ShopAbility discuss more of the findings of the POPAI/ShopAbility Shopper Marketing industry benchmark study, and its implications for retailers, in part #2 of this article series, for Retail World Magazine.
Last issue we shared some of the results of Australia’s first Shopper Marketing Industry Benchmark Survey from POPAI / ShopAbility and supported by TorchMedia.
Some compelling results show that Shopper Marketing is definitely on the rise, supported by 70% of business leaders with one third of companies actively increasing people and budgets. The Shopper Marketing Train is leaving the station.
A snapshot recap from last time:
- Nearly 7 in 10 said that Shopper Marketing is supported by Executive Leadership. One third plan to increase their program budgets and/or people budgets in the next two years. Just under 40% are currently measuring their Shopper Marketing programs
- 60% are engaged in Shopper Marketing activities
- 65% are undertaking category level and retailer initiatives
- Two in five are engaged in trials, whilst nearly three in five are not, due to a lack of one or more of resources, retailer engagement or lack of co-funding (budget)
- Almost half have undertaken shopper research of some sort
- A primary issue is lack of resource allocation to Shopper Marketing. Only 4 in 10 respondents are satisfied overall with focus, expertise, and people. All respondents are least satisfied with budget (23%)
- How Shopper Marketing is defined and what is included varied among respondents. A point of consensus is that Shopper Marketing targets shoppers at multiple touchpoints using and leveraging insights
The focus of our article this time is on who is best practice and what they are doing.
So, who is on the Shopper Marketing train and where is it heading?
The USA and UK were commonly nominated as international best practice by survey respondents, with participants typically perceiving Australia to be 8-10 years behind in activations. However, momentum is gaining.
In-store ‘theatre’ was a big indicator of best practice for survey respondents. Overseas retailers believed to be doing this well included Whole Foods, Trader Joe’s “making private label cool and branded”, WalMart for its WinPlayShow strategy and digital on shelf media.
Leveraging loyalty programs to inform the in-store offer was another biggie, with survey respondents citing Tesco for their Club Card program, ability to mine their shopper data and provide tailored offers, and in-store occasion based executions. Similarly Boots received honourable mentions for their loyalty program, understanding of multiple occasions and marketing to impulse.
Apple received top marks for its total experience including store staff, and totally different model of sales based on shopper experience rather than price or offers.
Marks & Spencer and Sainsbury were seen to be leaders in marketing successfully to shopper occasions (such as the M&S “Dine in for two for £10” campaign).
Global manufacturers rating most mentions included P&G for its ‘last 3 feet’ and ‘shelf back’ approaches, and Pampers World 4 Kids program; Coca-Cola for its understanding of tailoring pack and product sizes and formats to channels and occasions; and Unilever for its Dove real beauty campaign with WalMart, which was subsequently taken global.
In Australia, quoted leading retailers included: Apple, McDonalds, Priceline, and JB HiFi (for its performance and results, although its methods polarised opinion). Improvements in the Health & Beauty departments of both Coles and Woolworths were frequently mentioned.
Manufacturer P&G came up trumps for its shopper understanding and seamless ATL/BTL/in-store execution as well as retailer collaboration. As with their global counterparts, Coca-Cola was mentioned for its understanding of occasions and packs per channel, and its ability to change messaging consumers vs. shoppers. Unilever also rated highly for its “seamless integration and customer specific activations”. Colgate made the list for its engaging activations.
The common thread running through all organisations considered at the forefront of Shopper Marketing is their understanding of shopper behaviour, types and needs; their ability to execute against this consistently with tailored and customized programs; and their willingness to innovate and trial new concepts.
What makes Best Practice?
The intent of this first study was to provide an initial benchmark (with future studies aimed at measuring specific best practice activities now that we have a benchmark), so we have defined Best Practice by a certain set of overarching areas:
What this indicates is that while Shopper Marketing is still in relative infancy in Australia, 60% are engaged in Shopper Marketing activities (and 40% are not). Whilst 2 in 5 are engaged in trials, nearly 3 in 5 are not, due to a lack of one or more of resources, retailer engagement or lack of co-funding (budget). There were relatively more category level and retailer initiatives, at around 65% each.
When it comes to Shopper Insights, around half have been or are involved in research programs, and most are using sales and/or store data regularly. For the half that are not researching, budget and resources constraints (including lack of co-funding) were nominated reasons.
Defining and executing best practice measures for Shopper Marketing is also a huge opportunity,
with under half of respondents using shopper metrics (AWOP, frequency, basket and household penetration, spend, traffic etc) with regularity – either due to a lack of awareness/understanding of what these are and how to apply them, or cost of buying the data.
Similarly, achieving best practice retailer / manufacturer collaboration is an area for growth. Whilst nearly 70% say they have joint category discussions and have identified initiatives, fewer have actually conducted joint initiatives. 1/3 either don’t have or only infrequently have joint category level discussions or have identified joint initiatives to try. Shopper insights can be used as a jumping off point for collaboration between retailers and manufacturers at category level, a reason to increase shopper insights resources on both sides.
Implications and Opportunities for Retailers
Retailers cited a number of challenges to progress, including a lack of expertise, resources and people, how to differentiate low growth categories, gain store compliance and get suppliers to think in categories not brands.
Manufacturers, on the other hand, were hitting hurdles with retailer’s clean store policies and lack of willingness to innovate and trial new ideas and their expectation that suppliers should fund all Shopper Marketing initiatives for their stores.
Both sides have called for more effective collaboration in order to improve the experience for shoppers (and therefore optimise sales).
In the USA some manufacturers have set up cross functional retail customer specific business teams to achieve more holistic points of contact between retailers and manufacturers (not just via sales teams/merchant buyers).
What needs to happen in Australia:
- Retailers’ marketing teams need to start to establish links with brand manufacturer marketing teams and vice versa, in order to create broad joint programs of activity.
- Mutual understanding of objectives
- Mutual data sharing and shopper insights provision from both sides
- Customised programs per retailer and category
- Co-funded trials and insights programs.
Study respondents identified a number of areas for improvement, opportunity and sources of future growth. These opportunities exist at a number of levels, so for ease of reading we’ve divided these into Engagement, Activities, Processes and Tools.
Engagement and Education:
- Closer Sales & Marketing team collaboration in manufacturers (e.g. alignment on trade promotions, price, retail customer specific campaigns on specific brands) to achieve a consistency of shopper experience in-store
- Raising the profile and value of the Shopper Marketing function: Internal education (particularly of brand marketers in manufacturers) to understand the role of, and see the value in, Shopper Marketing and the benefits of truly integrated consumer/shopper in-store and pre-store campaigns
- Closer retailer and manufacturer collaboration, as discussed above.
Activities:
- Utilising pre-store touchpoints: creating awareness and consideration of not just brand but retail offers pre-store. Understand the role of all touchpoints, which ones need to be activated for your objectives and how best to activate them based on shopper behaviour
- Tailoring and targeting: Programs targeting specific occasions, shopper segments, store types, retailers. Data mining and segmentation via research and loyalty programs. Related to occasions, day-part and seasonal marketing, and better Shopper Marketing leverage of major events
- Occasion based solutions: cross category and cross supplier
- In-store theatre: The store is considered a marketing medium – take advantage of this with ‘theatre’
- Interruption: there is a perception that shoppers are becoming increasingly habitual and that the game is becoming about interruption. Trials of new mediums to interrupt shoppers
- Increasing channels of activation: much interest was expressed in online retailing/e-commerce and the related ability to market to shoppers via online, email, mobile marketing and social media.
Resources:
- People: dedicated Shopper Marketing people, ideally in a team that reports into Executive Leadership rather than into Sales or Marketing
- Budget: dedicated Shopper Marketing budgets, in particular dedicated shopper research and shopper data budgets.
Processes and Tools:
- Development of a suite of measures customised to different activity types and mediums
- Shopper budgets and headcount built into the annual planning and budgeting process and into operating costs.
You don’t need a first class ticket to get on board
Evidence points to a Shopper Marketing industry that, while currently relatively new, is gaining momentum quickly on the back of international successes.
In most cases there is (passive) executive leadership support in Australia. The challenge – and opportunity – is in making that support active to actually generate operational change.
In looking at international examples, it is clear that best practice Retailers have not been trying to be expert at everything. They’ve picked one thing – one area of priority in Shopper Marketing – and tried new things. With Tesco it’s loyalty. With Whole Foods it’s theatre. With Marks & Spencer it’s occasion-based marketing.
The lesson is – don’t wait until the Wizard or Witch of Shopper Marketing comes along to wave their magic wand and make it all happen for you. Just get started.
“Shopper Marketing: The Journey Begins” report is available from POPAI for $495 plus GST.
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.
Go to www.popai.com.au for more information, to purchase the report or to register for the workshop.
ABOUT THE SURVEY
The POPAI/ShopAbility Shopper Marketing Industry Benchmark Survey, supported by TorchMedia, involved depth interviews with leading companies (n=19) and an online survey (n=134) with a representative sample of company sizes and roles across the industry.
The resulting report, entitled “Shopper Marketing – The Journey Begins” outlines a comprehensive overview of Shopper Marketing in Australia – attitudes, status, activities, successes and roadblocks. It is available for purchase at www.popai.com.au Findings workshops will be conducted on Sept 22 in Sydney and tickets are also available at www.popai.com.au
ABOUT NORRELLE GOLDRING
Peter Huskins is joint director of ShopAbility. She is a category and channel strategy specialist with 20 years’ experience on both the manufacturer and retailer sides of the fence with companies such as Diageo, Coca-Cola and Vodafone. Call Norrelle on 0412 574 793 or email her at norrelle@shop-ability.com.au.
ABOUT SHOPABILITY
ShopAbility helps improve manufacturer and retailer thinking and doing capabilities for increased sales in category and channel. Our offers span Research & Insight, Strategy & Planning, Activation & Implementation, and Capability & Training. We work with senior executives, sales departments, category/customer/trade marketing departments, insights people and brand marketers for an integrated 360 degree picture. Call us on 1300 88 56 44 to discuss your needs.
