Why Shopper Marketing Is Winning

Long considered the anonymous step child of marketing services, shopper marketing these days has many eager guardians. The proof is in the ad dollars shifting to existing tools and increased investment in new ones. 

The shopper discipline has morphed from tactical trade marketing owned by the sales department to a rapidly preferred choice among CMOs and it’s viewed as an integral piece of the marketing puzzle. What was once ‘just’ the shopping aisle is now a critical part of the path to purchase and now includes category insights, shopper research, retailer knowledge, in-store merchandising, digital at retail, mobile, e-Commerce, and promotions and partnerships.

Traditional marketing channels such as TV, print, radio and out of home aren’t as effective or measurable as digitally-enabled ones like smart TVs, music apps, online publications media channels being increasingly fragmented and expensive to scale. It used to be that if you came up with a strong advertising campaign, most of your problems were solved. 

Today, you could have a phenomenal campaign without seeing the needle move on sales either because it didn’t resonate with shoppers, it wasn’t executed well at retail, or didn’t holistically consider the path to purchase.

At the beginning of the year, a Wall Street Journal article reported on the findings of a survey from the Economist Intelligence Unit in which marketing executives cited analytics, social, mobile and email marketing (extremely important tools to shopper) as the main focus of their investments in the next three years. Forty-four per cent expressed urgency around a need for restructured marketing budgets.

Naturally, the proliferation of these digital touch points in which to reach shoppers is driving these developments and forcing CMOs to re-think their marketing budgets to give more attention to shopper marketing. According to Kantar Retail’s 2012 Trade Promotion Study Report, Shopper Marketing comprised an average 16 per cent of manufacturer marketing budgets in 2011. The report also predicted that one of the biggest changes over the next three years would be a shift to shopper marketing, on the part of manufacturers, which recent history confirms. 

If I run a typical ad somewhere, without strategically considering the CRM, data and a media-modeling mix, I have to hope that the consumer will remember the message the next time they see the product or get a chance to pay for it.

A great shopper marketing plan has for its objective reaching what I call the Golden Triangle; the moment when a customer, a product and a cash register (or online shopping cart) consummate their relationship. In the Golden Triangle, no gaps or barriers exist between marketing and sales.

The path leading to the Golden Triangle is filled with so much ‘light,’ that I can see exactly how my dollars went to work.

 Still, executives must give careful thought to some potentially mitigating factors before investing in shopper marketing channels and more new tools.

1. Understand the path to purchase. Make sure your teams thoroughly understand a customer’s Purchase Decision Journey (PDJ) because it reflects shopper behavior and actions taken before, during, and after a purchase. It teaches us to make intelligent investments where it matters most. Align tactics with the most pivotal points in an individual’s purchase decision journey instead of blanketing it with one message on repeat, we have the greatest opportunity to affect behavior.

2. Let retail lead the conversation. Understand your key retailers to ensure that you have an insider’s perspective as to how their shoppers behave and what the retailers’ own initiatives are. Most important, develop brand programs and translate them into what retailers care about most - category growth. Countless great brand programs have died on the vine because they received no support from the retailer. Why? Because the programs didn't translate into a category-growth story.

3. Make program measurement a prerequisite. Shopper-marketing programs should require proof of performance. Investment in this discipline requires a bridge to sales performance. It isn't necessarily easy, but it is easier to measure than traditional areas of marketing.

For these reasons, CMOs should think of shopper marketing as their most effective marketing investment. Use the Golden Triangle to your advantage and you can count on the results.

Carl Hartman is North American CEO at Geometry Global