on the consumer's view of product. "The consumer chooses to have a relationship with you, not the opposite." So you need to know the consumer. And you need to understand your advantages. "You control the retationship. The consumer knows you." In the past, marketers used design to create beautiful packages. But that is not enough any more. Today, you need to understand the consumer experience. Vossoughi is taking the audience through a case study on a soap packaging project for Costco's Kirkland Signature. He shows how a beautiful package was part of a frustrating consumer experience where the packaging interfered with use of the product.  The redesign involved creating additional boxes that helped the consumer store the product at home. Sales for the line rose 200 percent.

 2:45 PM. Dan Hill, Sensory Logic, will talk about how consumers make decisions. Value is determined emotionally. People think in images, not words. We feel before we think. While there is a rational brain, it does not have "first mover advantage." It will typically rationalize what the emotions want to do. Conclusion: if you want to get to the consumer, you better reach them emotionally. Hill shows the results of several studies that measured advertising campaigns and found emotional appeals had twice the success of campaigns based on rational appeals.

3:00 PM. Appeals to price drag down emotions and force rational evaluation. They push down engagement because thinking gets in the way of feeling. Ads that appeal to price raise feelings of disgust; it can cause the shopper to think the company is desperate and they could end up buying an inferior product.

3:10 PM. Hill wants the audience to understand the importance of using faces in marketing. Part of brain devoted to evaluating faces is 8X more powerful than the part that evaluates objects. Minor facial movements can have big impact on consumers' reaction.  "Small sensory perceptions can drive big emotional outcomes." Packaging hints: "Focus on faces and familiarity in order to win... Focus on individuals, not crowds... Images on the left, words on the right (to leverage brain's lateralization... Stay away from brown coloring; in general, it does not signal premium."

• Participate in the only industry event focused entirely on store brands innovation and marketing. The 2012 edition of the Innovation & Marketing Summit will be March 12-13, 2012 in Chicago. To receive updates CLICK HERE

4:05 PM. Martin Cregg of Chase Design talks about listening to consumers. Unless you are using the same language the shopper is using, they may not belive the product is for them.  And if the store doesn't look like a place that should sell that product, the shopper won't buy it. One case study: Target's health and beauty category didn't work because shoppers said it didn't look like a place to buy health and beauty products.

4: 25 PM. New influences are changing the way shoppers chooses to shop. Last year, about 30 percent of diaper purchases were bought off the web.  Technologiy is also changing the way people shop. Today, shoppers know the best price. And shoppers want to shop more stores (they get bored).

4:55 PM.  Catherine Roe of Google starts by explaining that she came to Google with a CPG background with six years at P&G. After summarizing how much the world has changed from technology, she says that the "moment of truth" is still crucial: the m0ment when a consumer confronts a product on a store shelf.  What has changed is how the consumer has been influenced before they reach the decision point. She has a flood of research to show how much consumers are using online searches in buying decisions. Example: 6.1 Billion recipe searches were performed in 2010 and it's data that marketers can use. In the barbecue space, "poultry is searched on far more than beef or pork." Some marketers are changing the products they choose to market as a result (for example, around the holidays, more searches were done for "prime rib" than turkey). 

How are marketers using this information? She gave examples of manufacturers who used Google Insights for Search to target keywords associated with their products. She gave examples of display ads that were built to link into Google Ad Words results. In some cases, the manufacturers didn't sell the product directly, so they built display ads that directed consumers to Walmart or other online retailers for an immediate sale. Another example is "archer farms" who has built display ads that were custom built for searches on "archer farms."  

Read These Related Articles:

• Social Media to Expand Reach of the Innovation & Marketing Summit
• Live Blog Day 2 from the Innovation & Marketing Summit
• From the Summit: A Roadmap to Store Brands Success
• From the Summit: Building Shopper Centric Store Brands Models
• Ahold and BJ's Execs Join Summit Retail Advisory Board

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