CPGmatters: Diageo Commits to Shopper Marketing

Mar 09, 2011

Through a special arrangement, presented here for discussion is
a summary of a current article from the monthly e-zine, CPGmatters.

three years ago, Diageo began making a commitment to proactively working with
its retailer-customers on a number of shopper marketing programs. That commitment
particularly involved better understanding how consumers actually shopped the
spirits category in the store.

"People are on autopilot when they’re
shopping for, maybe, bread or other grocery staples," Shawn Fitzgerald,
Diageo’s director of
shopper planning, told CPGmatters. "But [spirits] are a more engagement-oriented
shopper experience, more similar to personal- or beauty-care items. It’s
more fun. So the insights that are driving our strategies and activations in
the store are really around how do we tap into the state of mind that the consumer
is in?"

Delving into its customer base, the owner of Guinness, Smirnoff, Captain Morgan
and other spirits brands was also surprised to find out that women are the
primary shoppers for spirits and liquors, not men. Further, while notable occasions
— New Year’s Eve, etc. — were certainly big drivers of liquor sales,
it found consumers’ definition of an "occasion" was much looser and
more casual than imagined previously.

"We had a tendency to focus on the big events," explained Mr.
Fitzgerald. "But
the reality is that those occasions are the minority. There are a lot of other,
more frequent occasions that happen throughout the year, and tapping into shoppers
for those occasions is a bigger opportunity."

Like what? Informal get-togethers
with friends, maybe even spontaneous ones, on the front porch or patio, or
hosting a Thursday-evening party. "It
that we didn’t understand those were going on," Mr. Fitzgerald
said, "but
we reframed our thinking about how to focus on more year-round events.

"It sounds simple after the fact, but it’s actually a very powerful
change and transformation in our thinking."

Harnessing those shopper insights,
Diageo has been developing, among other things, a "Simply Cocktails" merchandising

The idea is simple: Create a display and merchandising area for
retailers where shoppers are drawn into curiosity about making cocktails out
of Diageo spirits brands and complementary products. "Our insight was
that cocktails are appealing to people, but there is an intimidation factor
if they’re making
cocktails for themselves or others," Mr. Fitzgerald said. "Anything
we could do to make that easier or less intimidating would help."

Diageo displays have a "Simply Cocktails" banner and, in their
fully deployed mode, three adjacent displays of different types of spirits,
soft drinks and other complementary products. Each of these displays comprises
a particular "level
of difficulty" for shopper who wants to make cocktails. "Ready/Pour" is
one, "Simple Mix" is the next step up, and "Easy Shake" is
the highest level.

"’Easy Shake’ is the most complicated, but even it is relatively
easy to do," Fitzgerald said. "The idea is to provide different
solutions to help people with different types of occasions or different levels
of sophistication" in
preparing cocktails.

Tests of the Simply Cocktails concept with selected retailers
showed an average 11 percent return across the Diageo brands involved. And
Mr. Fitzgerald said that the company is looking for "directionally consistent" results
at its retailer partners as more test and roll out the concept.

Discussion Questions: What lessons can marketers draw from Diageo’s new shopper marketing approach? Do you see this level of in-store involvement with consumers working in other categories besides spirits?

Please practice The RetailWire Golden Rule when submitting your comments.

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12 Comments on "CPGmatters: Diageo Commits to Shopper Marketing"

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Anne Howe
11 years 2 months ago

This story is a great example of how to use insights to re-frame strategic thinking and develop opportunity for day-to-day growth. It’s refreshing to hear a story about a “big dog” in a category who was not and is not afraid to be nimble and quick like a small dog. I think I’ll throw a Wednesday night cocktail party just to show my support!

Joel Rubinson
11 years 2 months ago

Good example of the power of shopper insights translating into action, but I would have liked to see more description of vertical integration of the campaign starting in the digital space, driving traffic to the stores.

Gene Hoffman
Gene Hoffman
11 years 2 months ago

Lesson #1: Many people are alcoholically insecure. So it makes good merchandising sense to help them out.

Lesson #2: To secure “directionally consistent” results, do what Diageo is doing with their retail partners.

Lesson #3: Should Anne Howe follow through and hold a cocktail party Wednesday night, may she invite all of us…providing Charlie Sheen isn’t there.

Lisa Bradner
Lisa Bradner
11 years 2 months ago

Agree with Joel–great start but now I want the iPhone app so I don’t have to try to remember what I learned in store, the QR code so I can just scan the display and load it into my smart phone and the video that I can watch in my kitchen before the guests arrive. Great start but we have to stop defining shopper marketing as beginning and ending inside the store.

Anne Howe
11 years 2 months ago

Great points by all here. I love the APP idea, so we can skip relying on only our brain cells to remember things we learn in the store. (Especially in this category, right?)

And Joel, digital is a huge part of the path-to-purchase. You’ve inspired me to look for a new spring cocktail recipe online today.

And yes, I will hold a virtual cocktail hour at 6:00pm EST.

We’ll salute those shopper marketers who are using the principles of insights to move forward and engage with shoppers in all sorts of interesting new ways!

James Tenser
11 years 2 months ago

Solution selling makes sense on the spirits aisle. It was wise of Diageo to take an unbiased look at purchase patterns and formulate a new in-store merchandising “cocktail” based on actual behavior.

Of course the mixology approach will apply more easily in supermarkets (where the laws allow) than in drug, liquor-only or state-owned stores. In fact, I’d postulate that the observed trend toward more women making spirits purchases may be much more pronounced in states where supermarkets carry alcohol.

As for the “app” suggestions above–there are already several nifty bar-tending guides available for smart phones. A firm like Diageo could choose to sponsor one or more. It would be very neat to grab a drink recipe by scanning a QR code at the shelf. Even kewl-er to get an e-coupon for free limes, or a buck off on a jar of olives.

Ed Rosenbaum
11 years 2 months ago

Excellent points by all.

Diageo is setting the standard for the industry. They are marking the path for others to follow as this shopping experience seems to need a boost from the distributors. Sales have decreased along with others because of the loss of disposable income over the past several years. Their products are certainly not the first on the list of many family shoppers so Diageo is assisting the merchants in a partnering arrangement. Smart for both.

Carol Spieckerman
Carol Spieckerman
11 years 2 months ago

I find it fascinating that such a “fun” category is nonetheless driven by ingrained preferences and behaviors. Diageo did a great job of confronting the challenge. I’m with Lisa on connecting shopper marketing outside of the store and looking at ways to build lasting impressions and engagement for that very reason–old habits die hard.

David Zahn
11 years 2 months ago

I applaud Diageo’s work around Shopper Marketing and their initiative to educate the shopper. I have been “banging the drum” for 18 months or more to start to think of the retailer as more classroom than point of purchase.

Shoppers seek to understand, identify new trends, accomplish jobs (solutions to their “problems”), etc., and be educated on new uses of existing (or new) products. Diageo is meeting that need and is providing a way for shoppers to increase their “SAT” Score in the stores (Shopper Attitute Towards…).

There is much work to be done and it extends beyond the traditional boundaries of; Sales, Cat Man, Trade Mktg, etc. As Shopper Marketing, Consumer Insights, Customer-Centricity begin to evolve, the ability to match shopper information needs with a solution will become even more important.

Dan Frechtling
11 years 2 months ago

I echo the comments by Joel, Lisa, and Anne. Enhancing in-store ideas such as “Simply Cocktails” with pre-store shopper marketing can be a powerful combination to influence year-round beer, wine and spirits consumption occasions.

In particular, using purchase history to target individual shoppers may help marketers:

*Expand purchases among lighter buyers
*Identify which products to cross-promote (in cases where direct alcoholic beverage promotion is not possible)
*Recommend new items to try (correlations can exist between craft beer and wine, rum and flavored vodka, etc.)
*Avoid marketing messages to underage or non-drinkers.

Collaborating with both retailers and their third party marketing vendors can not only help alcoholic beverage marketers better target, but also comply with regulations around the direct exchange of funds from spirits companies to retailers.

M. Jericho Banks PhD
M. Jericho Banks PhD
11 years 2 months ago
I tended bar in Kansas City for five years as a second job while toiling for Fleming Foods back in the day. Harvey Wallbangers, Fuzzy Navels, and Tequila Sunrises were the cocktails of choice. Manhattans and Sidecars. Wow, is that dated! I may have made a dozen Martinis during that entire time, and absolutely no Appletinis. Bartending was a mystery to most back then and remains so today. Thus, Diageo’s very perceptive new marketing initiative. Particularly so in today’s economy when home entertaining is less expensive than going out. I’m encouraged about the results, and am reminded that a rising tide raises all boats. This should be good for the entire spirits market. To the questions posited, the top-of-mind lesson to other marketers is to revisit all of their long-held notions about the nature of their bidnesses. Diageo’s “who knew?” epiphany underscores the changing retail nature of, well, everything. Regarding other categories that could benefit from this level of in-store involvement, Mexican food comes to mind. Authentic recipe preparation in various stages of difficulty. The… Read more »
Shawn Fitzgerald
Shawn Fitzgerald
11 years 1 month ago

Thanks to everyone for the thoughtful comments and builds. I agree with the perspective that it’s critical to communicate with the shopper throughout the path to purchase. While the article focused on the in-store activation, our shopper marketing programs are activated throughout the entire path to purchase and for most of our shoppers, digital plays an important role particularly in the pre-store planning phase.

On Monday, July 11th, I will be speaking at the Shopper Insights to Action conference about how Diageo is using shopper insights to re-invent the Total Beverage Alcohol (TBA) category. Specifically I will share how we are developing shopper marketing programs that talk to the shopper throughout the path to purchase to drive basket size, trips and customer loyalty.

Again, thanks for all the great comments and I look forward to seeing you at the conference. Cheers!


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