Retail marketing was an altogether different ball game 10 years ago. Generic point of sale (POS) campaigns, on a national scale, were invariably the norm. Materials turn-around was relatively simple. Creativity alone drove programme development and execution. Budgets were easily and unquestionably available to spend.
The landscape looks somewhat different today. Calls for sustainability, recession driven cost cutting, and technological innovation have played a dramatic role in transforming our industry. Yet the major catalyst for change has been with the advent of shopper marketing. It’s an ever more challenging field that requires operators to be leaner, slicker and immortally in tune with shoppers’ thought processes.
Challenging times? Yes, but it’s far more fulfilling to work in a progressive industry that really gets under the skin of the shopper’s mind, than to plod along in stagnant waters.
When it comes to shopper marketing, the stats speak for themselves – 70% of purchase decisions are made in store and almost two thirds on impulse. The opportunity to disrupt shopper behaviour and influence purchasing decisions is tremendous.
With competition fierce and the eternal race on to pull in sales, demands on marketers are higher than ever. As point of purchase (POP) measurement becomes more effective, allowing for a scientific and targeted approach, shopper marketing has emerged as the competitive differentiator. Now the pressure is on to impart a deep understanding of the shopper and deliver highly targeted, complex programmes.
Walk into a model store today and the visible contrast to a decade ago is stark. POP consumes some 70% less floor space, yet it is robust, sells a story and innately appeals to the shopper. Brands collaborate to cross sell, enticing shoppers on a mission – champagne and chocolates for gift seekers, fizzy drinks and popcorn for a DVD night in. Meanwhile, technological innovation sees digital and interactive media take the place of traditional signage as campaigns become ever more sophisticated.
Such transformation of the retail marketing arena has heralded stark internal change for players, with many agencies creating dedicated shopper marketing functions to leverage opportunities and reap the rewards.
In return, marketers gain credibility and a slice of the newly allocated POP budget. Whilst marketing budgets grow by just 2%, the shopper marketing CAGR for manufacturers is reported to be hitting 21% and a staggering 26% for retailers.
Add the recession to the mix and, in a sense, POP becomes ever more critical as shoppers are forced to review their shopping habits and baskets. According to POPAI (Point of Purchase Advertising International) the trade body for the POP industry, only 5 per cent of shoppers remain loyal to one brand whilst Nielson reports almost two thirds are switchers. Add the mood of a recession to the equation and the store offers a melting pot of opportunity to the insightful retailer.
Yet, whilst brands are rightly thinking strategically to deploy spend effectively, the arrival of procurement departments has proven budgets increasingly problematic to release. And it is here that we face a real battle of wills – with the recognised need for sophisticated shopper marketing often over-ridden by financiers who fail to estimate the value of creative ideas over unit costs.
Furthermore, the recession naturally requires a real need to bring every aspect of marketing cost down. The challenge here is to find a solution that works for all whilst also adhering to the sustainable agenda that runs through the core of all marketing activity.
With large retailers and manufacturers under intense scrutiny, the onus lies heavily on the marketer to minimise waste and maximise recycling – and such sustainability calls for a radical change in sourcing of material.
The market is now looking to the Far East to manufacture cheaper, biodegradable, exclusive products that are robust and can withstand in-store experience. But for a more radical solution some are utilising floating boats – requiring no premises and reducing costs further.
Unfortunately for the marketer, these solutions bring with them a curve ball – sourcing times of eight to ten weeks dissolve competitive advantage of market leaders priding ourselves on the ability to recognise and react to retail highs and dips, and to turn materials around at break neck speed. The nature of the retail industry simply doesn’t provide for such timescales and the move to the Far East has added another dimension to an existing fulfilment nightmare onset by the advent of tailored, exclusive POP campaigns.
One trend is for agencies to take manufacturing in-house, to guarantee management of the supply chain and fulfilment. A trend that I suspect we will see more of in the coming years from those that have the capital and drive to diversify.
Without doubt, shopper marketing is the way forward for the retail industry, but marketers need to up their game to survive. Changes over the last decade have called for a major cultural shift that has seen some already fall by the way side.
As technology continues to make our world spin faster and client expectation becomes ever more demanding, surely the silver bullet is to stay nimble – with innovation, with collaboration, in fulfilment – creatively, scientifically and in delivery, and of course, in developing increasingly sophisticated insights to those that really count – our shopping nation.