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When Only a #Selfie Stands Between You and Those New Shoes

Posted by Stephanie Kimball

Thu, Aug 13, 2015

mobile, shopping, mobile walletThe next time you opt to skip the lines at the mall and do some online shopping from your couch, you may still have to show your face. . .sort of. MasterCard is experimenting with a new program that will require you to hold up your phone and snap a selfie to confirm a purchase.  MasterCard will be piloting the new app with 500 customers who will pay for items simply by looking at their phones and blinking once to take a selfie. The blink is another feature that ensures security by preventing someone from simply showing the app a picture of your face in an attempt to make a purchase.

As we all know, passwords are easily forgotten or even stolen. So, MasterCard is capitalizing on technology like biometrics and fingerprints to help their customers be more secure and efficient. While security remains a top barrier to mobile wallet usage, concern about security is diminishing among non-users. In addition to snapping a selfie, the MasterCard app also gives users the option to use a fingerprint scan. Worried that your fingerprints and glamour shots will be spread across the web? MasterCard doesn't actually get a picture of your face or finger. All fingerprint scans create a code that stays on your phone, and the facial scan maps out your face, converts it to 0s and 1s, and securely transmits it to MasterCard.

According to our recent Consumer Pulse Report, The Mobile Wallet – Today and Tomorrow, 2015 marks the year when mobile payments will take off. Familiarity and usage have doubled since 2013—15% have used a mobile wallet in the past 6 months and an additional 22% are likely to adopt in the coming 6 months. Familiarity and comfort with online payments has translated into high awareness and satisfaction for a number of providers, and MasterCard wants a slice of that pie. Among mobile wallet users, over a quarter would switch merchants based on mobile payment capabilities.

mobile wallet, wearables

Clearly the mobile wallet revolution is well underway, but the winning providers are far from decided, and MasterCard is taking huge leaps to see how far they can take the technology available. If MasterCard can successfully test and rollout these new features and deliver a product that their customers are comfortable using, they can capture some of the mobile wallet share from other brands like Apple Pay and PayPal.

So what’s next? Ajay Bhalla, President of Enterprise Safety and Security at MasterCard, is also experimenting with voice recognition, so you would only need to speak to approve a purchase. And don’t forget about wearables! While still in the early stages of adoption, wearables have the potential to drive mobile wallet use—particularly at the point of sale—which is why MasterCard is working with a Canadian firm, Nymi, to develop technology that will approve transactions by recognizing your heartbeat.

Since technology is constantly adapting and evolving, the options for mobile payments are limitless. We've heard the drumbeat of the mobile wallet revolution for years, but will 2015 be the turning point? All signs point to yes.

Want to learn more about our recent Consumer Pulse Report, The Mobile Wallet – Today and Tomorrow? Watch our webinar!

Watch Here!

Stephanie is CMB’s Senior Marketing Manager. She owns a selfie stick and isn’t afraid to use it. Follow her on Twitter: @SKBalls

Topics: technology research, financial services research, mobile, Consumer Pulse, retail research

A Lesson in Loyalty: Will J. Crew Get a Clue?

Posted by Hilary O'Haire

Wed, Aug 05, 2015

loyalty, branding, retailIf you follow news in the fashion world, you may have read about recent setbacks at preppy retailer J. Crew. Following another disappointing quarter of earnings, the company announced corporate lay-offs and changes at the helm of their women’s clothing design strategy. Although J.Crew has been quick to take action, its poor performance goes beyond declining sales and disappointed customers. Even customers most loyal to the brand are shouting their frustrations in the social media streets (see: “Dear J.Crew, What Happened to Us? We Used to Be So Close”).How could the direction of a company—known for its devout customer base—take such a dramatic turn? Although off-the-mark designing is partially to blame, many are frustrated with the poor construction and quality of the clothing. As a loyal customer, I have relied on J.Crew for items that are basic closet staples and distinctly on trend. Like others, however, I have been disenchanted by their new lines—my $40 t-shirt is stretched out after one wear and a hole has appeared near the seams. This is not the outcome one would expect when paying that much for a basic t-shirt. Sarah Halzack summed up the issue well in her Washington Post article on the topic—“J.Crew is learning the hard way that in an era when e-commerce has presented women with ever-greater shopping choices, customer loyalty is hard to win and incredibly easy to lose.”

That’s a point J. Crew and other retailers need to take seriously. It’s certainly true for me. Receiving poorly crafted items from a higher price brand such as J.Crew creates a sharp disconnect. After experiencing this, I’m more likely to purchase from one of many cheaper brands (e.g., H&M or ASOS). Most shoppers that I know feel the same way. In facing this challenge, J.Crew needs to re-examine its core strengths. What positive attributes drove customers to advocate the brand in the first place? Is it quality (as in my experience) or is it design? Is it something else? Although the world of fashion is very forward-thinking (fashion-forward!), the case of J.Crew is a good reminder for brands to consistently monitor and deliver on the core aspects that first led to success.  

Hilary O’Haire is a Project Manager on the FIH/RT team. Having worked for J.Crew back in college, she is particularly hopeful the brand will make a comeback!  

Topics: brand health and positioning, customer experience and loyalty, retail research

A Rose by Any Other Name Might Smell Sweeter

Posted by McKenzie Mann

Tue, Jun 23, 2015

amazon mom, family, segmentationSince the death of popular dad-blogger Oren Miller in February, there has been a resurgence of an initiative he started: pushing Amazon to change its parenting program’s name from “Amazon Mom” to “Amazon Family.” Amazon Mom is a subscription-based service that allows parents to get deals such as 20% off diaper subscriptions and 15% baby registries. Members also receive emails with messages like “As a busy mom, your time is precious. That’s why we’re offering you two free audiobooks—so you can catch up on today’s best sellers even when you’re on the treadmill, in yoga class, or toning up.” It’s apparent from its name and its messaging that Amazon has chosen a target market for this service, and it is not Oren Miller.However, in other countries, Miller wouldn’t have had to start this initiative. Elsewhere in the world (CanadaFrance, AustriaJapanGermany, and the U.K.), Amazon Mom is already known as Amazon Family. The sites all look similar and offer similar discounts, so why is the name different in the U.S.? While Amazon has not made any comments on this, it is clear that they thought naming the program Amazon Mom would be more successful for the brand in the U.S. marketplace. This one word change has an immense effect on who might use the program. As Miller frequently pointed out on his blog, the name insinuates that mothers are the only capable caretakers and, thus, the only ones who would use this service.

Why would Amazon do this? Probably because even though using the word “mom” instead of “family” ostracizes an entire group of people, it allows Amazon to directly appeal to this service’s primary target market: moms. This is a situation in which a segmentation study could have come in handy. Although sometimes the markets for services or products seem obvious, segmentation studies can identify underlying groups that might otherwise be missed. It can use goals, experience, usage, characteristics, and needs to group similar people together in ways that might not be obvious at first. In this case, a segmentation could show that Amazon was missing a smaller—but vocal—group in dads.

Miller’s petition is nearing its goal amount of signatures. If it hits its goal, will it make a difference? Will “Amazon Mom” actually change to “Amazon Family”? Possibly. It’s at least something to consider as more and more people get involved in the cause, using #AmazonFamilyUS to shine light on the situation and to illustrate how angry they are at being excluded.

McKenzie Mann is a Senior Associate Researcher at CMB. She spends most of her spare time trying to convince her friends that it’s funny to replace the word “man” with “mann.” It's a work in progress, but mann will it be great when it catches on.

Topics: brand health and positioning, market strategy and segmentation, retail research

New Study: How Wearables Will Drive the Mobile Wallet Revolution

Posted by Abe Vinjamuri

Tue, Jun 16, 2015

Mobile2015IconEvery year we hear bold new predictions about mobile wallet, and every year those predictions fall flat. So, with some trepidation, we ask: is this the year when mobile payments finally take off?A lot of pieces of the puzzle are finally in place:

  • NFC and tokenization have been accepted as the standard for payment tech (QR is fighting a losing battle although some heavyweights still back it)

  • Networks (Visa, MasterCard etc.) have managed to co-opt the mobile revolution and avoid the threat of disruption

  • Credit card providers see the opportunity to drive growth

  • EMV (chip and PIN) standards have forced retailers to upgrade payment terminals which now are NFC enabled

  • Mobile service providers have given up their bid to control the payments business

  • And most importantly, consumers are increasingly comfortable with the idea of using smartphones to pay for purchases-they are at a similar point in the adoption curve as they were with online payments a decade and half ago

So, yes, mobile payments will grow in the next 12-18 months. And smartphones will continue to drive that growth.  But the big news is that mobile wallets are poised to get a major boost from the proliferation of wearables. In our latest Consumer Pulse study, we surveyed nearly 2,000 smartphone owners about mobile wallets and wearables awareness and habits. Here are a few of the key takeaways:

You want to put that chip where?

Formerly confined to fitness trackers, and to some extent smartwatches, wearables are still emerging for the average consumer. Currently, about 60% of the market is at least somewhat familiar with wearables in the generic sense. And with the pace of technology, this is a low barrier.  A new product that fulfills a need (perceived or not) can gain attention in the flash of a Snapchat.

As the wearables category broadens to include trackers, shirts, bands and other devices that are an extension of the wearer, mobile payments are a natural offshoot. In fact, beyond table stakes (battery life, pedometers etc.) 40% of likely wearable buyers want built-in mobile wallet functionality. Our data shows that wearable and mobile wallet adoption is symbiotic in nature. A majority of those looking to buy wearables say having mobile wallet functionality would bring them closer to the purchase decision. And a similar majority say they would use mobile wallets a lot more if it were a part of their wearable functionality. Looks like a win-win.

Good news for smartphone makers

Although at present wearables are primarily associated with fitness trackers (smartwatches are perceived a bit differently though that line is blurring really fast); many see wearables as an extension of the smartphone category – and expect smartphone brands to lead the wearables march. While the top players are as expected: Apple and Samsung, the door is still wide open for a variety of players like Google, Microsoft, Fitbit, Sony, Nike, and LG.  And perhaps the best news is that, in general, buyers expect highly functional wearables to cost between $175- $275. Of course, there are always those who are willing to splurge north of $400.

What about payment companies?

In all this excitement around wearables and mobile payments we can’t forget the critical role of payment companies. As mentioned previously, networks and credit card companies have a critical role to play. At the moment, usage data indicates two things: one, usage of credit cards in a mobile first world mimic that in the physical world – card usage behavior (primary card, share of wallet) has not changed. Two, checking accounts, debit cards, PayPal have a large presence on mobile wallets. We continue to maintain that mobile payments present an opportunity to shake up some of the existing stalemates in the industry and at present it seems like no single player has a decisive advantage.

What does all this mean?

Depending on how narrow or widely mobile payments are defined, the trillion+ dollar industry is fluid at the moment, with everyone trying to get a large piece of the pie. From a purely consumer-centric perspective, the barriers are lifting, the options are expanding and before you know it a majority of consumers will have access to mobile wallets through smartphones or wearables. The key to winning them over will be to make the experience natural and seamless. The day someone can put together an experience where my jogging shirt tells me to run faster between miles 5 and 7 and then pays for my smoothie is the day wearables would truly achieve their potential. I’m betting that the day is not far away.

Abe is a payment-tech and ecommerce Project Lead, Strategist, and CrossFit enthusiast.

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Topics: technology research, financial services research, mobile, Consumer Pulse, retail research

The Early Bird Gets the...Black Friday Sales Dip?

Posted by Will Buxton

Thu, Dec 11, 2014

iStock 000030486308XXXLarge resized 600

I like to call myself a Holiday Champion. I like to think that I enjoy the Holiday Season more than most people, and I’m definitely one of those people who is more jovial in December than any other time of year. You can probably contribute my enjoyment to one of the following:A) The Holiday Season’s reliable signaled start (post-Thanksgiving) and finish (New Year’s).

B) The result of having a December birthday (please send all birthday presents to CMB).

C) I love the snow and the association it has with the Holidays.

D) My appreciation of all the rituals and traditions accompanying the Holiday Season.

E) All of the above

I believe it is E) All of the above, but it’s likely that some factors are more influential than others. Because I’m so appreciative of this time of year, I find myself hyper-sensitive to the events surrounding the Holiday Season. Here’s another fun fact about me: I like structure. Things around the Holidays are supposed to happen in a certain order. For example, Thanksgiving comes before Christmas and Christmas comes before New Year’s. However, more and more often, humans and even nature keep messing up the order of Holiday Season events . . .  and I’m starting to worry about the long-lasting consequences.

A few examples:

  • In 2011, New England received a considerable snowstorm just before Halloween, and despite my love for snow, it felt too soon.
  • This year, there were faux Christmas trees for sale at my local wholesale club the day after Halloween. Too soon.
  • Also this year, Kmart unofficially released the first Christmas shopping commercial on September 5th. TOO SOON.

In years past, I thought that my displeasure with these “too soon events” was because I had my own preference for what the order of the Holiday Season should be. However, it seems that this year, other Holiday Champions are sharing in my disapproval. This year also marked some of the earliest “start” times for Black Friday (is it still Black Friday if it starts on Thursday?) with stores opening at mid-afternoon on Thanksgiving Day. This list includes Old Navy (4pm), Best Buy (5pm), and Walmart (6pm). All of this must mean that spending is through the roof, right?

As you may have read by now, initial reports show that total spending on Black Friday was down 11% overall from last year. Some speculate that Black Friday numbers have dropped because of the lingering effects of the most recent recession and the increase of shopping on Cyber Monday. However, consumer confidence has been rising the past few years and holiday sales figures rise steadily every year.

Much of the advertising leading up to Black Friday this year focused on the time at which a particular store would be opening or the level of discount on particular products. Personally, what I felt was largely lacking from a lot of advertisements was the creation of a need or want for the consumer so that he/she would care about these start times and deals. I need a reason to keep track of what stores open at what times and where the best deals can be found. Is it possible that one of the contributing factors to the drop in sales for this year’s Black Friday was these misdirected marketing campaigns? Or is it that the frequency of messages and advertising extremely early doesn’t have as much of an impact on customers as we are meant to believe?

One of the ways Chadwick Martin Bailey helps our clients avoid communicating information and messages that don’t resonate with their audiences is through techniques such as Key Driver Analysis, Maximum Difference Scaling, Latent Class Segmentation, Discrete Choice Modeling, and TURF (Total Unduplicated Reach and Frequency) Analyses. In combination with 30 years of experience, each of these tools affords CMB the flexibility to tailor the right questionnaire design for each client, market, customer, and product. By utilizing the right analysis, CMB is able to see beyond self-reported tendencies or likelihoods and through to the emotional drivers or motivations that trigger consumers to behave in particular ways.

Given the knowledge and capabilities of Chadwick Martin Bailey, I can only hope that one day I will see a commercial for my favorite store that goes something like this…

“Happy upcoming birthday, Will! Now that Thanksgiving has passed, it looks like it is going to snow just enough for snowballs but not so much that you’ll have to shovel the driveway! So how about you put up all your seasonal decorations, and then come into [insert store here] and buy that hover-board or teleportation machine you’ve been wanting this year!”

Will Buxton is a Project Manager on the Financial Services Team at Chadwick Martin Bailey. When not complaining about having a birthday right before Christmas, Will enjoys long drives on short golf courses and riding in party buses in Chicago.

Want to help us craft the future of messaging and market research? Join our team!

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Topics: advertising, marketing strategy, retail research

Stitch Fix's Fixation on the Customer Experience

Posted by Amy Modini

Wed, Nov 05, 2014

iStock 000004343641SmallHow many of you are always looking for another minute in the day? Or perhaps some of you want something new, but don’t have time to get to a store? And how many others of you just simply hate going to brick and mortar stores? Stitch Fix, an online personal shopping stylist, is a service in which you set up a profile and pay a $20 styling fee to have five items shipped to your door. The styling fee is applied to the items you keep, and anything you don’t want has to be sent back within three days (in the pre-paid postage package provided). The service appeals to those busy women needing convenience. 

I ordered my first “fix” last December and loved it. Like the 70% of customers, I returned for a second time. Not only is this service convenient (after setting up your profile, you literally click a button to order your next fix and select a date), but it offers fairly reasonable prices. I get excited every time Stitch Fix sends me a box, and that excitement quickly accelerates or disappears after I see what’s inside. While I loved every piece in my first fix, I’ve since had mixed results, loving and hating certain pieces.

Since launching in 2011, Stitch Fix has done several things right as it continues to build its brand and enhance the customer experience. Here are a few:

1. Knowing the target audience.  

Stitch Fix does this well. Even though the company states that its customers range from teenagers to senior citizens, it realizes that busy women in their late twenties to thirties are its primary audience. This is why convenience is at the company’s core. For busy women, the experience needs to be quick, easy, and stress-free, and Stitch Fix has been able to do just that. The company is also appealing to those women who take fashion risks, dislike brick and mortar shopping, look for the latest and greatest trends, and are perhaps less price sensitive than others. 

2. Leveraging word of mouth and building advocates.  

An integral part of this service is its referral code system. The referral codes allow customers to earn $25 toward another fix if a friend uses the referral code for her first fix. I have seen countless friends post about Stitch Fix online. Even I have told some friends about the service—especially when I receive a compliment on one of my Stitch Fix pieces—so it doesn’t surprise me that word of mouth referrals account for 95% of Stitch Fix’s new customers.

3. Listening customers and making adjustments.

Several months ago, Stich Fix began to get a lot of publicity. Thus, demand increased and wait times became significantly longer. The company quickly realized that this resulted in a not-so-positive customer experience, so it expanded its team of stylists and shipment centers, which ultimately reduced wait times. Stitch Fix’s goal is to provide the best possible “fix” for each customer, so it continues to encourage customers to communicate through a variety of ways such as writing notes to stylists, setting up a Pinterest board to show pieces you like, and sending specific feedback on the clothing pieces you receive.

It’s not difficult to see that Stitch Fix has no shortage of data to analyze or algorithms to apply when determining which pieces customers will enjoy, but it doesn’t rely solely on the data. It takes the data and combines it with the expertise of a stylist. In the market research world, I see this as the delicate blend of art and science.

It’s been a few months since I’ve gotten a fix, and with the season change, it’s about time I click that button to order my next one! 

Amy is an Account Director and a mother of two small kids, which makes her an ideal target for this service. She’s willing to give her Stitch Fix referral code to anyone who wants to try it.

New Webinar: The New Hotel Path to Purchase: The Mobile, Social, and Online Journey – As part of CMB’s Consumer Pulse program, we asked 2,000 leisure travelers to share their journey from awareness to booking. This webinar will give insight into the role of mobile, apps, customer reviews, and social media. 

Watch Now!

Topics: marketing strategy, customer experience and loyalty, retail research

Tablet Purchase Journey Relies Heavily on Mobile Web

Posted by Chris Neal

Thu, Oct 16, 2014

consumer pulse, tabletsWe all know the consumer purchase journey has changed dramatically since the “mobile web” explosion and continues to evolve rapidly. In order to understand the current state of this evolving journey, CMB surveyed 2,000 recent buyers of tablets in the U.S. We confirmed several things that we expected to see, but we also busted a few myths along the way: 

1. TRUE: “Online media and advertising are now essential to influence consumers.”

  • Reading about tablets online and online advertisements are the top ways in which consumers learn about new brands or products. [Tweet this.]
  • Nearly everyone we surveyed does some type of research and evaluation online before buying—most commonly using online-only shopping sites (e.g., Amazon, eBay, etc.), general web searches, consumer electronics store websites, review websites (e.g., CNET, Engadget, etc.), or tablet manufacturer websites.

2. TRUE: “The mobile web is becoming more important in the consumer purchase journey.”

  • Over half of buyers use the mobile web during the research and evaluation phase, and nearly 40% of buyers do so as a part of the final purchase decision (although very few people actually purchase a tablet using a mobile device). [Tweet this.]

3. FALSE: Mobile applications are becoming very important in the consumer purchase journey.”

  • Although the mobile web is now highly influential, very little purchase journey activity actually happens from within a mobile application per se. This could be because tablet purchasing isn’t something that happens frequently for more individual consumers (high-frequency activities lend themselves better to a dedicated app to expedite and track them). [Tweet this.]

4. FALSE: “Social Media is becoming very important in the consumer purchase journey.”

  • The purchase journey for tablets is indeed very “social” (i.e., word-of-mouth and consumer reviews are hugely influential), but precious little of this socialization actually happens on social media platforms in the case of U.S. tablet buyers. [Tweet this.]

5. FALSE: “The Brick and Mortar Retail Store is Dead.”

  • The rise of all things online does not spell the death of brick and mortar retail in the consumer electronics category. In-store experiences (including speaking with retail sales associated and doing hands-on demos of tablets) were one of the top sources of influence during the research and evaluation phase, regardless of whether they ultimately bought their tablet in a physical store. 
  • Next to ads, in-store experiences were the top source of awareness for new tablet brands and models. 41% of those who learned about new makes/models during the process did so inside of a physical retail store. [Tweet this.]
  • Half of all buyers surveyed actually bought their tablet in a physical retail store. [Tweet this.]

6. TRUE: The line between “online” and “offline” purchase journeys is becoming blurred.

  • Most people use both online and offline sources during their purchase journey, and they typically influence one another. People doing research online may discover that a tablet model they are interested in is on sale at a particular retailer. At the same time, something a retail sales associate recommends to a shopper in a store may spur an online search in order to read other consumer reviews and see where they can get the recommended model the cheapest and fastest. Smartphone-based activities from within a retail store are just as common as interacting with an actual salesperson face-to-face at this point. 

The mobile web is undoubtedly here to stay, and how consumers go about making various different buying decisions will continue to evolve along with future changes in the mobile web. Here at CMB, we will continue to help companies and brands adapt to these shifts.

Download the full report. 

For more on our mobile stitching methodology, please see CMB's Chris Neal's webinar with Research Now: Watch the Webinar

Chris leads CMB’s Tech Practice. He enjoys spending time with his two kids and rock climbing.

Topics: technology research, mobile, path to purchase, advertising, Consumer Pulse, passive data, retail research, customer journey

Incentivized Reviews: A Look at Amazon’s Vine Program

Posted by McKenzie Mann

Wed, Feb 12, 2014

incentivized reviewsOne of my major motivators in life is receiving free stuff. You can often find me walking around Costco looking for samples or signing up for loyalty programs just for the bonuses. So, when I recently started using Birchbox, a monthly subscription service that sends a box of expensive beauty product samples each month, I was ecstatic to learn that I could earn rewards points for reviewing each product in the box. Birchbox’s use of points seems to be working; with around 400,000 subscribers most of their products have over 2,000 reviews with some nearing 10,000.

This program has two key benefits for Birchbox. It keeps users engaged; reviewers need to go to the website at least once per month to review products. And, it gives buyers more confidence in the products. With thousands of reviews and a 4- or 5-star rating, customers can feel safe they’re buying a good product. This strategy, however, might leave you asking: is it fair to ask customers to depend on reviews when the reviewers are incentivized to write them? If you’re not a Birchbox member you might think the question is purely academic. But chances are you are one of the nearly 700 million people who’ve shopped on Amazon, and in that case, you have some things to think about.

Enter Amazon Vine, an invitation-only program in which Amazon’s top reviewers are given free products to review, sometimes before they’re released to the public. According to Amazon, they welcome both positive and negative reviews, and ask only for honest reviews. Despite the fact that Vine reviews are identified with a green stripe, in the beginning many readers of reviews were unaware of the program, they believed they were reading the reviews of people like themselves, who reviewed a product they bought because they wanted or needed it. Instead, they are written by people who are given products by Amazon (sometimes worth as much as $1,000) with the only stipulations are that they have to write a review within 30 days and they can’t sell or give away the product. It’s fair to wonder whether these two types of reviewers may react differently to products based on the circumstances.

amazon vineAmazon has actually confirmed that Vine reviewers act differently than non-incentivized reviewers, but not perhaps the way you might think. On average, Vine reviewers give lower ratings than non-Viners. That being said, Amazon research shows that products with bad reviews still sell better than those with no reviews. In the end, it seems to be a win for all parties: Amazon gets reviews from invested reviewers which then boost product sales; The Consumer can read reviews from both Vine and non-Vine members, and decide themselves who to trust; The Vendor may very well see increased sales due to the reviews; and finally, the Vine Reviewer, who ends up with a lot of free stuff.

The key here is transparency, knowing whether the reviewer received the product for free lets the consumer weigh how much that review counts in their decision. For me, when I’m reading Amazon reviews, if I see the “Vine reviewer” stamp on it, I’ll trust that I’m reading the review of an opinionated, knowledgeable reviewer. And if I get an invitation to join Vine, you’ll be reading my reviews in no time.

McKenzie wrote this blog post from Oregon. She managed to avoid both snake bites and dysentery on her trip west from Boston.

Feb20webinar14
Join CMB's Amy Modini on February 20th, at 12:30 pm ET, to learn how we use
discrete choice to better position your brand in a complex changing market. Register here.

Topics: customer experience and loyalty, retail research

Craft Brewers Pop the Top on Beer Can Innovation

Posted by Sam Steiner

Wed, Nov 13, 2013

beer cansLast week my Facebook feed was filled with tragic news. The Alchemist Brewery, in Waterbury, Vermont (where I happen to live), is closing its retail store—no more dropping in to taste their beloved Heady Topper. Luckily, my fellow craft beer lovers can find some solace in the fact that while the retail space will close, the brewery will turn their focus to canning the delicious brew. But not too long ago the only canned beers you could get were decidedly not craft—they were mostly watery domestic lagers without a hop in sight. However, if you’ve been to a liquor store in the past few years you’ve probably noticed nearly every style of beer can be found in cans. In fact, a number of domestic standards have also changed the look and feel of their cans—there are bow-tie shaped cans, wide mouth cans, and cans that change color as the beer gets cold. It’s a canned beer revolution!A decade spent in the Market Research industry changes the way you look at everyday things, like these changes to the beer market, so I decided to do a bit of secondary research. First, I wanted to understand what motivates people to purchase canned beer. The results of my highly unscientific online search are here:

  • Beer cans work better with outdoor lifestyles (hiking, boating, etc.)

  • Cans keep beer fresher

  • Canned beer weighs less/is easier to carry

  • It saves money on packaging and shipping

  • Cans block light which is destructive to all the things that make beer so tasty

  • Cans are sturdier (won’t break in your cooler during your road trips)

  • Cans chill faster and keep beer colder

  • Cans are easier to recycle

  • Their favorite retail beer store closes (n=1)

So canning is great idea, right? In 2002 just one craft brewery canned their beer, now there are roughly 330 different craft breweries canning a little over 1,000 different brews. But, when I asked many of my fellow Vermonters whether they’d drink their craft beer from a can, I was told “no, that ruins the taste.”  

Ah, the taste…which is the reason aficionados buy craft beer in the first place. Luckily, the brewers of Sam Adams have been relentlessly pursuing beer can innovation, breaking down the key barrier that is that metallic taste. Just this summer, they debuted the SamCan:

“the result of two years of ergonomic and sensory research and testing…the new can design aims to provide a drinking experience that is a little closer to the taste and comfort of drinking beer from a glass. What you’ll notice: The larger, wider lid helps open your mouth allowing for more air flow during the drinking experience. The can opening is located slightly farther away from the edge of the lid, placing it closer to the drinker’s nose to help accentuate the hop aromas. The hourglass ridge creates turbulence (like our patented Perfect Pint glass) which “pushes flavor out of the beer” and the extended lip places the beer at the front of your palate to maximize enjoyment of the sweetness from the malt.”

The amazing thing is, that despite their research investment, Jim Koch, the co-founder and chairman of the Boston Beer Company, the producers of Samuel Adams, announced that they plan to "make the patent-pending design available, without any royalty or license fee, to all craft brewers who would like to use this can."

That’s great news for this Vermonter, who will continue to buy my craft brews in a can because let’s face it, it’s much easier to hike with backpack filled with canned beer than it is to carry a bottle.

Sam is a Data Manager at CMB, she loves hiking the green mountains of Vermont with or without a tasty brew.

CMB MovemberCMB is observing #Movember with some awesome mustachery. Check out the hairy competition here.

Topics: product development, retail research

Do You Need a Loyalty Program to Drive Customer Loyalty?

Posted by Judy Melanson

Tue, Sep 17, 2013

Originally posted in Loyalty360

Loyalty CardsIn early July, shoppers at Shaw’s, Albertsons, Acme, Jewel-Osco and Star were greeted at the door and asked to hand in their store loyalty cards. These chains, recently acquired by Cerberus Capital Management LP, all shut down their loyalty programs, focusing instead on everyday low prices and storewide sales.The move left some industry analysts scratching their heads, questioning why the brands would kill off decades old programs with millions of members. They pointed to the vast quantities of information that can be harnessed improve merchandising and marketing, and to customize products and messages. They hypothesized that the stores hadn’t invested in the data mining activities needed to extract insights. Perhaps…

Or perhaps the financial experts at Cerberus had done the calculation and determined that in today’s marketplace, the loyalty program – and its strategy and value– was standing in the way of profitable growth.

Think about it. What impact do the grocery store loyalty program cards you carry on your key chain have on your behavior?  Can you point to any benefit you’ve received beyond the ‘loyalty member price’ and coupons at check-out? Can you point to any special benefits you receive from your primary grocery store?  Or do you get the same level of benefits whether you spend $1 or $1000 per trip?

I think there are 3 compelling reasons these grocery stores don’t need a loyalty program to drive customer loyalty:

1. They need to compete with Wal-mart: These brands have to compete with Wal-mart and other warehouse stores offering EDLP (everyday low prices). To grocery and drug store shoppers, price matters!  And to sustain a business and drive profits at low prices, the brands need to focus on operational efficiency – not customer intimacy promised by a loyalty program.

2. They can take a local approach: The executives at these brands promise that analysis will be done at the store – not the customer – level.  Mining the data at the individual store level will, they theorize, provide plenty of data on what merchandise is important to shoppers and the impact of marketing decisions on spend. They also believe that taking a local approach – where store managers can make marketing and merchandising decisions – will enable stores to better meet customer needs.

3. They can focus on what matters to shoppers: Most customers are applauding the move to consistently lower priced products.  In addition, they suggest the brands focus on the basics – the features that drive their shopping decisions, including: (1) clean the store; (2) stock the shelves; (3) keep sufficient registers open to reduce check out time; (4) mark sale items clearly; (5) create a customer-focused culture.

In most locations, shoppers have many choices and in the absence of consistent delivery on these core elements, customers won’t shop at the stores, loyalty points or not.

“Sun setting” a loyalty program is not a low-risk decision. But program managers in every industry must be prepared to defend their programs by answering the following questions:How do you recognize and reward your most loyal and valuable customers?  How do you make participating in the program worth their while…and something they would miss if it were not present.

  • If you ran a grocery store program, how would you treat the person who spent $1000 per trip? Would your first check-out register be for those with 10 or fewer items?  Wouldn’t you help the shopper get the items into their car?  Into the house?  Into the pantry? Do you really have to make them come to the store and shop? Do these customers get any special recognition in store?  Could they visit customer service to get a free cup of coffee or a piece of a new signature pastry when they enter the store?

What mechanisms are in place to grow the share of wallet from light shoppers?  What incentives and processes are in place to support your shopper’s goals and encourage them to spend a higher share of wallet with you?

  • Could you look in my basket and make recommendations for recipes that my family might like?  Or like Amazon and Netflix, develop a recommendation engine (people who buy xyz also buy abc)?  Would you price match on identical items to prevent shoppers from fragmenting their baskets?

What has your organization learned from the data collected from the program?  Think about the tactical (e.g., merchandising, marketing) and strategic (e.g., location selection, branding, pricing) decisions supported and how you can get more value from the data you collect.

  • Have you shared insights with store managers?  Your media partners/ad agency?  If not, schedule some meetings and connect data you have with what’s relevant to them. Today.

Consider what would happen if your loyalty program “went away?” Are you prepared to answer the question “Do you need a loyalty program to drive customer loyalty?” in a way that would satisfy your CFO?

  • Get and communicate data on the value of your program, and how to drive additional value.  

It will be interesting to see the impact of Cerberus’ decision on the industry as a whole.  Will other grocers, to compete with Wal-mart, follow suit and disband their programs?  Or will we start to see some retailers ‘break away’ from the pack and to drive incremental behavior and true loyalty?

Where would you place your bet?

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with her clients. She's the mom of two college students and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

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In early July, shoppers at Shaw’s, Albertsons, Acme, Jewel-Osco and Star were greeted at the door and asked to hand in their store loyalty cards.  These chains, recently acquired by Cerberus Capital Management LP, all shut down their loyalty programs, focusing instead on everyday low prices and storewide sales. 

The move left some industry analysts scratching their heads, questioning why the brands would kill off decades old programs with millions of members.  They pointed to the vast quantities of information that can be harnessed improve merchandising and marketing, and to customize products and messages.  They hypothesized that the stores hadn’t invested in the data mining activities needed to extract insights.  Perhaps…

Or perhaps the financial experts at Cerberus had done the calculation and determined that in today’s marketplace, the loyalty program – and its strategy and value– was standing in the way of profitable growth. 

Think about it.  What impact do the grocery store loyalty program cards you carry on your key chain have on your behavior?  Can you point to any benefit you’ve received beyond the ‘loyalty member price’ and coupons at check-out?  Can you point to any special benefits you receive from your primary grocery store?  Or do you get the same level of benefits whether you spend $1 or $1000 per trip? 

I think there are 3 compelling reasons these grocery stores don’t need a loyalty program to drive customer loyalty:

1)     They need to compete with Walmart:  These brands have to compete with Walmart and other warehouse stores offering EDLP (everyday low prices).  To grocery and drug store shoppers, price matters!  And to sustain a business and drive profits at low prices, the brands need to focus on operational efficiency – not customer intimacy promised by a loyalty program. 

2)     They can take a local approach:  The executives at these brands promise that analysis will be done at the store – not the customer – level.  Mining the data at the individual store level will, they theorize, provide plenty of data on what merchandise is important to shoppers and the impact of marketing decisions on spend.  They also believe that taking a local approach – where store managers can make marketing and merchandising decisions – will enable stores to better meet customer needs. 

3)     They can focus on what matters to shoppers:  Most customers are applauding the move to consistently lower priced products.  In addition, they suggest the brands focus on the basics – the features that drive their shopping decisions, including: (1) clean the store; (2) stock the shelves; (3) keep sufficient registers open to reduce check out time; (4) mark sale items clearly; (5) create a customer-focused culture. 

In most locations, shoppers have many choices and in the absence of consistent delivery on these core elements, customers won’t shop at the stores, loyalty points or not. 

“Sunsetting” a loyalty program is not a low-risk decision.  But program managers in every industry must be prepared to defend their programs by answering the following questions: 

1)     How do you recognize and reward your most loyal and valuable customers?  How do you make participating in the program worth their while…and something they would miss if it were not present.

·       If you ran a grocery store program, how would you treat the person who spent $1000 per trip?  Would your first check-out register be for those with 10 or fewer items?  Wouldn’t you help the shopper get the items into their car?  Into the house?  Into the pantry? Do you really have to make them come to the store and shop?  Do these customers get any special recognition in store?  Could they visit customer service to get a free cup of coffee or a piece of a new signature pastry when they enter the store? 
 

2)     What mechanisms are in place to grow the share of wallet from light shoppers?  What incentives and processes are in place to support your shopper’s goals and encourage them to spend a higher share of wallet with you? 

·        Could you look in my basket and make recommendations for recipes that my family might like?  Or like Amazon and Netflix, develop a recommendation engine (people who buy xyz also buy abc)?  Would you price match on identical items to prevent shoppers from fragmenting their baskets?
 

3)     What has your organization learned from the data collected from the program?  Think about the tactical (e.g., merchandising, marketing) and strategic (e.g., location selection, branding, pricing) decisions supported and how you can get more value from the data you collect.

·       Have you shared insights with store managers?  Your media partners/ad agency?  If not, schedule some meetings and connect data you have with what’s relevant to them. Today. 
 

4)     Consider:  what would happen if your loyalty program “went away?” Are you prepared to answer the question “Do you need a loyalty program to drive customer loyalty?” in a way that would satisfy your CFO? 

·       Get and communicate data on the value of your program.  And how to drive additional value.   

 

It will be interesting to see the impact of Cerberus’ decision on the industry as a whole.  Will other grocers, to compete with Walmart, follow suit and disband their programs?  Or will we start to see some retailers ‘break away’ from the pack and to drive incremental behavior and true loyalty? 

Where would you place your bet? 

- See more at: http://loyalty360.org/loyalty-management/september-2013-online-issue/do-you-need-a-loyalty-program-to-drive-customer-loyalty#sthash.gK29hlJu.dpuf

Topics: customer experience and loyalty, retail research