Tag Archive for 'shopper marketing'

Why Shopper Marketing is A Good Idea for Retail Brands

Published on January 12, 2012 in Jim Lucas. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , .

Changes in consumers/shoppers and the retail landscape make it an opportune time for retail branding efforts to take advantage of a shopper marketing approach. With more choices than ever, shoppers are becoming more discriminating, taking advantage of new shopping occasions, and  shopper journeys are how consumers experience brands and how brands are coming to be defined.  The retail landscape witnessed changes in 2011—e.g., Interbrand’s Best Retail Brands look at the future of retail brands, Carrefour Planet’s bold experiment to revitalize the hypermart, the success of the discounters, experiments with smaller format stores (Walmart, Ahold, Best Buy), and the changes India made to its Foreign Direct Investment— all underscore the importance of a shopper centric approach to retail branding.

Retail Brands: Impact Consumer/Shopper Decisions

To some extent, the reason for branding has always been about making consumer/shopper decisions easier. Brands provide an assurance of quality, dependability, or fit and style. Once consumers learn about a brand and decide it is a fit, decision-making has been made easier!  Retail brands are no different—  they  make a difference in consumer decision-making in three key roles they play:

  • Relevance/Fit—retail brands help shoppers express who they are, effectively making their choice of retail brands a lifestyle statement (Whole Foods’ clear fit with natural and organic or  Lululemon’s  yoga-
    inspired approach to athletic apparel). Retail brands become choice editors who fit their consumers’ lifestyle.
  • Shop-ability/Accessibility—retail  brands provide shoppers with orientation. They make it easier to process information, help save time, make it easier to find the right product (e.g., IKEA’s guided choice—how to buy a pillow; or  Best Buy’s use of QR codes to access peer reviews, product specs and availability all aid “here-now” decisions).
  • Trust/Reducing Risk—retail brands reduce the perceived risk involved in making a purchase. Thus they provide shoppers with a safe choice; reduce buyer’s remorse (e.g., Best Buy’s Twelpforce and Buy-back Program, Apple’s Genius Bar). Their transparency and trust speak to the ongoing nature of relationships and provide entree into the shopper’s circle of trust.

Retail branding is moving from sole reliance on pricing (EDLP vs. high-low pricing) and locational convenience. Shopper intimacy is essential to creating retail brands that demonstrate relevance, simplify shopping and engender trust, and therefore make it easy to decide on a retailer. Successful retail branding provides a unique shopper experience, a desired destination, creates separation from the competition, and provides a reason for an ongoing relationship between a shopper and retailer.

One Brand, Many Dimensions, Seamless Experience

Retail brands typically have more dimensions than CPG brands. Not only do retail brands typically have more attributes than CPG brands, but they have many more touchpoints by which they can express their brand and be evaluated (e.g., store formats, layouts, assortment, pricing, store brands, associates, merchandising, loyalty program, website, circulars, etc.). This is more important than ever as consumers have come to expect a “seamless experience” across a retailer’s touchpoints.

Retail Branding must address three key dimensions of the retail brand to create a “seamless experience.”

  • Umbrella brand –what does the overall brand stand for (e.g., Walmart: “Save Money. Live Better”)
  • Store/format—clear articulation to help define experience and set expectations about different formats (e.g., Walmart, Walmart Express, Walmart.com, Walmart Marketside, Sam’s Club,  etc.);  most prevalent shopper segments or types of shopping trips (e.g., Tesco Express vs. Tesco Extra)
  • Own brand products—value, exclusivity, segment-specific benefits (e.g., Great Value, Equate, White Stag, Ol’ Roy, World Table, George, Faded Glory, Canopy, etc.).

In a very real sense, the retail brand is indistinguishable from the marketing of the brand. Shoppers define a brand based on their shopping journey and the touchpoints which comprise it. Any of the touchpoints on the shopper’s journey can serve as a purchase trigger, everything blends into one story. Understanding the shopper can help weave these three dimensions to produce a coherent brand story, a seamless experience.

Building & Sustaining a Strong Retail Brand

Finally, building and sustaining a strong retail brand require two things:

An attention to balancing creativity and consistency can:

  • Endow a brand with an emotional appeal which builds on its heritage
  • Update, contemporize and re-establish the relevance of the brand (e.g., think about Carphone Warehouse’s origins, and where it stands in shoppers’ minds today).

Retail brands have been built through traditional (advertising) and less-traditional media (store, employees, assortment, own brands, etc.). Retail brands are more than awareness — they have many moments of truth. Understanding the brand’s strengths and weaknesses throughout a shopper’s path-to-purchase is key to leveraging all of its touchpoints, to define an experience, and to express the brand. The brand must be rigorously managed across all of its touchpoints.

Shopper Marketing at the Heart of Retail Brands

As retailers grapple to differentiate themselves from each other, compete for share of shoppers’ wallets, increase frequency of visits or basket size, shopper intimacy plays an essential role in helping shape and express a retail brand. Establishing relevancy, making it easier to shop and garnering shopper trust help a retail brand move beyond price and physical location as the only choice factors.

Because much of a retail brand’s equity resides in the minds of shoppers, the brand experience is shaped by shoppers. It is a reflection of their needs and wants. Adopting a shopper marketing approach can help retail brands better reflect and accommodate their shoppers’ needs and wants. Ultimately, they must become their shoppers’ advocate.

Finally, a shopper-centric approach will identify, design and implement those touchpoints or apertures that are most relevant to the shopper and fit best with their journey. Today’s shopper is no longer constrained by a purchase funnel or linear path-to-purchase. To build strong, sustainable retail brands, we should not be either.

About the author

Jim Lucas - Guest blogger for Phenomena.com

Jim Lucas is executive vice president, global director, retail insight and strategy, at Draftfcb.  The acknowledged founder of the science of retail ecology, he is internationally recognized as an experienced marketer and leading authority on understanding how consumers interact with brands and how they behave in retail environments.  His article, Shopper Marketing: the discipline, the approach” appeared in the 2010 international book titled “Shopper Marketing” (Kogan Page, April 2010), featuring subject experts from around the world.

Retail Word of Mouth in Real Time – Really?

Published on November 9, 2011 in Dave Rockenbaugh. 0 Comments Tags: , , , , , , , , , , .

While thinking about how to improve the shopping experience for customers as well as the retailers and brands that fight to get on the shelves, I pondered the best practices of shopper marketing, as well as the most influential marketing tool of all: word of mouth. Then the idea of a “mash up” smashed into me.  (I’m fine. I didn’t even bruise.)

Mash ups are a recent development from the world of popular music where one takes two unrelated songs and combines them to make a new “tune.” Sorta.

So then, what if we mashed up in-store best practices with word of mouth marketing? Based on recent technological advances and what we see every day in ecommerce, I believe it’s possible. I call my mash up WOM-ASAP. A person who takes part is a WOMPAR or a Word Of Mouth Practioner at Retail.

And no, I don’t mean I’d hire my Aunt Mayverd to stand in Aisle Three in my local Jewel and shout at the top of her lungs how much she loves Inglehoffer Cream Style Horseradish. Nor, an army of Aunt Mayverds stationed across the country.

There are interesting ways to use technology and social media to get shoppers talking to each other at the store level, sometimes without anyone actually having to speak to each other.

Paid WOMPARs

Many people ask their waiter, “What’s good tonight?” or to suggest a wine that goes with the meal. I’ve often begged the Best Buy employee to tell me which is the hot new Xbox game to buy for a nephew. (Of course, I’m actually buying it for myself, but I don’t want her to know I’m a 50-something game geek.) So why not put a paid ambassador on the retail floor, whose sole purpose is to help people make purchase decisions based on their recommendations and those from other customers. Here are a couple of suggestions.

The Shopcierge. Somewhere near the entrance, a Shopcierge could be stationed with a mobile device that offers up a myriad of information to help the customer: Brand ratings by shoppers, even in real time. Reminders on weekly specials. News about new product introductions. Recipe/party planning help. Suggestions on “top-rated” accessories that go perfectly with the item one is about to purchase. The Shopcierge could even interview customers on why they made their choices and then add that information to the database.

The Samplierge. The typical store sampler offers up a bite/sniff/swig of some product sold in that establishment, sometimes followed by a coupon. My Samplierge, before you begin biting/sniffing/swigging, will give you a report on other peoples’ responses and ratings from the last few hours. That added reassurance that you’re about to become one of the in-crowd makes trying something new much less risky. You may possibly be more prone to respond positively. “If the last 17 people who sampled this gluten-free cheese-food icing loved it, who am I to disagree? I’ll take three, please.” And what if you can then add your rating right at the table, either by high-tech tablet or be videoed with your glowing response to the supping/smelling/swallowing? The videos could then be uploaded and compiled into a best-of video to be played online in that store, or at others, within minutes.

Peer2Peer WOMPARs

Word of mouth is best when it comes from a friend or acquaintance or even someone you may not know, but who has no vested interest in promoting the product. That’s why the following are stronger, but also harder to control and implement.

Coffee Klatch. A number of retailers feature coffee shops. Target has Starbucks. Barnes and Noble features Seattle’s Best. What if, after Wanda buys a Missoni blouse at Target, she immediately shares her experience over a caramel latte? Tablets or notebooks could be set up with instant forum access or a group chat (moderated, of course) with other shoppers in that store and across the country. And if a date or two transpires, even better.

Digital Kiosks. These are already available in a number of shopping environments. But it’s usually an “information out” experience to locate stores, events, specials, etc. What if the customer could take a quick survey or incorporate a rating or two and be rewarded for their input? Kiosks stationed around a store and open to the store’s Facebook page or other social media give a shopper the opportunity to ask others who are online about products in store.

On-The-Shelf QR Codes. QR codes are small enough that they can be easily placed on a store shelf’s edge. A customer looking at a product can scan the code next to it and instantly retrieve ratings from fellow shoppers. The customer could also add his/her comment as well.

Top Ten. Shoppers can offer up a list of their favorite brands they purchased that week through a simple in-store or online survey. All respondents are given an incentive to participate. The top ten most popular brands could then be published online and/or printed up as a small flyer or shown in a display located near the store’s entrance.  Those items could even be offered at a discount.

In-Store Ambassadors. I love showing off my expertise at certain stores. (Go ahead and ask me an iguana question the next time you see me in a pet shop.) Other people will too. So is there a way to create a “club” of ambassadors that are somehow identified by a button they wear or the color of the shopping cart they use? Other shoppers would then be able to approach them for their WOM advice or suggestions. This might be more valuable at a store selling more specialized products, like electronics, fashion and automobiles. If a person is in the BMW showroom picking out their 5th 300 series, you can bet a first-time buyer would do well to start up a conversation with him.

Mobile Mob. Create an app that connects fellow shoppers around the country. Much like a match service or chat app, people can log in and ask advice, share insights about brands and remind each other about special offers that may get overlooked.

Not all of these may be practical, or they may be too expensive, or they may just plain suck. Also remember that there has been some negative press recently about paid ambassadors and reviewers. My intent here is to prime the innovation pump, not for instant implementation. There’s a whole theory out there nowadays that says most new ideas are a mash up of previous ones anyways. So if you can mash up any of mine with some of yours, go for it. When you do implement it/them I would love to hear how it went. Contact me in care of this blog when you do. Thanks!

About the author

Dave Rockenbaugh - Guest Blogger for Phenomena.com

Dave Rockenbaugh is the Executive Creative Director at Robinson & Maites.

Robinson & Maties are a leading marketing agency with offices in Chicago and San Francisco.

R&M, The Marketing Transformation Agency®, helps clients achieve greater results by taking advantage of the massive transformations constantly taking place in today’s business environment, technology, social media and consumer behavior.

From Eating Occasion to Store Shelf

Published on October 18, 2011 in Harvey Hartman. 0 Comments Tags: , , , , , , , , , , , , , , .

Uncovering the Missing Link in Shopper Marketing

A considerable amount of the explainable variation in shopping behavior actually has more to do with changes occurring in Food Culture than it does with things happening in the store. It is my belief that if you are in the food business, it is critical that you really understand food. This means you must understand all about how people eat. Looking through the lens of how people eat exposes the fundamental flaw with today’s food marketing and shopper insights practices: These practices focus almost exclusively on where and how people shop. While this transaction-based data has been extensively analyzed, the drivers of shopping behavior are not fully understood.

We have long believed that a more in-depth understanding of the emotional drivers of eating occasions linked to the shopping experience would provide insights and opportunities to connect food companies and retailers even closer to consumers and shoppers. This is precisely what led to the Hartman Group’s development of a new way of thinking, or what we call Occasion-Based Marketing.

Occasion-Based Marketing is about knowing the right context. People do not consume according to demographics or segments. People consume based on occasions. Occasions are the cultural context that surrounds need states and gives marketers the ability to be truly relevant with consumers and shoppers. Because of this, shoppers choose different categories and brands based on the occasion.

Occasion-based strategy offers cultural context to marketing and innovation based on real category culture, driven by:

  • Trendsetters—consumers, shoppers
  • Specialized media/blogosphere
  • Specialty retailers
  • Mainstream media
  • Mainstream retailers

 Connecting Eating Occasions to Shopping

The evolving changes occurring in food culture have fundamentally changed the way people shop for foods and beverages. This explains, in large part, the blurring of channels as shoppers move seamlessly through a wide array of store types and across multiple product categories. America’s mainstream grocery retailers are fighting battles on many fronts: the restaurant has invaded the grocery store, drug and convenience stores have taken on more food categories (even venturing into fresh prepared foods).

The redefinition of quality has led to the long-term decline in categories with the processed halos. Most of the highly processed center store categories are on steady downward trend line. An increasing number of American consumers are consuming prepared, ready-to-heat and -eat foods. Our Hartman Eating Occasions Compass research finds 17 percent of adult eating occasions involve same-day purchase of food/beverage, most of it within an hour of consumption.

No longer can we afford to restrict our attention on discounting and price-based promotions to fight product, brand and channel switching. While the current recession reinforces this traditional marketing mindset, we believe that Occasion-Based Marketing is an alternative way to win consumers and influence shoppers.

Occasion-based shopper marketing is all about starting with everyday cultural understandings of food that drive what shoppers think when they enter a food retail environment. It’s about making sure that good shopper marketing for foods and beverage never forgets to connect directly with the joy of eating.

About the author

Harvey Hartman - Guest Blogger for Phenomena.com

Harvey Hartman – Founder and CEO, Hartman Group, Inc. and author of “A Brand Called Hope”

With a penchant for seeing what others cannot, Harvey Hartman received national recognition in America for accurately predicting the shifts in consumer behavior that would drive the sustainability, wellness and organic movements into mainstream prominence across the food and beverage marketplace. He is an author, business school lecturer and former Fortune 500 senior executive. His passionate belief in a consumer-driven marketplace paved the way for the Hartman Group to become synonymous with providing unique provocative consumer perspectives of measurable value to clients. Harvey has authored three marketing texts, the most recent being A Brand Called Hope: Reimagining Consumer Culture, which explores food culture and today’s consumer-driven interpretations of quality.

Interview with Markus Stahlberg, CEO of Phenomena Group

Published on October 13, 2011 in Markus Stahlberg. 0 Comments Tags: , , , , , , , , , , , .

GC Retail in Detail had the opportunity to interview Markus Stahlberg, CEO of Phenomena Group and co author of the Worlds 1st. Shopper Marketing Book.

Markus has been working with international shopper promotions since 2003 and prior to this he was involved with with mobile marketing and entertainment in two startups. Markus has a degree of Master of Science from Technology and he wrote his master’s thesis about mobile coupons.

Phenomena Group is a shopper promotions agency founded on 1999 in Finland, today the company is operating in 22 countries and creates more than 100 promotions each year around the globe, working together with clients such as Unilever, Nestlé, Anheuser-Busch InBev and Pepsico.

Markus, today in Latin America we are hearing about the concept of shopper marketing and the impact that it can have in the point of sale, but the truth is that it is still something new for most of the retailers and the small and medium manufacturers. Could you explain us which are the main differences between consumer marketing and shopper marketing concepts? 

This is a very good fundamental question. A simple answer is that consumer marketing is focused around consumer and shopper marketing is focused to the shopper. Understanding this small difference is essential, because applying the methods of consumer marketing for the shopper always delivers disappointing results. The reason for this is that the context of the consumer is completely different from that of the shopper. Consumer is the person using, enjoying or consuming the product and shopper is the person who should decide which products to buy.

Consumers are typically reached through media in a setting in which they have time to chew on the messages and think about them – and more importantly, there is no immediate action required. Consumer marketing aims at creating awareness and preference of the product and brand and intends to create a desire to buy the product. Within overall consumer-shopper context this could be called the “mindspace” of the person. The mindspace has a crucial effect on within the shopper context but it is alone not enough to make sure the shopper buys the particular brand.

Entering the shopper’s world, we can clearly see that the environment is very different. The primary driver for the shopper is the need, sometimes referred to as the mission. In order to fulfill certain needs, the shopper enters the store to buy certain products that fulfill the need. The products could be presented within the shopper’s mind as categories (e.g. nachos) or brands (e.g. Doritos). Taking a typical supermarket as an example; shelfs are filled thousands of different brands and hundreds of categories to fulfill existing need or to create new needs impulsively. The key focus of shopper marketing is in the last inches of the shopper’s decision making process in front of the shelf. In this setting, the shopper will make the crucial decision, which brand to buy for the need. In this crucial moment, the Mindspace enters the picture.

The Mindspace, sometimes referred to as the “consideration set” has been created through the past exposure to (consumer) marketing communications, social interactions and product experiences and will state the order of preference for the brands to fulfill a specific need.

This is where the context of shopper marketing really kicks in. What happens after this moment will define the outcome of over 70% of purchase decisions taking place globally. The first crucial factor for determining the direction of the shopper’s actions will be the “shelf space”, which means where the product is placed in the store and shelf, what kinds of secondary placements are available how many facings the product has in general. This will determine whether the shopper will even see the product, or whether she will ignore it completely.  Retailers control the shelf space, so for manufacturer’s shelf space can mainly increased through retailer-co operation and sales to the trade.

If the shopper notices the product, its appearance may or may not associate with the image of the brand, the shopper has in her mindspace. This is the context of packaging design. The final and very important determinant of brand selection for the shopper will be the “promotion” that can mess up the picture completely – like it usually does. Temporary price reduction is the most common type of promotion that any marketer will recognize as a crucial determinant of success. However, there are other types of promotions as well and the key determinant of the promotion for the shopper is how exceptional and attractive it is – when competing against price offs, majority of promotion mechanisms don’t have any chance. For marketers the key determinant is of course cost – and likewise all marketers will acknowledge that price discounts are not exactly the most cost efficient mechanism. This is the reason why our company Phenomena Group focuses on creating 5 to 10 times bigger promotions without increasing the budgets of our clients. 

Can the culture and traditions of each country affect to understand the shopper behavior?

Again a very good question! My colleague Ville Maila, Phenomena’s Planning Director  has dealt with this topic in details in his article for the 2nd edition of the Shopper Marketing book. Consumer marketing is heavily affected by the local culture and traditions, because products are consumed and used in a very different environment depending on the country. However, if you take a typical supermarket concept in China, India, Germany, US or Mexico, you will see only minor differences. This is the truly amazing thing about shopper marketing – instead of being local, it is universal. Anywhere you go, you will find out that the same fundamentals are operating; 70% of brand level decisions are made in-store, the more space you have from the shop floor, the bigger your sales will be and the price reductions almost always provide guaranteed uplift in sales. Having said this, there are some fundamental differences between the shopping behavior between the countries, relating to dominant store concepts (e.g. hard discounters vs. high end hypemarkets) or the overall climate of the area. Based on our experience, the hotter the climate is, the more the shoppers are willing to spend time in-store and the more they will enjoy shopping in general.

I would also ask you, if the shopper behavior could have some variations depending on the format of the store?

Shoppers choose the stores they visit based on their needs and the needs state how they will behave in-store. For some needs or “shopper missions”, the shoppers respond more probably to impulse offer and for some needs it is the complete opposite. Also, the average price of the products and the amount of items in the shopping basket will have a big impact on the behavior. Generally, the higher the average price of the product, the longer the decision making process will be and the more items in the basket, the shorter time will be used for picking each one.

Today, when a consumer goes to the supermarket to get a product to satisfy his needs, once he enter the shop and stop in front of the shelf, he realizes that there can be more than 10 or 15 products (depending on the category) to satisfy that need, so which are the key factors to succeed for a brand in order to be chosen among the others?

The key factors are getting a primary preference position within the shopper’s consideration set, maximizing optimal floor and shelf space for the product, succeeding in package design to stand out and to match with the mindspace expectation for the brand and creating exceptional promotions that are impossible to bypass without making a purchase.

After developing hundreds of promotions for different companies in different categories, which is your opinion about price off’s at the store, one of the most common promotions we can find at the supermarkets?

Temporary price reductions are an efficient but unintelligent promotion mechanism. The problem with price offs is that they are extremely expensive and completely non-selective. In other words, a big number of shoppers would buy the product anyway even without the price off, so for these shoppers it’s pure waste of money. On the other hand price offs are an easy promotion for shoppers that offer a tangible and instant benefit. Retailers love price offs for various reasons, so the best approach is to learn to optimize how they are used in conjunction to more innovative promotion mechanisms.

In order for a brand that is not at the top of the mind or the case of a newly launched product that wants to increase its sales and start creating loyalty, which type of promotions do you believe that are the most appropriate in this case?

First of all, we would not recommend a brand that is not in the top of mind or is a newly launched product to think about loyalty at all with their promotions. Instead, they should get their penetration up, and fast! Amount of the different people who buy and try the product will be the key determinant for success or failure of the product – if the retailer’s doesn’t see a clear trend of increasing penetration and consequently repeat purchases, the product is doomed to lose it’s shelf space and disappear. Unfortunately this is the destiny of majority of product launches nowadays. In the scenario of a product with low penetration, the key is to maximize the different people trying the product, ensure that the product quality matches the expectations and make sure shopper virtually bumps into the product every time she is shopping.

What is your opinion about combining the online channel with the off line in order to support a shopper promotion campaign?

We have experienced an immensely fast trend from in-store to online during the past few years. 5 years ago most promotions were mainly executed in-store through leaflets and various in-store materials. Today 99% of promotions are based on taking advantage of online as participation channel. Our prediction is that within a couple of years majority of promotions will also include a strong social media and mobile dimension through the emergence of smart phones. Online and digital channels in general provide a very good environment to enforce the brand’s key messages in order to maximize the probability for a repeat purchase or improve the preference position within the consumer’s mindspace. Furthermore, digital channels provide a possibility for a continuous interactions mainly through acquiring email direct marketing permissions  .

Assuming that a manufacturer has thought about a shopper promotion, the truth is that the stores are not of them and in most of the cases, he can’t decide if it will be possible to execute it or not, he will have to first talk about it with the retail buyer and then the retail buyer will have to think in lot of things such as if it the promotion will help to increase the value of the category, if there will be changes in the planograms or if he will have to manage space to include some external supports for the product. How can the manufacturer deal with this problem in order to increase the probabilities that the campaign will be executed?

The key thing is to stand out from the competition through exceptional approach, which is something the retailer truly gets excited about. It is very difficult to compete with the price reductions with ordinary promotions, which is the reason why our clients have opted for the approach of creating 5 to 10 times bigger promotions. This kind of approach will stand out from the clutter of ordinary promotions suggested by majority of competitions and is guaranteed to excite the buyer just like it excites the shoppers. Furthemore, we always recommend to invest into an excellent trade story to make sure the buyer understands the value proposition of the brand for them and benefits of the proposed activities.

Which tips would you give to small and medium enterprises manufacturers in order to start increasing it sales with the retailers and win market share on their categories?

Realize the fact that you can steal 70% of the buying decisions from your competitors as long as your brand can be found from the consideration set of the shopper. Forget about expensive and cluttered mass media. Take advantage of online and social media as inexpensive ways of improving your brand’s position within your target consumers’ shopper’s consideration set.Invest your money to great relations with the trade and provide constantly innovations for them. Do smart promotions, bigger is better and less is more – make sure the promotions are based on fixed cost element instead of variable cost one – for example through using promotion insurance.

At last I would like to ask when the new edition of the book is coming and what can we expect of it?

Markus Stahlberg, CEO of Phenomena Group

The book is coming out internationally in April 2012. The new edition has been completely revised and includes series of exciting new articles regarding the future of shopper marketing and shopper marketing from the international perspective. Additionally it includes an all new foreword by one of the most prominent marketing guru’s in the world, Philip Kotler. You can preorder the book from Amazon at: http://amzn.com/0749464712

You can read the full interview in Spanish here:
http://www.gcretailindetail.com/noticias-de-retail/2011/10/12/Exclusiva-GC-Retail-Entrevista-a-Markus-Stahlberg-CEO-de-Phenomena-Group/

Strategic Shopper Marketing Leadership

Published on October 7, 2011 in Dan Flint. 0 Comments Tags: , , , , , , , , , , , , , , , , .

A literal explosion of interest in shopper marketing resulted when the Coca Cola Retailing Research Council of North America introduced the concept in 2004. Although shopper marketing has its routes in co-marketing, emerged from retailer homogeneity partially created by the success of category management, and relies on many decades of research into shoppers, consumers, branding and retailing, a great deal of energy has been spent trying to define shopper marketing.  Let’s face it, it’s complex.  It’s more than promotion, more than price, more than merchandizing, sales, traditional marketing extended into the store, or a new phrase assigned to an old phenomenon.  Every discipline wrestles with defining aspects of its identity.  For example, supply chain management has gone through similar definitional battles as it has been confused with being just another name for logistics.  But nailing down one precise definition is not where we need to remain mired down.  What separates the “men from the boys,” “ladies from the girls” or better yet, the expert from the novice is that the latter thinks shopper marketing is a tactic while the former knows it’s strategic and needs leadership.   

We now seem to know that consumers shop with different mindsets or need states, whether we focus on the nine introduced by Coca Cola or the four used by many other firms.  We know that finding the overlap between brands’ targeted consumers and retailers’ loyal and profitable shoppers is a key segmentation problem.  We also see brands and retailers in an all out battle for the best, most unique “insights” to these mutual target shoppers.  We know that manufacturers, retailers, agents and agencies along with data service providers are working together to generate insights, leverage and build equities and create an effective path to purchase with high ROI, i.e., efficiency.

What I spend a lot of my time explaining to my MBA students is that all of this is strategic.  Any one small piece for one initiative could be seen as tactical.   When my students first walk into a retailer – be it grocery where shopper marketing began or consumer electronics, home improvement, pharmacy or convenience, some of the many channels where shopper marketing has spread – they have to learn to notice the difference between a merchandizing or promotion that is tactical or “old school” and a complex, strategically designed, well-integrated, insight-driven (not merely sales/category data-driven) solution center.  I teach them to reverse engineer in-store initiatives and notice whether both a manufacturer’s brand and a specific retailer brand are working together, if initiatives meet the tests of “stop, hold and close” power, if all of the media in store are working together synergistically, if secondary placements are being used intelligently, if events around which initiatives are woven make sense, if solution centers actually overcome shopping barriers and provide a real solution to a realproblem and not some trumped up slow-moving-sku-problem, and if initiatives are integrated with social media, mobile devices, brand and retailer websites, and traditional television and print media.  If all of this – or at least most of it – is not in place, it’s hard to call it state-of-the-art shopper marketing.  If all of this is in place, it required strategic thinking, planning and execution to pull it off.

When strategic thinking attacks shopper marketing problems, initiatives contribute to long-term loyalty for both brands and retailers.  Strategists tie solutions, whether permanent category/display redesigns or time-limited events, together with themes throughout the year.  As my friends at Hoyt & Co always explain, they attempt to hit five objectives:

  1. Make it easy for the mutual shopper to find and buy specific brands
  2. Leverage the equity built by manufacturers along the entire path to purchase    
  3. Provide a source of differentiation for both the brands and specific retailers participating in the programs
  4. Activate purchases by delighting, engaging and motivating the mutual shopper, and
  5. Tailor programs to align with the objectives, strategies, limitations and protocols of different channels, formats and retailers

Strategic leadership is required to achieve these five shopper marketing objectives.  When I look closely at great initiatives whether their for Seagate in Best Buy, U brand by Kotex in Kroger, Colgate Palmolive, ConAgra, Cricket Wireless, Gillette and many, many other brands with their retailing partners such as Safeway, Walmart, Target and others, and see integration along the entire path to purchase it’s hard to argue that these did not demand strategic leadership.  This is not easy.  This is not quick  – although I am constantly amazed at just how quickly some of my corporate contacts can pull off major initiatives.  But then again, that’s the point isn’t it?  One reason some powerful initiatives can be pulled off quickly when an opportunity presents itself is precisely because strategic connections have been made between manufacturers, agencies, retailers, and brokers as well as multiple functions within each organization that enable them to move quickly.  Resources are committed quickly and effectively because strategic thinking is behind it.   

Shopper marketing leaders need both marketing and sales knowledge.  Pulling these two groups together on a common agenda may itself be strategic.  But the shopper marketing leader of today must be this and more.  She must also understand supply and distribution issues, financial implications, product development and operations.  In short, shopper marketing done well requires general management style leadership skills.

The cool thing is that if shopper marketing is driven by strategic leadership, then demand side opportunities can be seized for revenue growth while also integrating with and leveraging supply side capabilities or constraints so that the true ROI is huge as compared to any other form of marketing initiative.  It can also potentially do so in a sustainable and socially responsible manner andembrace the involvement of consumers in a co-creative way.  But those are topics for future blogs.   Shopper marketing is marketing and sales along the entire path to purchase once someone has a predisposition to buy.  It leverages and builds brand equities for the benefit of all parties over the long term with the shopper at its center.  This may not be a definition and it isn’t intended to be – but it does require strategic leadership.  So go forth and connect, collaborate, generate insights, create engaging shopping environments – but for Pete’s sake, lead strategically!

About the author

Dan Flint - Guest Blogger for Phenomena.com

Dan Flint, Ph.D., Director Shopper Marketing Forum and Proffitt’s, Inc. Professor of Marketing, University of Tennessee

 Dan regularly researches, publishes in top marketing journals, teaches and speaks on the topics of developing a proactive customer orientation, business and consumer valuing processes, shopper marketing, branding, sales and marketing linkages with supply chain management.  He founded the Shopper Marketing Forum at the University of Tennessee to connect business leaders at leading firms such as Anderson Merchandisers, Bush Bros, CROSSMARK, Mars Advertising, Nestlé, Pepsico/Frito-Lay, and Pilot Flying J, (all sponsors), to faculty and students for research, curriculum design and industry movement.  Many additional firms such as Catalina Marketing, Deloitte, Disney, dunhumby, Food City, Kimberly-Clarke, Path-to-Purchase Institute, Meade Johnson, Nielsen, Novartis, Procter & Gamble, POPAI, Saatchi Saatchi X, TraceyLocke, and Walmart, to name only a few have been and continue to be involved the the UT initiative. 

Dan Flint, Ph.D., Director Shopper Marketing Forum and Proffitt’s, Inc. Professor of Marketing, University of Tennessee.

Four Steps to Win Back New Private-Label Shoppers

Published on December 19, 2010 in Warren Storey. 0 Comments Tags: , , , , , , , , , , , , , , , , , .

Putting a label on consumer purchase behavior these days is hard, what with Americans pulling out of the recession. But one thing is sure: The store brand is gaining ground as a core brand in an increasing number of households.

Despite improving employment figures and a stabilizing economy, American consumers continue to switch to lower-cost, private-label goods across every supermarket category. From cheese to shampoo to laundry detergent, shoppers are trading to store brands in the double digits – roughly 74% of almost 1,500 consumers recently surveyed by Epsilon Targeting said they shifted to private label in both food and household products. A surprising 61% switched in personal care.

Warren Storey - Guest Blogger for Phenomena

Warren Storey of Epsilon - Guest Blogger for Phenomena

This move could indicate not only the fading perception that purchasing store brands means sacrificing quality, but also that consumers are becoming satisfied with the value of these alternatives. (Wow, the store brand painkiller worked!) Yet at the same time, our research shows national brands still wield influence: In almost all segments, more than 65% of consumers said would return to their national brands, with a coupon.

For manufacturers of the nation’s most enduring brands, this is sobering shift, but they can rise to the challenge. The formula for winning back the best customers is well within reach – packaged goods makers just require the key ingredients of scale, consumer data and new-and-improved communication channels.

Winning Back Store-Brand Shoppers in Five Steps

To recapture this shifting segment and, importantly, to prevent additional brand-switches, we offer these state-of-the-industry findings:

  1. Target the Former Faithful: While more than 65% of those surveyed said they would return to their national brand if given the right offer, that means roughly 35% are not likely to switch. Marketers should first identify those consumers who would return to their national brand and then target them with coupons, samples and similar incentives. It is important to avoid directing resources to those consumers who are not willing to trade back, but focus instead on those who will deliver a meaningful return.
  2. Reward the Savvy Shopper: These days there is less of a stigma associated with store brands, coupons and other efforts to save money – this includes “image” categories such as hair and facial care. In addition to using coupons and samples, manufacturers can increase their consumer connections with “Savvy Shopper” clubs and similar loyalty programs tailored to the shopper’s lifestyle. Such rewards will increase the shopper’s emotional investment in the brand, and potentially result in powerful word-of-mouth marketing.
  3. Track the High-Risk Categories: Our research shows more consumers are switching to private label in high-quality categories such laundry detergent and diapers. Consumers make these decisions based on two factors: price and quality. Manufacturers must use their data to identify these price-conscious consumers and then target them with tailored promotions that emphasize the quality and value of the product. This equation should attract the shopper not just once, but for the long term.
  4. Use Food for Thought: The Wall Street Journal recently reported that food prices continue to rise, meaning that the trend toward store-brand foods will likely escalate. Using this pricing knowledge, manufacturers can cross-reference those categories with vulnerable pricing against the spending patterns of their best shoppers, and then promote accordingly. This trend also presents an opportunity for non-food marketers to develop cross-category promotions – “buy two cans of soup, get $1 off cold remedy.”

No Generic Answers

Indeed, there is no prepackaged solution to winning back consumers who have switched to store brands. But manufacturers certainly do have a recipe for altering the shift – it exists through the use of shopper data and tailored marketing.

The first step is segmenting out those consumers who have traditionally been faithful to national brands, since private-label loyalists are much more difficult to win back. Then, using robust, actionable data, manufacturers can win best shoppers with samples and money-saving promotions that emphasize the better quality of their product and innovative features. (New and improved! Works longer while reducing drowsiness.)

Lastly – and importantly – manufacturers must deploy their data based not only on what shoppers buy, but where they are likely to be reached, from the mailbox to the smart phone.

By combining these top-shelf ingredients, manufacturers should be able to recapture their most desired consumers while preventing others from switching to store brands. Most importantly, they’ll understand their shoppers better in the long run, which is the trademark of advanced, cross-channel marketing.

About the Author

Warren Storey is responsible for developing new products and improving ICOM’s current offerings in the sector and over-the-counter markets in the United States and Canada.

Ten Tips To Help You Save Holiday Green

Published on November 22, 2010 in Dennis Armbruster and Uncategorized. 0 Comments Tags: , , , , , , , , , , , , .

This holiday shopping season, there could be good news for those who hold memberships in customer rewards programs. Redeeming points and miles earned in loyalty reward programs saves money and lets you take advantage of early discounts, get a better selection and avoid the last-minute crowds.

Just in time for the 2010 holiday shopping season, here are ten tips for saving money on gifts and entertainment this year.

  1. One-stop-shop: To maximize rewards earning, consolidate holiday shopping to one retailer with a great rewards program.
  2. Double dip to accumulate points: Use a rewards credit card at merchants that also have their own loyalty programs.
  3. Combat high travel expenses: Frequent-flier miles are an excellent way to bring the family together without breaking the bank.
  4. Remember, reward points can be unexpected gifts: You can use this secret stash instead of cash to buy gifts. Research by COLLOQUY magazine found some loyalty program participants report zero redemptions over the course of a year, suggesting that people have points sitting in accounts ready to be redeemed.
  5. Get in the spirit of giving: Many rewards programs let you use points as gifts to pro-environmental causes and as donations to other charitable organizations.
  6. See about side benefits: Take advantage of a rewards program’s side benefits, such as members-only extended shopping hours and reduced shipping costs.
  7. Have a not-so-silent night: Treat the family to a night on the town. Many rewards programs offer great entertainment options, such as concerts and plays, for redemption.
  8. Open a store credit card: They often have a great rewards program that will provide instant savings and extra perks for your holiday season. Then there’s that card you opened and forgot about. Take it back out of the drawer; there may be some unused points you can redeem for a great stocking stuffer.
  9. Be aware that time is money: Save them both. Many retailers let you earn no matter how you shop. These multifaceted programs give points not only for in-store purchases but for timesaving shopping methods, such as catalogs and online stores.
  10. Treat yourself: Use points to select that “from me, to me” gift, such as spa packages or a new set of golf clubs.

About the Author

Dennis Armbruster guest blogger phenomena.com

Dennis Armbruster of LoyaltyOne Consulting - Guest Blogger for Phenomena.com

Dennis Armbruster is Managing Partner, LoyaltyOne Consulting and COLLOQUY Contributing Editor. As Managing Partner, Dennis leads the development of innovative loyalty strategies for LoyaltyOne Consulting clients throughout North America. He directs a team of internationally recognized practitioners who have worked with companies across the business spectrum, including MGM MIRAGE, Eddie Bauer, Best Buy, HP Software and Visa International. Looking at loyalty from an enterprise-wide perspective, their mandate is to develop breakthrough initiatives in customer strategy and experience design. The solutions they deliver to clients are grounded in deep consumer insights and custom-tailored to create new economic opportunities.

Telling Shoppers which to buy

Published on November 15, 2010 in Herb Sorensen. 1 Comment Tags: , , , , .

I would NEVER tell shoppers to buy something they are not already predisposed to buy. Way too much retailing is really desperate hectoring of shoppers, hoping they will buy something more. Suppliers have literally millions of items they would like to sell. But as we noted, shoppers have a massive filter in place to ignore the vast majority of what is in the store. It’s a matter of shopper-survival. Continue reading ‘Telling Shoppers which to buy’

Maybe It Is Rocket Science – Theory of Relativity applied to Customer Value

Published on November 1, 2010 in Michael Sansolo. 0 Comments Tags: , , , , , , , , , , , , , .

Albert Einstein once explained the Theory of Relativity in the following way:  If you put your hand on a hot stove for a second, it feels like an hour.  If you talk to a beautiful woman (or man, your choice) for an hour, it feels like a second.

Recently I put Einstein to the test. In the midst of a lengthy drive my car needed gas and I needed something light to consume.  The gas purchase went fine, but then Einstein found me. I went into McDonalds to get one of their new fruit smoothies.  I’ve had one before and found it passable, so I figured it was a fast, cheap and modestly healthy snack.

Continue reading ‘Maybe It Is Rocket Science – Theory of Relativity applied to Customer Value’

The Shopping List

Published on September 19, 2010 in Uncategorized. 0 Comments Tags: , , , , .

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The shopping list is the Holy Grail for marketers. The more specific (brand name, flavour/scent, packaging, size, etc.) the consumer is, the better. However, “making the list” is only a means to an end. Marketers need to do everything in their power to make sure the consumer executes on their shopping list.

Shopper research usually focuses on understanding how the consumers shop, when they shop, and why they shop. A knowledge gap exists in also the identification of why a consumer “stops” – specifically, why a consumer fails to execute on a particular item in his/her shopping list. Smart marketers ask the following questions:

1) Why didn’t a consumer purchase something on his/her “list?”
2) What did the consumer purchase instead of the listed item?
3) What was the consumer’s work-around/intention for not purchasing the listed item? This knowledge will help marketers proactively plan for some of the shopping “road bumps.”

Typically, in-store media and the lack of appealing choices (package size and price) are common road bumps and deterrents to shoppers’ objectives. A hang-tag on a competitive product might persuade the shopper to purchase Dove vs. Olay soap this shopping trip vs. most trips. An out-of-stock 24-pack (vs. the on-shelf 12-pack) of Evian might persuade the shopper to postpone this specific purchase until she visits the warehouse club next weekend. And, a side comment from a Whole Foods employee about the merits and authenticity of a packaged rice pilaf mix might actually persuade the shopper to create the side dish herself.

Obviously, as marketers, we can’t control the settings in which shoppers shop (with the exception of web presence and branded store environments). However, marketers should do everything to understand how the environment ultimately impacts the shopping behaviour. Regular review of in-store media activity, branded and store label competitive pressures, and pricing fluctuations should be routinely analyzed along with scanner data. In-store consumer behaviour (whether via a complicated, neurological device or via the professional eye of a trained market researcher) should be observed to see what happens at-home, in-store, at-shelf, and ultimately, at the cash register. The path to purchase is lined with many road bumps; marketers need to understand how to help navigate shoppers to success.

About the Author

AnnaMariaTurano - Guest Blogger for Phenomena

AnnaMariaTurano - Guest Blogger for Phenomena

AnnaMaria Turano is a partner and Executive Director with MCAworks, LLC – a strategic consultancy based in Westport, CT. AnnaMaria leads client engagements across a diverse set of industries including financial services, food/beverage, pharmaceuticals, telecommunications, and software. She has helped companies develop and roll-out strong customer value propositions and strategic plans as well as identify new opportunities for growth via new products, new targets, and new geographies.

AnnaMaria is co-author of Stopwatch Marketing (Portfolio: 2008) and is also a featured contributing author to Shopper Marketing (Kogan: 2009).

AnnaMaria holds both an M.B.A. and a B.A. from the University of Chicago. She has taught marketing at NYU’s Stern School of Business and Fordham University; she is currently an Adjunct Professor of Marketing at the University of Tampa.

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