What is shopper marketing?

What is shopper marketing?

In the very recent past and even still today, product manufacturers concentrated on marketing brands to consumers and retailers marketed categories to customers.

Manufacturers would (and still do) use “trade marketing” programs to promote their brands instore in a retailer specific or exclusive way. Brands sitting under a retailer’s program umbrella would be promoted via “co-marketing” programs, where two companies cooperate with separate distribution channels.

And then there was “category management”, which is predominantly supply and efficiency oriented and focused mainly around ranging and space management. But where was the shopper in all this? None of these strategies, either from the manufacturer or retailer, were aimed at understanding shoppers and their needs.

Enter shopper marketing. Shopper marketing is a new discipline that emerged from the US about six years ago from consumer goods company, Procter & Gamble, and retail stalwart, Walmart. While it was originally formed to understand the behaviour of supermarket shoppers, the principles of shopper marketing can be applied to the purchase of anything, not just FMCG.

Definitions of shopper marketing

So what is shopper marketing then? Broadly speaking, according to POPAI’s Shopper Marketing Industry Council in 2011, it is:

“The application of shopper insights along the path to purchase, to affect purchase behaviour in order to increase sales for both retailers and manufacturers”

There are several global and local definitions, however, the commonality is that it uses insights during the purchase cycle to ultimately result in a sale, and ideally a repeat sale. To do this, the practice recognises that shoppers have a set of stages they move through: they have a “path to purchase” or “purchase cycle” as they obtain solutions to their needs.

Further, it recognises that the shopper may not be the consumer. For instance, the shopper may be Mum, but she’s buying food for her children.

Even if they’re the same person, it’s important to recognise that somebody’s in a different mindset when they’re shopping as to when they’re consuming.

For example, a figure-conscious shopper may be set on buying healthy food at the supermarket, but later that night they’ll crave chocolate at home.

Key terms for newbies

For those in the dark about shopper marketing, here’s a quick rundown of the major terms driving product developers, marketing agents, and forefront retailers.

1. The purchase cycle

The purchase cycle is prestore, instore, and post store. You can market to shoppers using calls to action and conversion based messages throughout the purchase cycle stages. These stages can be summarised as: Need, Plan, Search and Compare, Select and Decide, Buy (broken down into transaction and then delivery), Use, and Tell.

These terms are quite self-explanatory and common sense when you think about them. For example, “Tell” is that stage all brands hope for, when consumers rave about their product. Shopper marketing recognises that there are many touch points (points of engagement or contact) that shoppers have with categories and retailers throughout the purchase cycle. Good shopper marketing uses this knowledge to implement the appropriate marketing tools and mechanics at different stages of this purchase cycle.

2. Occasions

Often shoppers are looking for solutions to occasion based needs. Occasions are the times and events that people consume and use things. Going to a party is an occasion. So is having people over for dinner. Packing your child’s school lunchbox is another one. Occasions may be consumption or socially oriented, based on gifting (Father’s Day), ethnic/commemorative/religious (Christmas or Anzac Day) or sports and event related.

Looking for a solution to an occasion often means that multiple categories may be involved. For example, having a dinner party might mean bread plus protein plus veggies, with a dessert to end the night on sweet note. Being aware about these shopper needs throws up the opportunity for occasion based cross-category activations or promotions.

3. Retail and shopping objectives

Good shopper marketing activities have a clear retail outcome expressed not just in sales value and volume, but in the measures of shopper behaviour outcomes. Outcomes include Traffic, Penetration (basket incidence), Average Weight of Purchase (AWOP), Frequency, and Spend.

Again, most of these terms are quite common sense if you think about them. For instance, AWOP is about measuring the number and/or size of items bought. Now we’re approaching the cutting edge, shopper marketing activities should start identifying which shopping behaviours will be achieved at which point of the purchase cycle. According to Liz Crawford, in her book The Shopper Economy published last year, these are Attention, Participation, Advocacy and Loyalty.

A new era for shoppers

In summary, shopper marketing uses insights throughout the purchase cycle to result in repeat sales. It has a retail outcome in mind and targets different shopper behaviour objectives across multiple touch points around the purchase cycle. This means thinking about pre store, instore, and post store by using a variety of communications tools. And where possible it taps into occasions.

Along with others, I will be discussing these principles in depth, and providing global and local examples of innovative shopper insight application, in forthcoming Inside Shopper articles.

In the meantime, I welcome queries, comments, feedback, and suggestions for what you’d like to see covered in my columns in Inside Shopper.

Until next time!

Norrell Goldring is head of shopper insight and retail strategy at global consumer research and retail datahouse, GfK. She has 12 years experience in shopper research and has worked in category and channel planning for Coca-Cola, Goodman Fielder, and Vodafone. Call her on 0437 335 686 or email norrelle.goldring@gfk.com.


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