OgilvyAction calls it “the last mile.” This is the moment of truth when a consumer actually puts their money where their mouth is and purchases an item in-store or online. Marketers understand the importance of getting consumers to the finish line, but given the power of retailers and fragmentation of media, this is easier said than done. OgilvyAction’s Global CEO Rick Roth explains what the challenges are today and provides some successful examples of brands that made shopper marketing work.
Brandweek: Given tightened budgets, is shopper marketing more important? Does it get cut too?
Rick Roth: Shopper marketing has been gaining in importance for many years now. Investments in this segment have increased at nearly three times the rate of more traditional marketing disciplines. And it’s easy to see why.
Shopper Marketing is about engaging and influencing the consumer when she is about to make a purchase decision. We know that no matter what that consumer was thinking she was planning to buy, the right engagement can pull her to another brand.
Marketers are under extraordinary pressure and must justify return on their investment. Economic strain makes performance measurement ever more critical. With every penny being scrutinized today, the smart money goes to where you can see its impact, measure results and turn shoppers into buyers.
Every budget line must be justified. We do not see shopper marketing expenditures being cut despite what’s happening to traditional communication budgets, quite the contrary. Shopper marketing that proves its worth should enjoy real growth. But, all spending must be justified today. If your Shopper work isn’t driving ROI, expect it to be cut like everything else.
BW: How has in-store marketing changed?
RR: In-store marketing is more important to a brand’s success than ever before but at the same time quite a bit more complicated. Marketers have had to learn how to navigate an increasingly powerful retail trade and a very fickle consumer…to make matters worse, that consumer is feeling great financial strain.
BW: Has it become more high-tech, low-tech?
RR: Both. Coupons are fashionable again, no surprise. But expect more and more incentives on the web, on your mobile phone, at the digital point of sale, on your shopping cart or in-store kiosk.
Today, the path to purchase…what we at OgilvyAction call “the last mile,” exists both in-store and on-line…real life and virtual. And with every day, we get closer to digital convergence. Mobile marketing, digital outdoor, online shopping, in-store digital communication…all of it will be connecting and the opportunities will be fantastic.
BW: What is the biggest obstacle today versus a decade ago for brands?
RR: Two obstacles come to mind immediately. First, a lack of control. In the good old days, you were a national brand who dictated how you wanted to be shelved, priced and featured. Today, the retailer calls most of the shots and you are competing with his private label brands, which by the way, now get real marketing advantage as they compete on price, quality and real brand credentials.
Second, a lack of understanding. In a recent study, manufacturers named shopper marketing as the area of expertise most critical to their success…at the same time, it was the area they said they knew the least about. OgilvyAction’s SDMIS (Shopper Decisions Made in Store) study has gotten stunning response from the most sophisticated manufacturers in America…and most impressive…it was from the C suite, not the promotion department. In-store is the ultimate moment of truth. Our most senior clients know they have to win there.
BW: Give me an example of something you think was wildly successful that you guys didn’t do?
RR: The Johnson & Johnson Zyrtec OTC launch. Zytrec was approved for OTC, but was facing an onslaught from private label. They developed a brilliant program which spoke to both the consumer and the retailer. Zyrtec launched a coordinated effort in-store and on the street creating memorable brand experiences and powerful buzz.
Despite price competition stressing massive savings, Zyrtec tailored a channel-by-channel and retailer specific approach to convert shoppers to buyers and retailers to advocates. An arsenal of merchandising tools was employed from SmartSound Talkers to allergy advice booklets to a dedicated micro site, allowing Zyrtec to break- through the noise. They even built an 8,100 square-foot “Spring Wonderland Dome” with gardening and dog training workshops in collaboration with retailer, Duane Reade.
Zyrtec shook up the allergy drug market. Prescription allergy drug sales declined while OTC sales shot up. In only 5 months during launch, Zyrtec OTC captured 1/4 of the market*, the same share as Benadryl and Claritin OTC which had been available for several years. * Nielsen
BW: Give me an example of something you guys did do?
RR: In Q4 2007, Maxwell House reformulated its blend to 100% Arabica beans to deliver its best tasking coffee ever. We uncovered insights about what a morning cup of coffee really means to consumers and the sense of optimism about the day ahead. “It’s a new morning, brew some good” launched with a true 360-campaign. OgilvyAction took the message to the street, to thousands of Thanksgiving travelers at tollbooths who were given a sample and told that their toll was ‘On the House.’ On Black Friday we greeted sleepy mall shoppers at dawn with free cups of Maxwell House.
To bring the story closer to the shelf, we executed a massive in-store sampling effort at 8,400 outlets handing out over 2 million total samples. Coupon redemption rate was the highest the client had ever seen in-store. The Maxwell House total 3-pound coffee business grew its baseline consumption by double digits, its strongest growth since 1998, reversing multiple periods of decline.
BW: Finally, if shoppers have less money won’t shopper marketing be less effective?
RR: No, in fact just the opposite. With fewer dollars to work with, your shopper program has to be more effective. It has to close a sale where traditional media can’t help and must out perform your competitions’ retail activities.
The effectiveness of shopper marketing is not a function of spending; it is a function of strategic understanding into shopper behavior and brilliant creative work that drives action. The days of throwing-it-out-there-and-see-what sticks are gone. Now is the time for smart marketers to get smart about the shopper and drive against share growth.
Fundamentally, we expect reduced spend across many lines of the marketing budget. Those hit the hardest will be those areas most difficult to measure. Shopper marketing is getting more and more attention because of its measurable impact on sales.