CPGs Prep for Growth of QR Code Promotions

By Dan Alaimo

Johnson & Johnson, Procter & Gamble and Kellogg are among many consumer product firms fielding small promotions with Quick Response (QR) Codes in stores as they prepare for growing shopper acceptance in the future.

These barcodes are placed on shelf tags, displays, packages and in store circulars. Shoppers aim their smart phone camera at a barcode and then link to such content as product and ingredient data, price comparisons, informational videos and coupons. Ideally they will find the content valuable enough to drive loyalty to the brand or store.

Most experts see shopper acceptance of this new technology tied to the penetration of smart phones, which will rise from 28% last fall to over 50% by the end of 2011, surpassing traditional cell phones for the first time, according to the Nielsen Co.

“QR codes are only this year starting to reach the consciousness of most Americans,” says Michael Balas, founder and chief executive officer of VitreoQR in Cleveland. “The awareness level is miniscule in comparison to what it will be 18 or 24 or 36 months from now. It’s the early adopters who are really aware of what QR codes are.”

David Apple, chief marketing officer, Augme Technologies in New York says, “Once smart phone penetration gets to 60-80%, which will be from the middle of 2012 into 2013, we will probably see a complete saturation of the market, and the QR code will be just as common as a URL on a piece of advertising.” 

In addition to J&G, P&G and Kellogg, other CPG companies with QR code tests or initiatives include: Kraft, Orville Redenbacher, Kimberly-Clark, Constellation Brands, General Mills, Unilever, Dole, Heineken, Delverde pasta, SC Johnson, Pfizer and Sara Lee.

In a creative and humorous use of the technology, Reckitt Benckiser is combining a video of a needy animated baby with an on-pack QR to promote its Durex condoms, notes Ed Fedorowich, marketing coordinator, Expand International of America, Stratford, Conn. Targeting young men, the baby video app is communicated by physically touching one iPhone to another, then a virtual crying baby must be cared for until the consumer finds a Durex package and scans the QR code to get a link to a condom app.

Crunchy Nut cereal (made by Kellogg)  now features a QR code embedded in the package, which is unusual for a consumer packaged product, says Apple, whose company provides the technology for the program. The brand’s “It’s Morning Somewhere” promotion is designed to make consumers aware of the technology.

“When you scan the QR code, depending on the time of day that you scan, it tells you where in the world it is 8 a.m., and gives you a video relevant to that part of the world,” he says. Later promotions could build on this with offers like mobile coupons, rebates and “webisodes” updated on a monthly basis.

This is a simple execution that makes good use of static media — the box — that gets thrown out. “They were able to take that static media and make it a rich media component, and a dialog component,” Apple says.

Another Kellogg QR promotion linked the Special K brand to a video co-branded with “Lucky Magazine,” notes Joe Garbarczyk, digital strategy manager for Launch Creative Marketing in Chicago. The mobile barcode brought up a video featuring an editor of the magazine reinforcing the brand message.

One of Launch’s client-brands, Orville Redenbacher’s Gourmet Popping Corn (ConAgra) has a QR code on an in-store display for its new pop-up bowl product. “This QR code expands the display and drives the shopper to a mobile landing page with a short video that shows the innovation of the bowl. This allows them to go into more detail of what the pop-up bowl does, what the advantages are and why the shopper should buy. They’re influencing the decision in-aisle and adding to the brand experience.”

CPG use of QR codes is changing from tactic to initiative, according to Apple of Augme Technolgoies. For example, J&J’s Reach toothbrush brand last month concluded a promotion for a line of designer toothbrushes in which QR codes were embedded in ads in magazines like Elle, Glamour and People timed for Fashion Week. “In this case, the consumer reward was a coupon, and information on where to buy it, so all the featured retailers were listed. You could learn about each artist. You could pick your toothbrush. It was a very, very successful program, not only from pure numbers, but from an adaptation standpoint,” Apple says.

Like all of Augme’s QR promotions, the Reach program also had a SMS text messaging component to involve consumers who don’t have smart phones, he adds.

In a holiday wine promotion for Christmas, Constellation Brands used QR codes on freestanding inserts, bottle neck hangers and other POP. When scanned, the QR code brought consumers to a custom web environment where they were asked questions, like “how many people are coming to your party?” and “what is your budget?” The results told the consumer where to buy the wine, or if in store, how much to buy. Although there was no coupon, it was “all rewarding content that will turn a consumer into a shopper and influence a purchase,” Apple says.

Some of the results from the Constellation initiative included:
  • Participants scanned QR codes over the use SMS by a ratio of 7-to-1.
  • 80% of QR codes scanned by consumers were on FSIs, followed by mail-in rebates (17%) and in-store case cards (2%)
  • The Food and Wine Pairing tool was more popular than the Party Planning Calculator based on total hits. The promotions page was the least popular tool.

Steve Meeks, chief executive officer of Meticul Solutions in Houston says his company has a yogurt company as a client that is using QR to drive awareness and brand interaction. “We are also working with several other CPG companies in implementing loyalty rewards programs where the QR is the key that unlocks the rewards,” he notes.

“QR Code technology means a better return on investment to CPG manufacturers. If implemented correctly, the technology allows a streamlined delivery system for information that can be tracked and analyzed. CPGs can leverage their digital content and open up a clear pathway for purchasing decisions that are actionable at the touch points,” Meeks says.

“The best marketing departments in the CPG industry are using QR codes on all their marketing mediums,” notes Dan Verhaeghe, marketing specialist, McLoughlin Promotions, Mississauga, Ontario. For CPG firms, QR code technology means the ability to interact with consumers without having a spokesperson, and for consumers to find more information or deals via the brand without being bombarded by advertising.

“QR Codes bridge the gap between the offline and online worlds, allowing for any type of traditional media to become digital,” Verhaeghe concludes.


FEBRUARY 2011

Kraft Foods’ New Face-Scanning Kiosk
Suggests Meal Solutions for Shoppers

By Dale Buss

Kraft Foods tries a variety of approaches to communicate with shoppers in the store and incline them toward its brands and products. There are recipes on packages. Also, displays spotlight several Kraft products and, by doing so, suggest a convenient and tasty meal. And, lately, a smart phone app called iFood Assistant that helps consumers find a recipe, compile a matching shopping list, and maybe, compels them to throw an extra bag of Oreos in the cart.

Now the Northbrook, Ill.-based CPG giant is preparing to move up a significant step on the shopper-engagement ladder with a Meal Planning Solutions kiosk that helps customers in the store figure out what to buy, leveraging some advanced Intel technology and Kraft’s  understanding of its consumer base.

“Shoppers are trying to put together meals for their families, but our research shows that 70%- plus of consumers, when they stop at a supermarket on the way home from work, have no idea what they’re going to make for dinner that night,” Don King, Kraft’s vice president of retail experience, told CPGmatters. Meal Planning Solutions is “a starting point that will lead to what’s next – how we can extend it further with mobile devices and as smart phone penetration increases.”

For now, Meal Planning Solutions is a kiosk that Kraft first demonstrated at the National Retail Federation (NRF) show in January and now is positioning to pilot-test at as many as three major supermarket retailers in coming weeks.

Here’s how it works: When a shopper approaches the free-standing device, Intel’s Anonymous Video Analytics technology zooms in on the face and instantly determines the person’s gender and age group with very strong accuracy. Then the Meal Planning Solutions software uses those determinations as a starting point for suggesting potentially appropriate purchases to the engaged shopper from the array of Kraft brands and products in the store.

“The unit really just makes a binary calculation – male or female – it’s not deeper than that,” King explained. While clearly Kraft could make hay if the Intel technology identified shoppers by height, girth, or ethnic background – imagine a kiosk that recommends only low-fat products to someone who fills the whole screen, for example – King insists that the company hasn’t gone there at this point.

“That would be a little ‘Big Brotherish’ and a little creepy,” he admits, although the technology theoretically could include such capabilities. And, King emphasizes, Meal Planning Solutions at its basic and involuntary level is an “anonymous” experience, not asking personal information from those it scans or keeping any record of individual images.

What Meal Planning Solutions does is take the basic information about gender and age group and tilt its resulting suggestions in “slight or subtle ways, skewed maybe 60-40 one way or another,” as King put it. For instance, a man may be slightly more likely to get recipe suggestions that lend themselves to grilling, while a woman would be more apt to receive ideas that include vegetables.

Meal Planning Solutions also “can take into consideration other variables such as time of day and time of week, to make a final decision on what to show on the display,” adds Shailesh Chaudry, marketing manager of retail strategy and innovation for Intel.

Another nifty capability is that Meal Planning Solutions measures “dwell time” – how long a shopper stands in front of the machine, engaging it. The technology can adjust engagement experiences for various individuals based on what it “learns” about how long members of different demographic slices engage the kiosk.

“It’s helpful to know in terms of how you should program the experience,” King explains. “How long is long enough, or too long? If folks are struggling to get through the [recommendation] experience, and maybe taking a minute and a half longer because they’re older, we may need to adjust the experience so they’re not frustrated. We also can present them with more options the longer someone stands there.”

Intel’s Chaudry told CPGmatters that, on the other hand, “if the average viewer for a display only looks for a couple of seconds, then the content strategy could be to show shorter, punchier messages. However, if the average viewing time is longer, more detailed information can be shown on the display.”

Where the system really kicks into high gear is when shoppers are willing to “identify” themselves by swiping their mobile phones loaded with Kraft’s iFood Assistant. Then, the Meal Planning Solutions kiosk can read shopping lists and suggest recipes based on what the shopper already plans to buy in the store, for instance. Shoppers also would be able to link to the store’s loyalty-card systems.

Collectively, Chaudry says, Meal Planning Solutions can become more valuable over time to both retailers and shoppers as the system gathers usage information. “Information for products can be shown that are in alignment with what customers have been searching for, reviewing, or purchasing – thereby helping to improve the relevancy of what is shown on the displays,” he says.

King says that Kraft’s work with Intel on using the technologies in the system is really in its infancy. But Kraft and its partners such as Intel pushed out the Meal Planning Solutions prototype as a way of engaging shoppers in the technology and beginning to learn what would be most helpful to consumers and retailers.

“Technology happens in a hurry, so the temptation was that things were changing so fast – why build a physical unit?” King explains. “But we could be waiting forever if we took that attitude. So last June we decided to put a stake in the ground with this and get something we could demonstrate at NRF.”

Although Kraft is still working out the features and bugs of a Meal Planning Solutions system that it would deploy, the company already understands that its retailer partners would only welcome the device into their stores if it were relatively maintenance-free. “It can and should be seamless within the shopping experience, but add a lot of value – and the maintenance ought to be minimal,” King says.

The systems also are remotely manageable. “By being able to remotely diagnose, fix and power down the machines, retailers are able to save on costs,” says Intel’s Chaudry.

Such concerns are one reason King winces at the use of the term “kiosk” to describe the system. “Folks want to equate it to a kiosk,” he concedes. “But if [Meal Planning Solutions] behaves like a run-of-the-mill kiosk, then we’ve failed miserably.”

And King and his colleagues intend to succeed.


Market Watch
CPG, Retailers Must Wean Shoppers Off
Price-Only Related Merchandising: Report

By Rose Anthony

A new year gives trading partners a chance to review product and retail strategies with an eye toward making changes and improving. Nowhere is this more relevant or important than in merchandising strategies.

These strategies are examined by SymphonyIRI Group in the current issue of its Times & Trends. Merchandising Trends: Achieving Differentiation with a Shopper-Centric Approach explores current and emerging merchandising trends that CPG marketers have embraced during the last few years in an ongoing effort to satisfy shoppers’ rapidly changing definition of value.

The firm anticipates shoppers will remain conservative in their purchasing habits, but evolve their definition of “value” slowly away from the almost singular focus on price that has shaped behavior for the past three years. The new focus will be one that integrates other factors, such as ingredients to support increased health and wellness, packaging and convenience.

“Approaching CPG merchandising from a shopper-centric perspective is critical and will become increasingly vital in the months and years ahead,” says Robert (Bob) I. Tomei, president, Consumer & Shopper Marketing, SymphonyIRI. “The challenges for those leading merchandising efforts are complex and multifold, and meeting these challenges head-on is the key to long-term success. Merchandisers must understand their key consumer segments at a micro level and gauge which tactic or combination of tactics generates the greatest sales lift across key categories and brands. They must take into consideration channel and retailer-based nuances while simultaneously addressing the interplay between strategies for national and private label brands.”

Also critical to the success of CPG and retail companies will be weaning shoppers off price-only related merchandising. In 2009, price-only merchandising activity increased across more than three of four (79%) of CPG categories, a figure that has moderated to a still-too-high 53% in 2010. Going forward, managers must rely on innovative merchandising strategies focused on a mix of feature, display and price to gain the optimum balance between attracting shoppers to the product and earning margins necessary to sustain and grow the brand.

The firm suggests that manufacturers and retailers seeking to maximize opportunity within the new, emerging retail environment should consider the following action items:
  • Identify new growth opportunities and threats  Manufacturers need to understand price elasticity of demand across key categories/brands and leverage that knowledge to develop and refine everyday and promotional pricing strategies. Retailers should monitor changing shopper dynamics to identify opportunities to build share and loyalty by cross-merchandising relevant parallel categories/products.
  • Work with key accounts to develop strategies that address market- and store-level shopping patterns and needs  Both manufacturers and retailers must focus on highly targeted, solutions-based merchandising programs that deliver against the needs and wants of key shopper micro-segments at the market and/or store level.
  • Measure and monitor pricing and merchandising executions and adjust continually Manufacturers should monitor store-level merchandising performance and retail execution among key retail partners and adjust mid-path as warranted. Retailers should test all pricing and merchandising initiatives at a micro level prior to roll out and then closely monitor the impact of that roll out.

Lost Opportunity in Center Store
According to a newly released five-year Center Store study co-sponsored by Grocery Headquarters magazine, Center Store generates 73% of total store sales and 77% of profit; however Center Store growth is lower than for the perimeter. The study further reports that lost trips accounted for $23 billion of “lost opportunity” in the grocery channel.

The research, unveiled last month at the Food Marketing Institute Midwinter Executive Conference, says the industry should leverage the total store – not just a single department or category – while focusing on shopper demand, as opposed to category management. The study also cited lost opportunities and profits in other retail channels besides grocery.

Wine Flowing Again in Pa.
Some of the wine kiosks in 30 supermarkets across Pennsylvania that were shut down in December seven months after they were installed were operational again last month. If all goes well, officials say the rest will reopen soon.

Kiosks are at some Giant Eagle and Shop ‘n Save stores in Western Pennsylvania, along with some Giant Food Stores, Wegmans and Fresh Grocer locations were taken offline  due to mechanical difficulties. The state Liquor Control Board (LCB) said the problem with the Pronto Wine Kiosks, developed by Simple Brands, was that bottles of wine were not being dispensed. 

IN-STORE MARKETING

CPGs Prep for Growth of QR Code Promotions

Kraft Foods' New Face-Scanning Kiosk Suggests Meal Solutions for Shoppers

CPG, Retailers Must Wean Shoppers Off Price-Only Related Merchandising: Report

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March 2011
               
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