Laying the Foundation for Shopper Marketing Success

Though shopper marketing only recently entered the marketing mainstream, most CPGs recognize that it’s an important move away from short-term trade marketing to a more strategic marketing approach designed around building long-term brand, retailer and shopper value. Despite this recognition, spending on the practice has plateaued, as the recession halted early shopper marketing development and turned the focus back to price-based promotional tactics. Though the economy is now experiencing growth, spending on shopper marketing remains flat. This is because what investment has been made in the practice has failed to deliver significant ROI back to the business. This lack of ROI isn’t because the practice itself is ineffective though—it is because the industry has failed to establish the principles needed to organize and manage it in way that delivers substantial return.

Below are five guiding principles that if drawn upon, can work to maximize shopper marketing return and deliver on the promise of the practice:

1. Determine shopper’s place in the organization

The need for shopper marketing is clear to many manufacturers, but where in the organization the shopper marketing should sit is often not. While sales seems to be the logical home for shopper, given it funds and oversees promotional pricing and features, many choose to have the brand managers within the marketing department oversee and fund shopper, since the discipline is,  by definition, brand marketing at retail. As companies struggle to find shopper’s place, the discipline fails to find its proper footing.

Rather than playing this tug of war between sales and marketing, shopper marketing needs to be reframed to focus on tying traditional marketing and sales disciplines, roles and responsibilities together. Shopper needs to sit at the intersection of sales and marketing, working in equal synchronicity with the two. As for who owns the shopper budget, we find that in larger organizations, it is best for shopper to be a separate department with its own budget to give it the dedicated focus and resource required to stimulate growth. For smaller companies, marketing ownership often makes the most sense, since shopper is more about building brand equity than driving short-term volume. Deciding which department shopper marketing should report in to is far less important than creating visibility and collaboration across all stakeholders though. Brand managers need to hear from sales what they’re experiencing in the field, sales needs to hear from the brands how to talk with retailers about category growth opportunities, and shopper needs to convert the insights of the two into retailer-specific programming.

2. Automate data capture & define performance benchmarks

Shopper marketers need to be able to analyze how different mixes of products, tactics, channels and timing effect performance, but event execution details are often hard to track down, making post-event analysis difficult. Shopper marketers need to streamline their processes into online portals that through standardized data capture, enable the automatic archival of program execution details, like offer, products, tactics, variable and fixed spend, and volume results.

In addition to creating a digital process for the collection of executional data, it is equally important to determine the benchmarks of success, or KPIs, used for taking this data and conducting post-event analysis. Benchmarks should be established for assessing the incremental lift and ROI of a program by product and by retailer, with the ability to understand how the addition or subtraction of a tactic along the path to purchase influences overall program impact. ROI is often difficult to quantify in shopper marketing though, given that brand equity may not be realized until long after a program and that shopper lift needs to be separated out from trade related lift. Nonetheless, ROI is often calculated by weighing the cost of program overhead and offer redemption against other performance metrics, like category impact, basket size growth and payback on retailer sales.

While it’s tempting to claim victory after successfully implementing executions in store, it’s necessary to examine the underlying metrics of your effort and to develop a measurement system that allows for both rapid testing of new ideas at retail, as well as performance analysis of current programs so that the best tactics can be put into larger practice.

3. Focus on creating shopper solutions—not programs

Purchase decisions are usually made in favor of the product or selection of products that provide the shopper with the most convenient response to her or his shopping motivation. For this reason, it’s important to consider the purpose of a shopper’s particular trip and how you can make their mission as simple as possible. Considering themes and co-locations that address shoppers’ need for value is an essential part of creating shopper solutions. For example, during a particular rainy season, a mom might be looking for affordable ways to create fun family nights at home. A POP could offer an array of movie night necessities, from popcorn to candy to drinks, with select products offering a free Redbox rental. Another example of an effective solution might be an in-store display prior to Memorial Day that includes everything needed for a low-cost family barbecue, from buns to condiments to grilling supplies—even outdoor games. A solution fully considers the season, occasion and events driving shopper intent at a particular retailer to address the shopper’s needs in a simple, but holistic way. By focusing less on the development of promotion- based programs and more on solutions to common shopper needs, brands can reduce reliance on price and re-establish brand intimacy by delighting consumers with unexpected convenience.

4. Put retailer collaboration at the center

Retailer collaboration is one of the fundamental pillars of successful shopper marketing. Collaboration begins with an understanding of how your retail partners are addressing change, from changes in the economy to technology and channel usage. In understanding how your partners are addressing change, you can help to develop programs that support their strategic business initiatives. Brands should also understand what programs the retailer is developing and at what timing, how these programs relate to their specific shoppers, and how they can offer the retailer shopper insights to drive the success of these programs, from consumption to usage occasion data.

Brands willing to fund and scale retailer ideas can work to win support of their own programs later on while opening the door to collaborative data exchange to drive mutual success.

5. Make your agencies accountable

Shopper marketers can ensure their engaging their shopper agencies in the most productive ways by setting clear goals for spending to achieve at both the brand and customer level. These goals should be tied to transparent KPIs, and should be reviewed on a quarterly basis. Creating agency accountability also depends on shopper marketers and account managers being more disciplined themselves, from giving adequate enough time for agencies to produce creative to streamlining editing rounds and requesting weekly reporting on digital tactics that goes beyond ad impression and email open rates—to detailed granularity that identifies the most optimal ad for each segment. By creating clear expectations and organized structures for the funding, review, production and measurement of shopper creative, agencies will be able to focus their talents on the most strategic shopper initiatives.

With shopping now an “anywhere, anytime” activity, there is a clear role for shopper marketing and the insights that the practice can deliver on the interconnected shopping ecosystem. With the right principles in place to truly establish and manage the practice, shopper marketing can finally be given the foundation it’s long needed to grow.

 

Share