With 82 percent of Americans online, 93 percent owning mobile phones and 155 million using Facebook, access to digital technologies is officially pervasive, yet retailers still spend an estimated 60–70 percent of their marketing budget on printed ad circulars.

Nielsen’s Todd Hale, SVP Consumer & Shopper Insights, shared new research at the U.S. Consumer 360 Conference about the benefits of both print versus digital circulars and outlined the steps required to optimize both.

Shoppers prefer paper, but digital has strong conversion rates

Sixty percent of shoppers from a recent Nielsen survey say they look at printed paper material either mailed to the home or in newspapers at least once per week. The only electronic tactic that matches printed paper’s weekly reach is email. But while far fewer people are looking at sales and product information from digital methods like social media sites, store sites using a tablet PC or from smart or mobile phones, the weekly usage conversion rates are strong.

And demand goes up for high tech information sources when shoppers are asked what they want for the future. While nearly 90 percent of consumers still want print, more than 70 percent want email and traditional websites and about one-third are interested in social and smartphone applications. These numbers are even higher among younger generations of shoppers who say they still want paper, but they are more accepting of all information sources.

The research showed that while printed material gets shoppers in the store, digital tactics reinforce and reward loyal shoppers. Printed campaigns help shoppers find deals about their favorite products and locate widespread sales and high-tech touch points such as tablets, social sites and in-store kiosks are used to more so for research purposes.
Today, printed circular response promotion lifts are less effective than five years ago, delivering about a 20 percent return on investment in 2010, compared to a 28 percent boost in 2005. An improved mixture of items with an overall higher lift profile and/or timing improvements can counterbalance smaller average lifts. Don’t underestimate the impact your competitive advantages/disadvantages have.

A Move to Improve Online Offerings

For many brick and mortar retailers, figuring out how to effectively draw people to online offerings and then determining what contribution online efforts are having to offline sales is a challenge. In fact, few of these retailers get more than 20 percent of store shoppers to visit their site, despite the fact that the majority of shoppers spend 25+ hours per week online.
In study after study, Nielsen finds that the online circular is the most widely used part of a grocery/drug retailer’s web site, but the lift gained is a bit less than the lift seen for the site overall. The research also shows that:

  • Online display ads drive offline sales
  • ROI is generally higher than traditional media
  • Every online campaign does not work
  • Success is driven by new shoppers, not greater spending among existing shoppers
  • The best responding offline segments are not always the most responsive to online ads

The Secrets to Success

Put a process in place for both print and media campaigns that tracks ongoing optimization. For print, start by defining who won the week – know what you did and what your competitor did in terms of attributes page-by-page. A department-by-department win/loss scorecard that includes display compliance should be deployed to get below the surface of the ad.
For digital, an understanding of past shopping behavior makes a big difference in the ROI of online campaigns on driving offline sales. Customer-based reach tactics can also be effective, but often requires a level of analysis beyond what is known about existing brick and mortar segments. Creative messaging with price and promotion on specific items is particularly effective.
While print will remain a strong part of the circular mix for five to 10 years out, it needs to be a leaner and more precise vehicle. Digital is necessary to bring about the type of consumer relevancy that future shoppers will expect. It will evolve along with development on the web and in social media and will be driven to a large degree by younger and more diverse population segments.



Source : http://blog.nielsen.com/nielsenwire/consumer/browse-all-about-it-the-evolution-of-the-circular/