Marketing News: September 2019

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AMERICAN MARKETING ASSOCIATION

AMA.ORG

SEPTEMBER 2019

EMPATHETIC DESIGN

GROCER GLUT

UX CHUTES AND LADDERS

MARKETING BEYOND GENDER STEREOTYPES

SEPTEMBER 2019 NO.

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table of contents AMERICAN MARKETING ASSOCIATION

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SEEN ON AMA.ORG

14-20 ANSWERS IN ACTION • Snapshot • Core Concepts • Ethical Marketing

22-25 SCHOLARLY INSIGHTS • Web Design • Research Digest

28-34 EXECUTIVE INSIGHTS • Jakki Mohr • Vikas Mittal

58-62 CAREER ADVANCEMENT

• UX Design • Event Experience

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AND NOW, A WORD FROM...

36  Shattering Gendered Marketing

In industries where products have been historically marketed based on gender, some brands are beginning to shun stereotypes and embrace neutrality.

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B ut How Does That Make You Feel? S hopping for Grade-A Grocers

Supermarkets are using customer experience to differentiate themselves in the hypercompetitive grocery sector.

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Research shows that empathy helps designers create more unique and creative products, and there’s reason to believe it can help marketers move out of fixation and better relate to consumers.

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SEPTEMBER 2019

LETTER FROM THE EDITOR VOL. 53 | NO. 8 AMERICAN MARKETING ASSOCIATION

Experience Design for One and All

Stacy Armijo Chairperson of the AMA Board 2019-2020 Russ Klein, AMA Chief Executive Officer rklein@ama.org EDITORIAL STAFF

Phone (800) AMA-1150 Fax (312) 542-9001 E-mail editor@ama.org David Klein, Chief Content Officer dklein@ama.org

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ender-reveal parties are all the rage—maybe you’ve attended one and witnessed the parentsto-be cut into a cake dyed blue or pink. Some brands have latched onto gender-based categories, designating otherwise unisex products as for boys or girls, men or women. Though Sally may like pink and purple, who’s to say John doesn’t, too? Are marketers who fixate on gender missing an opportunity to appeal to everyone—and will younger, gender-normeschewing consumers be turned off by ladies’ hammers and gentlemen’s candles?

In our cover story, editorial intern Katie Powers shares how brands are finding success by marketing products to anyone, of any gender, who wants to use them. It’s a new, open-minded frontier for customer experience.

Managing editor Sarah Steimer discusses the concept of inclusive marketing another way—by exploring how empathy and

Molly Soat, Editor in Chief msoat@ama.org Sarah Steimer, Managing Editor ssteimer@ama.org Julian Zeng, Assistant Managing Editor jzeng@ama.org Steve Heisler, Staff Writer sheisler@ama.org

human understanding produce better products and more relatable marketing practices. “There’s reason to believe that many marketers could benefit from stopping to ask, ‘How would this make the consumer feel?’” Steimer writes. “Research shows this simple action breeds increased creativity, which is a welcome addition to the relatively cold data collected on consumers.”

How have you seen inclusive experience design lead to better results?

MOLLY SOAT Editor in Chief @MollySoat

Bill Murphy, Designer wmurphy@ama.org ADVERTISING STAFF

Fax (312) 922-3763 • E-mail ads@ama.org Sally Schmitz, Production Manager sschmitz@ama.org (312) 542-9038 Nicola Tate, Associate Director, Media Channels ntate@associationmediagroup.com (804) 469-0324 Rianne McMahon, Recruitment Advertising Specialist Rianne.McMahon@CommunityBrands.com (727) 497-6565 x3467 Marketing News (ISSN 0025-3790) is published monthly except June/July and November/December by the American Marketing Association, 130 E. Randolph St., 22nd Floor, Chicago, IL 60601.

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ZACH BROOKE

JAKKI J. MOHR

Zach Brooke is a former AMA staff writer turned freelance journalist. His work has been featured in Chicago Magazine, Milwaukee Magazine, AV Club and VICE, among others.

Follow him on Twitter @Zach_Brooke.

Jakki J. Mohr is the Regents Professor of Marketing, the Poe Family Distinguished Faculty Fellow and Fellow at the Institute on Ecosystems at the University of Montana.

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MARKETING NEWS | SEPTEMBER 2019

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LETTER FROM THE CEO

So You Want to Be a CMO?

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ive years ago, I became convinced that we’re in the opening act of a third epic industrial revolution, powered by the internet of things.

There are unstoppable forces that will create an economic plurality of capitalism and commercialgrade sharing: creative destruction; disruptive innovation; Metcalfe’s Law of connectivity and networking; lateral economies of scale; Moore’s Law of faster, smaller, cheaper, open-source sharing and collaborative knowledge; disintermediation; horizontal commerce; and Rifkin’s theory of zero marginal costs. Ultimately, blockchain will distribute trust as currency to every person on the planet, changing the role of money in commerce. And it will all be managed by a single handheld device owned by nearly 40% of the global population.

But what does this mean for marketers, specifically CMOs? According to Christine Moorman’s CMO Survey from February, CMOs say acquisition, purchase volume and cross-selling are the most important consumer outcomes. Perhaps that’s why CRM spending is expected to grow at a faster rate than new product or new service introductions. But are we running out of ideas? Superior innovation ranked last as a CMO priority behind price, product quality, service excellence and trust-building.

If that’s true—watch out. Should marketers only focus on the new advantages of higher marketing spend, analytics spend and expanded go-to-market channels and penetration—along with their exacting understanding of location, context and immediacy to sell—then the brittle bottom of anti-consumption, declining brand loyalty, income inequality and tribal brands will fall out from beneath them. They should remember to also innovate better solutions, such as

improving customer experience and personalization.

Are price and trust more important than product quality? Maybe. But product usefulness has never been more important. My assertion is that experience design is the next frontier for marketers. As important as price is, time is more important. Every sustained disruptor has found a way to give back or sell time.

Despite the premise that technology is making things easier for consumers, it’s also complicating the job of marketing. Think about this: Only 40% of a typical American corporation’s marketing activity reports to the CMO, according to a study by University of Texas professor Leigh McAlister. In that environment, The CMO Survey shows one in three marketers find their job roles to be unclear. What we do know to be true from evidencebased research is that design-led firms outperform the S&P 500, according to the Design Management Institute.

Firms with higher marketing power, those with CEOs who have marketing bona fides (one in three) or firms with stronger marketing capabilities outperform their peers in growth and profitability, according to research from the Journal of Marketing. We also know that the marketing capabilities of an enterprise are dependent on both team-level and individual marketing competencies. Moorman asserts in her report that companies with the highest sales revenue and levels of internet sales make larger investments in marketing capability.

Companies with the lowest revenues and levels of internet sales prioritize investments in marketing consulting services.

As a marketer looking to build up your professional muscles, you can’t do everything, but you can do anything. As a starting point, you need a marketing competency assessment

to identify both your strengths and gaps in know-what, know-how and know-yourself. Then you can plot a personal development plan for yourself to address skill gaps in the context of the job you have or the one you want.

The AMA is planning to introduce the definitive world-class marketing competency assessment tool as the gateway to the best professional development solutions available, whether they are offered by the AMA or not. Only the independence of the AMA, along with this solution-agnostic approach focused on what’s best for you, can be relied on for something as important as your career.

It’s in this same spirit and set of values that my hope for the future of marketing is a world in which everything is bought and nothing is sold. Only then can the discipline rebuild its esteem and professional standing in an increasingly cynical and impatient world.

RUSS KLEIN CEO

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Design is Good for Business Companies with top design practices outperformed industry-benchmark growth by almost 2-to-1

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uperior design drives significant business growth opportunity, according to a report by McKinsey & Company titled, “The Business Value of Design.” The survey studied the design actions of 300 publicly listed companies over a five-year period, collecting more than 2 million pieces of financial data and recording more than 100,000 design elements. The four main themes that emerged formed the basis of the McKinsey Design Index (MDI), which exhibits the correlation between best design practices and business performance.

Investing in good design pays off. The top-quartile MDI scorers in McKinsey’s report experienced 32% higher revenue growth and 56% higher total returns to shareholders than their counterparts over the fiveyear period. In all three industries analyzed—medical technology, consumer goods and retail banking— those results held true. Good design matters whether companies offer services, physical goods or digital products.

Despite design’s clear impact on business performance, many companies are still slow on the draw. More than 40% of surveyed companies aren’t talking to their end users during development, and just over 50% admitted that they don’t possess an objective way to assess or set targets for their design teams’ output. With no discernible link to the health of a business, senior leaders are reluctant to provide resources to design teams.

—JULIAN ZENG

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UNPACKING THE MDI These four clusters of design actions showed the most correlation with improved financial performance:

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Measuring and driving design performance with the same rigor as revenues and costs.

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Breaking down internal walls between physical, digital and service design.

3

Making user-centric design everyone’s responsibility.

4

De-risking development by continually listening, testing and iterating with end users.

RESEARCH SUBJECTS

300 publicly listed companies tracked

5-year period

>50%

More than 50% of the companies surveyed admitted that they have no objective way to assess or set targets for the output of their design teams.

>100,000 design actions recorded

>2 million pieces of financial data collected

>40%

More than 40% of the companies surveyed aren’t talking to their end users during development.

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seen on ama.org Companies with top-quartile McKinsey Design Index scores outperformed industry-benchmark growth by as much as 2-to-1.

Higher McKinsey Design Index scores correlated with higher revenue growth and, for the top quartile, higher returns to shareholders.

ANNUAL GROWTH (NORMALIZED) %

COMPANIES’ McKINSEY DESIGN INDEX SCORES

TOP-QUARTILE McKINSEY DESIGN INDEX PERFORMERS

REVENUES (p.a.)

INDUSTRY BENCHMARKS*

10%

REVENUES (p.a.)

180

6.3%

10%

160

4%

140

4.6%

3-6%

120 100

BOTTOM 12/12

12/13

12/14

12/15

12/16

2ND

12/17

3RD

TOP

QUARTILE

TOTAL RETURNS TO SHAREHOLDERS TOTAL RETURNS TO SHAREHOLDERS

300

21%

20.6%

250

15%

200

12-16%

150

15.3%

15%

100 12/12

12/13

12/14

12/15

12/16

12/17

BOTTOM

* The envelope was set by the minimums and maximums of three independent data sets: MDI second, third and fourth quartiles; the S&P 500; and a McKinsey corporate database of 40,000 companies.

2ND

3RD

TOP

QUARTILE

The financial outperformance of top-quartile companies holds true across the three industries studied.

McKINSEY DESIGN INDEX: DIFFERENCE BETWEEN TOP QUARTILE VS PEERS, 2013−18 OVERALL AVERAGE

CONSUMER PACKAGED GOODS

MEDICAL TECHNOLOGY

RETAIL BANKING

108%

56% 41% 32%

REVENUE

42% 27%

25%

TOTAL RETURNS TO SHAREHOLDERS

REVENUE

18%

TOTAL RETURNS TO SHAREHOLDERS

REVENUE

TOTAL RETURNS TO SHAREHOLDERS

REVENUE

TOTAL RETURNS TO SHAREHOLDERS

Source: Financial statements for consumer durables/apparel; S&P 500; McKinsey Value of Design survey of 300 global companies, July 2018.

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Emotional Response, As Advertised What we can learn about American consumers based on the ads they love most

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e test a lot of ads at System1. For our Ad Ratings service, we test every ad that airs on U.S. TV in seven key sectors, from finance to food and drink. With Ad Ratings, marketers can look at effectiveness metrics across entire categories and see which ads are driving long-term growth for brands.

The key measure in Ad Ratings is the star rating, a one-to-five-star score that predicts the potential for

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an ad to amplify media spend into growth. The key is emotion: A longterm effective ad creates positive emotion and reinforces memory structures around its brand so that when it comes time for a purchase decision, those positive feelings make brands seem like a better choice.

Five-star ads are the most powerful of all, creating exceptional levels of positive feeling. But they’re rare, with less than 1% of TV ads hitting that score. This year to date, barely 20 TV

ads have managed a five-star score.

Some are for household names, such as Hershey’s and Microsoft, while others represent lesser-known brands, such as WeatherTech and dairy company Kemps. But they all have one thing in common: They delighted viewers.

By looking at some of the themes in these emotional ads, you can find advertising and product trends that aren’t readily apparent from the work that generates most marketing conversation. I’ve taken a look at five of them.

Familial Relationships The bonds of family are a well that rarely runs dry for advertisers, and it’s worth noting how much emotional mileage brands can get from

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showing parent-child interactions.

A 15-second, five-star ad for Google Home and its voice apps is a great example: A dad and his toddler son do push-ups together, with Google encouraging users to turn its devices off and cherish these moments. It’s a charming way for the brand to stay on the sidelines of the emotion but maintain its presence in the ad.

Other parent-child ads include one for Dole fruit bowls—which follows a daughter enjoying healthy snacks as she grows up—and an ad for Cheerios that shows parents and kids biking together. These are traditional ads, with only the health and tech detox messages betraying the concerns of the late 2010s.

Pet Care With America’s dog population growth outpacing that of humans, it’s hardly surprising that so many of the most-loved ads have a canine element. Dogs generate warm and fuzzy feelings in viewers, though without good brand relevance, a dog’s uplifting effect can be blunted.

The highest-scoring dog ads are for pet food and accessories, and they reveal an interesting trend.

These aren’t your parents’ pet food commercials; these are promoting products for dogs that are central to families and whose owners treat them more like a human than a pet.

The selling point for Freshpet food is that it “belongs in the fridge just like your food.” Merrick Pet Care offers breath mints, dubbed “Fresh Kisses,” to treat your pup’s halitosis. And WeatherTech’s five-star Super Bowl ad offers pet comfort in the high-tech style of a top-end car ad. These pet products go further and build more emotion than older brands. If there’s a ceiling on pampering, we haven’t found it yet.

Summer Treats The world of emotional advertising is seasonal; every year, there’s a crop

of summer-themed ads that evoke the season and make viewers happy.

Summer in ad land is a time for indulgence, a chance for snack, drink and dessert brands to make their mark. This year, Frito-Lay positioned this theme front and center in an ad celebrating summer socializing and our “favorite people, favorite places, favorite snacks.” It’s not an especially subtle or original ad, but it’s dynamic and fun. We rightly celebrate creativity, but done well, scenes of happy people having fun together can trigger positive emotions just as strongly. When life is good, sometimes all the advertiser needs to do is portray it on screen, make the brand connection and stand back.

Other brands aiming for a bit of summery indulgence in their fivestar ads are Kemps (advertising its ice cream with a lovely, folksy bit of animation) and dipped strawberry treat brand Shari’s Berries (pushing a Mother’s Day deal). Both show that smaller brands can tap into our desire for sweet indulgence as strongly as the big names.

Inclusive Purpose Brand purpose has become one of the most-discussed topics in the marketing world, with figures as senior and influential as Unilever’s CEO yoking their companies to the pursuit of wider, socially beneficial goals. Looking at the most emotional ads, it’s easy to see that purpose can be motivating and emotionally effective for consumers—but within limits. The kind of purpose-driven advertising viewers particularly enjoy is highly inclusive and focuses on providing opportunities to the disadvantaged. Purposeful advertising that is more controversial, which looks to break social norms or take political stances, tends to score lower.

Top purposeful ads so far this year include Microsoft’s Canneswinning Super Bowl spot featuring its

adaptive controller, technology that allows mobility-impaired kids to join in with their friends on Xbox without limitations. Coca-Cola landed two five-star ads highlighting its work supporting teachers and helping poor families afford shoes. These scored higher than any of Coke’s dozens of product ads this year, highlighting how strongly viewers respond to a company being a good corporate citizen.

Dogs (inevitably) get in on the action, too, with pet adoption and mobility services for injured dogs scoring five-star spots.

One interesting example comes from Hershey’s, whose “giving happiness”-themed ads scored five stars by adapting the style (mockdocumentary) and format (people being charitable) of many purposeful ads, but in this case, the charity involved handing out free chocolate bars.

All-Ages Ads One of those Hershey’s ads is the highest-scoring ad so far this year. It has a very unusual lead: a 94-year-old man who hands out Hershey’s treats to people in his neighborhood.

The success of this ad is a reminder that brands occasionally take myopic views of who or what will appeal to buyers. Brands often fill their marketing with youth, whether because they are the target consumer or because brands think that young people make their product more appealing across demographics.

But what’s notable about this year’s five-star ads is the range of ages represented. There’s plenty of other diversity, too: We’re well past the days of only white, middle-class families showing up onscreen. It’s heartening to have this proof that conventional wisdom is wrong and that viewers can and do respond well to ads showing a far wider age range than the narrow norm.

—TOM EWING SEPTEMBER 2019 | MARKETING NEWS

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environment year after year, earning consumer trust and active excitement.

The attendees are a nice mix of existing fans and totally new consumers, giving us an opportunity both for recognition and discovery throughout the weekend.

Additionally, although Pitchfork is a national brand—both through the festival and media property— Pitchfork Music Festival still feels local to the town and neighborhoods of Chicago, which plays into the bigger picture idea that the Branca Bar is not a fleeting, weekend-long pop-up, but rather the continuation of a plan for Fernet-Branca to authentically engage with each city and bolster the strong existing local relationships.

Q

What was unique about this pop-up experience?

Brands Flock to Music Festivals as Fans Embrace Activations

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rand activations at music festivals were once derided as the corporatization of an otherwise artistic event—there was no Dial soap pop-up at Woodstock. Nowadays, brands are ubiquitous at festivals and sometimes even welcomed by samplers looking to avoid higherpriced food vendors or the squinting masses seeking free branded pairs of sunglasses.

Sponsorship spending on music tours, festivals and venues totaled $1.47 billion in 2016, according to Eventbrite’s report, “The New Era of Concert & Music Festival Sponsorships.” The survey found that 82% of consumers who attend four or more music festivals a year embrace company and brand activations at these events. The most frequent festival attendees engaged with food

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or drink activations (70%), Wi-Fi access (61%), cell phone charging stations (46%), lounges or relaxation areas (45%) and photo booths (43%).

This year’s Pitchfork Music Festival, held July 19-21 in Chicago, welcomed 16 brand participants. These ranged from Bai ambassadors passing out free drinks, Acuvue’s mobile music video studio and the members-only Chase Sapphire Lounge. Marketing News spoke with Fernet-Branca CEO Steve Brecher about his brand’s pop-up Branca Bar at Pitchfork.

Q

Why did Fernet-Branca choose Pitchfork as one of the locations for the pop-up Branca Bar?

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Pitchfork has established itself for over a decade as a foundation piece in the festival circuit, sustaining a quality lineup and

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The most unique part of the Branca Bar is the designforward environment that invites consumers to enjoy the brand on their own terms. Rather than throwing together a Frankenstein activation or just trying to peddle products from the main festival bars, Fernet-Branca would rather design and build a truly beautiful pop-up bar that connects the consumer to the rich history of the brand.

The Branca Bar bartenders are encouraged to explain the complexity of the taste and share the Fratelli Branca family brand story, while Fernet-Branca brand ambassadors create a comfortable environment, never too pushy or tense.

Q

What were some of the results of the pop-up at Pitchfork?

A

There were two ways a consumer could enjoy FernetBranca on-site. First, within the Branca Bar activation footprint, guests could sample a small-format cocktail, including the Branca Buck

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with Fernet-Branca and ginger beer, as well as a Carpano Bianco Vermouth Spritz. Second, full-sized versions of these cocktails were also available within the Branca Bar activation and at various bars throughout the festival footprint.

(Editor’s note: Fernet-Branca says the activation earned 246,537 total impressions.)

Q

Any other anecdotal takeaways?

A

Pitchfork was the most robust lifestyle and music festival on the Branca Bar tour schedule this year and provided a great roadmap for how to integrate and execute similar events in the future. Their extremely organized and professional approach

to production left no questions to be asked, and their ability to maintain a familial vibe throughout the entire process, even through some tough on-site weather conditions, aligns directly with the Branca family mentality.

All and all, another great stop on the Branca Bar tour. With the combination of a beautiful activation, quality festival and event partners, insanely dedicated portfolio managers, targeted and engaged social media support and an amazing variety of press attention, the Branca Bar is definitely turning heads in each market while creating mass amounts of new Fernet-Branca fans and cementing love for the brand from its countless loyalists across the country. —SARAH STEIMER

The Branca Bar is not a fleeting, weekend-long pop-up, but rather the continuation of a plan for Fernet-Branca to authentically engage with each city and bolster the strong existing local relationships.

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How Blockchain is Boosting Transparency and Engagement in Consumer Research

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he marketing research industry is in a unique position to gain an intimate understanding of consumers, their behaviors and opinions. Developing the trust of survey participants through transparency and accountability is key to the future success of the industry—and the use of blockchain and crypto-technologies can help gain that trust.

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Blockchain helps solve persistent data privacy issues and removes security concerns of centralized databases, where survey participants have traditionally been found. It also predicates that transparency is one of its core values. Unsurprisingly, this approach has another beneficial side effect: better user experiences.

My company, Measure Protocol, ran a pilot project that put blockchain technology to practical

use for partners, including research agencies, brands and panels. The program showed surprisingly high and fast user engagement: 92% of those who started a data job completed it. Another indicator of a good experience is a quick response rate, and we found 44% of completed jobs garnered a response within 15 minutes of notification during our pilot.

Why were these numbers so high? We focused heavily on user experience. The transparency that surrounds blockchain means you can’t get away with a bad experience because the users have more visibility into the process. For every survey data job, participants had an

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Blockchain helps solve persistent data privacy issues and removes security concerns of centralized databases, where survey participants have traditionally been found. It also predicates that transparency is one of its core values.

Unsurprisingly, this approach has another beneficial side effect: better user experiences. blockchain-transparency philosophy, general network activity is made visible to the users of the system.

This includes the number of data requests, offers, acceptances, terminations, surveys taken, payments and ratings. This level of clarity provides the opportunity for analysis to understand the drivers of success and data quality. The data can also be used to encourage positive behaviors across the ecosystem.

Real-Time Feedback

opportunity to rank the system at various points in the program.

When adopting blockchain and its underlying philosophy, transparency and privacy-related directives need to be clearly established.

Interrogating the blockchain isn’t an easy undertaking for the average person, but there are built-in ways to expose the information and make it clearly available at the application level.

Here are some of the basics to this approach.

Transactional Activity Data Supply-chain and network activity is often a black hole with littleto-no transparency. By adopting a

Give users an instant opportunity to rate the quality of each survey or data job. Their ratings are written to the blockchain, become part of the reputation of the survey provider and are shared for other users to see. If ratings are low, people may choose not to participate.

From a researcher’s perspective, if a survey is launched and the first wave of respondents all give it one star, that’s an immediate indicator that something is wrong with the experience. You can halt the survey and send an alert to the provider, letting them know that this survey isn’t meeting quality standards for your network. This immediate feedback can help manage research firms’ reputations and prevent further bad user experiences.

Clear Incentives Some mystery surrounds how people are compensated for taking a survey.

In my company’s app, we chose to publish this information at the beginning of a job—incentive level, estimated time to complete, etc.— which holds everyone accountable.

No survey provider wants to be at the bottom tier of compensation, so this transparency starts to push us toward a fairer model.

Respondent Reputation This may not have as much to do with user experience, but it is important to note that ratings can work both ways in this ecosystem. Respondents are also rated, the information is saved to the blockchain and is made available to research firms. Building algorithms around the characteristics of a “good respondent” exposes their behaviors, such as average response rates to surveys, completion rates and number of surveys taken. Researchers can then target quality, higher-scoring respondents if they want feedback from those with better reputations.

This type of environment starts setting a different stage for incentives and motivations for survey participation—users are fully aware of “what they’re getting into” before they begin. Transparency also puts pressure on the survey providers to run high-quality surveys. While all the data is transparently stored on the blockchain, it becomes truly powerful when you start to unpack it for improved user experience.

—PAUL NETO SEPTEMBER 2019 | MARKETING NEWS

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SNAPSHOT

VOLKSWAGEN OF AMERICA/RICK LOOMIS

answers in action

‘Annie the Beetle’ demonstrates the longevity of Volkswagen By capturing the restoration of a loyal customer’s car, the iconic brand found an effective way to tell the story of its consumers and products

BY KATIE POWERS | EDITORIAL INTERN

 kpowers@ama.org Goal In 2016, Volkswagen was looking to bounce back after its corporate image took a heavy hit from a high-profile emissions scandal. To win back public support, it wasn’t enough for VW to tell the public how much it valued its customers’ experience and their continued loyalty; it needed to find a way to show them.

This led to the creation of the VW Newsroom, an in-house journalism hub designed to help tell the story of the brand and create opportunities for earned

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media. It also involved collaboration with several teams across the organization.

“Something my team was heavily involved with was taking the story of the people that drive our cars and bringing them to life,” says Patrick Pho, senior video content producer at Volkswagen of America. “We think all our owners have a story to tell.”

During a media sweep, the VW Newsroom team came across a local San Diego news story about Kathleen Brooks, a 72-year-old woman who had been driving the same 1967 Volkswagen

Beetle for 50 years. The car, which she affectionally called “Annie” after its rubyred coat, was in disrepair. The original news story featured shots of its faded paint job, broken hubcaps and pitted chrome bumpers.

The media relations team referred the story to Pho and his team, who were in the middle of working on developing a series called “Owner Spotlights.” After contacting and meeting with Brooks, it became clear that there was more to her story than her impressive relationship with her car. Her attachment was deep and grounded in memories of how, even during some of the most difficult times in her life—including marriage, divorce and three bouts of cancer—Annie always got her where she needed to go.

From there, VW’s media relations and marketing communications teams came up with a plan: Restore Annie back to roadworthy condition at VW’s factory in Puebla, Mexico, so Brooks could continue to drive her for years to come. They would document every step of the process on film, with the intention of capturing media attention that would emphasize the lasting significance of the brand to its customers.

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Upon hearing about the plan, Pho and his team jumped into its implementation.

“I was ecstatic,” he says. “What a way to really honor and recognize someone who has not only been a loyal customer but has gone through so much in her life.”

After Brooks agreed to the remodel, VW and its partners needed to find the best angle from which to capture the process. Brooks’s warm personality and her love for Annie would be central, but the longevity of the VW brand, and important technical elements of the car itself, would also need to be featured.

Action Pho emphasizes the value his team placed on collaboration with their partners and other departments within the organization in developing and creating the campaign. One such partnership was with First & 42nd, Edelman’s corporate social responsibility unit, which assisted in facilitating contact with Brooks. Mike Million, director and producer at VW’s production partner Third Story Films, wanted the ad to resemble a documentary.

“A big challenge was to try to ground it and make it feel real, but not like a reality show where she was winning a prize— even though she was getting her car refurbished,” he says. “I wanted to keep it grounded in her emotions, which I think we were able to do.”

In October 2017, Third Story Films captured Annie’s emotional departure from Kathleen’s home. From the time the car arrived in Mexico, restorations would take 11 months. The project was led by Augusto Zamudio, an engineer in the mechatronics shop in Puebla.

The production team captured the mechanical process on film, including interviews with Zamudio. “We kept close tabs on the progress in Mexico,” Pho says.

“It was so exciting to get updates from the plant and see the excitement our colleagues had.”

The project’s timeline presented an enormous logistical and creative challenge for the production team. “In traditional marketing, you develop a campaign and then you get the green light to execute,” Pho says. “We had to trust that this was a

great story, and sometimes great stories take a while to simmer. This would be a project that would take a while but, in the end, it was going to be so satisfying.”

Annie’s restorations were completed in November 2018. According to the VW campaign, Zamudio’s team replaced 40% of the car’s parts and restored 357 other pieces.

In facilitating the reveal, the filmmakers were tasked with achieving a dual objective: Authentically display Brooks’s love for Annie and exhibit the striking results of the restoration. But they also had to contend with a series of logistical challenges, including preventing Brooks from seeing her car before the cameras were able to capture the moment.

“Planning the reveal was complicated,” Million says. “We had a small crew and not a lot of control over the area we were in. We sort of had one shot at it.”

When Brooks saw Annie for the first time, she quickly became emotional. The footage also succeeded in showing off the updates to the car as Zamudio and his

COMPANY

Volkswagen FOUNDED

1937 U.S. HEADQUARTERS

Herdon, Virginia CAMPAIGN TIMELINE

December 2018 CAMPAIGN RESULTS:

More than 1.3 billion media impressions; 127,000 social shares and interactions with media content of the story; 1.4 million views of video content from the B-roll cuts for media.

answers in action

colleague gave Brooks an overview of the restorations.

“They did such beautiful work on [Annie] and put such care into every bit of it, and I think that meant a lot to her,” Million says.

Results Three days after Brooks and Annie were reunited in San Diego, VW released 40 photos and eight minutes of B-roll footage, with the goal of capturing earned media coverage. More than 100 stories appeared in media outlets and VW’s media content saw more than 1.3 billion media impressions. The B-roll cuts from Third Story hit 1.4 million views.

One week later, the VW Newsroom posted its own story and video across its social media channels. Video content posted on Facebook, YouTube and Twitter saw a combined 1.6 million views.

This year, the campaign won a Shorty Award for best auto campaign and Million won an Emmy Award from The National Academy of Television Arts & Sciences Pacific Southwest Chapter for best direction of a short-form film.

Pho and his team recently created a broadcast ad for the FIFA Women’s World Cup and believes that the VW Newsroom’s recent accomplishments are testaments to the success of “Annie the Beetle,” since the campaign solidified their ability to collaborate with groups across the organization and with agency partners. His team is working on the “Something Big” campaign, which seeks to promote VW’s new electric vehicles while telling the story of the brand’s commitment to partner with social causes. “‘Annie the Beetle’ was a story that very much aligns up to that, so it could be seen as an early herald of that direction,” Pho says.

Pho also believes the campaign achieved his team’s intention to promote the values of Volkswagen. “‘Annie the Beetle’ has boosted the brand by presenting a real human story that encapsulates what Volkswagen stands for,” he says. “We’re here for you for the long ride. It’s a great example of showing, not telling, as well as standing by our products and our customers.” m SEPTEMBER 2019 | MARKETING NEWS

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CORE CONCEPTS

How Brands Can Connect Authentically with Multilingual Audiences Research shows that consumers respond more favorably to messages they receive in their native language. But brands must invest in making sure their multilingual campaigns go beyond translation.

BY KATIE POWERS | EDITORIAL INTERN

 kpowers@ama.org

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n 1987, Braniff Airlines used radio ads to promote its planes’ new leather seats to the Spanish-speaking market in Florida. But the slogan, “Fly in leather,” failed to achieve its intended objective:

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The direct Spanish translation of the phrase sounded like “Fly naked.”

After some speculation that the blunder may have been intentional as a result of the attention it brought the

brand, it was confirmed to be a mistake by the executive who developed the campaign. Braniff not only failed to express its intended message, it failed to relay a commitment to its travelers.

In the U.S., more than 20% of the population speaks a language other than English at home, according to 2017 U.S. Census data. Native English speakers make up only 25% of global internet users, according to July Statista data. And although 60% of the world’s population speaks more than one language, research from Eurobarometer suggests that consumers respond far more favorably to messages they receive in their native language. When brands limit their marketing strategies to one language, both in domestic and foreign markets, they could be missing out on a significant opportunity to connect with potential customers.

But a direct translation of a marketing campaign from one language to another isn’t enough; brands must listen and speak authentically to their consumers if they want them to engage with the brand’s message.

Jill Kushner Bishop, founder and CEO of Illinois-based agency Multilingual Connections, finds that when brands fail to connect with consumers whose first language is not English, it’s a result of cutting corners in areas where more thorough work is required.

“Budgets are tight, people are busy and translation becomes an afterthought,” Bishop says. “People might say, ‘Well, these people speak English [well] enough, so we’ll just keep [our content] in English.’ … You could still get a good result out of that, but you’re very likely not going to.

If you want your user to understand your message, you have to talk to them in the language that’s theirs.”

Here are some tips for brands to consider as they look to connect with a multilingual audience.

Look Beyond Translation Bishop emphasizes the importance

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of understanding transcreation, the process of adapting a message from one language to another, while maintaining its intent, style, tone and context. By viewing language through a lens of transcreation—versus basic translation— marketers can be sure their audiences can read a message and understand the meaning behind it. Humor remains humorous and professional messages remain professional.

“If you’re a marketer, you don’t want to lose the relevance or immediacy of something just by going with a translation where people will understand the words but not the feeling,” Bishop says. She offers sports metaphors as an example of a language device that can easily become lost in a direct translation: They’re prevalent in the English language, but a culture that doesn’t play baseball, for instance, won’t understand the reference in the context of your message.

In translating content, marketers should also give thought to the target audience’s dialect nuances. “If you’re [writing] something that’s very slangheavy—where you’re trying to reach out to young people or a particular subsection of the community—you’re going to want to understand the way they talk among themselves and make sure you’re connecting with that,” Bishop says.

Consider Cultural Context Marketers must identify and understand their audience to create relevant content for multilingual campaigns. After all, not every person who speaks a given language comes from the same cultural background. Marketers are often mistaken in believing that people who speak the same language think the same way, says Kelly Hewett, a professor of marketing at the University of TennesseeKnoxville. “There are English speakers in South Africa, [in] the U.K.,” she says. “All these people have very different cultures, so the ability to immerse yourself in a culture is critical.”

Hewett leads a study abroad program

answers in action

A direct translation of a marketing campaign from one language to another isn’t enough; brands must listen and speak authentically to their consumers if they want them to engage with the brand’s message. for her marketing students that requires them to speak to locals in international markets and immerse themselves in different environments to observe the ways people consume. The goal is for students to gain the tools needed to understand what life is like for the people of a culture beyond the language they speak.

Understand Acculturation In targeting a multilingual audience within a domestic market, Hewett also encourages marketers to consider acculturation, which refers to how a person has adapted to the dominant culture in which they’re living. She says this can be one factor in how the audience receives and understands messages.

“Let’s take children of immigrants,” Hewett says. “The parents might be less acculturated than the children who were born in the United States, raised in their households speaking two languages, but probably consider themselves more American than their parents. If they are the target audience, the marketer must figure out how to use the language and the culture that is more consistent with the market where they were born. If the parent is the target, that’s a whole different story.”

Invest in Connecting Authentically Connecting with multilingual audiences in a meaningful way might require brands to invest in resources and tools to support their efforts. Bishop encourages brands looking to launch a multilingual campaign to do so with a growth mindset and a willingness to listen to

their consumers. “If you really want to connect with [a multilingual audience], you have to trust in them and build a relationship,” Bishop says. “You must spend the time and the money to do that.

When companies just put up a Googletranslated version of their website, it’s as if they’re telling customers, ‘We care about you and we want your business, but not enough to really invest.’”

Getting a multilingual campaign right might take time, and marketers must be prepared to seek feedback, adapt their processes as new insights become available and be open to employing new strategies.

“It’s important to educate our clients and it sometimes must be through error,” Bishop says. “They go out and they don’t do it right the first time, and that’s when they understand the value of spending time and money, talking to experts and using the approaches they would in English within those other languages.”

Seek Smart Partnerships For brands that are working with agency partners to create multilingual marketing campaigns, Bishop suggests starting the process early. This way, organizations can take enough time to find a group that understands and supports their goals. Brands should provide translation agencies with as much context as possible and be prepared to answer questions, such as tone and style of messaging and if they are targeting a specific regional dialect in their language.

“The more background information you can share with an agency,” Bishop says, “the more likely it is that you’ll get it right the first time.” m SEPTEMBER 2019 | MARKETING NEWS

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ETHICAL MARKETING

Reassuring Consumers on the Use of Their Data Using public social media data—likes, updates, photos—is perfectly legal, but it often makes consumers uncomfortable.

Brands that use this data ethically may be able to put consumers at ease and improve their own business.

BY HAL CONICK | FREELANCE WRITER

 halconick@gmail.com

I

magine that you’re waiting in a doctor’s office. You may feel sick, worried or in pain, but you know that your medical information will be safe—the doctor is

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legally obligated to protect your data. You feel comfortable that your information won’t be used nefariously or even questionably.

The information you provide at the doctor’s office is private, but what about that which you publicly post to social media? The premise changes: Most people openly post but aren’t sure how brands use their likes, statuses and photos. For such an opaque part of the marketing process, the stakes are high. A recent survey by cloud platform Acquia found that 65% of people don’t know which brands are using their data, while 65% said that they’d stop doing business with a brand that was dishonest about how it uses their data. This public data isn’t legally protected, so it’s up to brands to determine how they’ll collect, analyze and use it, often leaving consumers in the dark.

The term “online privacy” means different things to different people, says

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Jenna Jacobson, assistant professor of retail management at Ryerson University.

Jacobson—an author of a 2019 paper titled “Social media marketing: Who is watching the watchers?” published in the Journal of Retailing and Consumer Services—says that while it’s perfectly legal for marketers to collect, analyze and use publicly available data, brands don’t often consider whether they’re making consumers feel comfortable.

“I think that there’s a lack of understanding about how social media data can actually be used,” Jacobson says, also noting a lack of professional and organizational norms in marketing and many other professions. “For us, it was important to acknowledge that just because social media data is publicly

accessible doesn’t mean that individuals don’t have concerns and feel discomfort with third parties using their data.”

According to Jacobson’s research, the majority of consumers aren’t comfortable with how their data is used. The paper found that 53.1% of consumers are uncomfortable with their data being used for targeted ads, 42.3% are uncomfortable with it being used for opinion-mining and 41.9% are uncomfortable with it being used for customer relations.

This doesn’t mean that consumers want to hide. The paper found that consumers are constantly assessing the benefits and risks of sharing online and managing their privacy boundaries by considering what they share. They continue sharing because they want the benefits of using social media, whether that benefit is communication with people or being shown something useful they didn’t know about through marketing.

Brands can collect data and use it in a way that helps consumers, but Jacobson says that they often don’t contemplate what consumers could find unsettling.

Your doctor isn’t likely to go off on a negative rant about your health to a nurse in front of you—although it’d be legal— because it would likely make you feel terrible. Jacobson says that brands should consider what data practices would make consumers uncomfortable if they found out about them and brainstorm ways to change these practices. The goal should be to build consumer trust in the process and leave them without unpleasant surprises, perhaps by creating guidelines or practices on a business or industry level.

In Jacobson’s paper, she and her co-authors argue that marketing professionals have ethical responsibilities that extend beyond legal requirements. “For social media marketing to be executed effectively and ethically, the recipient of the marketing material—the consumer—needs to be comfortable with the practices,” they write. If consumers discover that a

answers in action

brand is using their data in a way that makes them uncomfortable, they may no longer buy from that brand.

People often think about data ethics in terms of politics. Much of the past few years has been spent debating what’s ethical and unethical when it comes to political data collection and targeted marketing.

Morten Bay, a research fellow at the Center for the Digital Future at the University of Southern California’s Annenberg School for Communication and Journalism, had his interest in the topic piqued by observing how ISIS and Russia used social media as something of a virtual warzone. His interests extended into how social media was used during the 2016 presidential campaign, especially the Cambridge Analytica scandal, in which President Donald Trump’s campaign leveraged thirdparty psychometric data—measures of a person’s knowledge, abilities, attitudes and traits—to target individual voters.

Some compared this use of data to the microtargeting used by President Barack Obama’s campaigns, but the data procured by Cambridge Analytica was mined without user consent or knowledge that it’d be helping a political campaign, a far cry from collecting publicly available social media data.

Bay wrote a paper—titled “Social Media Ethics: A Rawlsian Approach to Hypertargeting and Psychometrics in Political and Commercial Campaigns,” published in a special issue of ACM Transactions on Social Computing— arguing under a framework of philosopher John Rawls that using hypertargeting and psychometrics in politics was not ethical, as it blocked out the competing information necessary to a democratic society. In his paper, Bay writes that persuasion on social media is a zero-sum game: “Part of a persuader’s mission is to succeed in presenting SEPTEMBER 2019 | MARKETING NEWS

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ETHICAL MARKETING

information in a way that blocks out competing, contradictive information.”

But hypertargeting is different in commercial use, Bay says, and not exactly unethical. One can argue that people aren’t well-informed enough to know about data mining and targeting in marketing or advertising, he says, but that isn’t necessarily an ethical problem if they aren’t sold a certain product. The Rawlsian framework doesn’t see targeting used in marketing and advertising as unethical, so long as consumers have the chance to both opt in and out—in politics, users can’t opt out, as social media has become a central location for political news and debate.

“I’m not sure we can do anything about it in a commercial sense unless there’s an actual breach of contract,” Bay says. “But on a political level, the stakes are much higher.”

So how can a brand strike a balance between doing something that’s clearly legal and perhaps ethical, but makes consumers feel disconcerted?

Have Clear Policies, But Educate and Empower Jacobson’s paper finds that it’s necessary to create a clear privacy policy, but that alone isn’t sufficient to make consumers comfortable. After all, most people tend to skim or skip these policies entirely.

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Jacobson and her co-authors write that brands should “empower users with a higher level of control over what information they want to share, with whom and for what purpose.”

Much of this will likely start with education on how brands use consumer data. Although most consumers are uncomfortable with targeting, people are more familiar with targeting than they are of opinion mining or customer relations, two tactics which are more masked and less apparent to the average user. This means that brands have an opportunity to educate consumers about these marketing practices, using education to build comfort.

“Digital literacy will continue to be crucial as technologies evolve and new ways to use individuals’ data emerge,” Jacobson and her co-authors write. “The onus does not only lie with individuals; rather, third parties that use the data need to be held to higher ethical standards.”

Be Transparent Like Jacobson, Bay believes that it’s up to marketers and advertisers to figure out how they want to represent themselves ethically. Society may tacitly accept current data collection practices—most of society is blissfully ignorant, as Acquia found—but consumers may learn more about these practices and quickly sour on

how their data is being used. What was once a benign practice could quickly turn cancerous for a brand.

To prevent being caught engaging in something consumers may one day see as unethical, Bay suggests that brands be transparent with how they collect, analyze and use consumer data.

“If you say to people, ‘We would like to give you X opportunity, but it requires us to get your data and perform this analysis on it,’ then people can make up their own minds,” he says. Companies often falter here by telling consumers what data they collect but not how they’ll analyze it, “but as long as they make sure [everything] is transparent and people are informed, [data practices] can never really be completely unethical,” he says.

Do You Need the Data?

Though it may sound counterintuitive for marketers who want to be on the cutting edge of data analysis, Bay says that brands should consider what kind of data they actually need to collect.

“What’s your benefit of actually starting to collect this data?” he says. “Can you actually use it for anything useful? … I would imagine that for 40% or 50% of companies going into this field right now, they’re just doing it because of the hype.”

Consider Becoming a Privacy Champion Brands have an opportunity to become a champion of data privacy and perhaps win new business.

Jacobson says that she could envision a brand positioning itself as an ethical leader. This would be a challenge for most marketing departments, she says, as being a champion of data privacy would mean a high level of data literacy, something that doesn’t come easily and requires following industry changes. But brands that are outwardly ethical and put consumers’ comfort first could win their trust and increased sales.

Jacobson says that data privacy is constantly evolving­—and it may be the new frontier for ethical practitioners.

She sums it up simply: “These ethical practices are good business practices.” m

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WEB DESIGN

how 13 online design elements shape multidimensional customer experiences to influence purchase, and how these experiences should be customized based on the products or brands sold.

How to Structure Product Pages for E-Commerce Success A two-step customer experience design guide in the Journal of Marketing describes how to shape effective online experiences

BY ALEXANDER BLEIER, COLLEEN M. HARMELING AND ROBERT W. PALMATIER

A

mazon, eBay, Shopify and other online marketplaces offer unprecedented opportunities to market products to a wide range of consumers. But competition is fierce: More than 350 million products are listed on Amazon alone.

As the number of sellers and products on these platforms grows, the design of individual product pages becomes even more important. In fact, Forbes regards this factor as the No. 1 requirement for successful selling online. Amazon offers sellers various content options for building product listings, such as Basic and Premium A+ content or Enhanced Brand Content. Despite these options, most firms are still uncertain about how

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to create highly effective online customer experiences at the individual product and sub-brand level.

A new study in the Journal of Marketing seeks to empower firms with actionable guidance and a toolset to design pages for higher sales, ultimately driving rankings and category leadership. To this end, our research team collaborated with a specialized online content agency and four Fortune 1000 firms from various industries to create and conduct large-scale lab and field experiments, studying 16 products from 11 brands and creating 256 unique Amazon look-alike product pages.

Using a special Taguchi method to design the experiments, we investigated

Key points include: First, data from 16 lab experiments expands insights into online customer experiences and identifies four dimensions—informativeness, entertainment, social presence and sensory appeal—that act as underlying mechanisms by which design elements influence purchase.

Second, uncertainty about the offered product (due to its search versus experience focus) and its seller’s brand (due to its trustworthiness) influences the effects of the customer experience dimensions on purchase. Using actual product webpages on amazon.com, we conducted a field experiment that validates the lab results to show that search products benefit from a more informative experience, but experience products benefit from a more social experience.

We created a two-step online customer experience design guide with actionable advice for marketers regarding how to strategically orchestrate design elements to shape effective online experiences in an era of increased web design importance.

Our design guide advice includes the following: First, sellers must determine the most beneficial experience for customers, based on the search versus experience focus of the product to be sold and the trustworthiness of the brand. The measures we employ can help firms gather this information from current and potential customers.

Second, firms should leverage this product and brand knowledge and apply the design guide to select relevant design elements for their product pages. For example: • To create more informative experiences, bulleted features are 83%

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stronger than their effects on any other experience dimension, while a comparison matrix is 62% more effective and descriptive detail is 54% more effective. Recommendation agents are 150% more effective.

• More social experiences should be built by employing a conversational linguistic style and lifestyle photos, which are 139% and 134% more effective compared to any other experience dimension, respectively.

• Sensory experiences are also beneficial and can be built through product videos and product feature crops, which are 106% and 29% stronger compared to any other experience dimension, respectively.

In addition, firms need to consider the customer experience when assessing their existing digital assets. Managers often default to a logic that suggests that if a design element exists in the firm’s digital inventory, it should be used on the page (a more-is-better approach). Yet we show that certain design elements can induce unfavorable customer experiences for specific products or brands. An essential part of the process is thus to also determine which elements not to use. If the firm does not already own certain design elements, our design guide suggests where it should allocate investments to produce valuable new elements. For example, investing in highquality imagery can benefit any product or brand, but the most appropriate amounts of textual detail and linguistic style depend on the product type (search versus experience focus).

Our product page design guide can also inform contract negotiations between sellers and retailers. Many retailers offer premium content options that require additional financial investments from sellers. Amazon, for example, offers multiple tiered categories (e.g., Basic A+ Content, Premium A+ Content) that provide access to more design elements or configurations. For some products, these investments grant access to necessary

design elements. For other products, though, investing in premium content might not be needed or could even be disadvantageous. For example, premium content modules might support larger photos and more visually stimulating content (e.g., scrolling pictures) but also restrict the number of characters available to describe product features and benefits.

Such designs can induce more social or sensory experiences, but they likely are less effective at creating informative experiences. Thus, a lower-cost alternative may be more attractive to a seller that seeks to provide mainly informative experiences.

Our design guide is also relevant for retailers. The more conversions sellers generate on a retailer’s website, the greater the retailer’s earnings. Yet retailers must provide an infrastructure to support the digital content and guarantee adequate page load and transaction speeds. Helping sellers build effective pages as efficiently as possible is in the retailer’s best interest.

With our design guide, retailers might develop tutorials to help sellers improve the effectiveness of their product pages, as well as recommend available design elements to those sellers based on the products and brands that they market. This approach could improve conversions and customer loyalty and reduce storage demands by decreasing ineffective content. With our design guide and a dedicated customer experience mindset, sellers and retailers can work together strategically to maximize the performance of their product pages. m

scholarly insights

Most firms are still uncertain about how to create highly effective online customer experiences at the individual product and sub-brand level.

ALEXANDER BLEIER is an assistant professor of marketing at the Frankfurt School of Finance & Management.

COLLEEN M. HARMELING is an assistant professor of marketing at Florida State University.

ROBERT W. PALMATIER is a professor of marketing and John C. Narver Chair in Business Administration at the University of Washington.

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RESEARCH DIGEST

Latest Research Insights Highlights from the AMA journals—and what the findings mean for practitioners

The Value of Rapid Delivery in Omnichannel Retailing MARSHALL L. FISHER, SANTIAGO GALLINO, JOSEPH JIAQI XU

Forthcoming in the Journal of Marketing Research, 56 (October 2019). >>IN A NUTSHELL: Customers

love fast delivery, and new research shows that it’s worth the considerable investment required to achieve it for omni-channel retailers. Analyses show that in stores that experienced delivery speed change, online and offline store sales increased by an average of 3.8% and 1.8%, respectively.

This effect is positively related to the reduction in delivery time, with each business day reduction in delivery time corresponding to average sales increases of 1.5% and 0.6% in online and offline stores, respectively, from a baseline of seven business days.

>>PRACTITIONER TAKEAWAYS:

The results can be useful for retailers in deciding whether to expand their online store distribution capabilities, and they suggest that faster delivery in omni-channel retail can generate complementarities across channels.

Retailers can use faster delivery in the online channel to drive traffic to their offline stores in the short term, while the presence of offline stores can help increase the effectiveness of faster delivery in the long term.

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RESEARCH DIGEST

Dual Business Relationships, Opportunity Knowledge and New Product Development: A Study on Returnee Young Ventures WENSONG BAI, MARTIN JOHANSON, OSCAR MARTÍN MARTÍN

Journal of International Marketing, 26 (September 2019). >>IN A NUTSHELL: A new

phenomenon is that of the “returnee young venture”— firms whose founders accumulate knowledge abroad and then start a new venture in their home country. They often operate in both domestic and international markets to take advantage of dual business relationships.

However, the roles of international and domestic business relationships are different in new product development.

>>PRACTITIONER TAKEAWAYS: Returnee young ventures must balance their international and domestic relationships, as they complement each other in resource acquisition and may also compete with each other in resource inputs. The authors show that domestic relationships matter just as much as international ones because they can help with product manufacturing.

Networking is vital in the domestic market, especially when the home country is characterized by large manufacturing capacities.

scholarly insights

Task-Dependent Algorithm Aversion NOAH CASTELO, MAARTEN W. BOS, DONALD R. LEHMANN

Your Data Is My Data: A Framework for Addressing Interdependent Privacy Infringements BERNADETTE KAMLEITNER, VINCE MITCHELL

Forthcoming in the Journal of Public Policy & Marketing, 38 (October 2019). >>IN A NUTSHELL: When

downloading apps, people often unwittingly volunteer access to data that others might rightly claim, such as contacts, pictures or conversation logs. The case of Cambridge Analytica highlighted that the personal information of more than 87 million people could be gleaned from only 270,000 people because they allowed others’ data to be shared.

The authors illustrate how consumers and marketers can address the issue.

>>PRACTITIONER TAKEAWAYS: Using the authors’ 3R framework (realize, recognize and respect) and viewing data as property, consumers can take a more knowledgeable approach when downloading apps.

Marketers can help, for example, by changing privacy language, adding warnings or providing a preview of actual data being given away.

Forthcoming in the Journal of Marketing Research, 56 (October 2019). >>IN A NUTSHELL: Consumers

tend to be averse to relying on algorithms to perform tasks that are typically done by humans, even though algorithms often perform better. The authors find that algorithms are trusted and relied on less for tasks that seem subjective. However, the authors also show that perceived task objectivity is malleable and that increasing a task’s perceived objectivity increases trust in and use of algorithms for that task.

>>PRACTITIONER TAKEAWAYS: Affective computing is a growing industry that aims to create explicitly emotional algorithms and build them into products. Consumers will likely be skeptical about the emotional abilities of such algorithms, so marketers will need to convincingly demonstrate their effectiveness.

Algorithm Overdependence: How the Use of Algorithmic Recommendation Systems Can Increase Risks to Consumer Well-Being SACHIN BANKER, SALIL KHETANI

Forthcoming in the Journal of Public Policy, 38 (October 2019). >>IN A NUTSHELL:

Consumers frequently depend too much on algorithm-generated recommendations, posing potential harms to their own well-being and leading them to play a role in propagating systemic biases that can influence other users. >>PRACTITIONER TAKEAWAYS:

Recommendation systems often favor mainstream bestsellers, push more expensive items with higher margins and may even play a role in perpetuating social inequalities. Effective recommender systems should be designed to leverage the strengths and counteract the inherent weaknesses of their users.

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executive insights

DATA INNOVATION

Is There Magic in the Mashup of Data and Creativity?

BY JAKKI MOHR

 jakki.mohr@business.umt.edu

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have always been curious about how people generate ideas for radical innovation. It’s why I have a wide variety of books on the topic on my shelf, from Melissa Schilling’s Quirky: The Remarkable Story of the Traits,

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Foibles, and Genius of Breakthrough Innovators Who Changed the World to Janine Benyus’ Biomimicry: Innovation Inspired by Nature. I’m intrigued by the role of data in the innovation process— leading to another set of books in my

collection, including Peter Verhoef and co-authors’ Creating Value with Big Data Analytics and Frank Bien and Tomasz Tunguz’s Winning with Data. In fact, I teach a course on this very topic in our business analytics master’s program at the University of Montana.

Certainly, marketing has excelled in developing sophisticated techniques to measure customer reaction to new concepts, whether new products or advertising messages. And now we have access to Big Data, characterized by the plethora of types (e.g., sentiment analysis, click streams, credit card usage) and sheer volume, real-time generation and analysis.

McKinsey’s Brian Gregg, Jason Heller, Jesko Perrey and Jenny Tsai wrote about the relationship between data analytics and innovation in a 2018 post on the company’s website. The authors called

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executive insights

DATA INNOVATION

it a myth that “‘ideas and numbers’ have always had an uneasy alliance in marketing. … Creativity is an instinctual process of building emotional bonds with consumers. Bring in too much quantitative analysis and the magic dies.”

Even Marketoonist Tom Fishburne has captured the stereotype. In one cartoon, professionals—presumably marketers— quip to a painter, “Now let’s optimize the creative by adding puppies, emojis and an incentivized call-to-action.”

In contrast, McKinsey’s data offers a different perspective: Combining human ingenuity and insights from data analytics creates a power combination that drives value across the marketing value chain.

Creative functions are becoming more data-driven, while data-driven functions are growing more creative.

Here are a few takeaways that I have gleaned from studying the mashup of these two domains over the past three years.

TEMPER DATA-DRIVEN INSIGHTS WITH HUMAN JUDGMENT. The need for intuition and experience doesn’t go away when data enters the picture, as Peter Horst and Robert Duboff write in a November 2015 Harvard Business Review article­: “In a data-driven, automated world, the risk of unintended missteps grows significantly in the absence of an appropriate judgment screen.” This overreliance on data is a big part of the story that managing editor Sarah Steimer wrote about for Marketing News in January 2018: “How Airlines Get Customer Experience So Wrong with So Much Data.” Data analysis can make surprising connections and suggest nonintuitive marketing moves, but marketers must always ensure that these insights make logical, intuitive sense. This insight harkens back to an August 1990 article in Management Science by Robert Blattberg and Stephen Hoch: “A 50/50 combination of database modeling and managerial intuition always outperforms either in isolation.”

BUILD A TEAM THAT VALUES BOTH DATA AND CREATIVITY. It is well-known that

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Combining human ingenuity and insights from data analytics creates a power combination that drives value across the marketing value chain.

Creative functions are becoming more datadriven, while data-driven functions are growing more creative. a team tasked with generating radical innovation benefits from a diversity of skills and talents. This diversity is especially true when relying on a datadriven innovation strategy; a team with a tapestry of skills and roles—including skilled data scientists—can generate divergent ideas.

Horst and Duboff offer one reason to assemble a diverse team: “Just as the most creative marketers aren’t the best data people, analytic professionals usually lack the skills, the experience and perhaps even the ‘internal wiring’ to excel at brand, image and creativity.”

Although I don’t necessarily agree with their declarative statements—indeed, the McKinsey authors suggest that the best (e.g., not all) data engineers have incredible imagination and curiosity that help generate new insights—the important takeaway is to build a team of people nimble enough to work with colleagues with different skills and mindsets, including both younger and older team members.

(Note to young people: Be sure to generate data literacy. Not only will your older colleagues expect you to have it, you will also add great value by asking questions that demonstrate this proficiency.)

CLEARLY ARTICULATE THE PROBLEM TO BE SOLVED. Derek Thompson’s great article in The Atlantic from November 2017—“Google X and the Science of Radical Creativity”—notes that “Moonshots don’t begin with brainstorming clever answers. They start with the hard work of finding the right questions.” This is echoed by Nelson Repenning, Don Kieffer and Todd Astor

in the MIT Sloan Management Review in March 2017: “Clear problem statements can unlock the energy and innovation that lies within … your organization.”

They also note the flipside: The lack of a clear problem formulation can prevent innovation and lead to wasted time and money.

The focus on identifying the right question is consistent with a marketer’s focus on understanding the customer’s pain points. Getting to the root cause of an issue is required for creative problem-solving, followed by enlightened experimentation to generate and evaluate ideas. Gary Pisano’s article in this year’s January/February Harvard Business Review, “The Hard Truth About Innovative Cultures,” acknowledges that, “Demanding data to confirm or kill a hypothesis too quickly can squash the intellectual play that is necessary for creativity.”

Can data play a role in driving radical innovation? Based on my experience and expert insights, the answer is a resounding “yes.” Certainly, other factors also play a role in the mashup of data and creativity—importantly, the role of organizational culture—but these three are central to unleashing the magic: balancing data-driven insights with judgment and intuition, developing seamless working relationships between data-savvy creative marketers and consumer-savvy data analysts and valuing the importance of asking the right questions. m JAKKI J. MOHR is the Regents Professor of Marketing, the Poe Family Distinguished Faculty Fellow and Fellow at the Institute on Ecosystems at the University of Montana.

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executive insights

PRICING STRATEGY

benchmark survey, respondents rate their satisfaction with eight areas of their overall experience: sales and bidding, communication, pricing and billing, product or service quality, project management, safety, ongoing service and support, and sustainability and social responsibility. We can statistically ascertain the importance that customers put on each of the eight areas, but also various sub-components of each area.

The results provide important insights for B2B companies to improve their pricing strategies.

B2B customers see price as a small component of the total value proposition.

A Better Way to Price B2B Offerings

BY VIKAS MITTAL

 vmittal@rice.edu

‘O

ur offering is commoditized.

We must lower price to stay competitive.� The inability to raise prices despite an improved product offering is a common refrain among many senior executives at B2B companies.

Many B2B executives reduce price to dollars and cents paid by the customer, in lieu of improving the core product or service offered. This is a mistake. A better way to price B2B offerings is to encompass the totality of the customer experience, which includes the billing

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process, pricing perceptions, long-term pricing arrangements, credit terms and value for price paid.

Since 2017, my colleagues and I have conducted a large-scale survey of more than 7,900 B2B customers. B2B managers in our survey have rated more than 600 companies, including many Fortune 500 firms such as Apple, Microsoft, Dow, Caterpillar, UPS and 3M. The survey participants are B2B customers at all levels, including managers, directors, vice presidents and CEOs. In this

Among the eight areas evaluated by B2B customers, pricing and billing accounted for 9% of customer value, with ongoing service and support (34%), product or service quality (17%) and communication (15%) representing two-thirds of value.

Yet many sales executives believe that price accounts for most customer value that they provide. Nothing could be further from reality: Although pricing may be important for the procurement department, it may not hold the same importance for other stakeholders in a client organization. The latter stakeholders may value communication, ongoing service and support, and the quality of the offering. When asked about price, savvy salespeople start by enumerating the total value that their offering provides and then end with the price. Inexperienced salespeople start and end with price, extolling how their price is lower than specific competitors.

B2B customers prefer a fair price over lowest price.

Technological innovation in the B2B sector is typically geared toward increasing product quality and lowering price. Companies lower price to gain market share with the goal of rationalizing their product costs over a larger customer base.

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executive insights

PRICING STRATEGY

Our study results refute the logic of this approach. Customers in our survey rated their satisfaction with getting a fair price as well as the lowest price. Surprisingly, getting a fair price is three times more important to respondents than getting the lowest price. We have found this same result in many B2B companies involving software, parts distribution, oil field services, engineering and construction, and mobile-office units.

Fair price means that you are not priced at the extreme (highest or lowest), the pricing structure is easy to understand and the price is closer to industrysector average (slightly higher is OK).

For example, the price for propertymanagement services for single-family homes in a Houston suburb ranges from 3-10% with an average of 5%. By offering a flexible pricing structure in the 4-6% range, a management company was able to increase the count of properties under management from 80 to almost 150 within the span of a few months.

B2B customers want pricing and billing to be managed as a process.

At retail stores, customers choose a product, make a payment, get a receipt and walk out. The receipt serves as a clear reminder of the price paid and makes the bottom-line price relevant to customers.

B2B transactions are different: While pricing is relevant during the bidding and procurement stage, the billing process becomes important during the project execution phase. Over time, the customer expects the billing and invoicing to accurately and clearly document what part of the contract has been delivered, how it was priced, account for any variance from the original contract and so on. The billing statement becomes an ongoing communication tool for aligning customer and supplier expectations. Our study participants rated the clarity of billing statements, accuracy in pricing and ease of understanding pricing as some of the most important factors driving their satisfaction.

In one example, a waste-management company serving retailers and chain restaurants was losing clients despite

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low price and timely service. In-depth interviews with recently defected clients revealed dissatisfaction with the billing and invoicing process, not pricing.

The billing statement did not clearly indicate what each charge on the invoice represented. Customers could not store and search invoices online or get charges broken down for each location. There was no easy way for customers to dispute charges. Once the billing process was overhauled, customer retention increased in a matter of months.

Manage pricing holistically for B2B customers.

In a B2B context, price is part of an initial negotiation and purchase. It also provides a forum for managing the give and take between customers and suppliers during consumption. By pricing holistically— going beyond the bottom-line price— suppliers can add value for customers through flexible credit terms, cash discounts, volume discounts, rent-to-own

terms and leasing options. Rather than manufacturing and selling multimilliondollar planes to its clients, Boeing started a leasing company to help smaller airlines afford its aircraft. A valve manufacturer in Texas expanded its market to small- and medium-sized clients by maintaining its original price but supplementing it with a three-month extended payment option to qualified customers.

Suppliers can also extract value by pricing holistically. Frequently, many suppliers price the core product or service but give away many services for free. At the very least, you should price the entire offering to include any additional services and components. These can include service calls, on-site repairs or add-on consulting. Later, even if you decide to provide some of these for free, the client can quantify the value. As the relationship evolves, some or all of the additional components could be provided for an agreed-upon price.

What now?

Pricing B2B offerings is a complex endeavor that should go beyond determining the bottom-line price.

Fixating on the final price is a mistake in B2B contexts because customers view pricing as a broader concept. To meet customer expectations, you must realize that pricing is one component of a larger value proposition. You should manage your price holistically rather than striving to be the lowest-price provider. Incorporating the billing and invoicing process over time can be even more important to customers than getting the lowest price. The billing and invoicing process can become a valuable tool to manage client expectations, build stronger relationships and even upsell to customers. Accomplishing these pricing objectives requires close collaboration among the sales, finance, accounting, customer service and commercial departments of any B2B company. m VIKAS MITTAL, PH.D. , is a member of the faculty at the Jones Graduate School of Business at Rice University in Houston, Texas.

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Shattering Gendered Marketing In industries where products have been historically marketed based on gender, some brands are beginning to shun stereotypes and embrace neutrality

BY KATIE POWERS PHOTOS AND LAYOUT BY VINCE CERASANI REVIEWS BY REAL AMAZON CUSTOMERS

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IN A 1955 PRINT AD,

the household brand Lux presented a woman dressed in a sensible apron and pearl earrings, surrounded by a mountain of dishes. “Get out of the kitchen sooner!” read the text above her. An overlaid image depicted her husband and child relaxing outdoors. In another ad, released 31 years later in 1996, car manufacturer Daihatsu offered an image of a man driving a van full of smiling women below the words, “Picks up five times more women than a Lamborghini.” The logic behind such advertising, of course, is that women are in charge of housework and family care, while car purchases are left primarily to the men.

In today’s social climate, it seems unlikely that people would stand for such egregious stereotyping, but products such as dish soap and cars are still aimed at consumers based on gender demographics— brands are just subtler in their approach. For children, gender stereotyping is on full display in retail. A pink convertible or a doll might be listed for girls online or in stores, while a blue truck or a baseball bat may be labeled

as boys’ toys. It’s a relatively modern phenomenon: According to an Atlantic article by sociology professor Elizabeth Sweet, less than 2% of toys were explicitly marketed to either boys or girls in Sears catalog ads in 1975. By 1995, gendered toys made up roughly half of the Sears catalog’s offerings. For adults, brands might aim targeted online ads for household products to women, while a sports equipment company might only portray men in their commercials.

But this pink and blue divide also persists because brands have traditionally operated on the belief that consumers are making purchasing decisions based on their gender. Marketing to a person’s gender not only risks alienating other potential consumers—ones who don’t conform to traditional gender roles or interests— but it also shows a failure by the company to mine for deeper insights about its audience.

Stereotypes suggest otherwise, but research demonstrates that humans aren’t defined by their gender.

According to a J. Walter Thompson Intelligence report from 2015, 81% of Gen Z members strongly believe gender does not define a person as much as it did in the past. They’re also embracing the idea of gender nonconformity, with nearly 60% reporting that they believe forms should include selection options besides “man” or “woman.”

Ultimately, research from the American Psychological Association finds that a person’s gender has little to no bearing on their personality, cognition and leadership abilities. Sure, a consumer might identify as a woman, but she might also be interested in sports or perhaps enjoy hiking or camping. Maybe she manages a large group of people at her job, or makes major financial decisions. A man may be interested in

Finally, a hammer for women! Need something to fix a dollhouse with. My wife cannot lift a men’s hammer without breaking a nail, but she is (barely) able to lift this.

—S. PATHAK

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I didn’t realize candles were only for women. You learn something new every day.

—C. CARTER

cars, but he also might do all the grocery shopping for his children.

“There are more differences between individuals than there are between genders,” says Christia Spears Brown, a professor of developmental and social psychology at the University of Kentucky. “If you use gender as your metric, you won’t see what they’re actually interested in.”

Yet brands have caught themselves and consumers in a vicious cycle: Stereotypes trap people into thinking that they are meant to desire a certain product, then brands continue to market said product toward the gender that has typically bought it. As a result, companies have convinced women to spend more on products that are nearly identical to those marketed to men, a phenomenon dubbed the “pink tax.” On the other hand, a man might be persuaded to purchase beer when he’d prefer a bottle of wine, as aisles are stocked with brands such as Mad Housewife, Seduction and Little Black Dress.

The effectiveness of gendered marketing is changing as modern consumers—particularly those of younger generations—are seeking brand experiences that are inclusive toward people of all gender identities and don’t judge their preferences based on stereotypes.“Brands both reflect and influence societal norms, and for much of our existence, our American concepts of gender have always been organized in binary terms,” says Kate Snyder, strategist and head of anthropology at Instant Grass International, a consumer insights and research firm.

“We’re in the midst of a powerful cultural movement, one

in which people are beginning to embrace the fluidity of gender and that the way we identify and express ourselves doesn’t have to strictly fall under masculine and feminine stereotypes. Brands should be mirroring and representing this shift in order to stay with the times.”

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he toy industry is one of the first stops in the life cycle of a consumer, and it’s also an arena where gender stereotypes are built and internalized, says Brown. In a department store, consumers might find dolls and pretend makeup in an aisle labeled “girls” and sports equipment or monster trucks in an aisle labeled “boys.” They might even find the same product—a toy car, for instance—in both aisles; one in pink for girls and one in blue for boys.

Brown says such distinctions are based on stereotypes about what people of a certain gender might want: that girls, for example, are interested in their appearance and identify with motherhood, while boys are physical, aggressive and athletic. But it also suggests to children that some products are simply not meant for them. “That differentiation seems to tell kids that boys and girls are inherently different,” Brown says. “By gendering [toys], it conveys implicitly that kids are so different that they need different types of toys.”

And like the pink tax, gendered marketing can be a boon for sales: Insisting that girls’ and boys’ toys be differentiated might convince a family with children of

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But really, do they need to be pink and labeled for ladies?

Can we please get past the stereotypes? Took one star off just for the marketing.

—SEAMOMSTER

both genders to buy double. Plus, in many cases, the “girl” version of a product will cost more. In a 2015 report, the New York City Department of Consumer Affairs found that girls’ toys and accessories in the city cost 7% more than boys’ items, and girls’ clothing cost 4% more.

It may not appear that gender-neutral products would be in a brand’s interests, but modern parents want to protect their children from the stereotypes that could cause a little boy to ask for a toy monster truck when he’d prefer a doll.

In a 2017 Havas Group survey of parents across the world, 61% of women and 46% of men believe children should be raised in as gender-neutral environments as possible in order to guard them from stereotypes. A 2018 survey from Our Watch, conducted in Australia, found that 79% of parents of children ages 0-3 wanted to act against traditional gender stereotypes in the manner that they brought up their children.

Such insights have important implications for the toy industry. Parents are seeking consumer experiences that recognize their children as multi-faceted, in the same way they do in the products they select for themselves. And consumers are beginning to hold brands accountable for the ways in which they fail to be gender-inclusive.

Let Toys Be Toys is a consumer advocacy and market research group based in the U.K. It urges children’s brands to implement inclusive marketing by ending the practice of marking children’s toys as “for boys” or “for girls” in store, print and online advertising materials.

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The campaign was launched after a group of concerned parents connected over Mumsnet, a popular parenting message board. Since its launch in 2012, Let Toys Be Boys has convinced 15 major U.K. retailers to stop gendering their toys.

“We ask retailers to just say what the product is, not who it is for, and let children make choices about what to play with or read based on interest, not gender stereotypes,” campaign member Tessa Trabue says. She and her colleagues within the campaign echoed Brown’s sentiments about the ways in which such stereotypes impact children. “When boys and girls are directed and encouraged to play with particular toys, this limits children’s opportunities to develop their own interests, as well as their chance to learn different skills,” Trabue says.

As more parents raise their children with this mindset, brands that market to gender could be isolating a large portion of their consumer base by making a group feel as though they aren’t meant to be included in the story of a product, even though it might align with their interests. In order to avoid isolating potential consumers, brands should frame their marketing tactics around what a product is for as opposed to whom it is for. Not only will this capture the attention of progressive parents, it will also offer shoppers a more streamlined experience. “Surely grouping items into categories like games, arts and crafts, dolls, musical instruments, science, magic kits, etc. helps shoppers more easily find what they are

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looking for, as opposed to grouping items under two ‘girl’ and ‘boy’ umbrella labels,” Trabue says.

The results of implementing gender-neutral marketing for toy brands are mostly anecdotal at this point, but Trabue says that none of the 15 brands they convinced to drop gendered marketing have offered negative feedback to the campaign or expressed frustration at their decision to rethink their strategies. “Brands [that] are responding positively to these concerns and marketing more inclusively receive positive feedback from customers, and in turn inspire confidence and loyalty,” Trabue says.

Target, for one, now sells gender-neutral products for children and got rid of its pink and blue toy aisles in 2015. In 2017, the retailer partnered with Toca Boca to debut a back-to-school line of clothing, accessories, backpacks and bedding intended to appeal to boys and girls alike. Although it’s unclear if this strategy has helped sales at Target, it doesn’t appear to have hurt: Target’s shares are up 33% this year, while other U.S. retailers are on pace for the largest number of annual closings ever.

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n other industries, the pink and blue divide persists, as marketers work on the assumption of difference and stereotypes. But some brands are beginning to see the importance of responding to the current climate surrounding gender, and in a reflection of trends in the toy industry, consumers are holding brands accountable for failing to offer authentic representations and experiences.

A few years after its release, the Bic pen “For Her” began attracting online ridicule. The pen was “designed to fit comfortably into a woman’s hand,” featured pastel colors and was priced at a 70% increase from Bic’s non-gendered pen. Consumers disagreed with the brand’s assumption that women want pens based on appearance and their feminine characteristics, not their functionality.

They also took issue with the pen’s higher price.

“Before these pens, I was nothing. I was a mere inconsequential woman, stumbling around writing

The Instant Grass International report “Trends 2016: Gender Neutral Marketing” breaks down four questions brands should consider in order to execute gender-neutral strategies: 1. Question what’s “normal”: Does your brand reinforce old stereotypes of what men and women should wear, say or do?

2. Check your messaging: Does your brand communication perpetuate sexist or harmful stereotypes, i.e., women are sex objects whose bodies sell?

3. Rethink your segmentation: Are there ways that you can embrace female consumers in previously male-dominated categories or brands?

4. Beware of tokenism: Make sure that if you create a gender-friendly campaign, it delivers as authentic and believable.

nonsense with big pens that made me look ridiculous,” one customer wrote sarcastically in an Amazon review.

In response to consumer concerns, Bic released a lukewarm statement that fell short of an apology.

This year, in Kantar’s “Getting Gender Right Report,” 45% of consumers reported that marketers portray women in outdated ways, and ad targeting in many categories is based on stereotypes. What’s especially telling is 92% of marketing professionals reported that they believe they are portraying women positively and are successfully avoiding gender stereotypes in their work. “It’s precisely the brands that tend to be categorically ‘for men’ or ‘for women’ that should be more introspective about the stereotypes they’re spurning,” Snyder says.

5 stars for a quality product, -3 for fragile masculinity.

—AV

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She offers the “Find your magic” campaign from Axe, a company notorious for its promotion of masculinity.

Although it still markets products by gender, the brand has worked to change its values by rejecting stereotypical ideas surrounding manliness and recognizing individuality among its consumers.

“Men’s deodorant brands have an abysmal record of being ‘for bros’—that is, hypermasculine and hyper-, heterosexualized chick magnets,” Snyder says. “But Axe’s ‘Find your magic’ campaign broke down these unrealistic boxes for what a man ‘should’ be by portraying a beautiful, hilarious range of masculinity. It reminded us that men are free to express themselves in whatever way they choose, independent from traditional, rigid stereotypes.”

Brands that take the time to listen to feedback gain insights about what their consumers want out of the products—and they’re finding success. Bic released the Made For YOU razor blade system in June, marketed as a gender-inclusive product and designed for anyone who wants to use it. Although it’s unclear if this was an effort to distance itself from the gendered pen controversy, consumer feedback played a role in the Made For YOU development. According to a Bic spokesperson, it was created in response to a survey in which 67% of adults ages 18-24 expressed a desire for gender-neutral grooming products. They added that as consumers have a wide range of choices when it comes to selecting shaving products, Bic is excited about the prospect of offering a product that any person is invited to experience, regardless of their gender identity.

THE GREEN GENDER GAP For the researchers and organizers at Let Toys Be Toys, emphasizing the sustainability issues that stem from the pink and blue divide is a key aspect of their campaign.

“For families with both boys and girls, this means more toys being purchased and less toys being handed down, and therefore getting less use overall,” says Tessa Trabue of Let Toys Be Toys.

“This all has a negative impact on the environment in terms of more toys being manufactured, purchased and discarded.”

Sustainability and environmental responsibility have become a greater

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“There is still a market for men’s and women’s razors— we will certainly continue to sell those—but there’s a new market for a segment of consumers who are stepping away from traditional gender stereotypes and prefer a gender-neutral product,” says the spokesperson. And while the official numbers are unavailable, the brand maintains that it’s pleased with the sales momentum of the product thus far.

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here are also the products for which stereotypes about the roles of men and women drive brand perceptions of who might be using them, which impacts who marketers target. Brands are missing the mark here, too: 98% of baby, laundry and household cleaner ads are targeted at women, according to Kantar Millward Brown. But according to Kantar TNS’s annual Connected Life study, most domestic buying decisions are now made jointly by men and women. In a 2015 report from Kantar, 76% of female consumers and 71% of male consumers believe that the way men and women are portrayed in advertising is “completely out of touch.” In order to correct such oversights, Snyder emphasizes the first and most important step brands and marketers must take to implement a gender-inclusive strategy: They must listen to consumer feedback in order to understand who buys their products.

She offers the beer and cosmetics industries as examples of areas where marketing efforts have been historically targeted toward men or women, respectively,

concern for consumers, and this includes modern parents. Millennials want their children to play with more eco-friendly toys and games, according to a report from Let Toys Be Toys. Toy brands that market for sustainability understand the role that gender plays in the life span of a product.

“Interestingly, many of the new toys on the market that are advertised as more environmentally friendly and sustainable also tend to be much more inclusive, both in packaging and the products themselves, moving away from the pink–blue divide,” Trabue says. Research from the University of Notre Dame also identifies a green gender gap: Men do not behave as environmentally friendly in their consumption as women. This, according to another study from the Journal of Consumer Research, is because men associate concern for the environment and green behavior with femininity. This year, a study from the journal Sex Roles assessed

the social consequences that men face when they choose to engage in pro-environmental behaviors, finding that these men were more likely to face judgments about their sexuality and have feminine traits ascribed to them. Echoing previous studies, the Sex Roles research found that men were likely to distance themselves from pro-environmental activities for fear of social repercussions.

Let Toys Be Toys maintains that the process of dismantling gender stereotypes associated with environmental behavior could start in the toy industry. “[The green gender gap] suggests that when boys are expected to identify with mainstream ideas about masculinity, they learn to shun eco-friendly behavior,” a member of the organization wrote in a blog post. “For a more compassionate and sustainable future, part of the answer may lie in doing away with the stereotypes—we need to see more boys with butterflies.”

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It’s overpriced for what you get and the gendered marketing is for those with a fragile masculinity.

– MEH

but have made significant progress when it comes to understanding their consumer base.

“The shift is slow, but brands are beginning to realize that a solid portion of their consumer base is women,” she says of beer brands. “Where they have historically portrayed their consumer as a hyper-masculinized, working-class male, now we’re starting to see brands also speaking to women in mixed-gender occasions and in a more neutral context that invites anyone, regardless of gender, to enjoy.”

Products in the beauty industry have been heavily marketed toward gender demographics, but as gender norms become less definitive, the consumer base has widened. Snyder says that companies have made impressive efforts to recognize this. “More and more masculine consumers are buying beauty products for a whole host of reasons—self care, improving complexion, self expression—and now more brands are beginning to reflect this wider consumer profile through the influencers they hire as ambassadors and the models they employ in campaigns,” she says. “It all begins with expanding your understanding of who buys your products.”

In 2016, Instant Grass International developed a report outlining the rise of gender-neutral marketing across the world. It emphasizes that this is no fleeting trend; brands must embrace it if they wish to stay modern and relevant. The research was spearheaded by Snyder. “I have always had a personal interest in gender studies and the way in which the advertising industry has historically entrenched unhealthy expectations for women in terms of beauty, body and other submissive norms,” she says.

“I’m happy to see the shifts that are taking place that show all of us as consumers of brands and advertising that those expectations are breaking down.”

In an Adweek op-ed, Benjamin Lord, executive director of omni-channel marketing at makeup brand NARS, wrote that gender-neutral marketing should be a priority for all brands across all industries, particularly if they wish to capture the attention of young consumers.

Supporting brands that stand for self-expression, inclusion and social progress is deeply important to younger generations, he wrote. But in their approach, brands must listen to their voices and their stories if they want the strategy to come off as authentic.

“This means marketers might have to change their approach to consumers and talent alike,” Lord wrote.

“Because we’re moving beyond marketing to sexes, it isn’t just products themselves that can be gender neutral: distribution, packaging, advertising and even communications should be as well. This is an opportunity to create new campaigns whose images showcase fluid identities, communities and even families. Simply put, it’s time for brands to be as brave and real as Gen Z is. … An estimated 69% of Gen Z uses adblockers, so now is the time to be curious and get them on board.”

Consumers want brands to understand them and reflect who they are; and if brands want to deliver, they’ll need to think beyond gender demographics.

“Stereotypes are limiting,” Brown says. “The reality is that gender doesn’t predict very well what a real person is actually like.” m

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But how does that make you feel ?

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Research shows that empathy helps designers create more unique and innovative products, and there’s reason to believe it can help marketers move away from fixation and better relate to consumers

By Sarah Steimer

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here’s a wall in the Oxo offices in New York City covered in lost

gloves: fingerless biker gloves, work gloves, winter mittens, rubber-tipped, fur-trimmed, leather, suede, knit. It reminds employees walking by that they’re designing products for all the different hands that would occupy these gloves.

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Oxo is the 29-year-old brand that’s ubiquitous on wedding registries and in Bed, Bath & Beyond. The company is the poster child for universal design, the concept of creating products that are accessible to anyone, regardless of age, size or ability. Oxo’s origin story is steeped in empathy—the founder noticed his wife’s arthritic hands struggling to use a metal vegetable peeler—and the wall of gloves hearkens back to this founding principle. It urges you to have some perspective; put yourself in someone else’s … gloves.

Empathy has given the Oxo brand its edge, and there’s reason to believe that many marketers could benefit from stopping to ask, “How would this make the consumer feel?”

Research shows that this simple action breeds increased creativity, which is a welcome addition to the relatively cold data collected on consumers.

“A large part of putting the customer at the center is remembering that they are a human being, and not just an end user of your products or services,” says Mary Beech, principal at MRB Brand Consulting and former CMO of Kate Spade. “What you are creating,

marketing and ultimately selling is but one piece of your customer’s life as a human on Earth. One very small piece. And if we aren’t keeping in mind their full journey, including their emotional, mental, social and physical needs—as well as the challenges and joys they are facing— we cannot do our jobs well.”

But to truly benefit from empathetic thinking, marketers need to get out of their own way.

It’s all too easy to think of yourself as the end user, which breeds bias.

The best empathetic practices aren’t all that different from choosing the perfect birthday gift for a loved one: Think less about what you would want and more about how it would make the recipient feel.

the University of Connecticut. Of course, the end user should be kept in mind when designing a product, but Herd wanted to determine whether thinking empathetically would produce unique results.

She and Ravi Mehta, a professor of business administration at the University of Illinois, ran five studies to test the effects of empathy on design, resulting in an article published in the Journal of Consumer Research in June 2018.

The co-authors found that when study subjects were prompted to imagine a user’s feelings, they produced more creative and

Mental Agility “There just wasn’t a great understanding of how to think about consumers,” says Kelly Herd, a professor of marketing at

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original—but still practical—ideas, compared with when subjects were simply asked to design something for a particular audience. Three of the studies included college undergraduates—Herd says that these participants were mostly business students—and two of the studies used Amazon Mechanical Turk (MTurk), a crowdsourcing marketplace.

In one of the tests, participants were told that Frito-Lay was running a crowdsourcing campaign for new potato chip flavors for pregnant women. Half of the group was given the basic assignment in an objective way, but the other half was given an empathetic prompt to take a few minutes to imagine how the customer would feel while eating the chips. The latter group’s flavor ideas—sushi, margarita and pickles and ice cream—were deemed more creative than the former’s by a panel of mothers-to-be.

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The other studies yielded similar results, suggesting that adopting a feelings-imagination approach, versus an objective-imagination approach, enhances cognitive flexibility in the participants and boosts originality. Herd and Mehta also controlled for whether the effect holds for positive or negative feelings. It does.

While they found that empathy breeds mental agility—sparking creativity and originality—the researchers also discovered that the effects can last.

“It would hold that if you prime people to think about how a child would feel when using a toy you create, and then you are asked to think of some other creative thing, it would transfer,” Herd says. “The reason it works is because thinking about others’ feelings makes you more cognitively flexible, it makes you more mentally agile, and so that mental agility transfers into other things that might happen.”

The studies were similar to work done by the Massachusetts Institute of Technology’s AgeLab, where researchers designed the AGNES suit, which stands for Age Gain Now Empathy System. The suit is worn by product developers, designers, marketers and others to better understand the physical challenges related to aging. The wearer feels the estimated motor, visual clarity, flexibility, dexterity and strength of a person in their mid-70s. The intention is for the wearer to empathize with the struggles of an aging population, and thus design with the goal of easing the stressors.

Although she and Mehta’s study tested the effects of empathy on design, Herd maintains that marketers would see the same benefits. “My co-author and I have

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talked a lot about whether we wanted to test this with marketing professionals and see how it holds,” she says. “We’ve been very clear in the paper that we think this would hold for marketing professionals.

It’s possible it could even help more for people who are experts and tend to be very fixated in their own thinking.”

There’s just one small thing that can get in the way of empathy: marketer bias.

An April 2015 paper published in the Journal of Marketing Research, “Managerial Empathy Facilitates Egocentric Predictions of Consumer Preferences,” found that when marketing managers were prompted to think empathetically, they were more likely to say that customers’ preferences were the same as their own—even ignoring the provided market research on the customers.

But it’s not all bad news: The researchers were able to negate the egocentric effect when study participants were simply made aware of their bias.

“The job of a marketer isn’t to say, ‘Hey, what would I want if I were the customer?’ It’s knowing you have a bias,” says Brian Carroll, founder and CEO of Markempa, a consulting and training company for empathybased marketing.

In the story of his own path to empathic marketing, Carroll likes to reference a story he saw on CBS from 2013 about collections agency CFS2. Owner Bill Bartmann (now deceased) told CBS he made about 200% more than his competitors by being empathetic: Instead of hiring debt collectors, he hired people with customer care experience. Employees were rewarded for how many free services they provided—even helping to fill out job applications and schedule interviews—with the goal of getting the debtors back on their feet.

In his own work, Carroll has tried to help marketers recognize

their bias, employing systems such as empathy-mapping and customer story interviews. “I’m not just interviewing about what appeals to someone, I want to hear the story of their journey,” he says. “When you listen to someone share a story, they don’t [just] share the facts, they’re sharing emotional content and context.”

Marketers do try to capture consumers’ emotions, and sometimes it can work brilliantly— other times, it can backfire. It’s not dissimilar to the way an ad taking an insincere social stance can feel hollow. Belinda Parmar, CEO of The Empathy Business and the founder of The Truth About Tech, calls this phenomenon “empathy-washing.”

Parmar argues that empathy needs to start from the inside of an organization before consumers will feel it.

“The marketing cannot just change—the leadership style has to change, the way of working, the language of the business has to become more human,” she says. “Millennials are demanding empathy, as they will sacrifice meaning for money. To keep great talent, a business has to nurture empathy in the way they speak to each other, give each other feedback in an empathic way and have some of those honest conversations.”

A Good Grip on Empathy It’s easy to forget about Oxo. Its products become part of the household, easy to use and unflashy. They don’t release major ad campaigns and mostly let the products speak for themselves. But the brand hasn’t forgotten about you. In fact, it’s all they think about: How does using this gadget make you feel?

Consider the measuring cup.

The classic glass or plastic version requires users to pour in the ingredient, bend down to check the

level, add more or remove, bend down, repeat. It’s not a terribly onerous exercise for many people, but designers at Oxo watched this stoop-and-repeat and saw a better way. Enter the Oxo angled measuring cup, which allows users to check their measurement levels from above.

“You watch someone do something and you’re like, ‘Why did they keep doing that? Why do they have to tilt their arm that way? That looks uncomfortable,’” says Karen Schnelwar, VP of global brand strategy and marketing at Oxo. “Humans have an amazing ability to compensate for difficult situations subconsciously. …When that measuring cup comes into play and you get to retain your posture and your dignity and your composure, everything changes in a way that you never thought you were compensating for before.”

There’s empathy to the product design, and Schnelwar says the marketing team’s job is to communicate this empathy. Often, this simply means writing functional explanations of what the product does.

The company did release a brand video a year ago. The almost twominute spot features users of varying ages and abilities, and the voiceover says, “Love inspires everything that we do—how we work and what we create.” It covers Oxo’s origin story and design process, but it focuses mostly on its products in use. In fact, most of the company’s videos on YouTube are short, simple clips that highlight how an individual product works. No narration, just a little text and light-hearted music as video shows the product in use.

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how Oxo provides a consistent experience and what role the products play in users’ everyday lives.

“When you ask about how we get empathy into our communications, part of it is because we’re always communicating about our tools that have empathy baked into the inspiration and the design for the brand in general,” she says. “With all of the user testing and how the product teams observe people doing tasks—sometimes that becomes the inspiration for what we’re going to create next.”

Part of the brand’s empathetic communications strategy is being straightforward. In its product videos and on its packaging, Oxo gets to the point: You don’t have time to read a small novel about a whisk, do you? And in any case, you can physically feel the benefit in your hands. “We try to demonstrate that thoughtfulness without having to say we’re thoughtful,” Schnelwar says. “You want to demonstrate it so that people can internalize it and see how it would affect their everyday positively, rather than have to take up a layer of messaging by talking about how thoughtful we are, about how much better everyone’s life would be. We’d rather demonstrate it one campaign at a time, one piece of communication at a time. Let people discover it and fall in love with us on their own terms.”

But the reliance on letting the products tell the empathetic brand story presents a bit of a challenge for Oxo: You can’t touch its products on the web. Rather than be yet another thumbnail lost in a forest of products on Amazon, the brand took a step back and used its guiding brand principles to reach customers. It chose to name its products in a clear and concise manner, sometimes with a little wink. For example, Oxo’s Good Gravy Fat Separator: The name

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spells out exactly what it is, and that it’s better—with the added splash of wordplay.

Companies can’t maintain their brand font on Amazon’s search results pages, but Oxo saw an opportunity to provide some short, descriptive text on the thumbnails within product pages. “If you scroll down on Amazon—they call them A-plus pages where you can communicate with photography and with messages—we try to make those kind of an oasis of calm in a sea of e-commerce chaos,” Schnelwar says. If the products are intended to make every day better, why not have empathy for the shopping experience as well?

How to Become an Empathetic Marketer There’s never a bad time to use empathy in the creative process, but Herd recommends using it as a problem-solving tool. For example, thinking empathetically can be an add-on to using AI, introducing a human component to what can otherwise feel like a very mechanic system. In addition to moving the brainstorming team out of fixation, it can also move ideation out of the funnel and into journeymapping. As a professor, Herd tells her students to think about how a person may feel when they’re going through a particular experience: What would be some of the positives or negatives?

In Herd and Mehta’s study, the participants were asked to imagine how someone may feel when using the products, or to visualize a person interacting with the items. “It’s as simple as saying, ‘Think about how this person would use the product and then think about how this person would feel when using the product,” Herd says. To take from the Journal of Marketing Research, an additional prompt may be to

remind the brainstorming team of their biases.

Mary Beech, who spoke about empathetic marketing in a Think with Google session, says that once this shift in mindset happens, it’s hard to look back. She says some of the most empathetic brands don’t simply consider the consumer when they engage with the brand, but the user is seen as a whole person.

“I am a long-distance runner, marathons specifically, and I routinely feel seen and treated with empathy by the brands I associate with in that aspect of my life,” Beech says. “Not all, but most. As a marathon runner, my needs and experiences are specific and shared by other marathon runners. But the best brands and companies acknowledge that most people who run marathons do not do this full time. It is an aspect of their life, not the aspect of their life. I feel the most empathy from brands who treat me as a full human who happens to run marathons.”

Marketing technology can make a consumer seem more like a dataset than an actual human, and Beech recommends that marketers remember that a consumer’s experience with your brand doesn’t happen in a vacuum. “My demographic and socioeconomic data combined with my search and purchase history on the web tells a story,” Beech says. “But it is not my full story. It is not the most compelling story of me, but it gives a direction. Data can and should be a tool in the toolbox of the storyteller, and it should be part of creating a great story. But it still needs the magic of the human touch.”

And to Parmar’s point, a company also can’t separate internal and external empathy. So in addition to practicing empathy in the ideation process, marketers need to practice empathy with their colleagues.

“Often, unempathic behaviors

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toward customers or unempathic language in marketing is as a result of poor internal culture and low engagement internally,” she says. When Parmar works as an “empathy-in-residence” at companies, she works to be part of the organization’s culture to nudge it to a more empathic state. “The best and fastest way to change the levels of empathy in a company is to change the meetings and make them more empathic to make everyone feel like they belong,” she says.

But like any feel-good practice (and plenty of marketers have cautioned that empathy can be more of a buzzword than a real strategy), measuring for whether it’s working can be tricky. Parmar says that the answer isn’t in traditional metrics, but suggests looking at the “empathy quotient,” or what Alibaba co-founder Jack Ma calls “the love quotient.”

“We need to measure campaigns by how much they motivate and move people emotionally,” Parmar says. “How much a campaign helps people feel that they belong, and how much it helps people build identities.”

If that still feels a bit wishy-washy, Carroll has his own proud figures from taking a more empathetic approach. He trained his team at a previous job to understand people’s deeper motivations when they chose to download a report, rather than using that communication to convince the consumer to talk with a sales representative. After six months of focusing on answering

questions, Carroll says that the team had 303% more sales opportunities.

The brands and marketers that engage empathetically with consumers are the unique and creative problem-solvers. Perhaps you never gave much thought to standing with a hot kettle, making your morning cup of coffee—at least until Oxo came up with its auto-drip, pour-over coffee maker.

Now you’re grateful for getting those three minutes back in your morning.

An empathetic strategy isn’t always necessary—sometimes a customer simply wants to know when they can expect a package—but it can be wielded to overcome tricky brand and communication challenges.

“Empathy isn’t the only answer,” Carroll says. “I view it as a superpower to take what you do in marketing and make it way better because you’re actually orienting to what matters to your customer. … Empathy builds connection, connection can build trust and then trust ultimately is the precursor for what needs to exist for someone to say ‘yes’ or to ultimately buy.” m

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Shopping for

Grade–A Grocers supermarkets are using customer experience to differentiate themselves in the hypercompetitive grocery sector

By Zach Brooke

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ast year, the world’s leading consulting firm, McKinsey & Company, issued a report containing a dire warning: “To put it bluntly, much of the $5.7 trillion global grocery industry is in trouble.”

The report, “Reviving grocery retail: Six imperatives,” continued just as pessimistically, despite the grocery sector’s top line of recent steady growth. “Although it has grown at about 4.5% annually over the past decade, that growth has been highly uneven—and has masked deeper problems. For grocers in developed markets, both growth and profitability have been on a downward trajectory due to higher costs, falling productivity, and race-to-the-bottom pricing. One result: a massive decline in publicly listed grocers’ economic value.”

McKinsey went on to predict a coming era in grocery marked by mergers and acquisitions. From a customer experience standpoint, many grocers are now indistinguishable from one another. Mandy Rassi, Kroger’s head of brand building, acknowledged in a recent press release this “sea of sameness” in grocery retail advertising, the quickest escape from which starts and ends with rethinking customer experience.

Kroger’s new agency of record, DDB New York, is its first in its 130-year history. The agency’s challenged with “developing a refreshed, stronger brand identity” for the supermarket

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and retailer giant. For clues as to the direction in which Kroger may be taking its advertising, check out the 12-minute “Cooking with Jeff Goldblum and Special Guest” comedy video released on Funny or Die that features actors Goldblum and Bryce Dallas Howard cooking a meal with ingredients purchased at the grocer.

In-store distinctions exist as well.

In June, the latest version of the Food Marketing Institute’s (FMI) U.S. Grocery Shopper Trends reports that just 13% of Americans limit their food shopping to a single retailer. A tyical household makes 1.6 trips to a grocery store each week, spending a weekly average of $113.50. By the end of the month, an American shopper will visit an average of 4.4 different stores in one month, up from 4.1 in last year’s report. For millennials and Generation Z, that number is even higher, recording an average of five and 6.2 different retailers per month, respectively. However, most shoppers (92%) say that they have a single favorite store where they do the bulk of their shopping. This is a place they know by name and where they spend the lion’s share of their grocery budget. For 49% of shoppers, this place will be a supermarket. But FMI researchers have identified four additional purchasing behaviors that cause all shoppers to look past their preferred store. These behaviors are informed by experience—people want different in-store experiences at different times.

First is the stock-up strategy, which FMI classifies as separate from regular bulk shopping. Rather, it denotes times when shoppers are looking to replenish household staples intended to last weeks or months. Shoppers will usually perform this type of strategy at warehouse, supercenter or discount stores.

Then there are specialty-item visits, undertaken when consumers are seeking unique items or brands that are specific to one location. Trader Joe’s is a cornerstone for these trips, offering an abundance of special products that its devotees cannot live without. Yet another type of visit is driven by the pursuit of quality, which can draw thrifty shoppers into more expensive environs to hunt for premium produce, meat or seafood. Finally, there is the need-itnow shopping behavior for harried households that need a basic item or two from the most convenient locations.

Shoppers may believe that warehouses are the best places to buy in bulk, but not if they need items in a hurry. For that, they choose the closest, most efficiently organized or most advanced self-checkout options. Pricy joints might scare away budget-conscious consumers, only to lure them back when they are shopping for a special occasion. For everything else, there’s the mainstay supermarket. The type of experience shoppers require determines where they will go.

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Grocers need not become all things to all people. Struggling stores would be wise to concentrate on a single area, and all grocers should take care that they don’t fall too far behind in any single category. As Steve Markenson, FMI’s director of research, writes, “Perhaps the question retailers should ask themselves is, ‘How can I get a larger share of my grocery shopper’s spend?’” The operative word is “my”— grocers need to define what experience their core buyer needs and cater to it.

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nother way to get a handle on customer experience divorced from shopper strategy is to view customer satisfaction scores, benchmark them by industry and break them down by company.

This method, albeit indirect, reveals where customers do and don’t love to shop.

The American Customer Satisfaction Index has tracked consumer happiness by industry on a nationwide basis for the past quarter-century. Scores are issued on a 100-point scale and based on a proprietary calculation that factors in perceived quality, customer expectations, perceived value, customer complaints and customer loyalty. Data is collected annually in the form of 180,000 interviews.

Separate studies in the Journal of Marketing have found that a portfolio of stocks chosen on high-ranking ACSI companies outperformed both the S&P 500 and the market at large.

“Customer satisfaction is a leading indicator of company financial performance,” says David VanAmburg, managing director of the ACSI. “Companies with high ACSI scores tend to have better-performing stocks than those of companies with low scores. Additionally, changes in customer satisfaction impact the willingness to buy. The more satisfied a customer is, the more likely they’ll become a repeat customer and thus help grow a business.”

In 2018, breweries were the most beloved industry with a score of 85,

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while cable companies garnered the least love of all with a score of 62.

Supermarkets found themselves in the middle with a score of 78.

Looking within the supermarket sector, Trader Joe’s leads the pack with a score of 86. The brand goes all out with its experience, decorating stores with bright colors to fit its nautical theme, training Hawaiian-shirt-clad staff to engage and open any products customers may want to sample, and providing a cornucopia of goodies you can’t get anywhere else.

Wegmans clocks in at No. 2 with an overall score of 85. The northeastern luxury grocery has become the stuff of legend with its assortment of prepared foods, tech integration, locally sourced produce (some from its own farm) and happy workers.

Southeastern chain Publix places at No. 3. More of a conventional supermarket than the top two stores, employee-owned Publix nevertheless wins accolades for its helpful, knowledgeable, well-trained workforce; regionally attuned bakery and deli selections; and competitive prices.

Aldi, a no-frills hard discounter not known for providing an opulent shopping experience, is No. 4. This aligns with the theory that different purchase behaviors drive what makes a good customer experience. Shoppers who want unique, quirky products will find satisfaction in Trader Joe’s; those seeking a fast, affordable stop will be pleased with Aldi.

“Customer experience is the most important part of any campaign for a retailer’s execution,” says Karen Sales, an independent consultant and former Albertsons vice president of shopper marketing. “If you put the shopper first in all of your marketing, operations and merchandising efforts, you have the best chance of winning in today’s environment. Make it easy for the shopper. Make it friendly, local, personalized and at a good value. The grocery stores that can bring those four things together have the best

chance of succeeding and winning more of each shopper’s dollar.”

The search for the right elixir has created some truly unique offerings.

Giant Food Stores, a chain of 172 stores throughout the northeast and mid-Atlantic, is unleashing googlyeyed helper robots to search for spills.

The New York Times tech columnist Kevin Roose captured one on social media in July, tweeting, “My grocery store got a robot that is supposed to monitor the aisles, but it can’t get to the aisles because people just stand around staring at it.” In the southwest, H-E-B—America’s 15th-largest privately held company—is testing a self-driving delivery van equipped with various climate-controlled sections capable of storing frozen foods, produce and dry goods. Kroger is investing heavily in a subsidiary called Sunrise Technologies that’s charged with developing next-gen tech for its own supermarkets and to license to other stores. Elsewhere, Pittsburgh-based Giant Eagle is experimenting with a checkoutfree app, and Albertsons is adding an unlimited delivery subscription service to boost purchase frequency.

Sales, who left Albertsons in May to launch her own consulting service after four and a half years with the supermarket, also gives praise to oldschool promotions, such as games and loyalty programs. Albertsons has used a Monopoly-based promotion for 11 years, in which shoppers collect game pieces by making grocery purchases, then match the pieces with spaces on a Monopoly game board for a chance to win cash, grocery products and other prizes. This program has been updated to include an app.

Looking ahead, Sales points to digital shelf tags and displays as the new untapped frontier in grocery.

Digital shelf displays rethink the shelf space between rows of products, typically filled in with physical price tags. They replace the analog tags with a digital display that flashes dynamic advertising and nutritional

information to passersby and their smart phones.

“The technology, cost of equipment and Wi-Fi solutions are now at a point where scale is possible,” Sales says.

“Along with e-commerce, this will be the biggest game-changer in grocery and mass retail over the next few years.”

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ldi’s aisles are wide, the assortment is well-placed, checkout moves swiftly and the prices are cheap.

The small inconveniences customers endure would be unheard of at other stores. First, there’s the requirement of depositing a quarter in a shopping cart to unlock a basket (customers get the quarter back when they return the cart). Aldi’s product assortment is smaller and departments are limited to what gets delivered in trucks. There’s no bakery cranking out fresh pastries, no deli assembling sandwiches.

Patrons are expected to do their own bagging with totes that they’ve brought, or else pay extra for in-store bags.

Once dismissed as the bottomfeeders of the grocery ecosystem, deep discounters such as Aldi have ramped up quality while proudly wearing their reputation for low prices as a badge of honor, refashioning themselves into formidable competition in the process. In Germany, Aldi enjoys a market share between 20% and 50%, according to McKinsey.

Closer to home, Aldi is angling to do something similar. The chain is amid an ambitious five-year plan to transform itself into one of America’s largest grocers. IBISWorld estimates that Aldi’s U.S. revenue totaled $13.5 billion in 2017, only about one-tenth of Kroger’s $97 billion. To close that gap, the company will open 800 new stores in the U.S. and remodel older ones while upgrading its assortment.

By 2022, the company projects to reach a store count of 2,500 locations, more than any other grocer besides Kroger and Walmart.

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Jan-Benedict Steenkamp, a professor at the University of North Carolina’s Kenan-Flagler Business School, was so impressed by the performance of hard discounters that he made them the subject of his fourth book, Retail Disruptors: The Spectacular Rise and Impact of the Hard Discounters. He sees Aldi and similar stores as the main disruptor in the grocery world at the moment, with an impact more outsized than that of online channels.

“There are very few national chains,” Steenkamp says of the U.S. market.

“Most are regional. Many of those chains are not particularly strong, meaning that consumer satisfaction with them is low. Perceptions of key store attributes is low.”

Joining Aldi is Lidl, a Germanbased hard discounter. The chain first made waves in the U.S. four years ago when it announced that it would enter the American market.

The first stores opened in 2017, and there were plans to launch 100 by the summer of 2018. However, only 68 U.S. locations are in operation as of the end of June. Steenkamp admits that Lidl’s American invasion was fraught with missteps—the director of Lidl’s parent company called the rollout a “catastrophe.” But where Lidl has taken hold, it’s had an impact.

Steenkamp reports that retailers operating near Lidl stores must drop prices on their private labels by an average of 10% to remain competitive.

The discounters are adding pressure to what is already under siege. Supermarkets may never face existential obsolescence the way newspapers or coal mining might—we all need to eat—but the options for food shopping at nontraditional grocers have never been more numerous. If left unchecked, $200 billion to $700 billion could shift to discount, online and nongrocery channels by 2026, according to McKinsey industry analysis.

In the FMI report that outlines different experiences customers seek

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when grocery shopping, Aldi arguably makes a strong showing in three of the five categories: The chain has become the preferred bulk destination for many shoppers. Though it can’t offer the large quantities of a Costco or BJ’s Wholesale Club, it doesn’t charge an annual membership and its low prices encourage shoppers to stockpile nonperishables. Finally, its limited assortment and barebones checkout possess obvious appeal when shoppers shift into need-it-now mode.

“Sometimes, it’s nice to shop at a store and find some new things. There is some shopping experience there,” Steenkamp says. “But there is another type of shopping experience, which is also highly valuable: no hassle. Get in, get out.”

When it comes to quality or specialty items, Aldi will be never be considered the top of the line. But it has made strides with its private-label items, which now rival or surpass the competition, Steenkamp says. “The quality of the store-brand products offered by Aldi, Lidl and Trader Joe’s is better than what Walmart and Foodline offer,” he says. “They are not catching up—they are better.”

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or years, industry-watchers have expected a great online shakeup to mark the next evolution of grocery shopping, but there’s little such evidence. The McKinsey report identified Amazon’s purchase of Whole Foods to be a game-changer, but there is cause for moderation when assessing the immediate future of e-commerce. The U.S. Grocery Shopper Trends report notes that while millennials make up the largest portion of online grocery shoppers, their numbers have remained flat for the past two years, suggesting that the growing acceptance of online grocery shopping in Gen X and Gen Z might plateau as well.

Steve Dennis, founder and president of SageBerry Consulting, sees a customer experience problem.

The (Stores) that are in the middle that aren’t particularly convenient or low–cost— or they aren’t particularly high–interest or high–service— are sunk.

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Grocery is lumped in as part of retail, but food shopping is vastly different than buying clothes or hardware.

This is apparent in online shopping: Traditional e-commerce design doesn’t lend itself to grocery shopping.

“In most parts of e-commerce, you’re usually going to buy an item or two,” Dennis says. “If you’re buying multiple items on Amazon, you’re usually on a mission. Grocery, to me, is not a search-driven business, it’s more of a browsing-driven business. … It’s a hassle to put together a shopping basket on most grocery websites.”

Delivery itself is also a hurdle.

McKinsey points to the cost of delivery infrastructure as a thorny and expensive issue. If grocers aren’t willing to find partners or develop their own advanced analytics, warehouse relocation and automation system, online delivery will never reach the point of workability.

FMI reports that 17% of grocery deliveries are made through standard package-shipping services, while another 17% are set aside at kiosks for consumers to pick up themselves.

Thirteen percent are delivered by a store’s specialized delivery service, and 8% of online grocery purchases are delivered as part of recurring subscriptions. The mishmash of lastmile solutions explains why centerstore goods, such as salty snacks and other longer-shelf-life items, dominate online grocery purchases.

Sixty-nine percent of consumers say regular supermarkets do a better job of preserving freshness than online delivery.

Deloitte calls this phenomenon “the great bifurcation,” and Dennis has studied it extensively.

“You see this spilt between retailers.

On the higher end, more experimental, unique product retailers are doing well,” Dennis says, adding that toward the bottom of the spectrum are the Aldis of the world. “But the folks that are in the middle that aren’t particularly convenient or low-cost—or they aren’t particularly high-interest or highservice—are sunk.”

Grocers looking to avoid the drain must decide if they want to go bougie or go budget. There are a few options in each playbook, which Steenkamp calls offensive or defensive.

“Defensive is touching the price of the shopping basket,” Steenkamp says, the most obvious tactic being to slash prices and bleed your competitors before they bleed you. Introducing a line of store-brand economy products is another lever to pull. The most well-heeled and far-reaching initiative is to spin off a separate brand of hard

discounters. There’s no U.S. model for this route thus far, but iconic British grocer Tesco launched a cheaper version of itself last year called Jack’s, which advertises itself as “the cheapest in town.”

Marketers need not limit themselves to a smashmouth race to the bottom.

They can go on the offensive by adding value to the shopping experience.

In-store elements—such as a unique assortment, extra service, in-store experience and curbside pickup—are all proven options that attract most shoppers at least once or twice a month.

Above all, Dennis encourages experimentation. “Too many companies, not just the grocery industry, have been afraid to fail,” he says. “There’s a big process to decide what to invest in and things get averaged out and become not that interesting. If it turns out it doesn’t work, then you have to go back to the drawing board and you’ve lost a year and a half or two years.” m

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hat’s a grocery store marketer to do? The first step is to embrace either end, or both, of a stratifying marketplace. Major middleclass grocers might be unique with their “sea of sameness” conundrum, but they are far from the only retail sector that is seeing the market gravitate away from the middle.

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UX DESIGN

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Rolling the Dice on UX Design

SUPERFLUOUS ANIMATIONS HIGHER USER ENGAGEMENT

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Marketers who leave the userexperience design process to chance run the risk of alienating consumers and losing their competitive advantage

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94 CROSSPLATFORM CONSISTENCY

BY JULIAN ZENG

 jzeng@ama.org ILLUSTRATION BY ROGER SCHILLERSTROM

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reating meaningful, relevant experiences for users is at the core of any UX designer’s mission. The product being sold must meet the consumer’s needs, but the overall experience should be accessible, efficient and pleasurable, too.

But far too often, organizations are losing valuable customers by putting little care or effort into their UX design. Desktop websites can be cumbersome and overwhelming, or mobile apps can be unresponsive or display poorly on devices.

If your site isn’t optimized for mobile, users are five times more likely to abandon the task, according to a study by Adobe. And 88% of online consumers are less likely to return to a website after a bad user experience, according to a report from UX School. Information overload, unlabeled links, a lack of calls to action and slow load times are some of the many off-putting elements of bad UX design that keep users away. Marketers should take note by prioritizing performance, seamlessly integrating user data and favoring simplicity in design.

First impressions count; users’ brains are wired to make judgements about visuals within seconds.

If you’re not doing enough to instantly grab their attention, they’ve already moved on to a competitor.

In fact, 79% of users who don’t find what they’re looking for on one website will move on to others, according to a study from Google, conducted by Sterling Research and SmithGeiger. Poor user experience design can taint your credibility, but good design can generate leads and build brand recognition.

What’s your next move?

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EVENT EXPERIENCE

Setting the Stage for a Stellar Event Experience

BY GINA BONAR

 gina@5whysmarketing.com

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arketers across functions and industries are often charged with delivering events. These help to drive some combination of professional development, reputation, relationships, engagement, leads and revenue. Live events can also provide the forum for a unique customer experience.

According to a Walker Information study, customer experience will overtake

price and product as the key brand differentiator by 2020.

How do marketers design events to deliver authentic, relevant, positive and valuable experiences?

The following insights—which I’ve organized into 12 truths and one lie—are garnered from my own career, in which I’ve spent decades serving as organizer, exhibitor and attendee.

career advancement

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The experience window is wide Don’t box yourself into the time frame of the agenda. Expand your experience thinking to include a lead-in and followup. How do you seed and fuel a great experience in advance and reinforce it post-event? This creates opportunities for content, logistics and networking.

But beware of overpromotion: Use this opportunity to make it easy for your attendees to prepare for, absorb and capitalize on the experience you are creating for them.

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experiencing the event from their unique and often expert perspectives, which can translate into testimonials, referrals, social media engagement and potential business. Don’t leave out these essential constituents but avoid diluting your message. You can deliver a great supportsystem experience without sacrificing your primary audience experience.

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Turnkey is for turkeys Sometimes a template can impede continuous improvement and differentiation. People attend events to experience something new. Even if it’s a regular occurrence, your event and audience deserve positive change.

There’s no need to reinvent the wheel, but remember not to rest on your road-worn laurels.

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Energy powers experiences When it shines, the program moves.

When it doesn’t, crank up the generator.

Setting the tone from beginning to end is a must. Dynamic speakers, enthusiastic greeters, engaged staff and a lively environment—including energetic sights and sounds—can turn even a modest part of the program into a feel-good experience. Don’t go overboard, though.

“Fake” is easy to spot and becomes a detractor.

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Small stuff is worth sweating Mapping out every detail can seem tedious, but it pays off. Some of the greatest moments of truth in a live event are the in-between spaces that often get overlooked in the design—it’s where the most unexpected things go wrong. But beware of losing the forest in the trees; you don’t want to forget to experience your own event.

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The best-laid plans change One of the most important lessons I’ve learned is to be flexible in the moment. Watch for signs that you need to course-correct and be ready to adapt quickly. Don’t panic; it never helps the experience. Build some give-and-take into your design, be present and be decisive.

Often you’re the only one who notices

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when something is amiss, so don’t make things worse by over-apologizing or explaining.

7

Gamification plays well Knowledgeable, inspirational speakers and practical takeaways are table stakes.

No one needs that tip. But delivering with flair is unfortunately still a bit of a unicorn. Sometimes you need something different to deliver a memorable experience. Interactive, competitive gamification can steal home. Make it uncomplicated, fun and relevant.

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Automation and AI cut to the chase Personalization, convenience and data are increasingly essential components of customer experience. AI-based technologies provide tremendous shortcuts and enhancements to deliver timely, tailored information and resources. But don’t lose the soul and potential of the interaction; enable the technology before it enables you.

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Networking is awkward Small talk seems frivolous, and no one wants to get cornered into a sales pitch. But it’s also one of the main reasons people attend live events, and part of designing a great experience is to provide a forum for people to connect. Be overt; tell them it’s networking. Get creative, draw them in and facilitate. You’ll never get everyone talking, but if you focus on willing participants, they’ll love you for it.

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You can’t fake the feels Visceral is memorable. Incorporate shared moments that get people out of their chairs and comfort zones. The best experiences I’ve had involved music, tears, laughter, dancing, inspiration and even puppies. But trying too hard or being too silly can make you lose authenticity or make people uncomfortable. Epic is possible, but not guaranteed.

11

FOMO sells We’ve focused on designing and delivering experience through events, but it’s a longer game than that. You’re not just aiming to make people happy in the moment, you want them to rave about it later and attend again. This list of tips—wrapped around your relevant, valuable content—can create FOMO (fear of missing out). When you deliver a truly differentiated experience, people will share it and others will wish they were there.

12

People love to give advice Seek feedback before, during and especially after the event, and make providing it easy. Don’t just rely on a survey, ask attendees in person. This gives your audience a sense of ownership and ultimately turns your event into a co-creation with your customer. The truth hurts sometimes, and although you can’t please everyone, it always makes you better. Remember that requesting feedback creates an expectation that you’ll use it, so be sure they know you listened.

The lie: You control the experience Experience design is all about caring, not control. If you care how people feel, why they show up, who they meet and what they take away, everybody wins.

Your audience knows that you’re human and that you don’t have to be perfect—you just have to care enough to try. Experience design for events sets the stage for exceptional delivery with real people in real time. Caring is the single most important thing you can do. Prepare to deliver, co-create and be present. In my experience, attendees will feel it. m

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And now a word from…

REGGY

Official mascot for the Mascot Hall of Fame

STATS Organization Mascot Hall of Fame Date of birth I’ve been around the block once or twice Hometown Whiting, Indiana Excercise routine Eating Lifting pierogis into my mouth Notable physical features I’m purple, round and can’t seem to get rid of this boogie from my nose

What goes into the selection process for choosing your mascot hall of famers?

The best mascots in the business provide tremendous value to the teams and brands they represent. They bring together teams, players, communities and fans.

Mascots must be at least 10 years old and provide their mascotting résumé, including any school programs they’ve developed, the number of times they’ve visited hospitals to cheer up patients going through a rough time and so much more. While we don’t include it, I’d like to personally know how many high-fives they’ve given and how many T-shirts they’ve tossed into the crowd at their games.

So far, your hall of famers all work in sports—will you feature those in other fields soon?

What is the mission of the Mascot Hall of Fame?

We are the most unique hall of fame institution in the country. Our mission is to honor mascot performers, performances and programs that have positively affected their communities in North America. We do that by embedding our mascotthemed interactive exhibits with educational subjects focused on the K-8 student population. Not to mention, we are also teaching adults that it’s OK to be a kid for a couple hours!

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Is there pressure that comes with being the mascot of all mascots?

What’s your favorite part about working at the Mascot Hall of Fame?

There’s no real pressure on me, I just live here. The hall of famers are the ones who have all the pressure. They are judged on delivering iconic performances, the number of community events they participate in and the value they bring to their communities and brands—not to mention how many schools and hospitals they visit. Although, I suppose there is pressure on me to keep the Mascot Hall of Fame looking spickand-span for visitors.

You call it work. I call it ridiculous—ridiculous fun, that is! My favorite time of year is every June, when I invite all the hall of famers back to the home of all mascots to celebrate the induction of a new class.

It’s a ton of work and planning—and something called "logistics"—but it’s so much fun to host the best mascots in the business of mascotting.

It’s more likely I’ll invite international sports mascots to show their stuff. Mascotting is such an important cultural phenomenon across the globe; it’s a near certainty that we’ll go international before we go corporate.

That doesn’t mean I’m not inviting the Michelin Man, Cap’n Crunch, the Geico Gecko and so many others to stop by my crib to say hello!

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