Zeroing In On Shoppers
November 29, 2016
By Urey Onuoha
Driven by digital, shopper marketing is evolving rapidly. A new study looks at where it’s headed
This past April, research from PQ Media projected that investment in shopper marketing will grow to $18.64 billion by 2020, outperforming total brand marketing spend. The growing interest in shopper comes at a time when the industry is adjusting to consumers’ evolving shopper habits and preferences, driven largely by digital technology.
Shopper marketing is defined as a discipline at the intersection of marketing and sales, with the primary purpose of creating a win-win-win for brands, retailers, and shoppers, according to a new ANA/GfK report titled “Shopper Marketing: The Next Generation.” The report is based on a study of 185 marketers from B-to-B and B-to-C companies, and delves into the current state of shopper marketing, where it’s headed, and the strategies needed for success.
“The study challenges companies to define shopper marketing within their organizations and look toward trade organizations to assist them with shaping shopper marketing into a true discipline,” says Tracy Frisbie, shopper marketing director at Constellation Brands. “[It] inspires conversation among shopper marketing leaders so we as a group can help shape a more standard role for shopper within the marketing industry.”
As marketers look to adjust to the new realities of shopper marketing, here are four key findings from the ANA/GfK study to help guide the way.
1. THE ROLE OF SHOPPER MARKETING HAS EVOLVED.
While the primary role of shopper marketing is to drive conversions, marketers are also expected to deliver on long-term benefits. Thirty-five percent of survey respondents agreed that shopper marketers are responsible for motivating shopper behavior through levers beyond price, and 29 percent believe that executing solutions on need states falls under their domain as well.
Sarah Gleason, SVP at GfK Shopper and Retail Strategy, says the evolution of digital technology has forced shopper marketers to adopt a more strategic mindset. “To really reap the benefits of shopper marketing in today’s changing landscape, where the shopper has more control, it’s more important than ever to be a strategic thinker and be able to project forward on what the world’s going to look like,” she says. “It’s not just about driving conversions but about building more benefits to the business long term in terms of profitable volume growth and brand-building equity.”
2. A DEDICATED SHOPPER TEAM IS IMPORTANT.
Forty-two percent of survey respondents noted that their organizations have had a person or team dedicated to shopper marketing for more than three years. Of this group, 51 percent viewed shopper marketing as a competitive advantage within the organization. Furthermore, as digital continues to shift the balance of power toward consumers, a majority of respondents (55 percent) said they are establishing digital and mobile teams focused on the shopper space, either as part of their shopper marketing teams or as a separate group.
Creating such a team takes time, Gleason points out. “There needs to be some patience,” she says. “Three years seems to be the tipping point for shopper marketing. You’ve got the processes, roles and responsibilities, and insights far enough along that it can really take traction and accelerate its impact.”
Once the team is established, Gleason adds, it’s important to be clear about what works for the organization based on its categories, structures, and culture, and what shopper marketing is expected to deliver.
Having shopper marketing rooted in the organization’s marketing department allows for better communication." — Tracy Frisbie, Constellation Brands
3. SHOPPER INSIGHTS ARE CRUCIAL BUT UNDERFUNDED.
The importance of shopper insights cannot be overstated. Seventy percent of respondents agreed that shopper insights are used to develop programs designed to overcome shopper purchase barriers. Moreover, as shopper marketing continues to advance, it will be more informed by insights based on actual versus claimed behavior, the study notes.
Insights are critical to understanding how to communicate with customers, Frisbie says. “We live in a fast, data-driven world that is accelerating the growth of shopper marketing,” she notes. “Customers and consumers want to be spoken to on a personal level with relevant content. Knowing your customer and consumer at a more intimate level is a requirement for brand growth, and the only way to know them is to dig into insights about their preferences, consumption patterns, and usage occasions.”
Unfortunately, just four in 10 respondents believe their organizations are adequately investing in shopper insights. The reason? Many companies have difficulty changing years of processes, says Gleason. “There have been years and years of focus on gathering insights to understand consumers and there’s really only been about 10 years of focus about gathering insights to understand shoppers,” she says. “Your budgets aren’t necessarily increasing in this day and age, so you’re asking companies to give up what they’re used to relying on as their source of insight and perspective and shift it to something that they’re less familiar with. It’s hard to get justifications for the spend, even though we all know that’s what drives the best outcome.”
4. SHOPPER MARKETING IS HIGHLY VALUED WHEN IT REPORTS INTO MARKETING.
Over the past few years, shopper marketing has toggled between reporting into marketing and reporting into sales. In 2013, a GfK/Interscope study found that the discipline reported into sales more often (40 percent of the time) than it did into marketing (26 percent); by 2016, according to the ANA/GfK study, the numbers were reversed, with shopper reporting into marketing the majority of the time (53 percent versus 42 percent).
That said, the ANA/GfK study found that shopper marketing is more likely to be viewed as a valued strategic initiative within an organization when it reports into marketing. This organizational structure makes sense, Gleason says, because shopper and consumer marketing rely on insights to drive strategic direction. “Insights are a currency or perspective that marketers are used to looking at, and marketers are very much used to thinking about a strategic planning process,” she says. “By folding in shopper in a way marketing has already been doing business for years, they get more value out of what shopper can bring.”
Shopper teams at Constellation Brands report into marketing but remain strongly aligned with national account sales teams, Frisbie says. “I do believe that having shopper marketing rooted in the organization’s marketing department allows for better communication and better team play,” she says. “Being part of the larger marketing team provides us with greater resources such as strategic insights and digital marketing, as well as access to our category management teams on the sales side. The alignment allows us to be more strategic because of the support we receive from marketing and sales.”
Shopper Marketing: By the Numbers
With the effects of digital technology being felt across the entire marketing landscape, shopper marketers find themselves in the unique position of having to drive sales among consumers, who have more control over the buying process, while also balancing the needs of their brands and retailers. The ANA and GfK recently partnered on a study to get an overview of the current shopper marketing landscape and look at what the future holds for the discipline. Here’s a quick look at some of the key findings.
Survey respondents who said the primary role of shopper marketers is to drive shopper conversion. Other responsibilities include:
- Motivate shopper behavior through levers beyond price (35%)
- Execute solutions on need states (29%)
- Drive short-term sales volume (26%)
- Build brand equity to the benefit of a brand and retailer (21%)
- Build retailer and manufacturer collaborations (20%)
Expected shopper marketing spend in 2016
(source: ANA/PQ Media U.S. Brand Activation Forecast)
8 in 10
Respondents who said shoppers are gaining control over the purchase occasion via mobile and digital
Marketers who said their organizations do not have a dedicated digital or mobile team focused on the shopper space
Respondents whose organizations have had a person or team dedicated to shopper marketing for more than three years. Comparatively,
17% have established teams in the past three years
32% have other existing departments focus on shopper
9% outsource shopper marketing
Photo credit: James Steinberg/Thespot.com
This article first appeared in the Fall 2016 issue of Activate magazine.