ShopAbility discuss some of the findings of the POPAI/ShopAbility Shopper Marketing industry benchmark study, and the implications for retailers. For Inside Retailing Magazine.
The first Australian industry benchmark study into the Shopper Marketing function, conducted recently by POPAI and ShopAbility with the support of TorchMedia, highlighted the recognition of and growth in the discipline, and impediments to its acceleration. Summarised below are some of the key themes for retailers, extracted from the report ‘Shopper Marketing – The Journey Begins’ (© ShopAbility 2010). These will be explored in more depth in the September issue of Inside Retailing.
Shopper Marketing is broad, and is not limited to in store
The scope of what is considered included in Shopper Marketing is broad, and includes ‘traditional’ category management, as indicated in Figure 1. Shopper Marketing includes activities currently falling under the current labels of Customer/Account Marketing, Trade Marketing, Retail Marketing, Merchandising, Activations and Instore Presence.
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. Underscoring this, nearly all survey participants identified ‘instore theatre’ as an area of opportunity.
Retailer clean store policies are considered one of the major barriers to truly engaging with shoppers. Notwithstanding, both manufacturers and retailers 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.
Whilst the idea of marketing to shoppers outside of store/pre-store is not new for retailers, it is for manufacturers, who 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.
Retailers prepared to recognise that clean stores are a hygiene factor and not an end in themselves, and to explore new shopper instore and out of store marketing alternatives with manufacturers beyond traditional catalogue and pallet/gondola displays, will find a willing audience.
Struggle for resources is slowing the pace of growth, even for retailers
Support for Shopper/Customer marketing is there, but it’s passive. Whilst 7 in 10 said that Shopper Marketing is supported by Executive Leadership and a further 56% said that Shopper Marketing had been identified as a priority and source of growth, only 40% have dedicated resources for shopper programs and only 1/3 plan to increase their program budgets and/or people budgets in the next two years.
Less than 2 in 5 retailers were satisfied with their overall shopper marketing resources, driven by a low 37% satisfaction with number of people/roles and organisational focus. A lack of Shopper Marketing people and expertise, and particularly budgets, were the largest areas of dissatisfaction, with less than 25% of retailers happy with their Shopper Marketing people’s expertise, and under 10% satisfied with their Shopper Marketing budget.
Smaller retailers are less likely to have any Shopper/Customer marketing capabilities, where larger retailers may have a larger Shopper/Customer Marketing department (generally reporting through to Marketing) but it competes for funds, resources and air time both with brand marketing and with Operations.
The lack of resources was mirrored in manufacturers, with only 35% happy with their people/roles and under 1 in 4 happy with their budget.
The struggle for resources (both people and $ for programs) to increase growth stems from several key obstacles:
- The role, scope and value of the Shopper Marketing function is not understood internally
- Shopper Marketing is still largely tactical and isolated rather than strategic and integrated, and sometimes viewed as an add-on
- Measurement of Shopper Marketing activities and impacts is piecemeal, inconsistent, and based around hard measures (sales/ROI), with little understanding of appropriate ‘soft’ measures (impact, awareness, influence, attitudes, behaviours etc). The range of appropriate measures is neither understood nor developed, leading to a difficulty in justifying spend.
Inability to, or not knowing how to, measure was identified by participants as one of the greatest sources of dissatisfaction outside of resource and funding competition.
Given the opportunity, more than half would put more Shopper Marketing resources underneath shopper insights and research programs as their first priority.
There is a significant 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
- developing a suite of appropriate measurement tools and techniques that recognise the role of differing activation types, shopper behaviours, and touchpoints along the path to purchase, and understanding measurement of inputs versus outcomes
- Retailers and manufacturers co-funding category level shopper research and trial programs. The current paradigm where retailers are looking to manufacturers to fully fund these activities isn’t working, as manufacturers don’t have sufficient resources either.
Opportunities, Directions & Trends
Based on what and who were identified as best practice, and understanding that Australia is broadly considered to be 8-10 years behind the UK and USA in Shopper Marketing activations, the future interest and energy in the Shopper Marketing space is behind:
- Dynamic and interactive POS, rather than static
- Understanding the role of each touchpoint on the path to purchase, and appropriate activation of each
- Digital, online and social media uses to drive traffic and sales conversion
- Cross category and cross-manufacturer occasion based promotions and programs
- Target market segmentation and data mining using loyalty programs to provide pinpointed offers to specific shopper segments
- Multichannel retailing and ecommerce
… based on a sound and consistent understanding of shopper attitudes and behaviours via insights and research.
Implications
From the above discussion, the following opportunities and implications apply to retailers:
- Closer collaboration with manufacturers (particularly those manufacturers who are ‘with’ the shopper marketing program – increasing the points of contact so marketers and category/shopper marketing people connect; co-funding programs and initiatives)
- Increasing dedicated Shopper Marketing budgets and people resources. Smaller retailers who don’t have budgets could potentially band together to syndicate for research and certain activities to achieve economies of scale
- Developing a comprehensive suite of Shopper Marketing measures and metrics (ideally in collaboration with manufacturers; this would require more collaborative data sharing)
- Broadening the scope of what Shopper Marketing activities and programs could include, both instore and prestore (particularly prestore media use)
- Mining market, retailer and manufacturer data to develop specific, tailored and customised programs and offers for differing shopper segments.
These and other elements will be discussed in more detail in the next hard copy issue of Inside Retailing.
The Shopper Marketing train is at the platform, ready to leave. What will you do to reach the next station faster?
About the POPAI/ShopAbility Shopper Marketing Industry Benchmark Survey
METHODOLOGY & 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.
Retailers taking part included some of Australia’s largest grocery, and mass merchant and convenience retailers as well as a number of small and medium specialty retailers.
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.
SHARING THE FINDINGS
A half-day findings workshop where participants will discuss and work through the survey outcomes and implications is being held on September 22 at Darling Harbour as part of Retail2010 conference and Marketing At Retail Expo. Participants will receive a copy of the full report valued at $495, a sector specific summary valued at $95, and a copy of the workshop outputs. Go to www.popai.com.au to register.
‘Shopper Marketing: The Journey Begins’ full study report is available from POPAI for $495 plus GST. Go to www.popai.com.au to purchase your copy.
Sector specific summaries (retailers, manufacturers, agencies) will be available from September from POPAI for $95 each plus GST. Email popai@popai.com.au with ‘Shopper Marketing Survey: Sector Summary’ in the subject heading to purchase a sector summary.
