You don’t have to be a retail chain or top tier global manufacturer to gather and apply shopper insights (although it helps). You just need to know what you’re looking for, and what things can be used for what.  Here’s a bit of a rundown.

TYPES OF INSIGHTS AND SOURCES

We typically look at shopper insights through the lens of what we call the 5Ws and 5Hs: who, what, when, where, why, how, how much, how many, how often, how long. See Figure 1.

Different data sources focus on different things:

• Data such as scan will give you whats, wheres, and whens
• Homescan/Shopperview will give you how much (spend), how many (AWOP), how often (frequency/IPI)
• Retailer loyalty programs will get you similar data to scan (lots of whats, whens, wheres) overlaid with some whos
• Trackers will typically give you behavioural data (what they did, how they did it) with a little bit of attitudinal data
• Bespoke and custom shopper research tends to focus on the whys and the whos behind the hows – as much attitudinal and motivational as behavioural.

No single methodology will do everything, you actually need a mix of sources and methodologies to cover most of your bases – soft and hard measures, claimed vs actual behaviours, attitudinal vs behavioural influences.

WHAT RETAILERS AND MANUFACTURERS TYPICALLY WANT TO KNOW ABOUT SHOPPERS

So, data such as scan and homescan will give you a lot of whats, wheres, and whens. But in the past few years running shopper research projects for both retailers and manufacturers, we find what they really want to know is who, why, and how. The table at Figure 1 is a list of the most common shopper research questions (or strategic questions that research will provide guidance with, if not direct answers) and objectives we see when receiving a shopper research brief. Often the retailers and the manufacturers want to understand the same things, it’s just that the lens is different.

Figure 2: common retailer and manufacturer shopper research questions. © ShopAbility 2012

Interestingly, when we conduct shopper research we often see a difference in what shoppers tell us they want when shopping a category (which tend to be more emotional, and tend to align to Dr AK Pradeep’s 7 Shopper Experience Dimensions such as interaction, entertainment, education, information) versus what retailers generally want research to focus on (typically the more rational point of purchase drivers such as range, space, price, promotion – ‘RSVP3’).

CORE VS OPTIONAL INSIGHTS

Scandata and homescan/shopperview data are the basic insight building blocks.

We also consider RSVP3 to be the basics, but more important is the need to know why – what sits behind the needs for certain ranges and layouts, because this is how you understand what the hot buttons are to push.

Once you get into trackers and bespoke research, the questions you ask may have either short term/tactical, or long term/strategic ramifications. Figure 2 below illustrates elements of this.

So what is core and what is optional rather depends on whether you are taking a tactical or a strategic viewpoint.

Typically we find that the whos, hows and whys are strategic, and the whats, whens and wheres (and some of the hows) are tactical.

And commonly the Hs (how many, how often, how long etc) are the objectives or metrics you want to move or outcomes you want to achieve, eg you want to increase frequency, AWOP, spend, traffic, penetration.

We reckon the ‘must knows’ are who is doing what, why (occasions, trip types, what they value or place importance on), and how behaviour changes according to the who (purchase hierarchies, navigation, path to purchase touchpoints).  This then gives you the context for some of the ‘should knows’ (dwell times, traffic/browse/buy conversions etc).

There are lots of different methodologies to arrive at shopper insights, combining exploratory (qualitative, smaller numbers, ‘why’ focussed) and evaluatory (quantitative, larger numbers, ‘how many do/think what’ focused). These can be both instore (such as accompanied shops, observations, instore interviews) and out of store (online surveys, in home diaries, focus groups, social media). I’ll cover these in a separate article. As we mentioned, no one methodology fits all … employing one single methodology will give you a snapshot, or lens to look through.

USING AND APPLYING INSIGHTS, ONCE YOU’VE GOT THEM

So now you’ve got yourself some shopper data, what do you do with it?

Data is just information. It’s how you interrogate it and interpret it that the actual insights – the ‘what’s really going on here’ – start to become apparent. The key question here is ‘why’? And the more you bounce it around the more you’ll see.

In the data you have, look for commonalities – where does the data keep telling the same story? What are the common themes? Where is it different? Build hypotheses and implications – ‘this means that …’. Note that grouped themes often form the basis of category drivers.

Share your hypotheses and findings internally with sales, marketing, operations, merchants to build more theories, insights (the whys) and implications (this means that…) and then once you’ve got it to a place you’re happy with then share it externally – along with actions such as store trials – with your retailers and/or manufacturers.

BENEFITS

Why go to all this effort?

Because by understanding your shoppers’ motivations in your category, you’ll understand how to improve their shopping experience in your category. And that will improve sales.

It helps retailers and manufacturers talk in a common language – that of the shopper.

And it helps provide guidance with principles for consistent store merchandising.

And lastly, not only is it useful, it’s both interesting and fun.

Introducing Shopper Snapshot.

Get more leverage with retailers by supplying them with robust shopper insights about your category, in the context of their business, to speak their language.

Shopper Snapshot encompasses:

• Why they buy
• How they buy and make decisions
• Where your category sits relative to others
• What levers to pull to influence them, where

Shopper snapshot is an affordable solution especially designed for smaller companies who may be the third or fourth player in their category.

To find out more, download our Shopper Snapshot brochure here, and feel free to contact Norrelle Goldring of ShopAbility or Simon Ford of Shopper Tracker (details on the brochure). We’re excited to bring you a viable alternative, for a section of the industry with unmet needs. We’d love to chat with you about it.

Here’s the brochure:

Shopability-Shoppertracker Flyer FEB12_sml

There’s been a lot of media huff and puff lately about the growth of online shopping in Australia. But the larger revolution – albeit quieter from a media point of view – is the change in shopper behaviour before they purchase, brought about by the ability to search online for product information before they even get to a store.

This has implications for the ‘path to purchase’ and for impulse purchases. As the degree of prestore search increases, so does the degree of planning.

I thought it worthwhile having a look at this and its implications for what stores will need to do in order to retain a role broader than being a mere transaction zone. The game SHOULD be much bigger than just range and layout, which are hygiene, navigation and deselection (narrowing down) factors, they’re not strategy. Once you’ve got your range and layout right, then what are you going to do to increase your category sales in an environment where shoppers are getting harder to influence?

THE PATH TO PURCHASE IS BLURRING

Traditionally the path to purchase was thought to be prestore and instore.

Prestore was when shoppers were making lists and were the passive subjects of advertising and promotional stimulus. Prestore was about consideration.

Instore was where the shopper was influenced on which of their considered products in a category they would buy. Instore was where the conversion happened.

Now the model is blurred. We have conversion happening prestore, and consideration happening instore.

The advent of mobile search and compare is creating consideration at shelf, not just conversion. An example is a shopper standing in a shoe store looking at training shoes. The shopper can whip out their mobile phone and price compare the shoe in the store they are in versus somewhere else. And if the somewhere else is nearby they may change their store choice. You’re then relying on your store staff service and sales capabilities to keep the shopper in your store. Or they might be looking at a shoe on shelf and if a staff member isn’t available, look up the product information online using their smartphone.

This isn’t just for the ‘few’ who have smartphones, by the way. Australia has one of the highest smartphone penetrations in the world, currently nearing 40%, and set to hit 60% by the end of 2012.

THE ‘FIRST MOMENT OF TRUTH’ – JUST ONE OF A SERIES OF TRUTH MOMENTS

P&G are largely credited with coining the expression the ‘First Moment of Truth’ to describe the shopper experience at shelf, where theoretically all the prestore and instore marketing and category management efforts come together to create a purchase decision at the shelf (or offlocation display).

Now we have not only a First Moment of Truth, but a Zero Moment of Truth (prestore) and a Second Moment of Truth (post store, when the purchased product is actually trialled).

Google’s recent report (April 2011) on the Zero Moment of Truth (ZMOT), whilst not expressing a new idea, has probably been the first to articulate it clearly.

It identifies the shift in shopper behaviour by differentiating advertising and promotional stimulus (considered passive) from online and mobile search (proactive).

The ZMOT is when a shopper actively searches for product information online. This may be from a retailer’s website, manufacturer’s website, product reviews, social media such as Facebook, and blogs (which are a form of organized word of mouth), among other things a search engine may dig up. ZMOT is everywhere because it can be accessed whilst mobile, and it’s not just for high involvement purchase categories like cars and entertainment systems. Shoppers are actively searching prestore in product categories ranging from plasticware to pet food.

The Second Moment of Truth (SMOT) – product trial, usage and experience – has an impact on ZMOT. Users of a product when they get it home may post a comment about the product (and their purchase experience) on a social media website, or a product review on a blog or website. These reviews then contribute to the next shopper’s ZMOT findings.  In a recent report from IBM it was stated that a shopper is more likely to believe a review from a stranger than what a retailer or manufacturer says about a product. This demonstrates the need/role for informal product advocates and ambassadors (rather than paid celebrity sponsors).

Whilst marketers can’t control what shoppers post for SMOT, smart marketers in manufacturing can use ZMOT tools – including offers – to mitigate retailer clean store policies.

So now we have a model where advertising stimulus and promotions (Stimulus) may be prestore or instore. The ZMOT is everywhere (accessed prestore, instore, in transit) as is the SMOT. The First Moment of Truth may now be online, or in bricks and mortar stores, or multichannel (eg order online, pick up instore or order instore, have delivered to your home).

I haven’t figured out how to draw this yet in a pretty diagram. Stay tuned. It’ll probably look like one of those communication network diagrams like a cloud with lots of lines where everything connects to everything else.

THE DEGREE OF PLANNING IS INCREASING

The more ZMOT proactive product search that occurs, the greater the degree of pre-store product planning.

Depending on the channel, category and trip type, there may be a lot or a little impulse. On average in Australia across a number of shopper research projects in the past few years, we’ve found that most categories in grocery are planned down to product or brand level between 60% and 70%. That is within a specific category.

But this doesn’t mean you can’t get switch, upgrade or impulse instore, or that a shopper doesn’t buy other categories/products on impulse. We know that around 80% of shoppers deviate from (add to) their grocery shopping list once instore. That is, they come in for 4 things totaling $20 and wander out $50 and 8 items later.

What it does mean is that you need to work harder to interrupt them within a given category.

Interestingly, the recent Coles and Woolworths smartphone apps have a number of functions that will actually increase the degree of planning (My List, My Specials, where items are located in my store so I can find them faster etc) with fewer of the apps to increase browse time/impulse/engagement (recipe finders being the main one at this point).

In an environment where retailers have trained shoppers to expect low prices as the cost of entry and promotional strategies have simply shifted the majority of a category’s sales to on promotion (and deflated category value in the process), the crying need instore is for INTERRUPTION. Shoppers want to discover, be surprised, delighted, and informed … this requires engagement and theatre.

THE NEED TO PLAY TO EMOTIONAL, NOT JUST RATIONAL

In ‘The Buying Brain’, Dr AK Pradeep emphasizes that 95% of human decision making is unconscious and emotional not subconscious and rational. He outlines 7 shopper experience dimensions. In no particular order, these are Information, Interaction, Entertainment, Community, Education, Simplicity, and Self Worth. These serve as a useful ‘retail health’ scorecard for a brand or category.

It’s evident from this list that grocery retailing only really talks to simplicity (ease of shop) at the moment, with perhaps some bits of information and some Community (charity) activities. But supermarkets have work to do on the interaction, entertainment, education and self worth dimensions.

When you look at the traditional point of purchase drivers (range, space & layout, visibility & display, price, promotion and persuasion) there are 3 that are rational (range, space, price) and 3 that are more emotional (display/theatre, promotion, persuasion).

Clean store policies are effectively stripping the emotion out of a shopping trip that for many is already a grudge trip or considered a chore.

When we run shopper research typically the retailers want to understand what their range and layout should be, and most of what shoppers want is not just a layout that makes sense but typically category information, samples, tastings and demonstrations. They want things that will help them with solutions and keep them entertained.

Interruption and engagement – the levers to pull for impulse sales and category growth – will come from more theatre; better thought through relevant/tailored/interactive promotions that pull levers other than price, and from personalized service.

In the brave new world of shopper-controlled retailing, the retailers who retain relevance will be those who can interrupt, surprise and delight by playing to emotions.

POPAI’s Shopper Marketing Industry Council (SMIC), of which ShopAbility’s Norrelle Goldring is Chair, have developed a number of best practice tools and templates, including a handy ‘shopper marketing wheel’, case studies and roadmaps that are free to all delegates visiting the POPAI stand.

Delegates at the stand can also voice their opinions in the 2011 Shopper Marketing & Industry Survey. The study, a joint initiative of POPAI in partnership with  ShopAbility, will track advances in shopper marketing and category management, including case studies, since the first Australian industry benchmarking survey in 2010.

Survey participants are rewarded with a free copy of the resulting research report, valued at $495, and are invited to attend key industry leadership workshops where the research findings are discussed amongst retailers, suppliers / brands and POP agencies.

A link to the online version of the survey will also be announced in mid-May for those unable to attend Shopper Marketing Live!, according to POPAI’s General Manager, Karen Spear.

“The inaugural industry survey in 2010 led to a raft of measures for industry improvement, and the best practice tools and templates developed by POPAI’s Shopper Marketing Industry Council over the past months since the study’s completion are evidence of this,” Karen said.

“This year the online survey will be shorter, and we’ve taken our focus areas directly from industry feedback provided last year.”

Broad focus areas for the 2011 Shopper Marketing & Industry Survey include:

• Definitions
• Capability & Resources
• Insights
• Activities & Case Studies
• Digital / Online / Social
• Measurement & Effectiveness
• Impacts, Challenges & the Future

In addition to the online survey, POPAI and ShopAbility are conducting face to face interviews with interested participants willing to share case studies of shopper marketing in action (optional anonymity).

What you can do:

o   Visit the POPAI & ShopAbility stands at Shopper Marketing Live! To pick up your free tools http://www.shoppermarketinglive.com/

o   Want to know more? Download the survey FAQs at www.popai.com.au

o   Register to participate in the online or face to face or both: Email your name, company and ‘register for Shopper Marketing Survey’ to popai@popai.com.au

They’re the words promotional marketing agencies see on most briefs for ‘target market’. “Main grocery buyer”.  Aka women 25-54.

OK, so the two major supermarkets average 75% female shoppers. But to assume that’s the same in all stores, and that they all shop the same way, means the majors are missing opportunities to tailor activities – more profitably – to specific shopper types and shopping trip types. Vanilla is not the only flavour of milkshake.

Over the past few years that we’ve been running shopper research we’ve noticed that household makeup (how many people in the household, ie how many mouths to feed) and lifestage (eg SINK/DINK, young families, older families, empty nesters) have a far greater impact on shopping behaviour than does age, income, or geography.

Let’s look at how this plays out.

WHO REALLY SHOPS IN SUPERMARKETS?

Actually, males represent 48% of grocery shoppers overall, it’s just that their overall frequency of shopping trip is lower than females. But this changes by household type. Supermarkets located in areas with a lot of SINK/DINK households (single/double income no kids – like the South Yarras, Neutral Bays, Fortitude Valleys, Holdfast Shores, Subiacos) will often have up to half of their regular shoppers being male. This is because the guys are either shopping for themselves and their partner (male or female) or shopping for the household (particularly share households of guys – and it’s not unusual to see two male housemates doing the shopping together of an evening).

There’s a reason that such a high proportion of the major phone networks’ mobile phone traffic between 4 and 7pm is ‘I’m standing in front of the X category, which is the one that we buy?’ phone calls. And it’s not the women making them.

Blokes shop a bit differently to women – they’re generally less concerned with getting the absolute right brand/product (unless they’ll get in trouble). Near enough is good enough. And they’re more open to impulse, and to pester power from the kids.

So what?

This is part of the argument for store clustering – changing your execution store by store depending on who the majority of shoppers are in it. If you know which stores have higher proportion of young blokes you’d dial up on easy and RTE meals, and offer impulse snack bundles for a start.

HOW DO THE LIFESTAGES DIFFER?

Herewith some gross generalisations (it does vary per category) but this should give you an idea.

SINKS/DINKS: tend to have more disposable income so as a rule they are less price conscious and more into quality and gourmet items and anything new/different/sexy. Obviously because they don’t have kids they’re not buying baby aisle to begin with. As a result they are more likely to have pets, particularly small dogs, that are treated anthropomorphically (like they are small humans). So stores in SINK/DINK areas are likely to overindex in pet treats and premium pet foods, as well as categories involved in entertaining (eg high end dips, premium salty snacks and crackers). They are least likely to buy on promotion or private label as they’re looking for quality cues (depending on the category, of course). They don’t buy on volume as they’re more likely to live in apartments with smaller pantries, fridges and cupboards – so big bulk packs won’t fit! This is single serve land – which of course comes at a price premium.

Young families: are all about baby, school, nutrition and some sports. Shoppers for young families will buy based on what they know the kids like and will actually eat. Because there are more mouths to feed, and often a mortgage, budgeting starts to come into play. They’re more likely to have a repertoire of brands that they switch between (so if you’ve always got one brand in a category on promotion all you are doing is merely switching a ‘given’ sale down to the lower priced brand on promotion. Time to review your promotional slotting and frequencies!)

Older families: tend to be more volume based (particularly if they have teenage boys).These guys are your classic 2L milk and 20pack toilet roll territory (note – SINKS/DINKS and Empty Nesters aren’t). Almost the opposite of SINKS/DINKS in behaviour, they’re after economies of scale because they’ve mostly got the storage space to hold it all (not that it lasts long with ravenous teenagers about). Whilst they’ll have certain brand preferences in certain categories, mostly it’s about feeding the masses as cheaply as possible so you tend to see a lot more private label in these households’ cupboards. Often catalogue monitors, they might switch stores if there are enough of the right bargains in one catalogue to justify it.

Empty Nesters: longstanding loyals to brands they know and that have stood the test of time, they’re looking for value for money but also service and acknowledgement … ‘they know me and what I like’. They will pantry stock on a bargain (but then, you’re just pulling the sale forward in a lot of categories). They are less open to trial, demonstrations and sampling (where SINKs/DINKs love this) and more likely to buy mainstream than premium brands.

So if you know what the majority of your store’s shoppers are, you can tailor not only your range but also your promotion and marketing mechanics to suit.

And even if you are in an area with a reasonably even split of household types, you can rotate your promotions and marketing programs around the various household types – you don’t have to assume that the same promotion is going to suit everybody.

It just gives you more strings to your bow, or weapons in your promotional arsenal.

Next time we’ll look at trip types and shopping missions, and how you can market to those.

Until then!

The study, a joint initiative of POPAI in partnership with researchers ShopAbility, will track advances in shopper marketing and category management, including case studies, since the first Australian industry benchmarking survey in 2010.

Participants are rewarded with a free copy of the resulting research report, valued at $495, and are invited to attend key industry leadership workshops where the research findings are discussed amongst retailers, suppliers  / brands and POP agencies.

The inaugural POPAI  / ShopAbility Shopper Marketing & Industry Benchmark Survey in 2010 led to a raft of measures to improve the industry.

One such measure is the formation of POPAI’s Shopper Marketing Industry Council, of which ShopAbility Director Norrelle Goldring is Chair. This group of industry leaders is working hard to create best practice tools, templates and guidelines for the Shopper Marketing & Category Management industry in Australia.

What’s new and different about the survey in 2011:

“This year we took votes from last year’s survey participants on where they would like a more detailed focus for the 2011 study,” said Karen Spear, General Manager of POPAI Australia.

“In response, this year’s survey will place a spotlight on four key areas: emerging  and interactive POP activations; the role of online in shopper marketing; in-store theatre; and ways of measuring activity effectiveness. We will also be tracking progress across a range of general industry criteria that are core to the research.”

“People have also been crying out for case studies and examples of what is working, but they’re concerned about sharing their own.  So this year we are inviting participants to share examples and case studies anonymously via personal interviews with independent researchers ShopAbility,” said Karen.

“ The case studies will be altered by the participants and researchers in order not to be identified, and a larger library of industry best practice examples will be built this way,” said Norrelle Goldring, Director of ShopAbility.

“There is also an option to only be involved in the online questionnaire component of the study. So there’s no reason why everyone can’t participate in this important industry research.  Ultimately you only get something if you give something – the quality of survey findings and results can only be as good as the level of participation we receive.”

What you can do:

Register to find out more: want to know more but not ready to commit? Email popai@popai.com.au for an FAQ on how it works (download the FAQs HERE SM Survey FAQs), or phone in on 02 9938 5150.

Volunteer to be an interviewee: if nobody shares, nobody gains. Help POPAI out and offer to be an interviewee – it will only take 20 minutes of your time and is completely anonymous. Email your name, company and willingness to be interviewed to popai@popai.com.au

Register to participate in the online component: Only want to be involved in the online survey component? Email your name, company and ‘register for online SM survey only’ to popai@popai.com.au

More information on POPAI’s research reports may be found at www.popai.com.au. General Manager Karen Spear may be contacted on 02 9938 5150 / 0412 668 579.

POPAI is the only global, not-for-profit, industry association exclusively operating as the focal point for Marketing at Retail excellence. POPAI has 20 offices covering 45 countries and more than 1,700 members worldwide.

ShopAbility are FMCG and Retail Industry leaders, at the forefront of Shopper Insights and Shopper Marketing in Australia, and are regular industry commentators for trade publications including Retail World Magazine, Retail Pharmacy, Convenience World and National Liquor News.

Shopper Marketing: The Journey Begins

POPAI / ShopAbility Shopper Marketing Industry Benchmark Survey 2010

Supported by TORCHMEDIA

• Leverage the learning from Australia’s first Shopper Marketing Industry Benchmark Survey
• Harness the findings with implications and actions to move forward
• Participate in the industry discussion as solutions and frameworks are canvassed
• Be at the forefront of developments

If you want to know about the state of play in Shopper Marketing, please join us for this key industry discussion and applications workshop on the findings of the first Australian Shopper Marketing Industry Benchmark Study.

This workshop is designed for people working in FMCG, retail and related agency suppliers with responsibility for, alliance to or interest in Shopper Marketing.

It has also been developed for participants in the Survey who want to gain the most out of the summaries they have received.

On the agenda:

• The scope of possibilities emerging from the findings, including implications, opportunities, plans to move forward, and some initial solutions and frameworks development
• Discussion of results for those who did not participate in the survey
• Group / industry workshop of findings implications and applications

$395 standard price

$325 for POPAI members and Survey participants (individuals, not companies)

Includes:

• Copy of the full report, valued at $495 (emailed in pdf format along with workshop outputs)
• Sector specific (manufacturer, retailer, agency) report summary valued at $95
• Presentation and groupwork of implications and opportunities
• Summary of workshop outputs (to be emailed subsequent to workshop)
• Refreshments.

• Wednesday 10 November, 2010
• Half day seminar/workshop
• 9am – 12.30pm
• (8.30am for 9am start)
• Water Rat Hotel
• 256 Moray St (cnr Park St) South Melbourne VIC 3205

RSVP by emailing popai@popai.com.au with “Shopper Marketing workshop RSVP” in the headline

Or

Book online  - http://www.popai.com.au/Events/September-2010/Shopper-Marketing-Research-Findings-Workshop.aspx

Shopper Marketing: The Journey Begins

POPAI / ShopAbility Shopper Marketing Industry Benchmark Survey 2010

Supported by TORCHMEDIA

• Leverage the learning from Australia’s first Shopper Marketing Industry Benchmark Survey
• Harness the findings with implications and actions to move forward
• Participate in the industry discussion as solutions and frameworks are canvassed
• Be at the forefront of developments

If you want to know about the state of play in Shopper Marketing, please join us for this key industry discussion and applications workshop on the findings of the first Australian Shopper Marketing Industry Benchmark Study.

This workshop is designed for people working in FMCG, retail and related agency suppliers with responsibility for, alliance to or interest in Shopper Marketing.

It has also been developed for participants in the Survey who want to gain the most out of the summaries they have received.

On the agenda:

• The scope of possibilities emerging from the findings, including implications, opportunities, plans to move forward, and some initial solutions and frameworks development
• Discussion of results for those who did not participate in the survey
• Group / industry workshop of findings implications and applications

$395 standard price

$325 for POPAI members and Survey participants(individuals, not companies)

Includes:

• Copy of the full report, valued at $495 (emailed in pdf format along with workshop outputs)
• Sector specific (manufacturer, retailer, agency) report summary valued at $95
• Presentation and groupwork of implications and opportunities
• Summary of workshop outputs (to be emailed subsequent to workshop)
• Refreshments.

• Wednesday 22 September, 2010
• Half day seminar/workshop
• 9am – 12 noon
• (8.30am for 9am start)
• Bayside Terrace Room,
• Sydney Convention & Exhibition Centre
• Darling Harbour
• Held as part of the Retail and Marketing at Retail Expos

RSVP by emailing popai@popai.com.au with “Shopper Marketing workshop RSVP” in the headline

Or

Book online  - http://www.popai.com.au/Events/September-2010/Shopper-Marketing-Research-Findings-Workshop.aspx

Last issue we shared some of the results of Australia’s first Shopper Marketing Industry Benchmark Survey from POPAI / ShopAbility and supported by TorchMedia.

Some compelling results show that Shopper Marketing is definitely on the rise, supported by 70% of business leaders with one third of companies actively increasing people and budgets. The Shopper Marketing Train is leaving the station.

A snapshot recap from last time:

• Nearly 7 in 10 said that Shopper Marketing is supported by Executive Leadership. One third plan to increase their program budgets and/or people budgets in the next two years. Just under 40% are currently measuring their Shopper Marketing programs
• 60% are engaged in Shopper Marketing activities
• 65% are undertaking category level and retailer initiatives
• Two in five are engaged in trials, whilst nearly three in five are not, due to a lack of one or more of resources, retailer engagement or lack of co-funding (budget)
• Almost half have undertaken shopper research of some sort
• A primary issue is lack of resource allocation to Shopper Marketing. Only 4 in 10 respondents are satisfied overall with focus, expertise, and people. All respondents are least satisfied with budget (23%)
• How Shopper Marketing is defined and what is included varied among respondents. A point of consensus is that Shopper Marketing targets shoppers at multiple touchpoints using and leveraging insights

The focus of our article this time is on who is best practice and what they are doing.

So, who is on the Shopper Marketing train and where is it heading?

The USA and UK were commonly nominated as international best practice by survey respondents, with participants typically perceiving Australia to be 8-10 years behind in activations. However, momentum is gaining.

In-store ‘theatre’ was a big indicator of best practice for survey respondents. Overseas retailers believed to be doing this well included Whole Foods, Trader Joe’s “making private label cool and branded”, WalMart for its WinPlayShow strategy and digital on shelf media.

Leveraging loyalty programs to inform the in-store offer was another biggie, with survey respondents citing Tesco for their Club Card program, ability to mine their shopper data and provide tailored offers, and in-store occasion based executions. Similarly Boots received honourable mentions for their loyalty program, understanding of multiple occasions and marketing to impulse.

Apple received top marks for its total experience including store staff, and totally different model of sales based on shopper experience rather than price or offers.

Marks & Spencer and Sainsbury were seen to be leaders in marketing successfully to shopper occasions (such as the M&S “Dine in for two for £10” campaign).

Global manufacturers rating most mentions included P&G for its ‘last 3 feet’ and ‘shelf back’ approaches, and Pampers World 4 Kids program; Coca-Cola for its understanding of tailoring pack and product sizes and formats to channels and occasions; and  Unilever for its Dove real beauty campaign with WalMart, which was subsequently taken global.

In Australia, quoted leading retailers included: Apple, McDonalds, Priceline, and JB HiFi (for its performance and results, although its methods polarised opinion). Improvements in the Health & Beauty departments of both Coles and Woolworths were frequently mentioned.

Manufacturer P&G came up trumps for its shopper understanding and seamless ATL/BTL/in-store execution as well as retailer collaboration.  As with their global counterparts, Coca-Cola was mentioned for its understanding of occasions and packs per channel, and its ability to change messaging consumers vs. shoppers. Unilever also rated highly for its “seamless integration and customer specific activations”. Colgate made the list for its engaging activations.

The common thread running through all organisations considered at the forefront of Shopper Marketing is their understanding of shopper behaviour, types and needs; their ability to execute against this consistently with tailored and customized programs; and their willingness to innovate and trial new concepts.

What makes Best Practice?

The intent of this first study was to provide an initial benchmark (with future studies aimed at measuring specific best practice activities now that we have a benchmark), so we have defined Best Practice by a certain set of overarching areas:

What this indicates is that while Shopper Marketing is still in relative infancy in Australia, 60% are engaged in Shopper Marketing activities (and 40% are not). Whilst 2 in 5 are engaged in trials, nearly 3 in 5 are not, due to a lack of one or more of resources, retailer engagement or lack of co-funding (budget).  There were relatively more category level and retailer initiatives, at around 65% each.

When it comes to Shopper Insights, around half have been or are involved in research programs, and most are using sales and/or store data regularly. For the half that are not researching, budget and resources constraints (including lack of co-funding) were nominated reasons.

Defining and executing best practice measures for Shopper Marketing is also a huge opportunity,
with under half of respondents using shopper metrics (AWOP, frequency, basket and household penetration, spend, traffic etc) with regularity – either due to a lack of awareness/understanding of what these are and how to apply them, or cost of buying the data.

Similarly, achieving best practice retailer / manufacturer collaboration is an area for growth. Whilst nearly 70% say they have joint category discussions and have identified initiatives, fewer have actually conducted joint initiatives. 1/3 either don’t have or only infrequently have joint category level discussions or have identified joint initiatives to try. Shopper insights can be used as a jumping off point for collaboration between retailers and manufacturers at category level, a reason to increase shopper insights resources on both sides.

Implications and Opportunities for Retailers

Retailers cited a number of challenges to progress, including a lack of expertise, resources and people, how to differentiate low growth categories, gain store compliance and get suppliers to think in categories not brands.

Manufacturers, on the other hand, were hitting hurdles with retailer’s clean store policies and lack of willingness to innovate and trial new ideas and their expectation that suppliers should fund all Shopper Marketing initiatives for their stores.

Both sides have called for more effective collaboration in order to improve the experience for shoppers (and therefore optimise sales).

In the USA some manufacturers have set up cross functional retail customer specific business teams to achieve more holistic points of contact between retailers and manufacturers (not just via sales teams/merchant buyers).

What needs to happen in Australia:

• Retailers’ marketing teams need to start to establish links with brand manufacturer marketing teams and vice versa, in order to create broad joint programs of activity.
• Mutual understanding of objectives
• Mutual data sharing and shopper insights provision from both sides
• Customised programs per retailer and category
• Co-funded trials and insights programs.

Study respondents identified a number of areas for improvement, opportunity and sources of future growth.  These opportunities exist at a number of levels, so for ease of reading we’ve divided these into Engagement, Activities, Processes and Tools.

Engagement and Education:

• Closer Sales & Marketing team collaboration in manufacturers (e.g. alignment on trade promotions, price, retail customer specific campaigns on specific brands) to achieve a consistency of shopper experience in-store
• Raising the profile and value of the Shopper Marketing function: Internal education (particularly of brand marketers in manufacturers) to understand the role of, and see the value in, Shopper Marketing and the benefits of truly integrated consumer/shopper in-store and pre-store campaigns
• Closer retailer and manufacturer collaboration, as discussed above.

Activities:

• Utilising pre-store touchpoints: creating awareness and consideration of not just brand but retail offers pre-store. Understand the role of all touchpoints, which ones need to be activated for your objectives and how best to activate them based on shopper behaviour
• Tailoring and targeting: Programs targeting specific occasions, shopper segments, store types, retailers. Data mining and segmentation via research and loyalty programs. Related to occasions, day-part and seasonal marketing, and better Shopper Marketing leverage of major events
• Occasion based solutions: cross category and cross supplier
• In-store theatre: The store is considered a marketing medium – take advantage of this with ‘theatre’
• Interruption: there is a perception that shoppers are becoming increasingly habitual and that the game is becoming about interruption. Trials of new mediums to interrupt shoppers
• Increasing channels of activation: much interest was expressed in online retailing/e-commerce and the related ability to market to shoppers via online, email, mobile marketing and social media.

Resources:

• People: dedicated Shopper Marketing people, ideally in a team that reports into Executive Leadership rather than into Sales or Marketing
• Budget: dedicated Shopper Marketing budgets, in particular dedicated shopper research and shopper data budgets.

Processes and Tools:

• Development of a suite of measures customised to different activity types and mediums
• Shopper budgets and headcount built into the annual planning and budgeting process and into operating costs.

You don’t need a first class ticket to get on board

Evidence points to a Shopper Marketing industry that, while currently relatively new, is gaining momentum quickly on the back of international successes.

In most cases there is (passive) executive leadership support in Australia. The challenge – and opportunity – is in making that support active to actually generate operational change.

In looking at international examples, it is clear that best practice Retailers have not been trying to be expert at everything. They’ve picked one thing – one area of priority in Shopper Marketing – and tried new things. With Tesco it’s loyalty. With Whole Foods it’s theatre. With Marks & Spencer it’s occasion-based marketing.

The lesson is – don’t wait until the Wizard or Witch of Shopper Marketing comes along to wave their magic wand and make it all happen for you. Just get started.

“Shopper Marketing: The Journey Begins” report is available from POPAI for $495 plus GST.
A survey findings workshop will be held on September 22 as part of the Retail and Marketing at Retail Expo, for those interested in making most use of the survey findings and implications.
Go to www.popai.com.au for more information, to purchase the report or to register for the workshop.

ABOUT THE SURVEY

The POPAI/ShopAbility Shopper Marketing Industry Benchmark Survey, supported by TorchMedia, involved depth interviews with leading companies (n=19) and an online survey (n=134) with a representative sample of company sizes and roles across the industry.

The resulting report, entitled “Shopper Marketing – The Journey Begins” outlines a comprehensive overview of Shopper Marketing in Australia – attitudes, status, activities, successes and roadblocks. It is available for purchase at www.popai.com.au Findings workshops will be conducted on Sept 22 in Sydney and tickets are also available at www.popai.com.au

ABOUT NORRELLE GOLDRING
Norrelle Goldring is joint director of ShopAbility. She is a category and channel strategy specialist with 20 years’ experience on both the manufacturer and retailer sides of the fence with companies such as Diageo, Coca-Cola and Vodafone.  Call Norrelle on 0411 735 190 or email her at norrelle@shop-ability.com.

ABOUT SHOPABILITY
ShopAbility helps improve manufacturer and retailer thinking and doing capabilities for increased sales in category and channel. Our offers span Research & Insight, Strategy & Planning, Activation & Implementation, and Capability & Training. We work with senior executives, sales departments, category/customer/trade marketing departments, insights people and brand marketers for an integrated 360 degree picture. Call us on 1300 88 56 44 to discuss your needs.

Although still in its relative infancy, the Shopper Marketing discipline is gathering pace in Australia, with 60% of our recent survey participants implementing Shopper Marketing activities.

Back in January in our Retail World article ’Where to Shopper Marketing?’, we outlined some overseas status and practices in Shopper Marketing. Now that the first POPAI/ShopAbility Shopper Marketing industry study (supported by TorchMedia) is complete for Australia, we have a number of points of comparison. And there are some striking similarities – both opportunities and challenges – to overseas markets, particularly the USA.

Here we’re going to look at some of the key findings of the Australian study, extracted from the report ‘Shopper Marketing – The Journey Begins’ (© ShopAbility 2010). In the followup articles in subsequent issues of Retail World we will look more specifically at the implications for both retailers and manufacturers.

Survey Sample

The survey comprised 19 in depth interviews and an online survey completed by 134 respondents (66% brand manufacturers, 10% retailers, 8% POS/production agencies, 16% other agencies).
Online survey participants’ roles were represented across senior executive, sales, brand marketing, category and channel management, trade marketing/customer marketing, activations/in-store presence/merchandising, and shopper insights.
The sample achieved for this first Australian industry study into Shopper Marketing not only equalled that of the first similar American GMA/Deloitte Shopper Marketing study in 2007, but surpassed it.

Theme 1: Shopper Marketing is broad, resulting in ‘lots of homes’

It is commonly understood that Shopper Marketing targets shoppers at multiple touchpoints using and leveraging insights. The where (at what point) is up for debate. A summary of participants’ Shopper Marketing definitions might be: “The application of shopper insights across the marketing mix, using multiple touchpoints along the path to purchase, to engage shoppers and increase sales”.

The scope of what is considered included in Shopper Marketing is broad, and includes ‘traditional’ category management (see Figure 1 below). As mooted in our article in January Retail World, Shopper Marketing includes activities currently falling under the current labels of Customer/Account Marketing, Trade Marketing, Retail Marketing, Merchandising, Activations and Instore Presence.

So rather than being a new discipline in and of itself, Shopper Marketing is in essence an amalgam and evolution of shopper and retailer facing functions already in existence, albeit with some broader marketing elements thrown in.

The inclusions are not limited to traditional executions, with in-store media the third most cited activity type and ambient/sensory in-store experience coming in 8th. This is indicative of the ‘emotional , not just rational’ line we took back in January, underscored by nearly all survey participants’ identification of ‘instore theatre’ as an area of opportunity.

Retailer clean store policies notwithstanding, the above demonstrates that companies are broadening their perspective on what Shopper Marketing activities are, even if they are not yet actually trialling or implementing some of the ‘newer’ forms.

The flipside of this breadth of inclusions and amalgamation of more traditional fields is that there are too many different activity types to have a natural home in one place (or that ‘one home’ would need to encompass ‘everything’). This, combined with the fact that Shopper Marketing is considered a new discipline, is leading to it having ‘too many homes’.

This in turn is impacting resourcing – both people and budget – as we shall see.

Theme 2: Shoppers start before the store

The idea of marketing to shoppers outside of store/pre-store is not new. Major retailers like Target have been doing it for years, advertising their ‘20% off’ department sales. However, among manufacturers, perceived wisdom had traditionally held that Consumers and Consideration were pre-store, where Shopper and Conversion were in-store.

The survey indicates this notion is changing, alongside the broad definition of Shopper Marketing. Over half (52%) agreed that shopper is a mindset and/or shoppers can be influenced at any point between home, work and the store.  A further 26% considered Shopper Marketing to be activities inside and immediately outside the store. Only 22% believe that Shopper Marketing is limited to what is done inside the store.

This has positive implications for ‘above the line’ media traditionally used by marketers in consumer awareness and brand building. It indicates that the industry thinks there is a shopper messaging role for touchpoints outside of retail environments for activities including, but not limited to, major promotions. A further implication is that some Shopper Marketing messaging and activities will then fall under the remit and budgets of brand marketers – which means that brand marketers will need to start to understand and apply Shopper Marketing thinking.

Theme 3: Mind the gap – between Thinking and Doing

The good news is that nearly 7 in 10 said that Shopper Marketing is supported by Executive Leadership. This figure did not vary much between the retailers and manufacturers. A further 56% said that Shopper Marketing has been identified as a priority and source of growth.

90% have recognised and/or defined Shopper Marketing in some way and identified priorities and support required, even if 30% think they’re still at basic level.

40% said they have dedicated resources for shopper programs. However, only 1/3 plan to increase their program budgets and/or people budgets in the next two years.  A lack of Shopper Marketing people and expertise, and particularly budgets, were the two most common issues identified by both retailers and manufacturers, as Figure 2 indicates.

Very few had a sizeable or dedicated Shopper Marketing budget, with most shopper marketers going “cap in hand to marketing or sales in order to get stuff happening, and even then we have to justify ourselves a lot”, as one interviewee put it.

There was concern that other departments internally do not understand or support Shopper Marketing, with less than 30% saying they have internal understanding or support outside of the Executive Leadership. This problem was common to both retailers and manufacturers, and for manufacturers it is specific to brand marketing teams. There is a significant education opportunity in getting other areas of each business to understand and engage in and see the value of Shopper Marketing so that appropriate budgets can be released to support it.

Given the opportunity, more than half would put more Shopper Marketing resources underneath shopper insights and research programs as their first priority.

Theme 4: One third plan new directions for the train; the other 2/3 watch it leave

The gap between thinking and doing is demonstrated in changes to planned activity types, with the 1/3 planning more or different Shopper Marketing activities behind the small changes to percentage splits. Although there is an interest in pre-store Shopper Marketing, this is not yet reflected in wholesale changes to planned activities. However, some increases in Social Media, Loyalty Programs and Digital/Online are expected.

N = 134

The changes to planned activity types were mirrored in planned budget changes.

Theme 5: Measurement – The Great Unknown & Opportunity

Inability to, or not knowing how to, measure was identified by participants as one of the greatest sources of dissatisfaction as can be seen in Figure 4. The three areas relating to measurement and effectiveness added together equal the single largest area of dissatisfaction.

N = 129

Just under 40% are currently measuring their Shopper Marketing programs.  However, the forms of measurement are rudimentary, based around hard measures (sales data), with little recognition of the role of softer measures e.g. attitudinal, behavioural, influence and impact.

N = 134

Note that which types of activities being employed is reflected in the effectiveness rankings for activity types. The less utilised activities rate lower in effectiveness as fewer are using them and thus fewer understand their impact.

Unsurprisingly, sales is the number 1 way in which measurement is applied, and likewise ROI is mostly being measured on spend/cost vs sales. However one of the challenges of Shopper Marketing is that it is difficult to prove that which specific type of execution is responsible for what % of the sales increase. There is therefore a role for softer measures (attitudinal, behavioural, influence, impact, reach) as drivers of the result (as opposed to sales – the result itself). As yet, this role is not broadly understood nor applied, with 30% or under using measures that do not directly relate to sales, ROI or executional compliance.

The Shopper Marketing needle will move faster around the dial once a comprehensive, and easily comprehensible, suite of measures is developed covering the scope of Shopper Marketing activities and embedded in organisations’ sales, shopper, category, and marketing functions.

So that’s some of the initial findings. Next time we’ll look at who is considered to be best practice, what they’re doing, some of the key opportunities in the Australian market and what retailers and manufacturers need to do differently to get the Shopper Marketing train to the next station quicker.

“Shopper Marketing: The Journey Begins” report is available from POPAI for $495 plus GST – click here
A survey findings workshop will be held on September 22 as part of the Retail and Marketing at Retail Expo, for those interested in making most use of the survey findings and implications. register here
POPAI can help you with  more information, to purchase the report or to register for the workshop.