If you want to see one of the reasons why shopper marketing has been carving off an ever-bigger slice of the marketing pie, just compare the number of weekly shoppers at major retail chains with the number of Americans who tune in to top TV shows. Take Dancing with the Stars and American Idol, for example.
While 21 million people waltzed over to their sets to watch an average episode of Dancing last year, and Idol. cast its spell on still more (35 million for the season finale), those audiences pale when compared to the crowds that pack the aisles of the big-box retailers. Costco, Walgreens, Safeway and Kroger boast weekly shopper counts of 20 million, 30 million, 44 million and 68 million, respectively. Passing through the revolving doors of Wal-Mart locations across America each week are 150 million people.
Now consider this: While TV's audiences have been fragmented by the addition of hundreds of new channels, retail has been concentrating its consumer base via consolidation. Ten to 15 years ago, the top 10 retail accounts of the typical packaged goods manufacturer represented 20 percent of sales. No more, says Peter Hoyt, executive director for the In-Store Marketing Institute. "Due to consolidation and the rise of megachains," he says, "those top 10 customers now represent as much as 80 percent of sales-more, in many cases."
It's the confluence of these economic forces over the past decade or more, says MEC Retail partner David Sommer, that has allowed shopper marketing to truly come into its own. "The dynamics have changed, and now the one place you can still aggregate a mass audience is in-store," he says. "That's a big media buy, and if you hit shoppers with an ad message, 'This is relevant,' you'll get a response that can be measured via a sales lift."
No wonder, then, that shopper marketing (the in-store appeals that take the form of shelf talkers, end-aisle displays and the newest: in-store video networks) is getting more attention than ever from retailers, manufacturers and ad agencies alike. According to a study by the Grocery Manufacturers Assn. and Deloitte Consulting, the number of manufacturers and retailers that have significant shopper marketing organizations of more than 20 people has jumped from 29 percent in 2007 to 60 percent in 2008. The study also found that over the next three years, in-store marketing activity will grow at a higher rate than any other marketing tactic. A Booz & Co. survey of consumer packaged goods marketing executives found that 95 percent plan to either maintain or increase investments in retail store media.
"Companies know the battle will be [won] or lost in-store," explains Tonya Collins, customer planning for OgilvyAction. "The amount of resources companies are putting into shopper insights is increasing. They are making internal commitments, shifting funds and talent."
Formerly the domain of promotional agencies before the term "shopper marketing" supplanted older monikers like point-of-purchase marketing, media agencies are now creating specific units devoted to the specialty. "Our role is to develop best practices across the shopper continuum, connecting what is in-store with what is out-of-store and to make sure all the media comes back to the shopper," says Danielle Bottari, svp and director of shopper marketing for MediaVest's new shopper marketing unit.
One of the first shops to devote significant resources to shopper marketing was Mediaedge:cia, which in 2006 purchased marketing consultancy Retail MediaLink and created MEC Retail, which today works with both consumer packaged goods clients (Dr Pepper Snapple Group, Colgate-Palmolive, Campbell, Energizer, Mars) and retail/QSR clients (Citibank, AT&T, Pizza Hut) to integrate in-store digital signage into the communications planning process. In 2008, MEC doubled its revenue and projects 50 percent growth for 2009.
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