Shopper Marketing

One of my favorite riddles goes like this:

I’ll give you three statements and you have to figure out the object I’m describing:

He or she who makes it, sells it . . .

He or she who buys it, doesn’t use it . . .

He or she who uses it, doesn’t realize that they are using it

What is it???

I’ll give the answer to the riddle at the bottom of the post in Today’s Lagniappe.  The reason I bring it up relates to the second line, “He or she who buys it, doesn’t use it”.  It reflects the difference between the buyer (shopper) and the end user (consumer).  

9 INCH AXIOM – Shopper Marketing

‘Don’t forget about the shopper.  There is a difference between the buyer and the end consumer.  A majority of purchase decisions are made in store and therefore you need to cater to the shopper and their retail experience’

Depending on which statistics you look at (59% of statistics are made up on the spot) you’ll find that between 39% and 70% of purchase decisions are made in store.  According to a 2007 report conducted by Deloitte for the GMA, a staggering 68% of consumers are impulse buyers, a.k.a ’switchers’.  

ISSUE: How do you influence the buying process and differentiate between the shopper and the consumer?

The Answer: There is a growing segment of marketing called ’shopper marketing’.  The premise is that marketers gain insights on what motivates shoppers throughout the purchasing process and then implement programs or specific marketing stimuli to leverage those insights.  CPG’s have caught on to the impact of the shopper marketing.  In a flat to declining marketing landscape, the segment is growing annually at a robust 21% clip.

One of the companies that have embraced the concept of Shopper Marketing is Procter & Gamble.  P&G is spending upwards of a half a billion per year on shopper marketing programs.  It’s not only brands embracing the concept.  It’s also retailers getting into the act.  Wal-Mart has been a pioneer in ’shopper marketing’ over the years.   With 1 out of every 13 retail dollars flowing through the Big W, they are constantly challenging their manufacturers to develop effective programs. 

So why isn’t everyone doing it?

Here are the four major challenges in my opinion:

1. It requires marketing and sales to work together.  Marketing typically handles brand and sales is responsible for trade.  Getting both to work hand in hand and their respective agencies is no small task.
2. It requires strong execution to be effective.  It’s estimated that only about 60% of the time are programs executed properly.  
3. It assumes that shoppers care and are willing to justify time to engage while shopping.  The fact is that most consumers are lazy and have ‘tunnel vision’ in a retail setting.
4. It’s a fractured landscape.  You are dealing with different types of retailers and different types of consumers.  The permutations are endless.  How do you split the baby?

Evolving and Growing

Shopper Marketing is here to stay.  It will continue to grow and get more sophisticated.  Look no further than one of the greatest brands in the world.  Enter Coca Cola.  It was announced two weeks ago that Coca Cola North America is sponsoring a commission on shopper marketing.  According to the release the purpose of the commission is to work with industry experts to determine how to best leverage manufacturers’ insights to develop shopper-based marketing approaches and capabilities that enhance the shopping experience and increase same-store sales and profit performance.  

FINAL WORDS: I love this quote by P+G’s Head of Shopper Marketing Dina Howell,

“It’s doesn’t matter what we think, it only matters what the shopper / consumer thinks.”

At the end of the day . . it’s about the shopper, stupid.

Today’s Lagniappe - A piece of trivia, an answer to the riddle and a blogpost recommendation

Trivia – Back in ‘91 James Carville hung a sign in Bill Clinton’s Little Rock campaign headquarters that said:

1. Change vs. more of the same
2. The economy, stupid
3. Don’t forget health care.

It was meant to be a reminder to insiders, but it became a rallying cry for the Clinton campaign.  The quote that became legendary, “It’s the economy, stupid”.  Take a look at the sign again.  You have to think that the Obama campaign adopted #1 to beat both Hillary Clinton and John McCain.

Answer to the riddle:  A coffin

Blogpost reco: Here is a great post by Jonathan Dodd on ‘The 10 ways Shopper Marketing can improve sales in a tough economy’

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