Building a case for shopper marketing

Shopper Marketing: Closing the Purchase GapConsumer Electronics Vendor 2009

The following example is based on a consumer electronics company which manages the majority of their marketing at the global level, with limited trade marketing activities managed regionally via the sales function.

This example helps to build the case for adding an the additional Shopper Marketing function lead by the Global Marketing Organization.

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Global Marketing Overview

Global Marketing has three distinct, but equally important areas of responsibility:

Operational Marketing – • Providing the regions with the segmented marketing

materials and assets needed to successfully support a new product launch

Consumer Marketing – • Marketing to targeted consumer segments by specific stages

in the Purchase Funnel to assure maximum Return on Advertising Spend

Customer Relationship Marketing – • All marketing activities directed toward establishing,

developing, and maintaining successful customer relationships, to develop long-term relationships and improving corporate performance through customer loyalty and customer retention.

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Global Marketing – Purchase Gap

Loyalty

Awareness

Consideration

Purchase

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Our current marketing lack focus at the point of purchase.

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Global Marketing – Closing the Purchase Gap

Loyalty

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Purchase

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A critical and missing link between Consumer Marketing& CRM

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Global Marketing Overview - Proposal

Global Marketing should have four distinct, but equally important areas of responsibility:

Operational Marketing – • Providing the regions with the segmented marketing materials and

assets needed to successfully support a new product launchConsumer Marketing –

• Marketing to targeted consumer segments by specific stages in the Purchase Funnel to assure maximum Return on Advertising Spend

Shopper Marketing – • 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

Customer Relationship Marketing – • All marketing activities directed toward establishing, developing,

and maintaining successful customer relationships, to develop long-term relationships and improving corporate performance through customer loyalty and customer retention.

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What is Shopper Marketing

• Influence shoppers at the point of purchase where they make most final buying decisions

• Use shopper insights to deliver a better shopping experience, leading to sales growth and heightened loyalty to brand and store

Develop marketing stimuli based on a deep understanding of shopper behavior, designed to build brand equity, engage the shopper, and lead him/her to make a purchase

‘Each week 130 million customers visit Wal-Mart alone compared to 68 million people who watch ABC, CBS and

NBC evening news on average’

Source: Shopper Marketing: Capturing a Shopper’s Mind, Heart and WalletDeloitte, Grocery Manufacturers Association 2007

The Store as a Marketing Medium:

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Shopper Marketing - Shopper’s Path to Purchase

Prompt the purchase pre-store and in-store Loyalty & Advocacy

Targeted Activities (Banners, Search, Content) leading the consumer to Purchase – leading to strong ROI

We lack the consumer insight explaining how the consumer segments shop, therefore we cannot tailor the shopper marketing tactics to continue leading the consumer down the path.

Untargeted activities led by the retailers, rather than true collaborative partnerships – driving unproven results, and leading to inefficient ROI

Highly targeted to specific consumer

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Competitive Advantage: • Build an expertise at [brand], and become the vendor of choice and

thought leader for any retailer project focused on the in-store shopping experience. More collaboration with key retailers who have adopted Shopper Marketing (BBY, WM, Sam’s)

Shopper Marketing - Benefits

Source: 2007 Category Segmentation Consumer Segments. Hoyt & Company

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Competitive Advantage: • Build an expertise at [brand], and become the vendor of choice and

thought leader for any retailer project focused on the in-store shopping experience. More collaboration with key retailers who have adopted Shopper Marketing (BBY, WM, Sam’s)

Increase ROI:• Assure that high cost purchase level merchandising activities are

effective, and returning sufficient ROI/ROAS to help reduce A&P.

Shopper Marketing - Benefits

Source: Reveries.com 2007 Survey

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Competitive Advantage: • Build an expertise at [brand], and become the vendor of choice and

thought leader for any retailer project focused on the in-store shopping experience. More collaboration with key retailers who have adopted SM (BBY, WM, Sam’s)

Increase ROI:• Assure that high cost purchase level merchandising activities are

effective, and returning sufficient ROI/ROAS to help reduce A&P.Consumer Insights:

• Gain a better understanding of how the consumer segments shop in the category. Utilize the insights as the foundation of the shopper marketing efforts, and leverage in other functional groups like Sales, Web, PR.

Shopper Marketing - Benefits

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Competitive Advantage: • Build an expertise at [brand], and become the vendor of choice and

thought leader for any retailer project focused on the in-store shopping experience. More collaboration with key retailers who have adopted SM (BBY, WM, Sam’s)

Increase ROI:• Assure that high cost purchase level merchandising activities are

effective, and returning sufficient ROI/ROAS to help reduce A&P.Consumer Insights:

• Gain a better understanding of how the consumer segments shop in the category. Utilize the insights as the foundation of the shopper marketing efforts, and leverage in other functional groups like Sales, Web, PR.

Customized solutions:• Utilize insights to tailor innovative merchandising and promotional

solutions to the specific customer/shopper or retailer segments

Shopper Marketing - Benefits

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Competitive Advantage: • Build an expertise at [brand], and become the vendor of choice and

thought leader for any retailer project focused on the in-store shopping experience. More collaboration with key retailers who have adopted SM (BBY, WM, Sam’s)

Increase ROI:• Assure that high cost purchase level merchandising activities are

effective, and returning sufficient ROI/ROAS to help reduce A&P.Consumer Insights:

• Gain a better understanding of how the consumer segments shop in the category. Utilize the insights as the foundation of the shopper marketing efforts, and leverage in other functional groups like Sales, Web, PR.

Customized solutions:• Utilize insights to tailor innovative merchandising and promotional

solutions to the specific customer/shopper or retailer segmentsOff-Ad Sales Increase:

• Focus our insights, and actions to enhance the shopping experience leading to higher off-add sales. Win locations outside of the EHDD aisle.

Shopper Marketing - Benefits

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Build Consumer Insight: Build on what we already have today, by aligning data to consumer segments, and retailer segments.

Identify an Internal Expert: We need a dedicated resource to plan research needs, analyze data, develop insights, and design communication/merchandising.

Ad Hoc Projects w/ Retailers: Insights and resources are costly, so we start with Tier 1 retailers: BBY, Staples, Wal-Mart

Educate Internally : Sales, Regional Marketing, Corp Marketing – Lead by Global Marketing as an element of overall plan

Shopper Marketing – Next Steps