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10/01/2011

The shopper marketing Revolution

As shopper marketing techniques have come into their own during the past decade, food retailers increasingly are becoming enhanced marketing channels.

"Eighty percent of a brand's volume is controlled by a very few retailers."

– Jeffery Gabel,

Partners + Napier

"Eighty percent of a brand's volume is controlled by a very few retailers. They wield much more power than they would have 10 years ago," says Jeffery Gabel, chief creative officer and managing partner of Partners + Napier, an advertising and marketing agency in Rochester, N.Y.

Retailers also recognize that by working with food manufacturers, they can tap shopper insights and create relevant campaigns to guide consumers on the path to larger purchases. And it works both ways: Consumer products companies' campaigns generally gain strength when CPGs work in conjunction with retailers.

Steering to shoppers

Shopper marketing is "the process of reaching consumers when they're behaving as the shopper," says Erika Chance, a senior brand strategist at Sullivan Higdon & Sink in Wichita, Kan., which conducts shopper marketing programs for retailers and manufacturers.

With an emphasis on educating consumers about product attributes and uses, shopper marketing often circumvents pricey mass media advertising in favor of in-store activities or lower-cost digital components that can reach shoppers wherever they are. CPG companies now want marketing programs to start at the shelf level and extend from there, which is a radical change from the traditional approach of TV commercial blitzes, Gabel says.

"The key to shopper marketing is understanding consumer insights."

– Erika Chance,

Sullivan Higdon & Sink

While advertising campaigns often take a shotgun approach, shopper marketing starts with an objective targeting a specific shopper segment or purchase pattern. "The key to shopper marketing is understanding consumer insights," Chance says. In fact, one reason for the swift growth of shopper marketing during the past decade is the availability of new data and insights, particularly from shopper loyalty programs that track purchases.

Technology also has enhanced the information that marketers have about how shoppers select products for purchase. By relying on complex information that runs the gamut from point-of-purchase data to an analysis of the way consumers scan packages and store shelves, marketers can home in on what's important as shoppers make purchases.

Often, for example, the user and the buyer aren't the same person. For example, a shopper marketing program for Homeland's Red River Ranch private label brand of Cargill Angus beef focuses on women because they do most of the shopping for meat, although men consume more of it, Chance says.

Shopper marketing experts can provide meaningful information on shopping patterns by adding ethnographic research and observational research to data from shopper loyalty programs that track purchases, Chance says. For the Cargill-Homeland program, "we've gone out and watched how people have shopped the meat case," she says.

As the retailer has become more involved in the marketing of products, the return on investment for shopper marketing programs has increased as well, says Ken Barnett, global chief executive and owner of Detroit-based Mars. Done well, collaboration can ensure "that the brand lives properly in the retail environment," he says. "The insertion of the retailer is what makes it shopper marketing as opposed to consumer marketing."

Custom solutions

Once marketers have a thorough understanding of who the shopper is and how he or she shops, they can start to create appropriate marketing campaigns, says John Groene, senior manager at Kalypso, an innovation consulting firm in Beachwood, Ohio. Ideally, manufacturers will engage retailers early in a new product development process for a collaborative approach to determining product size, pricing and shelving, he says.

"Retailers want to come up with some ideas when there's a new product launch."

– John Groene,

Kalypso

"Retailers want to come up with some ideas when there's a new product launch," he says. "In order to get the shopper to come into the store, they want to differentiate themselves somehow."

What works for one retailer might be inappropriate for another because of its position in the marketplace. For example, a shopper marketing program for Pampers at Sam's Club should focus on value rather than education, because Sam's Club draws experienced mothers who already know how to diaper a baby and are at the store for savings. Yet another retailer might attract first-time parents who are willing to pay more for the brand if it comes with instructions that will boost their confidence, Groene says.

Increased use of the Internet combined with the advent of smart phones and other mobile technology means consumers are researching information about food products and grocery retailers more than in the past, providing a new way to educate consumers as they are thinking about a purchase.

"We think that shoppers are agile, taking in messages from a variety of different places and assimilating that information from a lot of different sources," says Barnett of Mars. A shopper's journey is a dynamic process, but it can be influenced through education and careful brand articulation.

During a special Grungy Grill contest that gave Weber grills to five winners in July, for example, the page views on Red River Ranch's website climbed to 39,200 from 20,500 the month before the promotion, Chance says. The campaign also included shelf displays, such as a 90-degree "Take your grill from grungy to great" shelf talker, while QR codes on other signage linked shoppers with recipes and videos from the website, Chance says.

Say cheese

For a shopper marketing campaign for specialty cheese maker President Cheese, Partners + Napier started by examining the way people approach the cheese case. "They were extremely overwhelmed. They didn't know the difference between brie and camembert," says Gabel. And that lack of understanding was discouraging some from making a purchase. "People were afraid of making an embarrassing mistake. They didn't want to screw up," Gabel says. "It would be a social screw-up."

To learn more about the challenges of cheese selection, the agency gathered 40 consumers at a wine-and-cheese party, where they were asked about the cheese-buying process. The women shared concerns about understanding the differences between one cheese variety and another and how to serve them. Based on that information, President created an educational "cheese coach" display board with a wheel that rotates, describing various specialty cheeses and how they should be served. It has become a permanent fixture at some retailers, Gabel says.

Retailers were happy to add the display because it helped overcome the barriers to purchase and resulted in higher cheese sales, Gabel says. "It did help demystify the category."

But the cheese coaches were just one component of the shopper marketing program, which included a word-of-mouth campaign centered on wine-and-cheese parties organized by consumers for their friends. It also featured FSIs and coupon books as well as new content on the website. "It was a big educational push," Gabel says.

In the store, product was sampled from cheese carts, and all of President Cheese's products were merchandised in one destination location within the store to provide a better presence for the brand.

Making arrangements

In fact, rearranging product within the store can be a low-cost but high-impact shopper marketing strategy. Experts credit Campbell Soup for being among the first to recognize the potential of putting product where shoppers are likely to find and purchase it when the company reorganized its soup diagram at retail seven years ago. Campbell Soup's research indicated shoppers were having difficulty finding the soups they wanted, so Campbell reorganized the soup category to group items logically, such as putting all the soups for children in one spot, says Nancy Shamberg, vice president, account service at TPN, an Omnicom agency in Chicago.

Another twist on product arrangement involves cross-promoting related products by pulling them together in one promotion. Clorox has used a "togetherness" platform in shopper marketing campaigns for its Kingsford charcoal and related products, Shamberg says.

The company arranges with retailers to display the charcoal prominently outside the store on a pallet or just inside the doors where shoppers can't miss it in order to trigger thoughts of, "Oh, we're going to grill tonight," Shamberg says. Marketers build on that by grouping related products, such as barbecue sauce, meat, salad and the company's Hidden Valley Ranch salad dressing, to help shoppers with meal planning. Often retailers will initiate a togetherness campaign by approaching several manufacturers and asking them to work together on a theme.

"[Shopper marketing] brings to the party a bigger emphasis to purchase."

– Nancy Shamberg,

TPN

Ultimately, the goal is to help shoppers put items in their basket that will enhance their lives and encourage them to return to the retailer again and again. "It brings to the party a bigger emphasis to purchase," Shamberg says. "Shopper marketing is powerful."

Freelance journalist Ann Meyer is editor of SmallBizChicago.com and chief executive of L3C Chicago, L3C. Meyer formerly was a freelance small business columnist for the Chicago Tribune and has written for a variety of business publications, including BusinessWeekSmallBiz, Crain's Chicago Business, Specialty Coffee Retailer, Multichannel Merchant and Prepared Foods.