The most interesting tidbits so far:

Ease of use will be key. Christina White of SapientNitro cited the Starbucks Card mobile app as an example of digital wallet app that gets the experience right.  The app lets consumers make purchases by scanning a bar code and reload their balances within the app.  The experience is low-effort for consumers, which has driven its adoption, but it will be harder to replicate for organizations that don’t own their own distribution channel.

Retailers, wireless carriers, and financial services all have a role to play in driving adoption. Carriers, owners of the networks and infrastructure, will need to work on creating standardization across networks to make it easier for retailers to adopt the “tap and pay” technology (The Isis mobile payment project is already moving in that direction).  The financial services firms, owner of the payment processing technology, need to adopt a more consumer-centric perspective to better understand how individuals will use the technology and the role it will play in their day to day lives.  Retailer, owners of the purchase moment, will need to fully embrace the idea of multi-channel shopping that goes beyond the brick and mortar store and the ecommerce site.

Financial Services is facing a “Blockbuster” moment. The Panel discussion on Saturday, appropriately titled “Banks: Innovate or Die!”, looked at the transitional moment facing many mainstream FS firms.  Much like Blockbuster failed to innovate effectively to deal with the arrival of Netflix into the marketplace, many FS firms need to understand how third-party financial management firms and the rise of alternative payment networks like the Android Marketplace could affect their businesses moving forward.

None of this is particularly new information, but the sense among attendees is that consumers will move to embrace these new digital tools with greater speed as smartphone adoption increases.   Understanding how consumers use these tools will be critical for all parties involved–wireless carriers, retailers, and financial services institutions–as they try to create compelling, effortless experiences to drive greater engagement and loyalty.

• 78 percent said they use two or more channels to browse, research and make purchases; 30 percent said they use three channels or more
• 43 percent said they start their research online or through a mobile device, but then need to call a customer service or call center representative to complete the transaction because the necessary product or service information cannot be found online
• 39 percent said they browse via the online or mobile channel and then make purchases in the store because they prefer to touch and feel the product; 36 percent said they do this to compare several brands of the same product

Consumers are embracing the freedom the new multi-channel environment provides them in evaluating products and services to ensure that whatever purchase they make is the right one.  Retailers are starting to follow suit, but they face some significant barriers in doing so:

• Touchpoint Coordination—Many retail organizations manage in-store experience, e-commerce, customer service, and marketing communications in separate silos, making it hard to coordinate and synchronize efforts across touchpoints and leading to inconsistency and mixed messages to customers.
• Brand Differentiation—Gone are the days where a cool website will get you noticed.   As more retailers embrace emerging touchpoints—social media, mobile, apps, etc.—it will become increasingly difficult for any one retailer to differentiate in such a high-noise environment.  Retailers need to bulletproof the value propositions that drive all go-to-market activities, reinforcing the company’s key differentiators that best meet customer needs.
• Data Collection and Capture—New channels are both a blessing and a curse: while they can provide retailers with the chance to collect previously impossible amounts of customer data, rarely do they have the systems or people in place to use this data to build a single customer view.  This problem is often exacerbated by the same org structure issues that make touchpoint coordination difficult: if the groups don’t report into a single source, their data probably doesn’t get aggregated either.

While there is no quick fix for any of these issues, there are a couple of ways retailers can begin to close the gap to ensure success in the new multi-channel environment:

• Use a jobs/outcomes framework to organize customer understanding. Retailers should use the consumer data they collect to better understand the specific tasks customers are trying to complete when they interact with the company at specific touchpoints and how customers will measure the success of those interactions.  In organizations where individual touchpoints and data sources are owned by many different groups, cross-functional coordination will be necessary to build a holistic picture.  Framing customer understanding in this way can help identify the most critical customer touchpoints that retailers need to get right. MLC members, check out this tutorial for more information on jobs and outcomes.
• Ensure that key touchpoints demonstrate the brand’s unique strengths. Rather than try to improve performance across all channels, retailers should instead focus on ensuring that the critical few key touchpoints will shape customer opinion and engagement, accurately reflect the brand’s unique differentiating strengths.   Check out Pat’s post from a few weeks back for a framework for shaping the customer experience this way.
• Identify and fix misaligned touchpoints. Once the critical touchpoints have been optimized, it’s important to make sure that the others don’t detract from the experience with off-brand service delivery or inconsistent messaging.  Retailers need to identify these “brand busters” quickly and find simple solutions for bringing them in line with other touchpoints.   MLC members, if you’re interested in seeing a framework for ensuring touchpoint alignment, click here.

Taking this approach to customer experience will help retailers move from merely interacting with customers across multiple touchpoints to creating a seamless, truly multi-channel experience.

We all know the recession has drastically impacted consumer behaviors, but we may often overlook its direct impact on brands themselves.   The recession has changed the way marketers manage their brand portfolios as they try to do more with less.  As such, marketers are taking a closer look at how then can stretch existing brand equity across a greater number of products, often taking a parent brand/sub-brand approach.   

We generally see four different sub-brand approaches, each with their own benefits and risks: 

1. Driver Sub-Brands—A driver sub-brand encourages purchase decisions by representing the value proposition central to the user experience.  The parent brand endorses the sub-brand—but it’s the sub-brand that defines the consumer’s perceptions of the product or service experience and proves the primary driver motivating consumer purchase. 

Take the Gillette Fusion razor.  Customers primarily buy the technology and performance represented by the Fusion name.  Fusion is the driver brand while Gillette creates a strong identity and clear visibility for the Fusion name on the package, retail rack, and in consumers’ minds. As you might guess, if a company is going to take a driver sub-branding approach, then the sub-brand must generate real response to its entrance in the marketplace to succeed.

2. Co-Driver Sub-Brands—In this case both the parent brand and the sub-brand play major—and often equal—roles in driving the consumer toward purchase.  

Cadillac’s Escalade sub-brand serves as a co-driver, as both the Cadillac and Escalade brand names influence consumers’ purchase decisions. While consumers associate the Cadillac name with top of the line performance, quality, and style, the Escalade brand compounds that image with the slightly rugged, more versatile associations of a sports utility vehicle. Cadillac marketers leverage the associations of both driver brands to command market share in the luxury sports utility vehicle category, as well as generating significant demand for the car among Hollywood celebrities attracted to the brand’s image of luxury, spaciousness, and high performance versatility. In co-driver situations, both the parent brand’s image and the sub-brand’s image together influence the consumer’s decision to purchase the product. 

3. Descriptor Sub-Brands—As implied by the name, descriptor brands communicate a distinct facet of the parent brand—e.g., class, feature, target segment, or function. 

For example, Purina Dog Food maintains the following descriptive brands: Dog Chow, Beneful, Hi-Pro, Fit & Trim, Puppy Chow, Moist & Meaty.  Purina Brand Dog Food uses these descriptor sub-brands to more accurately meet the needs of individual dog breeds and the specific demands of dog owners.  While all dogs could potentially thrive off of the standard Puppy and Dog Chow offerings, developing specialized offerings for overweight, high-energy, and performance dogs defined by a unique descriptor sub-brand enables owners to better address their dog’s perceived needs.  This is the riskiest category of sub-brands, as the sub-brand may cannibalize the parent brand if insufficient differentiation among the varieties exists.

4. Endorsed Sub-Brands—In an endorsed sub-brand relationship, the parent brand often provides support and credibility to the sub-brand’s claims in a more explicit fashion than co-drivers (for example, Rugby by Ralph Lauren). Endorsed sub-brands provide consumers with assurance that the sub-brand will deliver on the same value propositions as the parent offering, enabling the parent brand to expand into new markets while retaining its established brand position.

MLC members interested in a further breakdown can view the Council’s full report, The Sub-Branding Decision: Theory, Process, and Brand Architecture Strategies.

• The importance of authenticity remained a key theme throughout the rest of the presentations.  David Jones of Havas Worldwide talked quite a bit about making sure your brand genuinely connects to real issues consumers care about.  According to Havas research, 86% of consumers expect companies to stand for something other than profits.  (MLC members who are interested in creating these types of connections with consumers should click here to see the Council’s approach.)

• Don’t underestimate the power of outdoor.   Both Charles Schwab and Dunkin’ Donuts said outdoor advertising was crucial to keeping their brands top of mind with consumers.

• Marketing leaders need to be deeply involved in the management of the business to establish credibility with peer functions.  During the CMO Panel on Saturday afternoon, Mark Addicks from General Mills and Barry Judge from Best Buy both talked about the importance of having some role in managing the P&L, as doing so helps build internal support for long-term marketing investments.  Joan Chow from ConAgra, said that–at the very least– Marketing needs to be accountable for its spend and how that impacts the business.   (MLC members interested in learning more about tying marketing investments back to P&L should check out our Net Marketing Contribution metric—p.19 of this white paper.)

• The importance of integrating social media into existing marketing efforts.  I don’t mean to sound like a broken record, but every single presenter over the final two days of the conference talked about the importance of social media for creating real connections between the brand and consumers.  Brad Casper from Dial Corp. put it best when he said that social media levels the playing field between challenger brands and the bigger players in their industries.   A couple of my favorite social media anecdotes:
  • Fender’s “Show Us Your Fender” initiative asked guitar players to submit pictures of themselves playing their guitars along with their story, helping Fender to collect insights and engage with customers at the same time.
  • Dunkin’ Donuts’ group ordering iPhone app and website, which enables individuals to tell their coworkers that they’re going on a coffee run and collects orders quickly, lets that person become the “Office Hero,” which aligns with some of their in-store messaging.  Now if only we had a Dunkin’ Donuts nearby……

My biggest takeaway was the focus on authenticity I heard from all of the presenters.  “Your brand has to be who it is” was the common refrain.

• Stephen Quinn, Wal-Mart’s CMO, talked about how Wal-Mart’s current brand promise (“Save Money, Live Better”) is actually a higher purpose for the company and drives every decision internally.
• John Stratton, Verizon’s CMO, talked about the company’s commitment to its network despite the lure of running after “shiny objects” (in Verizon’s case, feature-laden smartphones.)
• Andy England from MillerCoors talked about the necessity of aligning each brand in a portfolio to a distinct benefit, and then letting that benefit drive communications and innovation.   For example, Coors Light’s cold-activated can aligns with its benefit, Rocky Mountain Cold Refreshment.

As with most conversations I’m having these days, the speakers also focused quite a bit on the benefits of social media:

• Eric Schmidt, Google’s CEO, said that social technologies have forced brands to become more transparent and have provided them with an unparalleled ability to engage with customers at a local level in a very scalable way.
• Diane Brink, VP Marketing of IBM’s Global Technology Services division, said that social technologies have helped IBM deliver on its brand promise, “A Smarter Planet,” by providing its employees with unparalleled access to data in real time.
• Jonah Bloom, Editor of Advertising Age, talked quite a bit about how social media will lead to the rise of the Creative Technologist (individuals who are part brand strategists, part developers) and how that will dramatically shorten creative development and execution timelines.

Multicultural Marketing will also become more important as brands seek to create authentic relationships with the widest array of consumers possible:

• Wal-Mart tries to connect with ethnic communities on their passions, e.g., they’ve sponsored the Af-Am Imprint on America, a traveling exhibit about the impact African Americans have had on American culture, since African Americans take great pride in their heritage.
• Neil Golden, CMO of McDonald’s, attributes much of the company’s growth to its success in marketing to Hispanics with targeted messaging.

I don’t know how many of you follow box office results, but I’d like to point your attention to Paranormal Activity, a horror movie getting a slow rollout from Paramount that just this past weekend grossed $19.6 million from just 760 screens.  That’s a per screen average of $25,813—a number more common for a summer blockbuster than a small, independent, genre film with a budget of $11,000.   So how did this small movie get so big?  Marketing, and more specifically a very smart use of social media.

Paramount first premiered the movie at a number of midnight screenings on Sept. 25^th, positioning the film as a one-time event not to be missed.  Paramount then capitalized on the strong positive buzz that came from these screenings by deploying a “street team” to promote the movie on social networking sites like Facebook and Twitter.   Posts encouraged other users to demand the film come to their home town on Eventful.com.  If users demanded the film one million times, Paramount would distribute the film nationally.  Even though national distribution was already part of Paramount’s plan, the ‘demand it’ strategy created greater interest in the film by actively engaging consumers in the distribution process.  Also, it provided fans of the film with the opportunity to serve as lead advocates and encourage friends and family to demand the film as well.

Paramount’s use of social media here is pretty refreshing.  Too often, studios spend millions of dollars on expensive TV and print advertising campaigns to drive up first weekend box office grosses, yet the ads do little to really engage the consumer.  Paramount’s lower cost approach allows it to put the movie into markets where it is likely to succeed (based on the areas where it has been most frequently demanded) while continuing to build demand in other markets by giving consumers a stake in its release, thus leading to better box office results than those typical of a horror film.  Of course, the success of such an initiative relies heavily on the quality of the film—a bad movie would be unlikely to capitalize on word of mouth effectively.

MLC members can click here for more information on driving word-of-mouth through social networks.