BrainTrust Query: How do we break the retailer/manufacturer impasse on effective In-Store Marketing?


By Ben Ball, Vice President, Dechert-Hampe
The importance of reaching consumers at the point of sale has grown dramatically in today’s era of fragmented media messages, disappearing channel differentiation and seemingly endless consumer choice. With consumers able to buy bread in Walgreen’s just as readily as in Wegmans, grabbing the consumer’s attention whenever and wherever they shop is critical.
The industry is addressing this emerging issue in numerous forums, one of them being this week’s “Shopper Insights in Action” conference in Chicago, where the focus will be on how to generate and implement better shopper learning. Most parties seem to agree that improved in-store execution and generating more actionable consumer insights are critical for success.
But a recent survey probing the state of In-Store Marketing for the industry reveals that major barriers to successful implementation remain. This nationwide survey of retailers, manufacturers and third party service providers, conducted by Dechert-Hampe & Co., found significant disagreements between retailers and manufacturers as to what is holding the industry back in this area.
Specifically, manufacturers feel that retailers’ tight control of the in-store environment is limiting and that sparse data for measurement of effectiveness impedes their ability to build enthusiasm for these efforts internally. Retailers say manufacturers don’t have many new insights into how to turn consumers on – particularly in THEIR stores – and have few innovative ideas as a result.
Discussion Question: What needs to be done to break the seeming industry impasse on more effective In-Store Marketing? Does the answer lie in more data?
To learn about and participate in the 2006 In-Store Leadership Survey, conducted by Dechert-Hampe & Co. and Grocery Headquarters magazine, go to www.instoreleadership.com
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15 Comments on "BrainTrust Query: How do we break the retailer/manufacturer impasse on effective In-Store Marketing?"
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How much data? Which data? Who is responsible for turning the data into information? Competition is difficult. Differentiating yourself is a real challenge in a competitive market. The most important factor is knowing your consumers – which comes back to the questions listed above. Everyone is responsible. Stores need to turn scanner data into information for their store. Chains need to turn scanner data from individual stores into identifiable patterns. Manufacturers need to merge scanner data from their partners with additional marketing research data collected by or commissioned by their company. Marketing research firms needs to identify trends that emerge within the general population. In addition, scanner and survey data provides specific information about consumers but doesn’t provide the whole picture. More and more companies are investigating in ethnographic research to determine how consumers use products and how they shop. Is this expensive? Yes. Is it time consuming? Yes. Is there a shortcut? No.
In our business, interactive digital signage and in-store interactive kiosks, we see the results of this melee daily. We often confuse data with information. Due to the overwhelming number of marketing choices available to retailers today, and the fluidity of today’s consumer landscape, many decisions are simply not made instead of analyzing options and choosing a direction which incorporates some flexibility. I’m not sure if we are paralyzed with fear due to world events and the economy, or if we are hoping to see where the market is heading so as not to make a costly mistake. Leading edge does not have to be bleeding edge.
We don’t need any more data other than to prove in-store marketing works more effectively than other forms of marketing. What we really need is better execution of the in-store marketing programs already in place. Retailers love to talk about their ability to execute programs at retail, yet rarely does an in-store marketing program ever come off in every store. The reasons for poor execution are endless and that’s where everyone needs to focus their attention. If we could merely get every store to execute every in-store marketing program at their fullest the incremental sales would be significant. Long-term, this would improve the ROI of in-store marketing programs even more which in turn would open the door for the development and execution of even better in-store programs.
Partnerships work best when each partner can pull its own weight. It isn’t a partnership when one partner can’t be relied upon. Page 4 of the GHQ/DHC summary clearly shows that retailers and manufacturers agree: the #1 “Major Barrier” is in-store execution. Page 3 shows the in-store marketing leaders. No one is likely to be surprised at the results: the best-managed chains are the best leaders.
No, the problem isn’t the amount of data, it’s the quality of the data. We have too much of the wrong stuff. We keep measuring the forced choice of a declining consumer cohort (i.e. people who shop in supermarkets) and confusing the results with the cohort of “All Consumers.” What we really need is an ethnographic omnibus study of shopper behavior. Why ethnographic? Because knowing what people do isn’t as important as understanding why they do it. Why omnibus? Because we need to understand consumer behavior as it actually plays out, not through the artificial lens of channel filters. Will we do it? I doubt it. We’re happier operating without the answers than we would be changing in response to the truth. One more thing — we aren’t looking for “actionable consumer insights.” Actionable means capable of being litigated, nothing more or less.
From my experience, both the retailers and the manufacturers have valid points. They are both falling down in specific areas. What’s perplexing is why it’s so hard for them to come together to find solutions based on the only thing that matters — the shopper.
Better customer insights, open communications and true data sharing are key to the success of Marketing at Retail. As previous topics have discussed, so is the integration of Merchandising and Marketing best practices. However, nothing is more important than what we DO with the data and consumer-facing activities. Who cares what’s behind the executional aspects of these activities if it’s not making an experiential difference to the consumer?
I agree with Mark…it all comes from the top. The middle management of all involved at Marketing at Retail will “fall in” when they are given expectations that will are accountable to. Otherwise, infighting and politics are likely be the norm. Regardless, a wonderful opportunity exists for a leader brand to set the bar.
Good Heavens Folks! Has anyone here actually been in a Retail outlet, like a grocery store, or mass merchandiser? Anecdotal experiences, second hand from wives do not count.
This is way too esoteric to be effective. The deltas between Manufacturers and Retailers on promotional effectiveness exist because we have altered the original intent. Promotion, once viewed as a way of attracting customers, is a revenue generator for Retailers. Manufacturers use promotion to force product or line extensions that the public doesn’t want.
Here’s radical – stop bombarding the poor customers. Too much information overload. Way too much space, too many products, too much advertising and promotion, too much noise. People have so come to expect a certain atmosphere when shopping that they just turn off sight and sound. Give the folks a break. Let them think and browse and take in what they see. Slow down.
We have plenty of data from consumers, mostly worthless in regards to this issue. Shoppers are not thinking much about the store, so asking them to tell us more of what they want is unlikely to be productive in regards to in-store marketing. How about putting the focus for in-store marketing back where it belongs – on the retailers and, maybe, the manufacturers. If Wegmans is losing bread sales to Walgreens (to steal the opening example), Wegmans is not doing something as right as Walgreens and it’s Wegmans’ job to figure out what else to do.