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Focus on shopper marketing to improve store experience, ROI

Author: Bill Gerba on 2006-11-17 07:45:47

The good folks at Reveries Magazine have once again conducted a survey that highlights some of the prevailing opinions about in-store marketing. Their Shopper-Centricity Questionnaire looks at the recent phenomenon of "Shopper Marketing" and tries to determine whether it's a powerful new strategy or (as some suggest) simply a re-badging of existing, common practices for informing customers. Given that nearly 70% of the 170 respondents listed shopper marketing as either an "important" or "extremely important" part of their 2007 marketing strategy, there's clearly a renewed interest in how to focus marketing activities on the shopper. With this in mind, I was quite eager to look through the results and see if everybody really is on the same page.

What is shopper marketing?

Oddly enough, the Reveries survey doesn't actually define the term "shopper marketing," instead preferring to let the respondents decide if it's something they engage in, and if so, how important it really is. A Google search for the term and a trip to all of the usual marketing resources on the web also don't turn up much. But if we apply some common sense, "shopper marketing" can be in-store marketing, loyalty marketing, or even customer relationship management -- basically anything that eschews broadcasting ads to the masses in favor of systems that narrowcast relevant, targeted ideas and messages to the individuals who will value them most, thereby improving the overall shopping "experience." There's a key distinction between "customers" and "shoppers," and this is key to the entire idea of shopper marketing: a customer is someone who has purchased something from you before (and who may or may not do so again in the future). A shopper, on the other hand, is someone who is actually engaged in the action of shopping, whether by looking through your catalog, browsing your website, or roaming the aisles of your brick-and-mortar store. Ideally, the right messaging helps convert shoppers into (repeat) customers.

What do marketers think about it?

Many (myself, at times, included) have romanticized shopping into an exciting, social quasi-sport that's about as far as you can get from your typical 7 pm quick top-off trip at the local supermarket -- and there are arguably millions of people who enjoy shopping as a pastime. However, for every shopaholic sitting outside of a department store at 5 am on Black Friday, there are thousands of others who shop out of necessity, and that means millions upon millions of opportunities for retailers and CPGs to deliver a pleasurable experience, whether through innovative product selection and placement, an exceptional in-store environment, or a conversation with a knowledgeable store employee. And if you look at the statistic that I mentioned in the opening paragraph, retailers and product marketers clearly seem to understand just how important those opportunities are: about 70% of the 170 respondents listed shopper marketing as either an "important" or "extremely important" part of their 2007 marketing strategy. But add in those who consider it "moderately important" and we're up at nearly 90% of respondents, which indicates a pretty significant trend to me.

Why isn't everyone using shopper marketing?

Barriers to adopting shopper marketing as a major part of an overall program or campaign included all of the usual suspects, including lack of budget/resources, lack of management commitment and the like. However, almost equal to those was a "Lack of a commonly understood Shopper Marketing definition within your company (or client)," which was reported as a problem by 41% of respondents. That's interesting to me for two reasons: first, it says that shopper marketing is a discipline that doesn't have clear, uniform boundaries (or perhaps it's an amalgam of existing marketing practices whose new moniker hasn't yet caught on). Second, the idea that shopper marketing could be different for every company says that one marketer's idea of what it entails could be completely different from another's. That makes the job of putting together a shopper marketing program a tough one, but it also suggests that the demand for such services should be high. When asked which factors are most important to becoming an effective shopper-centric organization, an overwhelming 73.9% responded that having a clear idea of why "understanding one's target consumers as 'shoppers' -- as opposed to just 'consumers' -- is important," and right now, it would seem that there's a strong need to find marketing experts that can understand this critical distinction.

What are the benefits (sales, loyalty, ROI, etc)?

In terms of the perceived benefits of implementing a shopper marketing program, 42.7% of respondents believed (or hoped) that it would yield increased sales, while others predicted improved customer loyalty or overall ROI. In terms of soft benefits, respondents also expected effective shopper marketing to yield improved relationships with customers (30.2%) and a better understanding of the shopper's needs (31.5%). That last one is a bit puzzling, since I don't quite understand how you'd effectively market to your shoppers without knowing what their needs were in the first place, though as one of many tools in the analytics toolbox, responses to existing marketing programs can certainly be used to improve future marketing programs. On the topic of ROI, most respondents believed the ROI of a shopper marketing program to be 50-74% better (45.3%), 75-99% better (14%), 100-124% better (4%) or even more than 125% better (3.3%) than traditional trade spending, though a quick read through the write-in responses for this question shows that a lot of people think it's too early to tell. Despite this, it's pretty amazing that two-thirds of respondents find that shopper marketing yields a higher ROI than traditional practices, and with improved methodology (as time goes on and marketers have a chance to refine their techniques) the results should only improve.

Caveat emptor

While the findings from the Reveries survey are certainly interesting, there's one big problem with taking them at face value: only about 5% of respondents said they worked directly in retail -- the bulk were from agencies or related service industries. Now, I know there's been a lot of buzz lately about major retailers hiring agencies to improve the store experience, but for the vast majority of retailers most in-store decisions are still made by corporate, not an outside agency. Thus, the results from the survey may have been somewhat self-selecting: those agencies and service companies that have experience with shopper marketing (or want to turn it into a revenue stream) were more likely to respond, potentially skewing the results.

Still, the news looks good for those of us who spend our time thinking about how to improve the store experience. Everything about a store -- from layout to lighting to signage -- can (and should be) improved to make shopping easier and more fun. These efforts tend to help shoppers find what they want and encourage them to spend more time actually enjoying themselves while shopping. Companies like Apple and Starbucks clearly get it, and even behemoths like Wal-Mart are working hard to catch up. So if you still think your retail firm can get away with offering the same bland experience to your customers, perhaps you might want to reconsider. While making your plans for 2007, leave some room for a few simple shopper marketing experiments, and consult your agency, partners and outside experts to help with your store experience planning. Shopper-centric marketing programs are on the rise, and based on the numbers above, they can not only improve your customers' relationships with your store and your brand, but also drive increased sales and stronger ROI for your marketing dollar.

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