Shopper marketing


As a discipline, Shopper marketing is still young. Therefore, there is a variety of definitions according to what is included or not under the shopper marketing umbrella. According to Chris Hoyt, "shopper marketing brand marketing in retail environment."

Description

Shopper marketing is not limited to in-store marketing activities, a common and highly inaccurate assumption that impairs the spread of any industry definition. Shopper marketing must be part of an overall integrated marketing approach that considers the opportunities to drive consumption and identifies the shopper that would need to purchase a brand to enable that consumption. These shoppers need to be understood in terms of how well they interpret the needs of the consumer, what their own needs as a shopper are, where they are likely to shop, in which stores they can be influenced in, and what in-store activity influences them.
Unilever defines a shopper insight, an insight upon which shopper marketing is based, as a "focus on the process that takes place between that first thought the consumer has about purchasing an item, all the way through the selection of that item."
Shopper marketing challenges the assumption that the shopper and the consumer are the same. Despite the fact that this is not always true it is clear that the industry still gets confused.
Shopper marketing is important for many reasons, but it is clearly of importance to manufacturers if for no other reason that they spend vast amounts of money on it, and that these amounts are increasing. Many organizations spend over 8% of total sales on in-store marketing; when total trade spend is added up it can often top 40% of total revenue.
In shopper marketing, manufacturers target portions of their marketing investment at specific retailers or retail environments. Such targeting is dependent on congruency of objectives, targets and strategies between the manufacturer and a given retailer or a given type of retail environment.
A significant factor in the rise of shopper marketing is the availability of high-quality data from which insights may be gleaned to help shape strategic plans. According to recent industry studies, manufacturer investment in shopper marketing is growing more than 21% annually.
For instance, Procter & Gamble, according to the company's financial statements, invests at least 500 million dollars in shopper marketing each year.
Procter & Gamble's Walmart/Sam's Club Customer Team and Sam's Club are considered by many as the original pioneers in true shopper marketing in the US. Rhonda Harper, the top marketing officer for Sam's Club at the time, is credited with launching shopper marketing during a two-day Bentonville strategic planning off-site in May 2001, attended by more than 300 vendor marketing and sales executives. Shopper marketing is also practiced by the leading European companies such as Unilever and Beiersdorf and the discipline is developed further by the likes of Phenomena Group, Europe's first shopper marketing agency.
The following statistics have caused the reapportionment of marketing investment from consumer marketing to shopper marketing. What follows is ultimately very misleading; each brand performs differently based on shopper need states, shopper trip types, retailer formats, brand importance, brand relevance and a host of other factors:

History

For almost 50 years, large-scale consumer packaged goods manufacturers had many possibilities available to spark continued business growth. The 1970s were about product commoditization; the 1980s brought channel consolidation; the 1990s increased consumerism, and in the 2000s, growth came from globalization.
The organization itself was accordingly structured to maximize these growth agents through efficiencies of mass production, distribution and sales. Marketers were organized into silos depending on which function they served. Product marketers developed and positioned goods for retailers to sell; distribution marketers took several brands of products and managed lifecycle and supply chain issues by channel; and consumer-driven marketers who were in the field among the channel trying to increase share or penetration.
The three groups were a bit like an assembly line where the first marketer would throw it over the wall to the second marketer and so on. The marketing organization structure was originally built around the big news at the time, the four Ps of marketing: product, price, placement and promotion. Other hot news as the time was that Elvis Presley was serving in the Army in Germany, Khrushchev became the Soviet Premier of the USSR, Alaska became an official state of the US and Bridge Over the River Kwai earned the Academy Award for Best Motion Picture of the Year. The four Ps of marketing were also a product of the 1950s.
By 2005 there was no new growth models on the radar for the Fortune 500 CPG companies. Much of the conversation behind closed doors sounded like this, “….But we've really improved our marketing and promotion capabilities; we have all the latest technologies, we have the best people from the top schools – why isn't our business growing the way we think it should?”
All of these previous growth mechanisms were driven by manufacturing technology and the knowledge transfer of this technology across the organization. Companies essentially were finding various new ways to squeeze their supply chain to remove costs or add in “value.” By 2005, getting even better by doing the same old thing generating additional growth in the marketplace. It had become radically different. Marketing wasn't in charge of the success of consumer products anymore, there was a new boss in town who was calling the shots – the consumer.
The 50-year run of marketing-centric, inward facing organizational structure was over. Gone were the days of making a product, with businesses telling consumers only the information they wanted them to know in order to create awareness and drive them into the store, and then making sure the retailer got his product order. Fueled by consumers empowered by globalization and technology, marketing-centric has replaced with consumer-centric, an outward facing organization structure that's concerned with being there for the consumer wherever, whenever, and with whatever they want to know at any point in their journey to purchase.

Retail shopping environment

In late 2004, a new model for growth emerged as product manufacturers and retailers alike identified the need to uniquely influence the shopping experience. It was called shopper marketing. It wasn't until 2010 that it was formally defined by the Retail Commission on Shopper Marketing as follows:
"Shopper Marketing is the use of insights-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience and improve business results and brand equity for retailers and manufacturers.”
The informal interpretation summarizes shopper marketing as "bringing shoppers into the marketing plan and the marketing plan into the stores". The shopper marketing proposition holds that product manufacturers should put as much if not more emphasis on marketing through retail as they do on conventional mass media campaigns.

Buying behavior data

Several different data collection methods provide information on the shopper's buying behavior of a given brand: observations, intercepts, focus groups, diaries, point-of-sale and other data.
Observations made before entering a store, in the store, and after exiting a store clarify when, what, where, why, who and how shopper behavior occurs.
Issues to be noted consist of, for example: the length of the buying process, the items the shopper noticed, touched, studied, the items the shopper bought, as well as the purchase methods influencing the process. Interviews help uncover motives guiding the buying behaviors. The matters commonly clarified are: the likelihood of product substitution and the identification of substitutes; values and attitudes; desires and motivational factors; as well as lifestyle and life situation. Point-of-sale data provide information on which products were bought, when and for how much.
How other shoppers in a store can influence the shoppers in a target market are also of interest. For example, research by Martin in a retailing context found that male and female shoppers who were accidentally touched from behind by other shoppers left a store earlier than people who had not been touched and evaluated brands more negatively, resulting in the Accidental Interpersonal Touch effect

Segmenting shoppers

When conducting shopper segmenting, the market is divided into essential and measurable groups, that is, segments on the basis of the buying behaviour data. Shopper segmenting makes it easier to answer the requirements of individual segments. For example, price-sensitive and traditional shoppers clearly differ from one another as far as their buying behaviour is concerned. Segmenting makes it possible to target marketing measures at the most profitable shoppers.
The value of segmenting shoppers is debated in the shopper marketing industry. For retailers it can provide direction on positioning relative to competitors as well as in terms of store locations. Loyalty cards can provide one of the richest sources of segmentation data. For consumer product manufacturers, shopper segmentation is less useful, at least in physical stores, as the shelf and displays communicate to all store shoppers in the same way.