For companies committed to the emerging discipline of shopper marketing, there’s good news and bad news ahead in 2011. The good news: New research shows consumers have become less impulsive at the point of purchase. The bad: New research shows consumers have become less impulsive at the point of purchase.
A less impulsive shopper means consumers are spending more time on their pre-shop, making lists; checking them twice. And then, when they get to their store destination, they check them a third time, perhaps via mobile phone app, against prices at other stores. Depending on what type of marketer you are, that could be an advantage or a disadvantage.
“I heard a lot of stories over the holiday about people going to Best Buy to look at the sexy new TVs, then using their cell phones to check Best Buy prices against Amazon,” says Bill Sinnott, chairman of the Promotion Marketing Association, which is running a series of webinars this month devoted to shopper marketing. “Obviously, that’s not always going to be a good thing for Best Buy.”
Sinnott and others contend that a new reality, born from recession, has taken hold of the American consumer. Shoppers forced to become more frugal at checkout several years ago have maintained that pattern—even as the economy has started showing signs of life.
A study of more than 2,700 consumers and nearly 35 marketing firms last summer conducted by the Grocery Manufacturers Association in con junction with consulting firm Booz & Company showed that old-school methods of shopper preparation remain essential. Just over 70 percent of respondents said they check store circulars in their newspapers before half or more of their shopping trips while 59 percent reported clipping coupons from newspaper inserts.
The study, titled “Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results,” found consumers using today’s digital tools as well. In fact, 62 percent of respondents said they use some form of digital media prior to half or more of their shopping trips. Among the most popular activities in this group are viewing store circulars at retailer’s websites and getting coupons from the brand’s sites.
Sensing this heightened level of preplanning associated with shopper marketing; advertisers are keen on increasing their spending in the area. The GMA/Booz Allen study showed 83 percent of CPG companies that participated plan on upping their shopper marketing budgets during the next three years. That places shopper marketing behind just social media, with 93 percent, and Internet brand advertising, with 86 percent. Moreover, when considering just that CPG firms saying they plan to increase spending by more than 5 percent, shopper marketing beats all comers.
“It really seems like things are heating up,” observes Rob Rivenburgh, chief operating officer at MARS, the Southfield, Mich.-based firm that bills itself “The Shopper Marketing Agency.” Explains Rivenburgh, “It’s become much more important to retailers as well as the marketers we partner with. And you’re seeing some new people coming into the space.”
By “some new people,” Rivenburgh is underplaying. Advertising industry icons JWT and Ogilvy last December joined forces to create JWT/ OgilvyAction: the “first fully integrated, end-to-end shopper marketing and experiential marketing agency” (their description).
And just last month, another WPP Group unit, Kinetic, threw its hat into the shopper marketing ring by christening a new practice called Shopper 2 Buyer, or S2B.
Shopper marketing also is in the DNA of Brian Kristofek, the president and chief executive officer at Upshot, a Chicago-based firm working with blue-chip marketers such as Procter & Gamble, Kraft Foods, Corona and Omron. Kristofek believes that shopper marketing is at a very interesting—and highly influential—moment in its evolutionary development. The moment, he says, is defined by the confluence of shoppers who long to make informed decisions and the technological platforms that can make that happen before, during and after the shopping experience.
Case in point: Upshot created a program in Chicago-area Publix grocery stores for Kraft Foods called The Full Plate Club. The initiative utilized a mix of consumer promotions, retail displays, custom recipes, email, microsites and various collateral materials to target young adults with quick, inexpensive and easy dinner ideas.
Efforts such as these, Kristofek maintains, can take on a life of their own when, in the hands of young, tech-savvy consumers, they enter the social networking arena. With dizzying speed, Kraft-centric recipes can be shared by Facebook friends and, with a little good fortune, brand evangelists are created.
Both Rivenburgh and Kristofek are quick to point out that the best shopper marketing campaigns involve retailers who share a passion for the discipline. The Simon Property Group, the Indianapolis, Ind.-based shopping mall operator, is such a partner. T
he company recently created an iPhone app—customized for the country’s 300- plus Simon malls—that helps consumers maximize their shopping experience in a number of ways, including offering a store locator, news on the latest deals and events and the ability to vote on various instore elements and contribute to crowdsourced recommendations. The smartphone- based software tool also lets users connect to their favorite Simon mall via Facebook, Twitter and Foursquare and—after a full day of shopping—even tap into GPS technology to help them remember where they parked their cars.
“Retailers and brands have to invest in the mobile space,” says Mikael Thygesen, chief marketing officer of Simon Property Group and president of Simon Brand Ventures, the company’s business-to-consumer unit. “Being on the sidelines is not an option.”
Beth Ann Kaminkow, chief executive officer at TracyLocke, goes one step further: She contends that mobile marketing has become GPS for brands. “Mobile will be one of the cornerstones of marketing in the future,” she says. “It allows you to keep the entire loop of the shopping experience going indefinitely. It becomes a neverending cycle.”
This all paints a much different scenario from the shopper marketing world years back. “We used to joke that we sat at the kids’ table,” says Rivenburgh. “But now shopper marketing is rising in the value chain in the marketing community and we’re influencing these types of campaigns right from the start.”