An industry reality check from Bruce Gourley, Head of Strategy at Hyper on Shopper Marketing.
Will the real Shopper Marketing please stand up?
"Just because you and I call it a rose doesn’t actually make it a rose. So stop saying we’re doing shopper marketing. We’re not. We’re doing trade marketing and calling it shopper marketing.
Who’s up for the real thing?
Let’s start with some observations. From the supplier side, the dominant relationship remains between the sales teams and the retailer’s category managers, meaning marketing prioritises the in-store space and short-term results. This isn’t a problem when you look at it through the lens of trade, but it becomes problematic when looking at it as a shopper promotion. In short, a shopper promotion has a wider remit – designed to affect consumer AND shopper behaviour, whereas trade marketing focuses solely on shopper behaviour.
This, unfortunately, but not unexpectedly, means a high proportion of giveaways, competitions, gift-with-purchase etc. Even more distressingly, these are activated alongside price drops meaning we’re using two different mechanics during one period when one would be enough. Now why do I say ‘unfortunately’? It comes done to the balance between brand building (equity) and brand sales (volume). Creating an imbalance here may make for better overall sales, but there is a significant downside. Firstly, promotions like these water down the brand proposition and reduce the ability for shoppers to build a relationship with the brand based on any other levers. Secondly, the results of this approach give a false sense of progress. Sales spikes followed by sales slumps or simply a return to base – meaning there isn’t incremental growth occurring. This is obviously more a problem for the supplier than the retailer, and it leads us to reflect on how shopper marketing isn’t really be done by the retailers either.
In the good/bad old days, the suppliers were far more active in the store experience. In truth, there was probably overly active participation resulting in too many pieces of marketing collateral and leading to more retailers adopting ‘clean aisle’ policies. But where they did a powerful job was helping the retailers innovate in the development of category management solutions (which was a significant part of the store innovation roadmap). Suppliers often funded them, were involved in design and development, and as category leaders, they realised that floating the overall category was the best way to grow sales.
Looking out from my perspective today, there exists a direct correlation between the ‘clean aisle’ policy adoption and a stall on category development. Centre store is now an ‘experiential issue’ – a place where shoppers are confronted by walls of products with few ways of navigating the shelves and little encouragement to engage. Coffee is a category with huge potential, but little has been done. Another example is Wine. Snacking? Make no mistake, I sympathise with the problem. For one, sales per square foot force us to create density and shy away from anything that impacts this planogramming. Secondly, category managers may well take the view that the store ops and design teams are responsible for improved aisle experience and why should they invest their money when ‘experiential benefits’ won’t be attributed to them anyway.
When we look at shopper research, one of the leading issues remains “I didn’t know about your product / I couldn’t find your product”. We call this “Search & Select”. If we’re not helping elevate categories, guiding shoppers to them and helping create category management then we’re not tackling the big problems and instead focusing on smaller ones which tend not to shift the needle all that much. Beyond the shopper, the biggest opportunity to grow basket size is to get shoppers to engage with more categories – basically to get them down more aisles. But again, we’re not seeing enough cross-category merchandising, innovation, experiences, or planning.
Why aren’t we doing this? The most obvious answer is that it’s hard. If we dig into that, we see that we’ve fallen into a treadmill of activations to keep up the sales spikes and that the current resources and structures can’t get to the business of innovation (especially the kind of stuff that takes cross-team interaction and often long-term planning and development).
Beyond the immediate challenge, we’re also seeing some significant changes occurring within retail marketing. Retail Media Networks are throwing up challenges to how media is bought across retail platforms, with some overseas suppliers even consolidating all media spending instead of having trade teams and some shopper marketing teams responsible for trade media. We’re also seeing greater consideration being given to more long-running brand-focused activations or collateral being deployed into store (based on Binet & Field’s research).
These both showcase the following:
- The store remains critical as a sales, media, and brand touchpoint.
- There are expectations of more connected experiences in and out of the store.
- Wider teams within the supplier marketing ecosystem must work together to achieve genuine impact within this medium.
- Ways of working between retailers and suppliers need an overhaul to help both achieve better, more sustainable results.
- If the retailers believe that the store is more than just a transactional platform, suppliers need to align to these goals as partners in the process.
I don’t expect the treadmill of activations to stop. There is a place for them, and they help many players meet their KPIs. I tell my clients that we need to operate at two speeds – continue business as usual (fast) but start working out how to create a budget and resources for innovation (slow) – the kind of projects that can genuinely solve shopper issues and affect behaviour.
At Hyper we run Shopper Marketing Basics training sessions to give suppliers a deeper understanding of the dynamics around trade and shopper marketing as well as giving retailers the insight into what brands are increasingly trying to do and how they (the retailers) can innovate to help increase sales and experience. Oh, and the training is free.
Let’s do some real shopper marketing."
By Bruce Gourley, Head of Strategy at Hyper
