Retail marketing used to mean a store taking cash from a brand for the privilege of running a promotion, but the traditional transactional relationship is being replaced by a burgeoning “shopper” marketing sector in response to changing consumer expectations and a better understanding of in-store shopping journeys.
Developing deep customer insights that help to create successful in-store campaigns at the point of purchase is increasingly seen as a vital strategy to boost the bottom line for retailers and brands alike.
Retailers responding to increasing competition and value-hunting shoppers are attempting to become destination brands to increase footfall, adopting the kind of mood music once the exclusive reserve of fancy cocktail bars.
The Marketing Store planning and strategy director Wendy Lanchin argues that creating the right atmosphere in store prevents the shopping experience being reduced to a bargain-hunting exercise. “There appears to be a rebalancing of the quality versus price equation, despite the recession still being with us.”
She points to John Lewis being at the top of Verdict’s customer satisfaction survey for the last three years and Asda’s move to introduce more “quality lines” as just two of many examples that show shoppers are being more choosy about where they spend their money rather than just looking for the cheapest prices.
Other supermarkets have also been pushing their own label brands in a bid to increase overall spend. This shift is creating a new landscape because the growth of own label popularity is here to stay, according to sector analyst Planet Retail’s recent PR report.
“For an increasing number of retailers, the role of own label is moving from generic alternative to FMCG brand. The extension of own label into services and other key areas aims to strengthen the brand equity of the retailer and drive shopper loyalty,” it concludes.
Brands must respond to this shift by developing shopper-led partnerships with retailers. Diageo, which created a category in-store marketing campaign in partnership with supermarkets this summer, set up a shopper marketing department because winning in retail has become very important to them as more people drink at home rather than in pubs, according to Anthony Hopper, UK managing director at Saatchi X.
The agency has helped to develop the “Together for a Better Summer” campaign, which attempts to shift the tendency for customers to opt for beer or wine in supermarkets by prompting shoppers to buy fruit and mixers that go with spirits before they reach the alcohol aisle at the end of the shop.
Sales of spirits and mixers have risen as high as 45% year on year in stores that have been running this campaign, claims Louise Curran, head of shopper marketing at Diageo.
She adds: “Investment targeted at consumers in shopper mode has increased in the past 12 months and is an increasingly important part of the marketing mix,” she says.
Meanwhile, retailers’ approach to in-store communication has also changed, points out Debra Walmsley, retail director of market research agency Leapfrog. “Sales have historically been communicated with the colour red and sales branding has always sat separately to the retailer’s brand. The use of softer, subtler colours such as green demonstrates the shift towards retailers thinking as a brand, and an awareness of the need to not devalue or damage that brand,” she says.
The growth in intelligence about shoppers’ habits, gathered from everywhere from focus groups to loyalty cards, has allowed marketers to influence in-store decisions much more effectively, says Alan Treadgold, head of retail strategy at advertising agency Leo Burnett.
“Cutting through the visual congestion in store is very important,” say Treadgold, who suggests that brands should develop different messaging depending on where the marketing material is placed in store.
Schweppes brand manager Shelley Norris agrees. “Define the main type of shopping mission you’re tapping into and build your plan around that,” she advises.
A greater focus on in-store messaging has created tension between FMCG retailers and brands, however. Some leading retailers moved to create “clean shelf” policies to combat growing customer inertia as a result of being bombarded with too much information.
Saatchi X’s Hopper says: “Retailers have cut out almost every type of messaging in store apart from what you say on pack and they probably have an influence on that too, so it’s really difficult for owners to control how a brand is seen in store.”
Shoppers want and expect some kind of experience and retailers aren’t allowing that any more, he argues. However, the recent high profile launch of Apple’s iPad demonstrates that customers will rush to stores if retailers provide the right experience.
Morrisons supermarket is another retailer using physical retail space cleverly to communicate brand values and increase sales, according to a recent IGD report.
The retailer’s decision to turn store space over to its Market Street initiative – where counters display fresh food – demonstrates that its message of quality, good value groceries is more important than the fact that its space could be used more profitably, argues Billington Cartmell’s shopper marketing expert and group account director, Andy Jarvis.
The agency, which has worked with Morrisons to refine its marketing in recent years, advocates that retailers should concentrate on becoming a destination brand. Jarvis says: “Marketers should focus not simply on reaching the next turn in the road, but on the ultimate destination for their brand.”
Empowering retail staff on the ground is of crucial strategic importance, adds Jarvis. Morrisons trains its Market Street staff to be specialists in particular areas such as the bakery or butcher’s department.
It’s crucial to invest in training, engaging and empowering staff, argues Elvis business director Gareth Rowe. “Store staff are the most effective, most flexible way of delivering messages in store,” he says.
Elvis recently created the Event in a Box campaign for T-Mobile, which encouraged branch store managers to pitch a business case to create an in-store event that would attract local people, for example a small business networking breakfast.
For Schweppes’ Norris, shopper marketing lives or dies on understanding the target shopper and partnership with retailers.
“You need to understand clearly what the opportunity of the marketing initiative is for the retailer and build a plan with them,” she says. “Doing shopper marketing well requires absolute retailer buy-in to allow you to access the right in-store touchpoints and feature that will capture shoppers’ attention.”
What is retail marketing?
All marketing activities contained in a retail environment or specifically at the moment of contact in store, commonly referred to as point of purchase (PoP).
How is it carried out?
Deals between retailers and brand owners to create an in-store promotion are being replaced by a more strategic partnership between retailers and brands to create targeted shopper marketing campaigns that are based on understanding the journey customers take in a retail environment.
Brand in the spotlight
Schweppes and shopper marketing
Shelley Norris, Senior brand manager, Schweppes
MW How do you define shopper marketing?
SN: Shopper marketing is understanding what your audience likes to buy, and also understanding what is preventing your target shopper from buying your product. It’s also about executing a plan that makes it more likely to persuade your shopper to buy.
Shopper marketing usually boils down to incentivising your shopper, with a price promotion, for example, or inspiring your shopper with a new product development or a new idea, and running activity around that.
MW: How do you track the effectiveness of in-store marketing campaigns that you implement?
SN: It’s important to understand your shopper’s path to purchase. Eye-tracker technology has helped us to understand what are the most effective elements of shopper marketing for our sector.
Our joint spirit and mixer campaign (which promoted an alcohol brand, along with a Schweppes mixer) was a comprehensive through-the-line campaign. You couldn’t just put that down to one piece of point-of-sale alone. Joint feature and display (of the alcohol brand and the mixer) along the in-store shopper journey was paramount.
MW: What level of investment is appropriate in shopper marketing, as part of an overall campaign?
SN: It depends on what your shopper barriers are and how difficult you believe it is to lower them. For the spirit and mixer campaign, we were very specific in committing a 50:50 split between above-the-line marketing and shopper marketing as we needed to work hard in winning shopper consideration.
MW: What do you predict will be the key issue or development to affect the sector in the next 12 months?
SN: One of the key issues shopper marketers face in big grocery environments is clutter and being seen by shoppers in the first place. Technology will undoubtedly help improve this, bringing deals available in store to your mobile phone, and equally phone apps being available to scan product barcodes to see how deals compare across retailer estates. Technology will continue to evolve and should focus on simplifying the complex in-store environment for shoppers rather than adding an additional layer of complexity to it.
Retail marketing in numbers
- Shopper marketing as a percentage of marketing investment averaged about 5% in 2007 and was forecast to rise to more than 12% by this year. This was the fastest growth rate of any spend area even outpacing investment in digital, according to Deloitte.
- A shopper may encounter between 3,500 and 5,000 pieces of marketing during a trip to a grocery store. 70% of purchase decisions are made in store, while 68% of purchases in store are impulse driven.
- 41% of retailers now regard new product launches as one of the top three priorities for their trading relationships. This is a significant increase from 12% in 2009, although this figure remains below the 2008 level of 58%.
Source: IGD’s Maximising the Impact of Trading Relationships report, April 2010
TOP TRENDS 2010/11 predictions
Anthony Hopper, UK managing director, Saatchi X
Retailers must allow experience to return to stores. Until that happens, brands will move into retail themselves, such as Cadbury cafés, for example. Digital applications in store will start to have a real impact on campaigns in the next 12 months.
Wendy Lanchin, Planning and strategy director, The Marketing Store
Shopper marketing is set to become mobile, personal, location targeted and social. Retailers like US discount store Target are now using mobile apps that allow shoppers to “scan” barcodes that give price comparisons and product information. Target uses Voucher Cloud’s location-based technology to tell shoppers what discounts are on offer. These innovations will further break down the barriers between on and offline shopper marketing.
Owen Catto, Creative director, Live & Breathe
With technology affording more and more opportunities to purchase beyond the traditional store or brand website, brands will need to continue evolving their approach to integrated communications. This means a consumer can become a shopper at any point/ on their smartphone, on Facebook or, of course, in store. Therefore, the traditional distinction between “brand” communications and “sales” activity will blur. As a result, shopper marketing will become ever more relevant beyond the retail space.
Gareth Rowe, Business director, Elvis Communications
Technology has moved on from the likes of touch screens in store, which proved expensive and difficult to manage. Instead it’s about apps or sites that you access via your handheld device in order to enhance your shopping experience, to enable customers to shop smarter.
Louise Curran, Head of shopper marketing, Diageo
Brands need to work closer with retailers to develop in-store activity programmes aligned to their events. While promotions continue to play an important role in driving footfall and conversion in store, we are seeing an increasing number of our retail partners looking at the full shopper marketing mix to drive increased loyalty among their core shopper group.
Top tips you need to know
- Develop communications that are relevant to the setting and shopper mindset. Don’t assume the consumer message is relevant when people are in shopping mode.
- Develop campaigns that benefit both the retailer and brand. Retailer buy-in is essential to the success of a campaign at the point of purchase.
- Include local staff and empower them to deliver marketing that’s relevant to the local market.
- Develop tailored messaging that is appropriate to each touchpoint, such as the shelf and window poster. The message needs to be big, bold, legible and compelling as you often have less than five seconds to make an impression.
- Don’t be afraid to trial new customer touchpoints in store; invest 10% of your budget in something new, then measure it and you might have found a more effective way to speak to your shopper.