Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results

"Shopper marketing is not just an effective means of driving action by creating trial and purchase, but also a way to increase awareness and loyalty, all of which are critical to long-term brand health. It is the promise of reaching consumers all along the path to purchase, from when they first begin to shop ... to the store shelf ... that is causing CPG manufacturers to invest in shopper marketing."To read the full report, click on the attachment at right.Sixty-two percent of consumers search for deals using digital tools before conducting their shopping trips. Forty-two percent view retailer circulars online and print coupons from the Internet. Five percent access coupons from their mobile phones.Yet despite their rapid -- and, by all accounts, mandatory -- move toward digital consumer communication, consumer packaged goods marketers still count traditional in-store practices as among the more effective tactics in their arsenal, according to Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results.The new report was developed by Booz & Co. on behalf of GMA, the association of food, beverage and consumer products companies, and unveiled earlier this month at the organization's annual conference. It is the fourth straight year in which GMA has commissioned a study on shopper marketing, and the second in which it collaborated with Booz. (See Related Articles for the other three reports.)This year's report is based on a survey of 34 packaged goods manufacturers, retailers and marketing agencies, supplemented by 28 interviews with executives representing various industry constituents and a two-stage online survey of 2,700 consumers, all conducted in summer 2010.The report's primary goal is to present a "playbook" of 49 shopper marketing tactics that practitioners can consult when planning their activity. (See "Shopper Marketing Vehicle Effectiveness" at right.)"This year's study finds shopper marketing continuing to gain strength and momentum. But complexity and uncertainty around what is most effective persist," according to the report's executive summary. "Now, companies are seeking to impose more order and rigor on their shopper marketing initiatives and optimize their spending."Steady Growth AheadAmong the manufacturers surveyed, 83% said they plan to increase spending on shopper marketing annually over the next three years. That's slightly more than the percentage that will boost outlays for digital media (76%), and far more than the number that will allocate additional funds to traditional media or consumer and trade promotion. (See "Expected Growth in Advertising and Promotions Mix" at right.)Moreover, 31% of respondents expect to reduce their budgets for both traditional media and trade promotion, and 13% say they'll do the same for consumer promotion. Those numbers imply a shift in funding from these areas to shopper marketing."Companies are shifting their advertising and promotions mix away from traditional media, while trying to hold the line on further increases in trade promotion spending," the report states. "They are planning to rapidly scale up spending on platforms that are closer to the point of purchase to create direct relationships with shoppers and drive more measurable results."In addition, 55% of manufacturers say they plan to increase their shopper marketing spend by more than 5% in each of the next three years, a projection that tops the estimates even for such hot-topic marketing strategies as social media, Internet-based brand marketing and mobile marketing. (See "Expected Growth in Advertising and Promotions Mix, by Tactic" at right.)[Editor's note: In theory, at least, most of the marketing vehicles listed in the aforementioned chart -- such as print media, paid search and, especially, mobile marketing -- would be utilized in an effective shopper marketing plan. So the question of reduced spending in those areas may represent a shift in messaging strategy rather than dollar outlays for those media.]Figurative and Literal 'Killer Apps'The report notes that "traditional vehicles" such as product displays, in-store ads and custom packaging "still account for a lion's share" of shopper marketing funds, despite the buzz surrounding "path to purchase" tools such as Internet-based advertising and mobile-phone communication.That's certainly not surprising, given that many of the other shopper marketing vehicles identified in the report are relatively new digital tools that have yet to be adopted widely by either CPGs or consumers. Therefore, on-shelf and secondary displays and signs, sampling and events, and packaging have much higher "adoption" levels than, say, smartphone apps or thematic microsites. (On the other hand, the fact that 16% of respondents claim to "never use" in-store tactics is a bit of a head-scratcher.)Similarly, despite the aforementioned emergence of "digital planning" for shopping trips, 71% of consumers still consult the print circulars distributed through newspapers, and 59% continue to clip coupons from weekly FSIs as part of their pre-shop process. (See "Deal-Hunting Activities of Shoppers.")Nor is it surprising that a number of traditional vehicles -- on-shelf and secondary display, sampling, events, in-store coupons -- are cited as having "high effectiveness" in delivering results. Also identified as effective were newer tools such as direct-to-card coupons, personalized storefronts (like the ones CPG brands set up on Amazon.com) and sponsored search-engine results. (See "Shopper Marketing Vehicle Effectiveness.") Booz's assessment is based on data from both the industry practitioner and consumer surveys.But what might be surprising to some is that two in-store tactics -- secondary display and events -- are among the handful of vehicles believed to deliver "high effectiveness" in driving awareness and consideration. (See "Most Effective Vehicles for Awareness and Consideration.") While the ability of such in-store tactics to drive trial and purchase has long been accepted as fact (see "Most Effective Vehicles for Trial and Purchase"), their capacity to help in the brand-building process historically has been viewed skeptically by media-minded brand marketers.Identifying communication vehicles that fulfill both objectives is increasingly important, because "leading shopper marketers are not focusing exclusively on driving trial and purchase. For instance, the use of the displays and in-store advertising and deal platforms to build awareness and consideration is rising, as shopper marketers coordinate their in-store marketing activities more closely with trade promotions," the report states. "More companies are also recognizing ... that the best in-store marketing activates equity closer to the point of purchase and drives shoppers to put the brand in the cart."While the report intelligently presents a playbook of the tools that can be utilized to drive awareness, sales, or loyalty (see "Most Effective Vehicles for Loyalty and Advocacy" for the last), it also notes that the "best means for keeping the [shopper marketing] wheel turning will always differ based on the unique objectives of brands, the conditions that shopper marketers face, and the means -- in terms of budget and capabilities -- that they have at their disposal."The report also notes that the playbook represents a "snapshot" of existing options and capabilities that "will change over time as new vehicles emerge and current vehicles are tested."

Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results

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