Nick Handrinos of Deloitte on Shopper Marketing

Connecting with consumers and shoppers and creating loyalty is as challenging as it has ever been for consumer products manufacturers and retailers. Consider Figure 1, the profile of today's marketing execution and reaction by consumers and shoppers.

 

 

Indeed, marketers are abuzz with refocusing their efforts on marketing to the consumer in a holistic and integrated manner, sometimes referred to as 360-degree marketing. However, in doing so, they are quickly concluding that there are many "blind spots" across the 360-degree view of the consumer. One such blind spot is perhaps one of the most compelling marketing mediums -- the retail store.

 

The store is a critical and highly attractive touch point to reach and influence consumers as well as convert them into buyers. Marketers, who traditionally focus on consumers, are realizing the opportunity to address consumer needs in-store, in other words, "shopper" needs. When planning or engaging in a purchase, a consumer-turnedshopper may have different needs and different behaviors. For example, a shopper who is in "pantry restocking" versus "grab-n-go" mode will act and need different things, and thus be influenced by different variables.

 

Retailers and manufacturers realize the store's potential as a strong marketing medium and are now targeting shoppers with shopper marketing.

 

STATE OF SHOPPER MARKETING
In October 2007, Deloitte Consulting and the GMA released a report on the state of shopper marketing in the industry called, Shopper Marketing: Capturing a Shopper's Mind, Heart and Wallet (www.deloitte.com/us/consumerproducts). Four key insights emerged:

 

Confusion Trumps Clarity: Wide-ranging debate exists across the industry on what comprises shopper marketing. Manufacturers and retailers use the term shopper marketing interchangeably with other marketing concepts -- some examples include customer marketing, customer experience, account/retailer/customer specific marketing, retail marketing and commercial innovation.

 

We define effective shopper marketing as "All marketing stimuli, developed based on a deep understanding of shopper behavior, designed to build brand equity, engage the shopper and lead him/her to make a purchase." In brief, it is shopper centric, positioning the shopper at the center of the universe.

 

The Train has Definitely Left the Station: Irrespective of the confusion or interpretation of shopper marketing, companies are investing in it and making change happen. Companies consider shopper marketing a competitive advantage and market leaders have started mobilizing their shopper marketing efforts by allocating more funds, dedicating resources and re-evaluating their collaboration efforts with partners and service providers.

 

The Status Quo Won't Do: Building shopper marketing capabilities and competence into the organization is a major disruption to traditional marketing and sales organizational constructs, budgets, funding structures, processes, metrics and incentives, and many other foundational areas within consumer products companies.

 

Our research confirms that on their way to effective shopper marketing, manufacturers face considerable barriers that, if not addressed correctly, can hinder overall shopper marketing success. These barriers are:

• Inconsistent shopper marketing understanding
  
• Lack of shopper marketing capabilities and skill sets
  
• Lack of alignment and support by necessary functions
  
• Lack of funding for programs and infrastructure
  
• Lack of performance metrics and/or measurements
  
• Inability to consistently execute programs in store
  
• Lack of ability to generate specific consumer insights

 

Learning the New Tricks of the Trade: Retailers are turning into more sophisticated marketers, thereby increasing their already high levels of influence and power with consumer products manufacturers. To counter this mounting pressure, there are a number of factors that can help manufacturers effectively work with retailers and differentiate themselves from their competitors, including:

• Alignment with retailer's overall marketing plan
  
• Relationship depth and quality
  
• Shopper marketing capabilities and skills
  
• Customized and innovative shopper marketing programs
  
• Quality of consumer and shopper insights

 

THE RACE IS ON
Can you afford to stand on the side lines? With today's complex marketing world, marketers must aim to deliver a clear and consistent message throughout every consumer touch point. The focus on in-store marketing has begun to increase as companies have realized that shopper marketing can generate a competitive advantage. Learning about intricate details of shopper behavior is helping companies send focused and targeted messages to shoppers and consumers. More importantly, companies are leveraging these insights to improve their existing relationships with retailers/manufacturers. Market leaders have started mobilizing their shopper marketing efforts and are achieving results! Whether you're ready or not, shopper marketing is here to stay.