Shopper Marketing

1
Shopper Marketing

• Mastering Execution for Competitive Advantage
• Based on Information from the 2008 GMA/Deloitte
  Shopper Marketing study

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What is Shopper Marketing?

• Shopper Marketing includes all varieties of
  marketing incentives that
• Build brand equity
• Have the potential to influence a shopper to make
  a purchase
• Activities developed based on a "deep
  understanding" of shopper - or consumer-in-shoppin
  g-mode behavior (Shopper Insights)
• The premise behind shopper marketing is that
  manufacturers and retailers together, can create
  a more engaging shopper experience, influencing
  shoppers at the point of purchase where they make
  most final buying decisions.

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Top 5 Things That Differentiate Manufacturers In
The eyes Of Retailers

• Leading manufacturers are considered to be those
• Best aligned with the retailers marketing plans
  and strategies.
• Whom retailers have highly productive and
  cohesive relationships.
• 3. Who possess advanced shopper marketing
  competence.
• 4. Who develop unique and exclusive programs.
• Who can deliver powerful insights on the consumer
  and the shopper.
• We are moving beyond transactional relationships
  into more strategic collaboration to improve
  shopper experience, driving category and
  cross-category growth.

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Comparative ROI for Marketing Mix Elements
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Expected Marketing Mix Growth, One Year and Three
Years
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Shopper Marketing Effectiveness at Company Level
Results
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Top Challenges of Shopper Marketing
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Shopper Marketing Development Lifecycle
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Priority Actions by Lifecycle Stage
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Priority Actions Continued
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6 Critical Characteristics for Successful Shopper
Marketing

• 1. Compelling Leadership
• 2. Realistic Expectations (Commit to working
  through challenging modifications. )
• 3. Flexibility (commit to ongoing on-the-job
  experimentation and learning.)
• 4. Commitment to Building Talent
• 5. Unwavering Focus on Relevance (bring
  manufacturers together to develop cohesive
  program solutions)
• 6. Willingness to Tackle Culture. (shun the
  traditional adversarial manufacturer/retailer
  relationship by surveying manufacturing partners
  to determine how you can become easier to do
  business with.)
• Chart Your Course Prepare For The Journey
• Calibrate Your Compass Implement Access
  Lifecycle

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Example Shopper Marketing Positioning Questions
The most effective retailers have developed a
platform to position their banners in the minds
of shoppers. All retailers want to win, but
approach the market in different ways. For
example, some position themselves around
innovation in customer experience, while others
offer cost/value leadership. Likewise, forward
looking manufacturers differentiate themselves by
owning a specific area of the shopper marketing
space and dialogue. Unilever, for instance,
targets trip management, building its relevance
to retailers by helping them understand how to
make the most of each shoppers visit to their
store.
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Shopper Insights

• Done well shopper insights should
• Align consumption and use occasions with shopping
  mindsets
• Reflect shoppers in-home and in-store
  experiences
• Build on shoppers brand and category experiences
  
• Ensure that the desired brand cues are triggered
  during the shopping experience
• Be relevant beyond basic demographics and life
  stages that reflect causal understanding
• Deliver more targeted and integrated
  communications
• Create actionable strategies and tactics that
  deliver profitable volume

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Overcome the Barriers to Genuine Collaboration

• Retailers need to show manufacturers that they
  collaborate well. If they fail to do this,
  they will be at a disadvantage because
  manufacturers will spend shopper marketing
  dollars with their competitors.
• Manufacturers need to understand their key
  accounts (retailers) inside and out what
  categories they want to drive, their core
  customers, needs states and shopping occasions.
• Build credibility by finding activations to
  address the retailers specific issues. Alignment
  of retailer and manufacturer goals.
• Manufacturers cannot fully understand a retail
  banners marketing needs without retail
  cooperation, and they cannot obtain the detailed
  data to create customized insights without the
  retailers willingness to share.

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Problems Misalignment
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Transactional vs. Committed Collaboration
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Strategic Shopper Marketing Collaboration Process
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Master Execution for Competitive Advantage

• Execution is the universal pitfall. Even the
  organizations with the most advanced shopper
  marketing operations identify execution as their
  Achilles heel. The best laid plans can fall flat
  if
• Managers wont think beyond a traditional
  marketing and trade promotions mindset
• Incentives remain misaligned
• Companies lack the tools and data to uncover
  insights and measure results
• Organizations cannot track or ensure compliance
• Partners are not prepared to collaborate
• Shopper marketing teams lack the right skill
  sets
• Planning calendars are misaligned, and in-store
  programs show little integration with
  out-of-store marketing efforts
• Companies relinquish strategy control

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Communication is Key
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Retailer Collaboration Strategies

• One group will embrace shopper marketing as a way
  to work with manufacturers to improve the shopper
  experience and drive revenues through increased
  trip frequencies and basket sizes. They will
  share shopper data and develop deep relationships
  which are rewarding for both sides.
• The next two camps of retail strategies are
  dangerous for retailers and manufacturers alike.
• 2. The second group will listen to
  manufacturers but take sole responsibility for
  their in-store strategies without truly giving
  manufacturers a seat at the table. Listening to
  manufacturers but excluding them from the final
  strategy risks alienating them and losing out in
  the future. Alienated manufacturers may take
  their most-valuable insights, funding and
  programs elsewhere.
• 3. A third group will see shopper marketing
  primarily as a way to extract revenues from
  manufacturers by selling real estate. Using new
  tools and technologies to better understand the
  value of store parts and working with
  manufacturers to improve shoppers experience is
  a sound strategy. However, when retailers use
  these tools to purely monopolize the store, they
  are essentially giving up control over the
  shoppers in-store experience. This strategy is
  sure to deliver a short term profit boost but is
  unlikely to be a winning strategy in the
  long-term.

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Safeway U.S. Demonstrations Commitment through
Collaboration

• Successful shopper marketing collaboration
  depends on manufacturers developing a strong
  understanding of the partners business
  initiatives, customers, and issues. Safeway is
  making it easier for manufacturers to accomplish
  these by collaborating with them in the areas of
  customer segments, customer marketing, frequent
  shopper card data and internal processes.
• While the day-to-day transactional sales channel
  is a key component of manufacturer interaction,
  Safeway has developed a larger, more holistic
  approach to communications.
• Strategic Industry Participation Safeway has
  agreed to participate in manufacturer and
  retailer industry panels such as the GMA/FMI
  sponsored New Ways of Working Together initiative
  to foster open communications with manufacturers.
• Manufacturer Meetings Safeway calls in
  manufacturers and holds large group meetings to
  inform them of changes in strategic direction,
  segmentation, and business processes
• Optura Portal Safeway provides free
  pre-generated sales data reports to give
  manufacturers an opportunity to develop new
  insights and a provide a baseline for discussions
• Internal Channels Safeway has developed
  internal lines of communication that ensure
  manufacturer insights are shared and
  strategically incorporated into other relevant
  parts of the organization.
• Internal and manufacturer-completed surveys are
  another key element of Safeways plan to improve
  communication and collaboration. Safeway uses
  these surveys to identify the pain points of
  working with manufacturers and on ways to improve
  business processes.
• The adoption of a strategic communication system
  has improved Safeways shopper marketing efforts
  and enhanced the shopper marketing maturity of
  its manufacturer partners. The company has
  witnessed improvement in the number and quality
  of shopper marketing programs being offered by
  manufacturers. By helping educate and advance the
  overall industry, Safeway can better identify and
  select the campaigns that will be the most
  fruitful and profitable.
• Source 2008 GMA/Deloitte Shopper Marketing Study
  Interview

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Final thoughts from the latest GMA/Deloitte study1

• The store is a "compelling and ideal marketing
  canvas". Some 70 percent of purchasing decisions
  are made in-store, and 68 percent of in-store
  purchases are impulse. This, it said, leaves
  marketers with a "tremendous opportunity to reach
  consumers".
• "Building shopper marketing capabilities will
  require a significant transformation of the
  status quo in marketing and sales organizations.
  This transformation will include, but is not
  limited to, how insights are generated, how much
  is spent on insight generation, how segmentation
  is performed, how budgets are developed, how
  teams are structured, what skills are required,
  and how execution happens in-store," writes the
  report1.
• 1The 2008 GMA/Deloitte Shopper Marketing study