Many retailers and brand owners long-ago declared as dead the idea of earning shoppers’ loyalty to their store or brand. Some of the “evidence” used to support this conclusion includes:
1. Shoppers have so many choices about where to shop that we can’t possibly keep them from straying (often cited by retailers)
2. Store brands’ lower pricing and me-too products naturally undercut loyalty to national brands (often cited by manufacturers)
3. Decisions are often made on the basis of price rather than store or brand, so shoppers buy whatever is on sale (often cited by retailers and manufacturers)
In fact, many companies which hold these beliefs gave up on earning shopper loyalty before they even tried. It’s not hard to find out which ones they are. Here are some of their characteristics:
- Their Shopper Marketing programs are focused on growing store traffic or household penetration rather than growing shopper retention and share-of-wallet.
- They are more focused on their competition than on their shoppers.
- The majority of their shopper-facing store and brand investments are not planned or executed with their best shoppers in mind.
- They can’t answer the following questions:
1.Which shoppers matter most to my store or brand, based on their actual shopping behavior?
2. What is their current and potential contribution to my business?
3. What, how, and why do these shoppers buy?
4. How many of these shoppers is my business losing or gaining each year, at what cost and benefit?
5. What proportion of my demand creation activity (advertising, innovation, promotion, price, etc.) is targeted to and lands on the specific shoppers who matter most?
6. How much are we wasting by aiming at the wrong shoppers and aiming the wrong ideas at the right shoppers?
As a result of these knowledge gaps and flawed strategies, most retailers and brand owners have failed to identify, disproportionally engage, and adequately reward the shoppers who matter most. Their Shopper Marketing progras (and other efforts) continue to underperform because:
(1) much of their investment lands on the wrong shoppers.
(2) their best shoppers find most of their programs irrelevant.
The bottom-line impact? Shopper Marketing strategies which are not based on a deep understanding of the most valuable shoppers results in slower growth, narrower margins, and an increasing commoditization of stores and brands.
Happily, some retailers and brand owners are starting to turn the question around. Instead of asking “why are shoppers disloyal to us?” they are asking “how loyal are we to our best shoppers?” If these leading thinkers allow their curiosity to drive them forward, they will find themselves on a very rewarding journey, with superior Shopper Marketing strategies and improved financial results.
About the Author
Matt Nitzberg is Executive Vice President, Manufacturer Practice at dunnhumbyUSA. In this role, Matt leads dunnhumby’s strategy and client relationships with brand owners in emerging channels and directs global strategy among dunnhumby’s consumer packaged goods business. Prior to his current role, Matt served as Global Vice President, dunnhumby ltd. in which he established and led dunnhumbyUSA’s Manufacturer Practice. Before joining dunnhumby, Nitzberg held marketing roles of increasing responsibility at Procter & Gamble and Borden Foods. Nitzberg also held a variety of senior roles at Information Resources including the leadership of IRI’s National Accounts client group.