ShopAbility discuss some of the findings of the POPAI/ShopAbility Shopper Marketing industry benchmark study, and the implications for both manufacturers and retailers. For Retail World Magazine.
Although still in its relative infancy, the Shopper Marketing discipline is gathering pace in Australia, with 60% of our recent survey participants implementing Shopper Marketing activities.
Back in January in our Retail World article ’Where to Shopper Marketing?’, we outlined some overseas status and practices in Shopper Marketing. Now that the first POPAI/ShopAbility Shopper Marketing industry study (supported by TorchMedia) is complete for Australia, we have a number of points of comparison. And there are some striking similarities – both opportunities and challenges – to overseas markets, particularly the USA.
Here we’re going to look at some of the key findings of the Australian study, extracted from the report ‘Shopper Marketing – The Journey Begins’ (© ShopAbility 2010). In the followup articles in subsequent issues of Retail World we will look more specifically at the implications for both retailers and manufacturers.
Survey Sample
The survey comprised 19 in depth interviews and an online survey completed by 134 respondents (66% brand manufacturers, 10% retailers, 8% POS/production agencies, 16% other agencies).
Online survey participants’ roles were represented across senior executive, sales, brand marketing, category and channel management, trade marketing/customer marketing, activations/in-store presence/merchandising, and shopper insights.
The sample achieved for this first Australian industry study into Shopper Marketing not only equalled that of the first similar American GMA/Deloitte Shopper Marketing study in 2007, but surpassed it.
Theme 1: Shopper Marketing is broad, resulting in ‘lots of homes’
It is commonly understood that Shopper Marketing targets shoppers at multiple touchpoints using and leveraging insights. The where (at what point) is up for debate. A summary of participants’ Shopper Marketing definitions might be: “The application of shopper insights across the marketing mix, using multiple touchpoints along the path to purchase, to engage shoppers and increase sales”.
The scope of what is considered included in Shopper Marketing is broad, and includes ‘traditional’ category management (see Figure 1 below). As mooted in our article in January Retail World, Shopper Marketing includes activities currently falling under the current labels of Customer/Account Marketing, Trade Marketing, Retail Marketing, Merchandising, Activations and Instore Presence.
So rather than being a new discipline in and of itself, Shopper Marketing is in essence an amalgam and evolution of shopper and retailer facing functions already in existence, albeit with some broader marketing elements thrown in.
The inclusions are not limited to traditional executions, with in-store media the third most cited activity type and ambient/sensory in-store experience coming in 8th. This is indicative of the ‘emotional , not just rational’ line we took back in January, underscored by nearly all survey participants’ identification of ‘instore theatre’ as an area of opportunity.
Retailer clean store policies notwithstanding, the above demonstrates that companies are broadening their perspective on what Shopper Marketing activities are, even if they are not yet actually trialling or implementing some of the ‘newer’ forms.
The flipside of this breadth of inclusions and amalgamation of more traditional fields is that there are too many different activity types to have a natural home in one place (or that ‘one home’ would need to encompass ‘everything’). This, combined with the fact that Shopper Marketing is considered a new discipline, is leading to it having ‘too many homes’.
This in turn is impacting resourcing – both people and budget – as we shall see.
Theme 2: Shoppers start before the store
The idea of marketing to shoppers outside of store/pre-store is not new. Major retailers like Target have been doing it for years, advertising their ‘20% off’ department sales. However, among manufacturers, perceived wisdom had traditionally held that Consumers and Consideration were pre-store, where Shopper and Conversion were in-store.
The survey indicates this notion is changing, alongside the broad definition of Shopper Marketing. Over half (52%) agreed that shopper is a mindset and/or shoppers can be influenced at any point between home, work and the store. A further 26% considered Shopper Marketing to be activities inside and immediately outside the store. Only 22% believe that Shopper Marketing is limited to what is done inside the store.
This has positive implications for ‘above the line’ media traditionally used by marketers in consumer awareness and brand building. It indicates that the industry thinks there is a shopper messaging role for touchpoints outside of retail environments for activities including, but not limited to, major promotions. A further implication is that some Shopper Marketing messaging and activities will then fall under the remit and budgets of brand marketers – which means that brand marketers will need to start to understand and apply Shopper Marketing thinking.
Theme 3: Mind the gap – between Thinking and Doing
The good news is that nearly 7 in 10 said that Shopper Marketing is supported by Executive Leadership. This figure did not vary much between the retailers and manufacturers. A further 56% said that Shopper Marketing has been identified as a priority and source of growth.
90% have recognised and/or defined Shopper Marketing in some way and identified priorities and support required, even if 30% think they’re still at basic level.
40% said they have dedicated resources for shopper programs. However, only 1/3 plan to increase their program budgets and/or people budgets in the next two years. A lack of Shopper Marketing people and expertise, and particularly budgets, were the two most common issues identified by both retailers and manufacturers, as Figure 2 indicates.
Very few had a sizeable or dedicated Shopper Marketing budget, with most shopper marketers going “cap in hand to marketing or sales in order to get stuff happening, and even then we have to justify ourselves a lot”, as one interviewee put it.
There was concern that other departments internally do not understand or support Shopper Marketing, with less than 30% saying they have internal understanding or support outside of the Executive Leadership. This problem was common to both retailers and manufacturers, and for manufacturers it is specific to brand marketing teams. There is a significant education opportunity in getting other areas of each business to understand and engage in and see the value of Shopper Marketing so that appropriate budgets can be released to support it.
Given the opportunity, more than half would put more Shopper Marketing resources underneath shopper insights and research programs as their first priority.
Theme 4: One third plan new directions for the train; the other 2/3 watch it leave
The gap between thinking and doing is demonstrated in changes to planned activity types, with the 1/3 planning more or different Shopper Marketing activities behind the small changes to percentage splits. Although there is an interest in pre-store Shopper Marketing, this is not yet reflected in wholesale changes to planned activities. However, some increases in Social Media, Loyalty Programs and Digital/Online are expected.
N = 134
The changes to planned activity types were mirrored in planned budget changes.
Theme 5: Measurement – The Great Unknown & Opportunity
Inability to, or not knowing how to, measure was identified by participants as one of the greatest sources of dissatisfaction as can be seen in Figure 4. The three areas relating to measurement and effectiveness added together equal the single largest area of dissatisfaction.
N = 129
Just under 40% are currently measuring their Shopper Marketing programs. However, the forms of measurement are rudimentary, based around hard measures (sales data), with little recognition of the role of softer measures e.g. attitudinal, behavioural, influence and impact.
N = 134
Note that which types of activities being employed is reflected in the effectiveness rankings for activity types. The less utilised activities rate lower in effectiveness as fewer are using them and thus fewer understand their impact.
Unsurprisingly, sales is the number 1 way in which measurement is applied, and likewise ROI is mostly being measured on spend/cost vs sales. However one of the challenges of Shopper Marketing is that it is difficult to prove that which specific type of execution is responsible for what % of the sales increase. There is therefore a role for softer measures (attitudinal, behavioural, influence, impact, reach) as drivers of the result (as opposed to sales – the result itself). As yet, this role is not broadly understood nor applied, with 30% or under using measures that do not directly relate to sales, ROI or executional compliance.
The Shopper Marketing needle will move faster around the dial once a comprehensive, and easily comprehensible, suite of measures is developed covering the scope of Shopper Marketing activities and embedded in organisations’ sales, shopper, category, and marketing functions.
So that’s some of the initial findings. Next time we’ll look at who is considered to be best practice, what they’re doing, some of the key opportunities in the Australian market and what retailers and manufacturers need to do differently to get the Shopper Marketing train to the next station quicker.
“Shopper Marketing: The Journey Begins” report is available from POPAI for $495 plus GST – click here
A survey findings workshop will be held on September 22 as part of the Retail and Marketing at Retail Expo, for those interested in making most use of the survey findings and implications. register here
POPAI can help you with more information, to purchase the report or to register for the workshop.
