The creation and evolution of Shopper Marketing emerged from a simple realization: Brands can enhance sales and increase return on investment if they can successfully reach and influence people when in “shopping mode”.
Big Data Birthed Shopper Marketing
A significant factor in the rise of Shopper Marketing was the availability of high quality data. At first this was primarily shopper card data from retailer loyalty programs. But, with the explosion of Big Data, information sources have expanded to CPG loyalty programs, credit card data, social media and other behavioral sources. But, the fundamental question is: What is Shopper Marketing, and is it relevant today?
There is not one singular definition, but perhaps the most accepted was coined by a GMA Study authored by Deloitte.
Shopper Marketing is all marketing stimuli, developed based on a deep understanding of shopper behavior, designed to build brand equity, engage the shopper and lead him or her to make a purchase.
The key to this – or any definition – is the focus on understanding the Shopper. A simple example best illustrates why a deep understanding is critical to Shopper Marketing:
Of these Two Shoppers, Which is your better audience?
Before you answer, let’s add a few data points…
So, what about the woman who was seen buying only one bag of Oreos…and she bought on sale?
Turns out, she has an “Oreo and milk’ habit. Her routine is to eat a little comfort snack after dinner.
And, she does this EVERY night. And, to keep her habit going, she buys a single bag of Oreos EVERY week.
For 52 weeks!!! But don’t get too excited.
Focusing Oreo’s marketing budget on her might be a mistake, too. She’s not going to ever buy more. One bag is her limit regardless of promotion or pricing.
If you guessed the guy with his hands full was the “Most Valuable Shopper”, you’d be wrong.
Turns out this guys was just a helpful father. He made a quick trip to the local grocery store only to stock up for his son’s school science project.
It’s true he did buy five bags of Oreos in a single trip. But, this trip was his only purchase of Oreos for the entire year.
Focusing Oreo’s marketing budget to get him to come back to the store and buy again would be pointless.
So, understanding shopping and consumption habits is very important to effective marketing. There are many factors that affect shopping decisions. And, understanding these influences is necessary, regardless of being inside or outside the store.
100% of Revenue Comes from Shoppers
So, the Shopper is the Sweet Spot of Shopper Marketing. Yet there are others in the game too: The Retailer and The Brand. Brand and Sales Connectivity is important to great Shopper Marketing. Sell to cheaply (as the retailer might want) and you are hurting the brand’s long term prospects. Spend too much attention on brand building (as a brand might want) and not enough on selling can be an issue too if the retailer decides to delist the brand.
So, to be most successful, the key to Shopper Marketing is to understand the Shopper and market into that understanding in a way that drives Brand Equity and Brand Sales. This could not be more relevant today.