Shopper Marketing Trends Report 2017

Engaging shoppers – not relying solely on price promotion or simply implementing the latest technology – will be key to success this year and beyond, according to our panel – all members of the Path to Purchase Institute's Distinguished Faculty. "There is a critical need for brands and retailers to get out of their own heads, break barriers and offer shoppers a truly differentiated experience," says Wendy Liebmann, CEO & chief shopper, WSL Strategic Retail. "The consumer goods industry has been so focused on competing on price and how to use technology that it has forgotten how to engage shoppers in a more meaningful, relevant way."In order to do that, shopper marketers need to question every accepted principle and provide new, innovative, market-based answers, says Christopher Brace, founder & CEO, Syntegrate Consulting. "Our society has evolved from mass and impersonal need-based, to fragmented and personal want-based," he says. "Mass targeting and media worked because marketing was driven by more rational, logic-based needs that were en masse. But now, we need brands, strategies, innovations and communications that create a want, and that want is emotional."As we work to engage them emotionally we won't be able to rely on shoppers to tell us what's working. "Behavioral economics tells us we can't trust what shoppers say they want or like," says Scott Young, global CEO, PRS In Vivo. "Asking them questions doesn't often yield accurate insights. We need to observe people in real stores or create new situations and see how they react in order to identify more effective approaches of connecting with shoppers."For a detailed look into some of the trends facing the industry, we talked with multiple Distinguished Faculty members. Here is the edited, virtual-roundtable discussion:Let's talk more about price promotion. How has cutthroat pricing affected shopper marketing?YOUNG: It's circular. The more marketers and retailers emphasize pricing, the more they teach shoppers to make decisions based solely on price. It's self-defeating in the short and long term. NICK JONES: It may have had an unexpected positive effect. Brand manufacturers know they cannot get into a protracted price war, so they look for ways to speak more directly to the right shopper or to provide value or a solution that goes beyond price.What are some of the important issues facing the discipline this year?BRACE: How it will be integrated with all of the other marketing disciplines. In most companies, shopper marketing is still being executed in a functional silo isolated from the other aspects of a brand's go-to-market strategies. Clients tell us they have healthy communication between the brand and shopper teams. But unless the brand teams understand how retailer and shopper needs should change how a brand builds its strategies, then this communication is largely ineffective. Communication/conversation does not equal collaboration, and collaboration does not equal integration.JONES: Technology and innovation. Mobile in particular has all the gravitational pull right now, whether you are looking at geo-fencing and other location-based technology, or shopper interactivity with technology like Near Field Communication. It all comes back to the mobile device we carry.JULIE QUICK: E-commerce. Shoppers are transitioning to online shopping much faster than shopper marketers are. Retailers are doing a fair job of keeping up. But CPG brands are lagging in their ability to inspire, inform and close the sale online. Or to even sell more while shoppers are in-store by providing "endless aisle" options via mobile. LIEBMANN: Disillusioned shoppers. The discipline of shopper marketing will need to prove to shoppers why brands and retailers are not mediocre and why they are to be trusted by offering worthy, distinctive and compelling choices to their shoppers.What impact is e-commerce having on the in-store environment?JONES: It's starting to mold the brick-and-mortar store in its own likeness. Perfect example: Amazon entering the physical bookstore landscape with every book merchandised out like tiles on a website, ratings and reviews beneath each title, and a SKU assortment determined by the popularity of certain books in specific neighborhoods.QUICK: It's redefining the standard for frictionless. Walmart knows that digital interaction has rewired our brains, shortened our attention spans and shortened our patience in-store. You see them accelerating shopping with the use of digital in-store and breaking down the buying experience into fewer, easier steps working to remove every millisecond of waste.LIEBMANN: Not nearly enough. I continue to be amazed at how little retailers have integrated a digital ecosystem into their stores. Click-and-collect is probably the most profound example. But for the most part, it's still up to shoppers to bring e-commerce with them (on their smartphones) when they come to the store.What impact will Amazon.com's private labels have in the CPG space?SARAH GLEASON: Huge. No one really knows [the product] is private label and, in many cases, thinks it is just a lesser-known brand. But if Amazon carries it, it must be OK and the price is good.RICH BUTWINICK: Brands can no longer just view Amazon as a sales channel. It is now a competitor with a bigger membership base than any of the established club stores.Have you changed your marketing activity to account for Millennials?BRACE: For some reason, we feel Millennials are an entirely new species, behaving in ways completely different from all other generations. What Millennials have finally made clear is that human beings are motivated by emotion first, then logic. This has always been the case. JONES: It's a chicken-and-the-egg question. Which came first: mobile, data, geo-targeting, proximity marketing, etc., or Millennials? New tools, new mindset. It's less about the demographic than the technology landscape they inherited. But yes, our marketing activity has changed and will continue to change.QUICK: Absolutely, because they're difficult for CPG brands to win. They have grown up with limitless options, a desire for experiences over things and a preference for innovation over convention. That's not exactly a recipe for big, national brands. If you look at a Millennial's cart in the checkout line, you're likely to see lots of private label. I coach companies to adapt for this audience by ensuring they have a deep, meaningful value proposition that aligns with what Millennials care about. GLEASON: It is critical to remember not all Millennials are alike. Older and younger Millennials are likely to behave very differently based on life-stage influences. And sub-groups, such as Millennial Hispanics, are going to at times behave and have different needs than Millennials as a whole.BUTWINICK: Our process and approach are similar if the target is a Millennial, Gen X or Boomer. Effective marketing still begins with deep, actionable insights that lead us to engaging ideas and tactics to achieve desired outcomes.Thinking about the brand/manufacturer side, do entire organizations understand shopper marketing and its role?JONES: Shopper marketing has certainly arrived as an important marketing discipline, but it still feels like it is well down the list of priorities for many CMOs. If a CMO is spending more time thinking about the next 30-second TV commercial campaign than how to engage shoppers on their mobile device in-store, they are falling behind.GLEASON: No, and maybe it is not necessary. But certainly the critical groups that can be impacted by shopper should include sales, brand marketing, insights, customer marketing and even finance.LIEBMANN: I'm still amazed how often the brand marketing and digital teams do not understand - or do not buy into - the critical importance of shoppers and the imperative to connect with them on the selling floor, be it physical or digital.How is shopper marketing education being addressed within companies?BUTWINICK: Some have an informal series of "lunch and learns" and presentations at sales/marketing meetings. Other times, it falls on the agency to provide "Center of Excellence" support through ongoing communications and sharing best practices. Some include shopper marketing 101 for new ABMs and BMs. Organizations should create a more formal training plan that keeps brand and marketing teams up to date on the latest trends and best practices for influencing shopper behavior.QUICK: Enough best practices and models have emerged that there are now standards for "classic shopper marketing." Even five years ago, the how-to of shopper marketing was an unwritten script. Today, it's a pretty teachable proposition. Observing industry leaders like PepsiCo, P&G and Unilever is one way I learn. I also have a lot of passion for Path to Purchase University, which I know many companies find invaluable. BRACE: Companies should focus on finding outside sources to help them. Internal training tends to focus on "here's how you get your work done," while outside sources take a more "here is how to prepare your teams for the future" approach. And shopper teams have little to no time to prepare internal training, so too often it never gets developed.What keeps you up at night related to your career?YOUNG: That marketers have so much access to data and such fast and cheap ways to talk to people that they're tempted to misuse it as opposed to really understanding the why behind the decisions. Being time-pressed, they just race to take actions as opposed to taking more time to learn, understand and ultimately make better decisions.QUICK: We should all spend our nights dreaming of where shopping is headed, not lying awake with worry. I believe we're working in the most exciting, creative time in the history of marketing. We have new ways to reach, influence and transact with shoppers. We have new tools around data and targeting.

Shopper Marketing Trends Report 2017

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