Tpv The Carlson Group

© 2012 The Carlson Group, Inc. All Rights Reserved.

TOTAL PROGRAM VALUE2012

If you’re like 50% of the brand teams asked in a recent survey*, you want to know more about how your customers make purchases, and how you can affect their decisions.

* Shopper Marketing 2012 Trends Report, January 2012

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› Total Program Value

You can call it Shopper Marketing, Consumer Research or Retail Strategy, but by any name it means information which can improve the retail performance of your brand. To move the needle on consumer behavior, you need two things. The first is a resource that knows how to gather the right knowledge, and the second is the ability to translate that knowledge into programs which deliver ROI in the retail environment.

Here’s our approach for retail success, we call it:Total Program Value (TPV).

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What isTotal Program Value?

The retail world moves at breakneck speed, and nothing changes faster than the behavior of today’s shoppers. Shifting consumer needs, influences and preferences vastly outpace a brands’ ability to develop and implement new and exciting brand experiences. At the same time, brands are looking far more critically at the cost, effectiveness and ROI of their retail programs. The notion of a high-cost branded retail solution with a finite lifecycle makes little sense in today’s market. Total Program Value offers a new perspective on the development of retail programs. It’s consumer-centric, focusing on changes that continually better the shopping experience and it’s incremental, improving the performance of retail programs as they evolve over time.

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TOTAL PROGRAM VALUE HAS FIVE PILLARS

1. TPV is holistic. It addresses the full ecosystem of retail programs, from overall brand strategy through operational and logistic details. All aspects of retail are included, so that programs address marketing, merchandising and implementation concerns as thoroughly as they consider the retail program elements themselves.

2. TPV takes the long view. TPV incorporates the full lifespan of retail programs, delivering value at every stage. By emphasizing a cycle of ongoing innovation, programs continually elevate what’s working, and make incremental changes to address challenges. The emphasis on testing and program evolution leads to smarter and more cost-effective procurement strategies.

3. TPV is flexible. Each category and each brand is unique. Consequently the meaning of success varies not only per organization, but also per individual program. TPV addresses differing needs of both brands and retailers, creating better-informed and more efficient programs while calibrating the process to include only what is relevant.

4. TPV is smart. In the cycle of innovation, tribal knowledge accrues. In addition, the model includes fully integrated participation by best-in-class partners in strategy, shopper marketing and digital media. These seamless partnerships offer the depth of experience to be efficient and effective, with nothing lost in the translation from strategy to execution, no matter what mediums are involved at retail.

5. TPV has its feet on the ground. TPV is fact-based. Design is based on response to actionable insights and observations. While there’s an emphasis on the intellectual property of retail – the strategy and evaluation – working in design and execution keeps us honest.

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How does it work?

THE FULL-CIRCLE PROCESS – PROGRAMS THAT IMPROVE WITH AGE

Total Program Value means the end of the old lifecycle of retail programs. The paradigm used to be a year of development, resulting in a program with a 3-year lifespan in the market. The new model makes the most of your investment in retail programs. Through the TPV cycle, we look both outward – to discover what’s new and innovative in the market, and inward – to evaluate programs for effectiveness and opportunity for improvement. As information is gathered, it is applied to the next generation of your program, to enhance what works or to improve what doesn’t.

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“The best strategies are simple, and they’re designed to do two things: fix what people hate, and give them more of what they love.”

- Rebecca Huston, Principal – Strategy, Huen LLC

Discovery establishes the foundation for success. Strong strategy is the basis for better program design, and the better the design, the easier it is to translate to a seamless execution. In Discovery, three levels of information are layered together to inform strategy.

› The first level is a comprehensive understanding of consumer decision-making at retail. Which trends and behavioral patterns influence what shoppers do in the retail environment? How do technology and new

The Process of Discovery: Anticipating Consumer Response

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media play in to the retail experience today? What successes and challenges do we see in the market that can inform direction?

› The second level is category influence. Typical behavior patterns change from category to category. (For example, men purchasing golf clothing shop much more like women than they do in any other apparel category.) Some categories see much greater influence from changing technologies. (The PC category is in constant flux.) Understanding the specifics of each category helps to shape solutions, and makes it easier to anticipate consumer response to program elements.

› The final layer is the brand. Specific brand objectives, strengths and challenges inform a virtual mixing board of options. Emphasis can be put on key areas to amplify, alter and influence how shoppers interact with the brand environment.

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Direction is the interpretation of discovery into program design. Execution translates design into real-world retail programs. With TPV, brands and retailers are partners in the process from the outset, so when we arrive at these hands-on phases, there are no surprises. In addition, the engagement of all partners from the beginning ensures a more effective and cost-efficient process, with nothing lost in translation. It’s a more comprehensive approach leveraging the best thinking from all participants, which conserves time and money without sacrificing results.

Direction and Execution: Putting Knowledgeto Work

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Evaluation completes one cycle, and sets up the next. In the TPV model, performance is measured against short and long-term program objectives. As in discovery, both qualitative and quantitative data contribute to the full understanding of program success. Ultimately, evaluation delivers information which directly impacts the next evolution of the program by identifying elements that contribute to ROI, and those which aren’t worth the investment.

“It’s a mistake to base strategy on what consumers tell you they’re going to do. If people were good at predicting their own behavior the self-help gurus would be out of business, and we'd all keep our New Year's resolutions.”

- Rebecca Huston, Principal – Strategy, Huen LLC

Evaluation: Reality Check

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› Testing in operating retail locations is the best possible way to gauge the effectiveness of new program elements. Being able to watch what consumers actually do beats asking them what they’re going to do every time. Real-time, real-world observation is data you can count on for accuracy. In addition, it’s relatively easy to see how a small change affects shopping behavior. Positive changes can be implemented throughout the retail channel; those that prove ineffective can be left by the wayside.

› ROI is not a one-size-fits-all proposition. Metrics need to be calibrated based on both organizational and program objectives. There are multiple places to look for success beyond sales figures, including areas such as brand recognition, social media imprint, frequency of store visits and response to specific initiatives.

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What are the benefits?

BETTER OVERALL BRAND EXPERIENCE

› TPV is a vehicle to bring brand strategy into the environment.

› The process ensures that branded retail programs keep pace with current brand marketing and communication.

› TPV is structured to incorporate all the critical elements of the brand including product merchandising, brand marketing and technology into one seamless experience.

MORE EFFECTIVE CONSUMER CONNECTION

› Design is driven by actionable insights that connect with consumers to maximize the effect on their purchase decisions.

› Both discovery and evaluation are consumer-centric. Understanding

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the factors which affect decision-making, and evaluating how solutions play out in real environments create a foundation of knowledge that is directly applicable to the design of retail environments.

BETTER USE OF INVESTMENT

› With TPV, you spend your budget with a sharp focus on fixing issues and improving performance.

› Retailer and category needs are anticipated, facilitating buy-in from retail partners.

› The iterative process is more innovation-friendly. It’s designed for quick-turn testing and implementation without a full-scale overhaul of programs.

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Take-Aways

Of all the brand communication mediums, the retail environment is most closely aligned with consumer purchase behavior. As such, retail offers an unparalleled opportunity to directly affect how shoppers make decisions about products and services. Total Program Value offers the best possible approach for organizations to create retail programs which deliver on those opportunities.

› TPV is a comprehensive approach, working at all levels and phases of retail program development to deliver lasting value.

› TPV focuses on the unique needs of your brand, its relationship to core consumers and today’s markets.

› TPV is consumer-centric, building engagement through integration of environment, merchandising and communication.

› TPV is a vehicle to amplify and leverage your brand’s marketing and communication efforts at retail.

› TPV empowers your organization to make informed and effective decisions about retail programs.

› TPV makes fiscal sense. It’s a tool to optimize your retail investment, putting budgets to work in ways that maximize ROI.

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