CPG Brands and Retailers Focus on Shopper Marketing
A new study conducted by Deloitte for the Grocery Manufacturers Association finds that consumer packaged goods companies and retailers are rapidly ramping up shopper marketing efforts even as many acknowledge they are in the early learning stages around such initiatives.
The report, Delivering the Promise of Shopper Marketing: Mastering Execution for Competitive, found that 60 percent of brands and retailers say they have significant shopper marketing organizations compared to only six percent who gave a similar answer in 2007.
The report defines shopper marketing as “…the employment of any marketing stimuli, developed based on a deep
understanding of shopper behavior, designed to build brand equity, engage the shopper (i.e., an individual in ‘shopping mode’), and lead him/her to make a purchase.”
“Nearly every major manufacturer and retailer in the industry is dedicating resources to shopper marketing,” said Brian Lynch, GMA director of sales and sales promotion, in a press release. “This report outlines lessons learned to date and puts forth a game plan to help companies become more sophisticated in their operations and thus more fully realize the enormous potential of shopper marketing.”
According
to GMA and Deloitte, companies typically go through three stages as they develop
shopper marketing organizations and programs:
- Incubating – Beginning stage
where some fall by the wayside by failing to develop the means to ramp up. - Scaling
– Ramping up to carry programs off on a larger scale. - Embedding – Developing
a culture of thinking and working around in-store marketing.
Only about 10 percent of companies involved in shopper marketing saw themselves as advanced in its practice.
Those who excel at shopper marketing have a clear competitive advantage, said Rob Holston, Deloitte’s shopper marketing practice leader. “Retailers and manufacturers who are embracing shopper marketing and executing against a core set of principles are growing 50 percent faster than the categories in which they participate.”
Retailers saw greater opportunities to drive return on investment (ROI) using shopper marketing. Nearly half of all retailers saw it as the most effective means for generating ROI while 19 percent of CPG companies agreed.
Discussion Questions: What do you see as the challenges and opportunities associated with shopper marketing? What types of in-store activity do you think are most effective in driving ROI?