Honestly, as I interviewed the person it (the deal amount) was not what I expected.  When someone says they got a deal on shoes, my mind goes to lower prices, say $50 or $60 dollars, but a deal is relative.  A deal is within a price sensitivity range to the shopper. Therefore, it comes as no surprise that a deal for one person will be an exhorbatent amount for another.

But the word “deal” goes much deeper for shoppers.  It is a way to shop for some and a social deflector for others.  A deal can be pennies in one category and hundreds of dollars in others.  By honing in on the truth behind the different definitions for a deal we are able to understand shopper attitudes and behaviors to better market to them.  Below are six different lenses to view a deal.

The Deal Seeker
Many people seek deals, but not all deal seekers are the same.  Two ways to bucket deal seekers are planners and hunters.  The primary difference between the two is their approach to deal finding.  The planner preps and identifies many of their deals prior to going to the store.  They will use many deal tools like coupons, deal web sites and apps.  Conversely, the hunters do very little prep and mostly confine their deal seeking to the retail environment.  Within a store or mall they will seek deals, however, since they don’t canvas the market like gatherers it is questionable if they got the best deal overall.

Sale as a Deal
Sales are always a deal, but deals are not always a sale.  By definition if something is on sale it is a deal, however, it is not always the best deal.  Since deals can be by category (shoes) or by brand ( e.g. Vera Wang, Jimmy Choo), the deal is relative to the percieved price and the shopper’s price sensitivitiy.  If you want the cheapest shoes you could go to Payless or a discount store.  If you want a deal on Jimmy Choo shoes you will need to do your homework, and most likely if the deal is too good to be true (say $600 shoes for $50) a shopper will question the deals authenticity.

Deal Believability
This brings me to another topic: deal believability.  Deal Seekers are a peculiar sort. While many seek deals, they question if a deal is to good to be true.  Cognitive paralysis occurs when the deal is out of whack, making the shopper wonder what is wrong with the product.  Examples can be found on NoMoreRack.com where you will find iPad 2 for $43.20 (98% off) or a 55″ Samsung HDTV for $59.96 (95% off).  These are extreme deals which make you wonder about product authenticity.  You wonder about what is the hook, the flow, the catch.  I am a user of Woot and often question the price of certain deals.  Manuy times upon further review I normally find out the product is refurbished.

The Deal with Passion
Passion is a lens that may distort a deal seeker’s normal behavior.  We all have passions, and most people spend their discrentionary resources (i.e., time and money) on their passions.  Passion can result in an emotive spending where we shift from mind to heart.  For example, I know a couple who I would classify as deal seekers — they are always finding ways to save pennies.  Pennies they will use to spend on their passion, which in thier case is water skiing.  While they maximize coupons and their membership to Costco, they have their eye on a new Malibu boat.

The Price Blind
The antithesis of a deal seeker is a shopper who is price blind.  The reason I bring them up is that many think they are smart shoppers or deal seekers, yet they are operate in the retail environment like they are price blind.  One reason for this misconception is many buy on habit — a habit may have been initiated by a deal, but at this point they just buy the same brand or go to the same store, assuming they are getting the best deal.  This is a common phenomenon with warehouse stores.  Some deals at Costco or Sam’s Club are true deals, while others not so much.  However, in the mind of the shopper they believe they are a smart shopper and are getting a deal on everything.  After all, they wouldn’t pay a membership to pay more on products.

Deal as a Social Deflector
The last lens I want to bring up is social.  We live in a marketing world where social dominates the conversation.  Groupon and LivingSocial are methods to group buy — get a great deal.  The flip side of social is after purchase, especially when someone made a socially questionable purchase.  An example today would be the purchase of a tablet PC.  iPad dominates the market and then there is everyone else.  Imagine a person who bought an Archos Arnova Tablet talking to a friend who owns an iPad.  Instead of disussing the features of the product, there is a very good chance the person just says “I got a great deal.”

• Meijer offers a Meijer Tom Turkey (17 pounds) for 39-cents per pound with a $20 purchase.
• Kroger offers a River Tom Turkey for 59-cents per pound with a $10 purchase.
• VGs offers a Self-basting Turkey (12 pounds+) for 48-cents per pound with a $10 purchase.
• ALDI offers a Butterball Turkey (10 – 20 pounds) for $1.09 per pound (no additional purchase).

So what’s the best deal?

If brand does not matter, Meijer is the best deal on price with an 18-pound turkey costing $7.22, however, you need to spend at least $20 on other items to get the discounted price (probably not a stretch given all the other fixins needed for the holiday dinner).   The next closest is VG’s at $8.64.  Kroger is $10.62 and ALDI tops it off with $19.62 for their Butterball Branded offering.  Seems like a slam dunk — not so fast.

If you are a deal seeker, head to Meijer and you are good to go.  However, you need to ask yourself: am I getting a quality turkey or a dry, tasteless bird like the one in National Lampoon’s Christmas Vacation?  I am not a turkey enthusiast so I did a little searching to see if there truly is a difference — and there is.  The following is a segment from the Today Show a few years back discussing the topic: The Top Turkey Brands.  While two of the three brands were obscure (at least in Michigan) and the third was Butterball, the turkey “expert” explained the difference on how a turkey is processed which effects taste.

If you look deeper into the stores you will find out brand matters with price and possibly with processing.   For example, Kroger’s River Turkey is 59-cents per pound, however, Kroger also sells a Honeysuckle White brand for $1.59 per pound or $28.62 cents for an 18-pound turkey.  Re-looking at our four stores, ALDI seems to have the best deal on a branded turkey, Butterball, for $1.09 per pound.

I guess a shopper’s final choice will probably fall somewhere between price and whether they believe there truly is a difference in turkey brands.

Usually it starts with the funnel conversation.  You know the funnel is a spiral, dead or in some cases a Yellow Brick Road (see Making the Purchase Funnel Fixation Personal).  To be honest I am tired with the funnel debate.  It seems to have turned into some zealous endeavor to find the next consumer thing — like digital people incessantly talking about Web 3.0.  Okay, enough of the funnel. 

My focus lately is on the path to purchase.  For the sake of this blog, let’s call it the consumer journey.  The theory I am working under has several dimensions:

• Not all purchase paths are created equal.
• It starts with the consumer’s shopper mindset.
• Shopping scenario affecting the mindset.

For brevity purposes of this blog entry, I am focusing this blog just on the first dimension: not all purchase paths are created equal.  This seems logical — shoppers  will take more time researching a high-consideration like a large screen TV for the man cave, a new car for yourself, or remodeling your home than a low consideration purchase like a restaurant to eat dinner, an oil change place for your new car, or can of pork and beans in aisle 3 at the nearby Kroger.  And from a macro perspective this is somewhere between “duh” and a “no-brainer”.

Even though this is obvious, it doesn’t explain why some people will go up and down the aisles at Kroger tossing items into their cart until they reach a certain food category where they pause and contemplate their purchase — say choosing a cut of meat for family dinner, a personal care product like deodorant or shampoo, or in my case a nice six-pack of beer. 

The same “pause” can be found for your daily life.  You may find yourself on auto-pilot when you fuel your car, drop of your dry cleaning, or getting a morning cup of coffee.  However, you may deliberate with the family on where you will go to dinner on Friday night. 

Predisposition drives your auto-pilot.  This predisposition is a built in mechanism we have in our purchase behaviors to avoid revisiting every purchase decision throughout the day.  While you can consider it “loyalty” to a product or service (it is), it can also be a routine.  Many are choices that  conveniently fit into our daily routine.  For example, I like Caribou Coffee better than Starbucks, however, the Starbucks is on my way to work, and I am not willing to exert the extra effort to be loyal to Caribou and drive 2 miles out of my way.  

Breaking a person’s predisposition or routine is difficult.  They aren’t looking for a reason to switch and therefore are not seeking out information to rethink their predisposition.  Therefore a marketer is limited to intrusive methods.  The most obvious one is media — promoting a compelling reason why their current decision is incorrect (i.e., my product is better so you need to try it).  This may work but the product differentiators better be pretty damn compelling.

Another popular intrusive method hits the wallet — giving them a deal.  Coupons, deals, sweepstakes, and group buying are pervasive (just ask Groupon) and a compelling deal has the potential to induce trial.   The objective of the deal is to disengage someone from their predisposition and establish a new predisposition — a new routine.   

The interesting aspect of product trial, is if you remove the stimulus will the behavior persist.  For example, Shell has partnered with Kroger to offer a cross brand loyalty program — if someone spends $100 at Kroger the shopper will get 10-cents off per gallon on their next fueling at Shell.  The program is a great example on how to redirect one loyalty program (Kroger’s) to another brand (Shell).  The question at hand for Shell is: will people frequent Shell without the 10-cent per gallon incentive?  If the program goes on perpetually, this is a non-issue.  However, Shell is normally priced higher than nearby stations, and removing the 10-cent per gallon incentive may result in a reduction in fuelers as they go back to their previous routines.

For me it is not a surprise, and a little of apples and oranges comparison.  For example, comparing fans to visits is incorrect.  Facebook fans are not all active on the page, in fact I would argue the majority of fans are not active on a marketer’s page in a given month.

If we want to truly make it an apple to apple comparison, Facebook fans are more analogous to an marketer’s email list — people who opted in to stay in touch with the brand.  For comparison purposes let’s assume Kraft had an email list equivalent to their facebook fan volume.  The exposure rates would be similar if a message was sent out in email and facebook.  While we know the exposure volume, we don’t know how many people acknowledged the message.  We only know the response rate (e.g. likes, comments, postings).  Comparing facebook to email, in a given email blast a marketer would expect a 25% to 35% response rate or about 2.6 million responding.  I doubt that 2.6 million people are active on Kraft facebook communications.

“Digital Direct Math” aside, there is several data nuggets in the article.  One is the extreme drop in web site traffic for Kraft.  The article points out this may be a function of marketers shifting email lists to facebook fans.  Logically, it makes sense.  If my email list declines (or becomes more passive) the number of people going to the site would drop with each blast.  

While we could micro-analyze each digital experience we need to take a macro view the online experience.  We need to stop assessing a brand/consumer presence by one destination or domain (e.g. facebook, website, YouTube Channel). This is so 2003.   The online brand presence should be measured as an aggregate of all content, all experiences, all conversations.   Kraft is probably looking at their online presences in totality, understand the purpose of each channel within the brand / marketing strategy.

From a consumer perspective this makes sense too.  Marketers are smarter to integrate their brand experince into the consumer’s online experience, instead of brand-centric view expecting consumer’s to come to the brand destination.  A marketer’s online investment strategy should not be restricted to one destination, rather it should assess opportunities holistically, and determine the best places to intercept the desired target, at the right time, right relevance, and right mindset.  This may be facebook, search, email — or all the above.

I received an email today inviting me to try a new crispy chicken taco via facebook.  However, getting the coupon seems to be a little loco (their words, not mine). 

In reviewing Del Taco’s facebook presence, you can see they are trying hard to build their fanbase (currently at 96,300 fans) and engage them too.   Del Taco has created many facebook elements including a webisode (The Del Taco Special Show with Wes & Barry).

Unfortunately for Del Taco the facebook banter the past several days is more about the missing coupon then anything else.  To their credit the facebook admin is highly apologetic about the SNAFU.

As I reviewed in a past entry (Can I bribe you to be my brand fan?), coupons can be an immediate draw, but are brands truly attracting brand fans or the coupon fringe?

“The Elephant is the emotional side of motivation, while the Rider is the logical side.  Perched atop the Elephant, the Rider holds the reins and seems to  be the leader.  But the Rider’s control is precarious because the Rider is small relative to the Elephant.  Anytime the six-ton Elephant and the Rider disagree about which direction to go, the Rider is going to lose.  He’s completely overmatched.”

The authors examine how these two internal motivations play together (or not).  The most obvious examples we most can relate to are sticking to a diet, staying on an exercise program, or quitting smoking.   We know it is the right thing to do (Rider) but we have a difficult time sticking to it (Elephant).  The Elephant and Rider are the yin and yang of our psyche.  The Rider is the planner (getting thin on a diet), while the Elephant is attracted to the short term payoff (enjoying an ice cream cone). 

“Changes often fail because the Rider simply can’t keep the Elephant on the road long enough to reach the destination.”

As marketers we advertise to induce change.  A change in brand choice.  Getting people to rethink their brand selection is about motivating them away from what they do today.  Getting them to take a different path — a new path.  The question is are we talking to the Elephant or the Rider?

Educating the Elephant
I have a friend who frequently fuels his two cars at Sam’s Club.  This fueling behavior requires him to travel 15 miles or about 20 minutes each way from home.  Seems illogical to most people.  However, in a recent study I completing on fueling behaviors my friend is not alone.  About five-percent of  people share this fueling behavior.  There are different reasons why, but primarily these people spend time to save money.  They believe by watching their pennies they will save dollars — thousands of dollars in the end.  It is what drives them. It is their elephant.

The  elephant drives many marketing decisions, because it is our DNA – it is who we are.  It is our natural approach to the world, so why would marketing be any different.  Many times the elephant will drive the consumer to choose our product, sometimes the competition.  We need to be careful to just talk to the rider.  Some marketers believe we can logically change behavior.  We love our products, and logically we see reasons why people should choose our product over the competition.  These logical “why buys” may appeal to the rider, but may be meaningless to the elephant. 

• A car’s high Miles Per Gallon may appeal to the rider, but the elephant likes the roominess of a full-size vehicle.
• Saving the environment may appeal to the rider, but the elephant does not want to pay a premium for green products.
• A quality cup of coffee may appeal to the rider, but the elephant does not want to drive four miles out of the way to get it.

You get the idea. 

I am not suggesting we suspend logic.  Rather I recommend building campaigns based on our core target’s motivations.  In order to get the consumer to change their behavior, we need to understand their internal inertia — the motivation within their current choice.  We then need to architect a path — a message — an experience, that will get them to rethink their choice, and redirect their behaviors.

Nabisco is not the first (nor last) brand to incentivize people to join their fan page.  Different brand stimuli have been used by Outback, Babies’R'Us, and Sears just to name a few.  Outback offered a free Bloomin’ Onion, while Babies’R'Us gave fans a $5 gift card.  Sears like Nabisco offers coupons to new fans.

Nabisco’s offer is not really free (note the asterisk).  The deal is fans can download a coupon on the first Monday of every month (limit 500,000 coupons per month) throughout 2010.  The coupon is good for a free package of Chips Ahoy when you purchase one package of Chips Ahoy and a gallon of milk.

 The second question is what type of  fan does a brand attract with incentives?  I don’t know how many fans of the Nabisco Cookies page came for love of brand or love of free cookies.  However, there is some insight by reviewing the page content.  In reviewing the past 24 hours there was over 30 postings.  Fan postings are primarily shout outs to their love of cookies.

• J Blair: we love cookies Yesterday at 4:57pm
• L Goodman: we are all cookie monster in this house:)Yesterday at 4:56pm
• V Coffey: MMMMMMMM COOKIES!!!! Me love cookies!! Yesterday at 4:38pm
• A Orr: Nabisco cookies and milk?! hummmmmmmm Yesterday at 3:13pm

Not every post was for the love of cookies.  There was some banter about the coupon promotion.   On the discussion page there seems to be a little angst around the use of the coupon.

• J. Mowen: Went to the store this morning and tried to use my coupon. I admit I should have read the date ahead, but what kind of coupon is only good for three days!!!! Leave it to a huge corporation like this to put such great limitations on the deal!  (Yesterday at 10:13am)
• J. Moore:no stupid coupon nabisco you suck (March 8 at 1:21pm)
• B. Dyer: NO COUPON.  WHAT IS WRONG WITH NABISCO? MUST BE RUN BY A MALE (Tue at 6:07pm)
•  
  D. Cooley:We have two major grocery chains in St. Louis/St. Charles Missouri. They both rejected my coupon because they SAY, it is not posted in the stores, that they reject all internet coupons for free items or even cents off! I talked with the store managers and they say they were not told by Nabisco they were having a promotion, and they would not accept a free item internet coupon!!! Thanks for a good idea, but it turned out to be useless to me!  (March 1 at 6:21pm) 

The apps outlined in the article were interesting.  I could see the appeal how the apps would appeal to certain shoppers.  However, I do believe there is a bigger idea out there.  Albeit not an easy idea to execute, but if successful the application could define the category. 

Before I paint a vision of what that could be, let’s first briefly review the mobile apps discussed in the article.  I grouped the mobile apps based on perceived shopper benefit: saving money, knowledge, and convenience.  Note that some apps may fit into multiple benefits.

Saving Money
Some people spend time to save money, others spend money to save time.  When a person is driven to save money, they view their time as an investment to get the best deal.  The lowest price, coupons, rebates, are priorities.  These shoppers are willing to drive out of their way to get a deal.  So it is not a question of ”if” they will drive out of their, rather it is a question of “how far” they will.

•  Yowzadelivers coupons to nearby stores based on GPS-ing the shopper’s location. 
• ShopSavvycompares store prices (through scanning the bar code) with  online and at nearby retailer pricess.  Also includes coupons and allows users to make online  transactions.
•  The Find will locate retailers, both online and offline, that carry desired products, will compare prices of the product, and even calculate the cost to drive to each store.

Shopper Knowledge
Making an informed decision is a desired benefit for many shoppers, especially on a high-consideration purchase.  Achieving this goal is not always easy.  It is not for lack of information — the internet provides an abundance of information on products, pricing, and product reviews.  No the issue isn’t information.  The issue is gathering knowledge to determine what is the right product.  What product meets the shopper’s needs.

• RetrevoQ uses texts and tweets to provide shopper with information about electronics equipment including pricing information, reviews, and whether it is a good buy.

Convenience
Sometimes it is a manner of getting in and out quickly.  For many shoppers going to a mall is an experience.  A social journey where they explore stores and take in the ambiance of the mall.  For others it is a task.  They prefer not to waste time. Get in. Get out. Or get to where their desired location as quickly as possible. 

• Fastmall provides interactive maps displaying the quickest route to stores and it can remember where their car is parked.
• GroceryIQ (now owned by Coupons.com) allows consumers to create grocery lists, organize them, access coupons and share lists with others.

By reviewing the list of apps one can see the inherent benefits of each app.  However, I do think there can be more benefit.  The true killer apps will get more personal.

Get Personal
Right now the apps listed are rather impersonal, and a bit pushy.  Pushing coupons to the phone.  Pushing prices to the phone.  Pushing reviews to the phone.  We need to be a little less pushy, and take a more empathetic view of the shopper.  Make it more about them.  Make it personal.

Mobile phones are digital wallets. Potentially, they have reams of personal data.  Mobile phones know who we know.  They carry our contacts, our social groups, our trusted advisers.  Mobile phones also know where we have been.  They can capture visually a place or the specific GPS location.  Mobile phones can learn our tolerances.  They can record how far we are willingto travel for certain items like shopping or dining.  Mobile phones can learn our time-value relationship.  By combining these factors and more we can match shopping information with our personal code will generate knowledge.  If the app can fuse  our personal information the shopper environment think of the possibilities. 

My Meals
We don’t eat ingredients, we eat meals.  We all have favorites meals. So, imagine GroceryIQ with a taste layer – finding and recommendingfood and recipes based on personal or family food genres like ethnic flairs (e.g. Thai, Italian), and then incorporatingthe recipes into your shopping list. Also, imagine a time layer – accessingyour calendar to determine how much time you have to cook and making meal recommendations (then pullingrecipes, coupons into the list).  There are sites on the web that do aspects of this today.  The challenge is combining the elements together in a seamless experience for the shopper.

My Money, My Time
Some people save pennies, some save dollars, some just spend. The variance is mostly explained by how we valuate our time.  As stated prior some people will spend time to save money, others prefer to spend money to save time.  There can be an app for both.  Apps like Shop Savvy and The Find could be fine tuned to understand a shopper who is willing to wait a week (for shipping) to save ten dollars, while another shopper may willing to spend $30 to buy the product today.  The Find is headed down this path with the ability to calculate the driving cost to each store.

 My Purchase
Many marketers (and tech people) think what people need is information.  This is a misconception.  People do not need information, the internet, publications, and retail environment offer an abundance of information.  No, what the shopper needs is knowledge.  In the case of shopping, knowledge is the synthesizing of personal needs  with product information to determine the appropriate fit. 

Think about a high-consideration purchase like an HDTV.  The mobile app can combine electronics advise from experts with your friends with your personal needs and home environment.  The goal of the app is to not push the information, rather synthesize the information by fusing the data points into knowledge.  Think of this as a three step process.

The first step would be to create a personal foundation.  The app could capture a picture(s) of where the television is to be located including room lighting, distance from viewing area, and accessibility to cable, stereo and internet/wi-fi.  The app would also ask the shopper questions like budget, primary television usage (e.g. movies, sports, gaming), and brand preference.

The second step would be to fuse this information with product data (e.g. specs, pricing, product availability) and expert reviews.  This overlay would inform the shopper about product fit with their needs, product reliability through expert reviews, and where the television can be purchased (and for how much).

The final step is to fuse it with social information.  Mobile phones are a gateway to our social network.  For important purchases, most shoppers seek advice from someone in their social circle.  Maybe the person is a tech geek or fashion savvy or just a friend whose opinion matters.  From the shopper’s perspective the social circle could provide first-hand experiences from people who either bought the product recently or knows someone who has.  Based on this first or second hand experience, the shopper would receive additional input.

It is not about My Phone, it is about My Life
Based on the last example, you get the idea of the depth and breadth of an app.  However, the complexity of the app brings up a final point: the best apps should be integrated into our life – accessible from multiple access points and not limited to just our mobile device.   Think about facebook, YouTube, or Twitter — they began as experiences to accentuate different aspects of a person’s life.  Each began by fulfilling a need.  Each has multiple touchpoints including a mobile app.

Generating an app solely for a mobile device is limiting.  While there are merits of mobile, there are also restrictions.  The more complicated the application, the more cumbersome the application usability within the limited screen realestate.  The more visual the application, the more difficult it will be to shrink it to a mobile screen without compromising visual aesthetics.  That is why the best mobile apps will transcend the device - the best apps will emanate from the shopper within the shopping experience.

According to the weather gurus, they are calling from some pretty crazy snow out there! It is beautiful to look at!! BIGGBY COFFEE wants to help you combat the cold weather and B warm, use this coupon and enjoy the snow days on Friday and Saturday! It’s our snow gift to you.

The email had a coupon for a free hot chocolate with the purchase of a grande beverage (not a bad idea since I plan on taking my kids sledding this weekend).  An email synched up with the pending storm is clever, stands out, and the coupon is useful for many.  Although the email by itself is not a grand strategy, sometimes the little “cool” things stand out, differentiate our brand, and are worth talking about.

A survey by BizRate Research notes many retailers will be offering special one day promotions on Cyber Monday. ”Promotions will range from special email campaigns (32.0%) to specific deals (29.9%) to one-day sales (28.9%). Additionally, one-fourth of retailers (24.7%) will offer free shipping on all purchases. In fact, 72.2 percent of online retailers are planning a special promotion for Cyber Monday, up from 42.7 percent just two years ago.”

Cyber Monday is about the deal, getting a jump on holiday shopping, and for some people avoiding a little work.  With a projected 68 million hitting cyberspace, it makes you wonder if it may also be a social opportunity.  Like Cyber Monday, Black Friday is about the deals too, and for many a social experience too – normally hitting the malls with a friend or family member.  So why not Cyber Monday?

There are many sites (and retailers) dedicated to intercepting cyber-monday shoppers.  Some of the sites like CyberMonday.com even have a facebook page (with about 3,340 fans).  Of course, having a fans on facebook does not necessarily translate to a social experience. 

The idea of virtually shopping with others is in the spirit of  Cyber Monday.   Virtual shopping with friends could manifest itself in different ways like c0-shopping on sites, tracking shopping progress through a status feed, or just simply sharing the latest deal.  Sharing the latest deal would be very simple to do, and benefits both the shopper and retailer.  The shopper gains fame through good-natured bragging, while the retailer gets exposure through word-of-mouth.

Tracking the status of friends as the meander from one shopping cart to the next is another way to socially share the experience.   The shopping path will spur conversation on where they found the best deals or the most unique items.  Similar to sharing the best deal shoppers can brag about their best deals, but also guide each other through Cyber Monday.

Finally, there is the idea of co-shopping.  Imagine an app where you and a friend can co-browse a shopping site.  Similar to an experience at the local mall or department store, friends can share a real-time experience.

Virtual co-shopping may not work on most days, but on Cyber Monday with so many people online,  there seems to be an opportunity to leverage a virtual social shopping experience.  Of course with many good ideas there many be a drawback — you probably do not want management aware you are shopping while you are suppose to be working.