People today seem to be in shopping mode 24/7. While they are still going to traditional brick-and-mortar retailers for the vast majority of purchases (estimated to be between 85-90 percent of all sales), their path to purchase now passes through a wide range of digital, mobile and social channels, reflecting a shift in behavior that is changing the face of shopper marketing.
The ultimate goal of shopper marketing remains the same—it is still about the strategies and tactics that influence in-store purchase decisions and drive sales. In fact, more money than ever is being dedicated to these strategies—shopper marketing’s share of U.S. manufacturers’ marketing spend more than doubled (at the expense of traditional advertising and trade promotion) in Cadent Consulting Group’s most recent biennial study. The store aisle has become the battleground for CPG, food and beverage and other retail-focused brands, but many of the tactics used to influence consumers as they pull a product off the shelf are now taking place digitally.
Digital’s influence on retail has been staggering over the past 3-5 years. According to Deloitte Digital’s recent Navigating the New Digital Divide study, digital interactions were expected to influence 64 cents of every dollar spent at retail at the end of 2015, or about $2.2 trillion worth of in-store sales. That’s up from $1.7 trillion a year earlier and just $0.33 trillion in 2012.
As important, Deloitte found that among consumers who use digital devices while they shop, a third indicated that they spend more due to their use of smartphones and other devices. Moreover, those who use digital while they shop in-store convert at a 20 percent higher rate compared to those who don’t.
What is perhaps most important is that many of the digital behaviors brick-and-mortar retailers feared—such as showrooming or in-store price comparisons—are no longer as chilling. As they have become more digitally sophisticated, consumers are turning to their devices for different reasons, searching for shopping ideas or inspiration, not just price. Retailers are getting the message. Research from RSR found that nearly every retailer surveyed (98 percent) believed a digital presence is key for driving sales in physical stores. This points to the importance of creating a seamless customer experience across channels—something that nearly half strongly agreed was a necessity.
For shopper marketers, the challenge is significant: how do you create campaigns that convert shoppers who may be researching price and building shopping lists on their laptops in their living rooms, finding coupons as they’re ready to enter the store and reading through product reviews as they’re moving through the store aisle?
“Twenty years ago, manufacturer brands ruled the day. Ten years ago, we saw the power had shifted to retailer brands. Today we are entering the era of the shopper—empowered with smartphones that are always on, and always aware of location, time, pricing, rewards, offers and more,” explains Nick Jones, EVP of global business development and innovation for Arc Worldwide. “There is no more online and offline shopping. There is no line. People shop where, when and how they choose—sometimes that is all analog in a physical store, sometimes it is all digital through a device, and sometimes it’s via ecommerce platforms within brick-and-mortar. But the boundaries don’t exist because shoppers can transition seamlessly between all of these modes.”
The expansion of shopper marketing’s influence is driven in large part by the immense amount of data generated by retail sales. Scanner information, loyalty-card and CRM data, credit card charges, coupons, location information and the like all provide insights that now allow marketers to target consumers based on their past purchases and current behavior. And that personalization is exactly what consumers are asking for. In a study from Retail Touchpoints, consumers said what they really want is relevancy—information that is shared with them has to be relevant to what they’re interested in or looking to buy, as well as pertinent to their personal taste, style, age group or location.
“What’s really changed the path to purchase is data and its use by retailers to deliver new value and experiences from what has traditionally been the beginning (pre-shop) and the end (post-shop). While studies have proven the value of omnichannel marketing, investments are now delivering on that reality,” says Jason Rogers, SVP of digital at Match Marketing Group. “The real impact comes through personalization and relevance to the shopper. The retailers that are getting it right are going to the core of what elevates the consumer experience from before the customer even walks into the store to the time they use self-checkout.”
“In-store digital strategies, as of today, are far more limiting in terms of scale [but] they are far more valuable in terms of being able to provide a 1:1 connection with your shopper,” says Elizabeth Bleser, director, digital strategy at Blue Chip Marketing Worldwide. “As mobile continues to evolve, the level of personalization and data available to inform our shopper marketing strategies continues to grow. We can now not only find our target with that final-moment-of-truth, at-shelf impression. We can also inform the messaging within that impression with data beyond demographics and all the way to past purchases made, retailer affinity, app affinity, time of day, weather, their social media habits, the list goes on.”
Mobile changes the game
Traditionally, shopper marketers look to impact the in-store experience with messaging and triggers that encourage the behaviors a brand or retailer wants the consumer to take. And with shoppers consumed by their mobile devices, they’re more likely to pay attention to their screen than an in-store display. As a result, shopper marketing and in-store communications have become mobile first.
Major brand marketers such as Unilever and Mondelez are putting mobile at the heart of their communications. Yogurt leader Chobani recognized this as well when it started to use search marketing as a key part of its shopper marketing strategy—noting that shoppers were turning to their phones in-store to search for information. Working with Yahoo, the brand was able to demonstrate a 1.3 percent increase in market share and, by targeting its own buyers via the search platform with data from Nielsen Catalina, a 9 percent incremental sales lift.
“From the moment a consumer steps into a retailer, she can move from awareness to consideration to purchase just from viewing content or ads on her smartphone,” says Chris Fagan, CEO of Key Ring, a shopping-focused app. “Because of this, it’s more important than ever to capture shoppers’ attention when they are near or at the point of purchase.”
Similarly, media properties are now building digital shopper marketing programs that can link ad exposure back to in-store sales. Meredith’s Allrecipes, for example, now provides a way for advertisers to add local and retailer-specific product offers to recipes and content, with metrics and KPIs tied to the influence of those specific placements on sales. It’s yet another way to get to that moment of truth.