Shoppers are changing their behavior: are you prepared for a fragmented retail future?

shoppersIn case you hadn’t noticed, things are changing in the world of retail. And not just by a little. They are changing a lot! And at its heart is a revolution in the way shoppers are shopping. If ever there was a rationale for the existence of shopper marketing, this is it, or rather, now is it! To win in the world of consumer goods, brands and retailers have to win with shoppers. And that means all marketers, whether marketing to consumers or shoppers, need to invest in understanding shoppers, segmenting shoppers, targeting shoppers and marketing to shoppers better than anyone else.

Shoppers’ behavior is shifting radically

Changes in shopper behavior are sending shockwaves through the industry, but many misinterpret and over-simplify the situation. What we are seeing in shopping behavior shifts is more than a simple move to online, and it is more than shoppers being more price sensitive. To understand shoppers properly shopper marketers must dig a little deeper to understand what has driven shoppers in the past, to better understand the likely patterns of the future.

Want to know more about understanding shoppers, creating shopper insights, marketing to shoppers and investing in retail? Join me, together with my business partner Toby Desforges, in London this July for fantastic one-day workshop – The Shopper Marketing Revolution LIVE

The internet has clearly liberated shoppers from the tyranny of having to shop in the stores in a specific locality, and has helped price-conscious shoppers dig out the best deals through price comparison sites. But while that might have been the catalyst of these shifts it is an oversimplification to look at shopper behavior as a movement online. What is actually happening is a reversal of a sixty-year long trend in shopping and retail. What I’m talking about is the end of the one-stop-shop.

For decades shopping trips have coalesced into fewer and smaller shops: driving the collapse of specialist retailers and the growth of superstores and hypermarkets. At its heart was a shoppers’ desire for convenience, quality, selection and price. These superstores offered a reasonable compromise at a time when the independents they competed with didn’t. Those who look back with nostalgia on the high street of yore forget that for every quality butcher or baker, there were many who sold mediocre produce, relying on the fact that shoppers in the town had little choice about where to buy.

Shoppers are making different decisions

And that is where this shopper revolution begins. Shoppers now have choice, and they seem to be rather enjoying it. Not just a choice of buying online, but a choice of where to buy, and what to buy, and who to buy it from. A choice of which categories and brands to invest time in, and which not to. Shoppers have suddenly found themselves with more options than a shopper has ever had. And they are loving it.

Retailing is disrupted as shopping trips are fragmenting

Shoppers are smashing the one-stop-shop into pieces – their shopping is fragmenting over multiple shopping trips and multiple shops. Don’t believe me? Convenience stores are booming across the world. In the UK, entertainment specialist HMV, driven into administration just a couple of years ago by the big superstore retailers and online retailers such as Amazon, now sells more music than Tesco, and is the UK’s number 2 entertainment retailer. Specialists are growing in all sorts of categories, driven by the desires and needs of some shoppers to experience something that the likes of Amazon and Tesco can’t create.

Discounters are growing too, as there are categories which, for some shoppers, are all about price. Categories where a wide range of products simply isn’t important. Yet the discounters’ offer clearly isn’t all about price. In the UK, Aldi and Lidl have just won a whole bunch of awards for the quality of their own label product. Hardly what one would expect of an apparent ‘hard discounter’.

Shoppers shift, retail responds – brands caught in the crossfire?

Now is the time for brands to really start thinking carefully about shoppers, and how they are going to engage with them today and in the future. This shopping fragmentation creates challenges, for sure, but also creates a number of opportunities for manufacturers to reconfigure the way they market to shoppers and invest in the retail trade. Brand manufacturers have some really tough decisions to make. They are being pulled in multiple directions. There is a need to invest in new channels and retailers as they are potentially ‘the future’. Yet customers such as Walmart-owned Asda, who this week announced a massive sales slump, will still demand investment (indeed might be demanding more!)

How to survive? The answer is quite simple in principal (though let’s not pretend that its simple in practice!):

Different shoppers will go to different channels and stores for different things

Genericism is never good in marketing. In the past, however, it hasn’t been fatal in the world of shopper marketing and retail investment. Evidence the walls of price discounts in most stores. In the future, this type of ‘marketing’ will simply not be good enough. Shopper marketers must focus and adapt. It is impossible to win with everyone, everywhere. But by understanding, segmenting and targeting shoppers effectively, brands can both drive growth and improve returns on shopper marketing and retail trade investment.

Start by identify your target shoppers

It’s not possible to win with every shopper, everywhere. Omnichannel in its purest form isn’t possible. But we can win with the right shoppers in the right environments. The starting point of real shopper marketing is therefore to understand who your target shoppers are. Trying to understand too broad a set of shoppers will lead to generic data which doesn’t lead to insight. True marketing is about focus and targeting, and shopper marketing is exactly the same.

Prioritize the channels and environments where you can influence your target shoppers

There are so many environments, both online and offline, where shoppers can be found, the choices facing shopper marketers are dizzying. But investing in all places is inefficient, if not impossible. Shopper marketers therefore must invest in channels where there target shoppers can be found, and influenced. Just because a shopper is present in a channel, doesn’t mean it is worth investing in. We’re all on Facebook, but that doesn’t mean you can influence my choice of detergent there. And again, the key comes in focusing on those target shoppers you want to influence, and prioritizing channels based on where they can be found, and where they can be influenced.

Invest in the right shopper marketing mix

With clarity on which channels and environments are influential for your target shoppers, the next step is to identify the right shopper marketing mix to create the desired behavioral change in those target shoppers.

Reconfigure trade investment to support your shopper behavioral goals

The last step is to then begin the process of reconfiguring retail trade investment to support the right activities in the right environments. This might mean reducing investment in some retailers as the stores which they own simply aren’t that influential. It will certainly mean investing in different ways. Easy? Not at all. Necessary? Absolutely! Brands simply can’t afford to keep investing in activity which isn’t effective.

These are turbulent times for the consumer goods industry, and those who think that business as usual will somehow be good enough are in for a rude awakening. The world is shifting radically, and new approaches are needed. Tough decisions need to be made, but those decisions must be informed.  And that means all marketers, whether marketing to consumers or shoppers, need to invest in understanding shoppers, segmenting shoppers, targeting shoppers and marketing to shoppers better than anyone else. Want to know more? Come and join me, with by partner and co-author Toby Desforges, in our one-day workshop in London this July. We’ll cover all of this, and more, in way more detail than I can hope to do in a simple article. Hope to see you there!


Digital Marketing Rules: Do We Need Shopper Marketing?

digital marketingShopper marketing has barely established itself in the marketing lexicon and in the halls of consumer goods companies, and yet it seems to be facing a new existential challenge. In this age of digital marketing, the worlds of the consumer and the shopper seem to blur: I can be a consumer one moment and a shopper the next. The neat line between the world of the shopper and that of the consumer is harder to define. Surely it is time to ask a key question. In this age of digital marketing, do we still need to differentiate between consumers and shoppers? Do we even need shopper marketing?

Digital Marketing blurs the lines between shoppers and consumers

It is true that the lines have certainly blurred. There used to be a simple approximation: that the world outside the store was ‘consumer’ and inside the store was ‘shopper’. But let’s be clear – that was always an approximation as there were always shopper-related activities taken outside the store (think about writing a shopping list, or deciding where to go shopping – both are clearly shopper decisions).

So the in-store versus out-of-store model was just that: a model. An approximation of the real world that was useful to marketers to help them recognize that consumers and shoppers are different, but to give a practical model that they could work to.

Fast forward to the age of digital marketing and that model has long since broken down. Shopping can happen anywhere, and shopping activities have invaded spaces which were always considered to be the realm of the consumer. So how do we as brand marketers cope with this new reality? It is quite simple: we need a new model!

Digital Marketing accelerates the need for a new marketing model

One alternative model would be to consign shopper marketing to the trash can, and just go back to talking about consumers (or for those of you who still haven’t caught up with the reality that consumers and shoppers are different, just carry on as you were!). But this model really doesn’t approximate reality. Shoppers still are different. Or rather, when I am in ‘shopper-state’ I am different to when I am in ‘consumer-state’. The lines are blurred, for sure, but they are still different. The last thing we want to do is go back to thinking that marketing to shoppers is basically sticking the consumer message in front of a shopper. No, we need a new model.

An alternative would be a blend: to think of people as ‘shopsumers’ (yes, I hate that word too!). But that ‘average’ runs the danger of being just that, an average. Consumer and shopper are two different states which switch ‘in a heartbeat’ – that much is true. But two states which switch in a heartbeat are still two states and while on average we in between, that is a poor approximation for what we are at any time. Put it this way, imagine you are betting on a two-sided card – on one side of the card is a zero, the other side has a ten. If you have to place a bet on which side comes up, what would you do? On average the score will be five, but betting on five will be a loser every time. Trying to understand a ‘shopsumer’ is just like that.

The new digital marketing model still needs to reflect the differences between consumers and shoppers

We need a model that reflects that consumer and shopper are potentially two different states, but that people switch between them. We need a marketing approach which understands how to appeal to consumers, and how to influence shoppers. We need to develop a marketing mix for consumers, and a mix for shoppers, and they need to be integrated.

Is this new digital reality make things difficult? Yes! Does it validate a move back to consumer equals shopper? Not in my mind!

Digital Marketing brings together consumer marketing and shopper marketing

Great marketing in the future will be marketing that recognizes both consumers and shoppers but is able, at any given touchpoint, to work. The way we develop this for clients is to develop a consumer marketing mix, and then a shopper marketing mix, and then to integrate this, touchpoint by touchpoint. Some touchpoints are pure consumer: some are pure shopper. Some need to be a blend of both.

This calls for a much closer integration between consumer marketers and shopper marketers, and will, I believe lead to more companies bringing shopper marketing within their broader marketing teams, rather than (as many companies currently do) housing it within the sales team.

For more about Total Marketing and how it works in the age of digital marketing, why not join the workshop that Toby Desforges and I will be running in London in July. We’ll be sharing much, much more on this topic, together with case studies from some of the global clients we’ve worked with. Check it out here.



Consumers and Shoppers have Different Brand Relationships

shopper marketing brand relationshipsI’m often asked why we need shopper marketing (thankfully less now than before). There are many possible answers – but here is one: Shopper marketing exists because shoppers and consumers have fundamentally different relationships with brands. Consumer marketers spend an enormous amount of energy creating (or at least attempting to create) ‘brand-love’. But brand relationships aren’t all about love. And that love is, unfortunately, far from ubiquitous. This is no more true than in the world of shopper marketing. Or, to put it another way, The Beatles would have made lousy shopper marketers. In the world of the shopper we need more than love.

Consumers and their brand relationships

Consumers can have very intense brand relationships. For example, there are some brands I really love. Not many, but some are truly awesome. But let’s explore that love a little.  When do I love these brands? Where do I love them? I love them when I’m consuming. I love them at the point of consumption (or at the point of anticipation of consumption). I love my minty shower gel when it zings me in the shower in the morning. After that, I don’t give it a second thought for the rest of the day. At that precise moment, it is awesome. Ten minutes later I’ve “dumped” it for that Illy coffee which is hitting the spot at the breakfast table. Consumers are promiscuous, and their love is short-lived. I don’t mean within a category necessarily, but my love lasts for a few precious moments of consumption, and then I’m off professing my love for the next brand. A consumer’s brand relationships may be intense, and  may be long lasting, but the periods of intensity that you, my dear brand, are ‘in the zone’, are fleeting.

Shoppers often have very different brand relationships

This is especially true when I’m shopping. Most brands fail to create that quality of relationship with shoppers. Apple may be able to recreate powerful brand relationships in their stores, but they are the exception. Out there in the store the shopper may not even be the consumer.  But even if the shopper is the end consumer, they are now in shopping mode, not loving mode…. And that makes the shopper a completely different target with a very different brand relationship.

Here on the shelf the brand I love is just another product, and it’s hard for marketers to conjure up that “consumer-love” that exists at the point of consumption. In the store brand relationships are diluted by all of the other stuff that is going on: the noise, the deals, and all the other elements of my shopping mission. In the shower, that shower gel was the main event, if you like, but here in the store it is only a small contributor: my budget, my time, the check-out queue, the other things I need to buy today – they are all vying for my attentions.  At this point, as a shopper, I am so far removed from the intimacy of the consumption moment –  it is hard to believe that marketers believe that what works for me as a consumer would also work for me as a shopper. Where I do buy a brand regularly, it is often out of habit, more than love – it’s easier that way, and no other brand is offering enough of a reason for me to switch.

But it doesn’t have to be this way, dear brand. Whilst the in-store environment may never be quite as intimate and close as those consumption occasions we share, there are things you can do to woo me in the store.

What can brands do to improve brand relationships and create a little love in the store?

  • Be realistic. Not everyone loves your brand. And those that do probably feel that love in or around the moment of consumption – only at that point of relevance. Be realistic and recognize the real reach and power of brand-love.
  • Rekindle the romance. Can the magic be conjured up in-store? Is it possible to remind the shopper, there in the store, of just how special that consumption moment is? And, no, I don’t mean playing your commercial on in-store TV – but what cues can be delivered to rekindle the romance? It might be difficult to build significant brand value in a store, but reminding shoppers of values that already exist is often eminently possible.
  • Check if the consumer is the shopper. If they are not, then that consumer love is even harder to work with. The shopper almost certainly has little love for your brand. Live with it.
  • Recognize habits – don’t disrupt them. If your brand relies on shopper habits, then please let’s not disrupt those habits. Execution focus must be on availability, and almost certainly on the home shelf. Take care with promotions, or any activity which makes it harder to maintain availability. The last thing we want to do is to force shoppers to change their habits.
  • Add value to the shopper. Consider if there is anything that can be done to add value to the shopper (and I don’t mean a coupon!). What would make their life easier as a shopper? Easier to carry? Easier to shop? Easier to find? Choice of sizes? By understanding the shopper’s value points as distinct from the consumers, we may be able to find something to build just a little ‘shopper-love’.

Understanding brands as they work across consumers and shoppers requires a paradigm shift. Successful brands require a Total Marketing mix which recognizes that the target market is a consumer AND a shopper. By understanding the difference between the brand relationship at the point of consumption, and that at the point of purchase, our plans in both areas can be much more effective. Integrating consumer marketing and shopper marketing can be a challenge. If you’d like to learn more, join one of my workshops. The next is in London, United Kingdom, in July. If you can’t make it to London, register here and we’ll let you know when we’re in your area.

The Complexities of Understanding Shopper Behavior

shopper behaviorWinning with shoppers is key to consumer goods success: I think we can all agree on that. And on the surface, shopper marketing looks pretty straight forward. Stick some activity in a store and a shopper responds… Simple eh? Alas not. Shopper marketing is fiendishly complicated. Deep understanding of shopper behavior is key to shopper marketing success. In this post I’d like to dig into why understanding shoppers is a lot more complicated than many think: and to share some guidance as to how shopper marketers can cut through this complexity. Some of this is pretty straight forward, but please read through to the end, as there are some subtleties to this that even some of the most experienced shopper marketers miss from time to time!

Shopper behavior varies by outlet

First and foremost, shopper behavior varies by outlet type. I’m pretty sure you all know this, but it’s worth repeating. Too often similar activity is implemented across channels without any real thought as to how shopper behavior varies. A shopper in a convenience store is different to a shopper in a superstore. They are in a different environment, with potentially a different mission, and different needs. It stands to reason that they will respond differently to stimulus. Someone buying (let’s say) a beer in a superstore might be interested in browsing and checking out new offers: in a convenience store, grabbing my favorite brand may be my priority and any attempt to interact with me beyond this may be ignored.

Shopper behavior varies by category

If it were just that simple. If all convenience store shoppers were grab and go and all superstore shoppers were browsers, shopper marketing would be pretty straight forward. Alas – it isn’t! Shoppers shop differently in different categories – even in the same store – even on the same trip. A shopper might be “grab and go” in one category, and then browsing in the next aisle. They might be deal hunting by the time they get to the next aisle, and looking for information in the next. This is where most retailer-based shopper segmentation approaches fall down. They look at overall shopper behavior, and try and allocate shoppers to a generic segment such as ‘Family deal seekers’. The trouble is that this simply isn’t nuanced enough. Just because I seek deals in some categories, doesn’t mean that defines me across all categories. As shopper marketers, we need to understand shoppers’ behavior by channel, by category.

Shopper behavior varies by shopper

Of course, not all shoppers are the same. I might deal seek in toothpaste, and browse in hair care. The next shopper might do the opposite. Unfortunately, there isn’t a fixed pattern. Different shoppers behave differently in different categories in different channels. To market effectively to these shoppers, shopper marketers must effectively segment shoppers, and understand how different groups of shoppers behave (by channel, by category).

Shopper behavior varies by shopping trip

OK – last one, I promise, but this is the best one and the one that (most of the time) gets missed. We’ve agreed that shopping behavior varies by shopper, category, and channel. But there’s more. The same shopper, in the same category, in the same store, but different behavior. How can this be? Sometimes shoppers use outlets for different purposes. In a recent study in Singapore, we found two very distinct behaviors. The same shoppers used a supermarket in two distinct ways. Sometimes they went for a small, top up shop: picking up necessities for the next twenty- four hours or so. On these trips, shoppers were highly planned, and rarely strayed from that plan. The same shoppers also used the same outlet, in the same category, in quite a different way. They also had different trips where they stocked up. They bought product for the pantry, often travelled with their family, and took a lot more time over their shop. The trip was less planned, and the shopper was much more likely to be tempted to buy other brands. Which shopping trip should a brand target? The second one of course!

Shopper marketing is complicated. Marketing to shoppers at the highest level requires an in-depth understanding of shoppers. Even before shopper marketers consider which activity they should use, they must understand the following:

  • Who is my target shopper?
  • What shopping missions do they have, and how does my category fit with these?
  • Which stores do they use for which shopper missions?
  • How do they interact with my category/brand, on those trips?
  • How open to influence is the target shopper on each of those trip types?

This information helps the shopper marketer understand whether, and where (and when) there is the best chance of influencing a shopper. Only then should the shopper marketer start planning activity.

To learn more, check out our free e-book – “Managing Channels in the Age of the Digital Shopper”.  And for those of you living in or near the United Kingdom, I’ll be running a workshop covering this and more on shopper marketing and shopper insights in July, together with renowned shopper and customer management expert Toby Desforges. Click here for more details of “The Shopper Marketing Revolution – LIVE”


Eight Steps to optimizing in-store investment

in-store successMy last post argued that often (though not always the case) the role of shopper marketing is to disrupt shopper behavior. This is critical to shopper marketing success: if the shopper doesn’t behave differently, it is unlikely that our results will change. Most marketers I know are looking for growth: and growth means that some shoppers at least must change their behavior. Different shoppers, in different channels, all behaving different. Every situation is different. We also know that a huge amount of in-store investment is wasted. So how is a shopper marketer to know which activity to focus on to make their shopper marketing effective? Loads of people asked how best to plan, so here (in as much detail as I can cover in a short blog post) is how to tune your shopper marketing activity to have the best chances of changing shopper behavior in a way that works for you and your brand.

Who is the target shopper?

I’ve discussed the target shopper this at length before. In any marketing situation, we are not interested in everyone. A consumer marketer isn’t interested in all their consumers. In the same way, a shopper marketer isn’t interested in all shoppers. We are interested in a specific group of shoppers – our target shoppers. These shoppers are the ones that are critical to us achieving our objectives.

What is the current in-store behavior of the target shopper?

The starting point of any behaviorally based shopper marketing is to really understand the current behavior of the target shopper. Where do they shop, where in the store do they go? What do they look at, what do they notice? What do they touch, smell, read?

What will happen if I do nothing (and will that help me hit my objectives?)

This might seem like a pretty simple step, but it is worth some thought. At one level, if we do nothing, the shopper is likely to continue to do what they currently do, right? First things first, are we happy with their current behavior? Are they, for example, buying our brand? Are they buying enough? And most critically, if they don’t change their behavior, will we hit our targets? If not, we either need a new target shopper, or we need to change their behavior!

What do I really want the shopper to do in-store?

Assuming that we do need them to change their behavior, the next question is obvious – what do we want them to do? Are we trying to get shoppers who have never tried the category to try it? Are we trying to get competitor shoppers to try our brand? Infrequent shoppers to buy more frequently? Or a shopper who usually buys one pack, to buy two? I hope you can see that a really clear and focused understanding of who the target shopper is, and what is their current behavior, is key to this step.

Is there any evidence that the shopper might be prepared to do that?

Before we get too excited, it’s time to check whether this is realistic. What do we know that suggests that the shopper might do this? On the contrary is there any evidence to suggest that the desired behavior is a stretch. To be clear, I’m not looking for a cast iron case to prove the shopper will definitely do it: that I find is too constricting and kills off some of the best ideas. What we’re looking for here is enough support to suggest that the behavioral change is at least credible.

What activities are most likely to encourage the desired behavior in the target shopper?

We are now clear on the behavior we want to encourage: the next step is to decide which activity to deploy. We can use previous activity evaluations and any shopper research we may have to support this. If you don’t have either, then it is time to start evaluating activities! But, if you genuinely don’t have much data, then go with your gut! What makes sense? What feels right? And then – evaluate

Will those activities have a negative impact on other shoppers?

This is the only step in the process where we do need to think of the other shoppers. For our own sake, and that of our retail partners, we need to consider the impact of our activity on their behavior. Is it going to have a negative effect on other shoppers who currently buy our brand (but are not the target shoppers of this initiative?) Is it going to have a negative impact on brand perception? Will it have a negative impact on the overall category sales, in which case our retail chums are unlikely to be happy!

How much will this activity cost, and am I likely to get a return on investment from this activity?

The last step is to remember that shopper marketing activity is an investment, and we should seek to make a return on that investment. So we need to calculate how much the activity will cost; calculate the incremental profit that it will deliver, and that will enable us to ensure we are likely to deliver a positive return on investment.

At the heart of all of this is the need to build a better understanding of shoppers. If you haven’t started your shopper research journey yet, check out this free guide to conducting great shopper research. If you have some data, but are looking to squeeze some insight out of it, don’t worry: we’re writing an e-book on shopper insight right now! Click here to be notified when it’s ready!



Should Shopper Marketers try to ‘Disrupt’ Shoppers?

shopper marketers

There is a lot of debate among shopper marketers as to whether or not ‘disrupting’ shoppers is a good thing. The word ‘disrupt’ gained a lot of credence a few years ago, but it appears now to be falling out of favor. To quote a recent TNS study: “To broaden product consideration and grow sales, category managers and shopper marketers must abandon disruption – and focus on helping shoppers find what they are looking for.”*  Is shopper marketing as simple as that: or as shopper marketers or category managers should we be taking a more nuanced approach to influencing shoppers?

The argument against shopper disruption

There are compelling arguments in the ‘against’ camp, and it is easy to see why. Anyone who has ever shopped knows the frustration of pacing a supermarket aisle, searching in vain for a product we can’t find. A shopper who is disrupted is an angry, frustrated shopper and angry, frustrated shoppers are less likely to buy more. Further, while shoppers are searching for the product they want, they aren’t typically open to new ideas. They will, in all likelihood, ignore anything that isn’t what they are searching for. I’m all for making it easy for shoppers to find what they want, and reduce that ‘search time’ that shoppers hate and a shopper marketer can do little with. Where I am less aligned is the extension of this to the argument that shopper marketing is only about making it really easy for shoppers to do what they want.

Sometimes shopper marketers must disrupt shoppers

The trouble with this argument, is that it doesn’t necessarily help shopper marketers. Let’s say a shopper is planning to buy your competitor. As a shopper marketer, we should do what? Put up a sign saying ‘here it is – go buy my competitor?’ Of course not! We want to disrupt them!

I’ll make the leap that most, if not all of the shopper marketers reading this have to grow their business. Correct? OK. For your sales to grow, shoppers have to do something different than they do right now. If shoppers continue to do what they do, then your sales will be flat. Period. Your job is to get shoppers to behave differently. Facilitating shoppers to do what they want to do will only get you so far.

Shopper marketers must strike a fine balance

The reality is that shopper marketing needs to do both. As we position it in workshops, shopper marketers need to make it really easy for the shopper to do what they want to do, but even easier to do what we want them to do. Clearly there are some shoppers we definitely don’t want to disrupt (those might be the ones already buying our brand in large quantities!) So how should marketers get the balance right? There are a number of factors which shopper marketers should consider:

Know your shopper and the category – Sweeping statements and generalizations at this stage are unhelpful. The TNS article* quotes a P&G case from skin care: a high involvement category where a shopper is indeed happy to browse, check and try new things. Under such circumstances the thesis holds true. Shoppers may well happily browse the category after they have found the product they were looking for. I wonder what happened when P&G applied the same logic in, say laundry?  Did shoppers linger? I would guess perhaps not.

Understand their current behavior – This helps in two ways. Firstly, we can understand what they do, where they go. This allows is to pinpoint where and how to intercept them much more accurately. It also gives us a clarity on what (unchecked) the shopper would most likely do. How ever our plans work out, we’ll need to check that we haven’t made it too hard for the shopper to complete their ‘desired’ shopping pattern.

Set clear shopper behavior objectives for each shopper segment – Make it clear specifically what behavioral change we are targeting. Be it getting a shopper to switch from a competitor to our brand, or buy two units instead of one: clarity will create focus. Different shopper behavior objectives will lead to different actions. In the skin care case above, the objective might be to get shoppers to try a broader regime of skin care products. Encouraging browsing would therefore be great. If your goal is to switch brands in an inelastic category, more browsing might not be desirable or even possible.

Check that the existing behavior is till ‘easy’ – Before executing, we need to sense-check whether the existing or planned shopping behavior is still relatively easy. If not, we run the risk of dissatisfying shoppers. If possible, we should test, too.

At the heart of this approach, as at the heart of all shopper marketing, is the need to understand shoppers. Not all shoppers are the same, and not are equal. There are some shoppers that are highly planned, some that are not. More critically, there are some whose behavior we wish to change, and some that we do not. To learn more about how to understand shoppers, why not join one of our shopper marketing workshops?

* I’ve quoted a TNS article which you can find here. It is well-worth a read, with the caveats expressed above.


Image: Flickr

Facebook and Dunnhumby – the holy grail of marketing effectiveness?

marketing effectivenessFacebook and Dunnhumby, the data company owned by Tesco and behind Tesco’s Clubcard, have announced a data partnership which promises to be able to connect specific campaigns to in-store shopping behavior. Is this a major step forward to measuring true marketing effectiveness? Is the data trustworthy or valid? How should consumer marketers and shopper marketers respond?

The holy grail of marketing effectiveness

Marketers have, since marketing has existed, sought to find effective ways of measuring the effectiveness of their activity. It was after all around a hundred years ago that John Wanamaker famously opined that 50% of his advertising was wasted, but that he didn’t know which 50%. The era of digital marketing promises to make marketing effectiveness more than a pipedream, with the ability to track specific behaviors and activities. But to date there have been limited successes. Marketers have (quite rightly) been derided for measuring marketing effectiveness in terms of Facebook ‘likes’. True marketing effectiveness must include the ability to measure its impact on sales in stores, something which has eluded marketers until, apparently, now.

A step forward for marketing effectiveness

On the face of it, the deal between Facebook and Dunnhumby is a big step forward. Both companies wield huge databases (Facebook has 37 million users in the UK: Tesco has 17 million shoppers subscribed). Connecting the activities of a user on Facebook to a shopper in-store is to some extent groundbreaking. The ability to run a campaign on Facebook and see whether the individuals who interacted with that campaign behave differently in stores sounds great, doesn’t it? And there are few, if any, media companies able to offer that right now. But before we all get too excited, let’s examine the limitations and concerns associated with this.

Facebook isn’t the same as online, and online isn’t marketing

37 million users out of a total population in the UK of 63 million is pretty impressive. It’s a large sample, though of course it will be somewhat skewed. Then again, those companies advertising on Facebook will have already factored that in. But Facebook is only a slice of these people’s online existence (a large one, granted, but still). So it’s important to recognize that when analyzing marketing effectiveness, we’re missing any other activity that shoppers may have indulged in online. And beyond this, of course, there is an entire marketing mix beyond the Internet which needs to be factored in before we really reach a clear understanding of marketing effectiveness.

Cynical me – What do Facebook and Dunnhumby stand to gain?

As soon as the announcement was made, the web was awash with comments about Facebook having a vested interest in making their advertising look good. The benefits for Facebook are obvious – they are desperately trying to prove that advertising on Facebook can create real changes in sales. But Dunnhumby? Well, I guess they get kudos for setting up a partnership with Facebook, and the opportunity to sell a lot of data and analysis? What else? It took me a little while to work this on out. But first let’s take a look at the data that Dunnhumby actually gather.

Dunnhumby doesn’t cover all shoppers, or all their shopping

Dunnhumby will only track purchase behavior in Tesco, and of course that doesn’t get close to covering everything. Tesco has 17 million cardholding families, though press releases don’t suggest how frequently they are active. The fact that they represent a fraction of the total number of households isn’t an issue (they have pretty good coverage of the around 24 million UK households) but the fact that they only represent a fraction of those families’ total shopping is a limit. Most shoppers shop in many different chains (and their shopping trips are becoming more fragmented). An analysis looking at the impact of an activity in Tesco alone isn’t seeing the whole picture. A shopper may switch from one chain to another, and it would look like a sales uplift. Of course it would be an uplift for Tesco, but not necessarily for the brand. Put another way, there is a bias built into the analysis: a bias in favor of Tesco, who own Dunnhumby.

Stacking the odds in Tesco’s favor

Beyond the lack of a complete picture of a shoppers buying habits, a campaign, targeting a group of consumers/shoppers, being measured only on its impact in one chain, is more worrying. Campaigns which drive sales in other retailers would seem to be less effective than those in Tesco. It’s not a stretch to see a world where, based on this data, the campaigns that ‘work’ in Tesco will be prioritized over those that work in other chains (as the benefits there may be invisible). Maybe I’m being cynical, but it does definitely appear to be an area of concern.

Beware the myopia of marketing effectiveness

The big challenge for consumer and shopper marketers is therefore to beware myopia. The Facebook/Dunnhumby data will give a limited data set. It will be limited to the intersection of Facebook users and Tesco shoppers, and will only look at marketing activity on Facebook, and shopping activity in Tesco. As long as marketers keep that in mind, they will be fine. As a friend of mine once said: “data doesn’t lie, it’s the stories we tell with it that do”.

The Facebook & Dunnhumby tie up is clearly a big step forward in the long journey to true marketing effectiveness. But it is not without its limitations and concerns. They are marketing a limited dataset and both have a vested interest in demonstrating the effectiveness of Facebook advertising in influencing Tesco shoppers. Marketers should welcome the move, but treat the data with caution. It is a great move forward, but hardly a holy grail!

The world of shoppers and retail is changing. To learn more about how marketers and executives should respond, why not pick up a copy of “The Shopper Marketing Revolution”. You can get a free sample chapter here.



Retailers changing in-store promotions strategy – good or bad news?

in-store promotionsThose of you who have read my posts for a while will know that I’m not a big fan of in-store promotions. Well, promotions are all in the news again. But this time it is retailers talking about doing fewer in-store promotions, not more. Some large retailers in the UK have announced that they will stop doing multibuys (such as the infamous BOGOF – buy one get one free). Others are saying that they want more stable pricing which will ‘make pricing more transparent for the shopper’. Bless those retailers. They’re doing this to make it simpler for the shopper, eh? Or do they have other motives? And what does this mean for manufacturers? In this post I’d like to explore the good and the bad of this development, and you’ll have to read to the end to find out why this is in fact, really good news, and what trade marketers and key account managers should do to really capitalize on the situation.

Fewer in-store promotions is good news for brands

Promotions are, overall, not very good for brands. Or rather, the way they are currently used doesn’t help much. Promotions drive extra costs into the supply chain, erode brand loyalty, and often cause out of stocks.  Reducing promotions, especially the extreme ones, would therefore be a good thing.

Fewer in-store promotions isn’t all good news

But before we pop champagne corks, let’s pause. Retailers will still want to compete. Secondly, retailers seem hell-bent on competing on price. Thirdly, most retailers will expect their suppliers to foot the bill for this pricing activity. I don’t think that this is a case of ‘better the devil you know’ but until we know what comes next, it is hard to say. Retailers doubling down on fierce price competition can erode margins and brand value in much the same way as excessive promotions. So until retailers step away from deals and pricing as their key marketing weapon, it’s probably not all good news for manufacturers.

How should brands respond to changes in in-store promotions strategy?

Firstly, embrace reality. It is what it is, and retailers will call the tune to some extent. Whether good or bad on the whole, the opportunities and threats lie in what we do with the situation. Here are three fabulous ways for trade marketers and key account managers to create opportunity from changes in retail in-store promotions strategy.

Change is an opportunity to influence

If you think that this is a chance to cut the total expenditure at trade, then you might be disappointed. But it is a chance to change the way it is being spent. Norms will be pushed to one side. There is a clear opportunity to go to customers with a new shopper marketing agenda of how you think that spend should be spent. If you don’t have an agenda, now is the time to create one!

Remember that change is a constant

Back at the beginning of my career I worked in the United Kingdom on the Tesco account for a large food manufacturer. I remember a time that Tesco said they were culling BOGOF deals. I also remember a time when they said they didn’t want us to fund promotions: just a simple, low price that was simple and clear. Today the stores are full of BOGOF deals, and promotional funding is back. Whatever happens today isn’t necessarily destined to last.

The best news about fewer in-store promotions  – Plan what you will do with your time

One of the biggest hidden costs of a heavy promotion calendar is time. Whenever I talk to shopper marketers, trade marketers and key account managers, they invariably say that planning and executing promotions take more time than any other activity. So if promotions become simpler, or even fewer, then the biggest opportunity is to do something far more valuable with that time. The change in retail strategy won’t in itself drive profitability, but if managers can use their time to ‘lift their game’ – to plan, to be more strategic in the way they approach, then perhaps this could be the best thing that has happened to the consumer goods industry in decades. If you’d like to know more about how to put your time to more strategic usage, check this out

Omnichannel and the end of one stop shopping

one stop shopping

It doesn’t appear to be a good time to be an established bricks and mortar supermarket or superstore retailer. Companies such as Tesco, who a few short years ago appeared to be eternal leaders in their field, now appear to be stumbling. The growth of online shopping, the rise of the convenience store, and in particular the onwards march of discounters, seem to be causing established businesses significant headaches. These retailers are attempting to fight back – trying to persuade shoppers to return to their old one stop shopping ways. I’m not convinced that the efforts of big retailers to lure shoppers back one stop shopping will work for the simple reason that shopping behavior has changed, and shoppers aren’t ready to return to one stop shopping.

Big retail is fighting to re-establish one stop shopping

For around six decades there was one key trend in shopping, and that was the move towards one stop shopping. Supermarkets lured shoppers away from bakers and greengrocers. Superstores systematically added books, newspapers, flowers, music, movies – it seemed that pretty much anything could be added to the weekly shopping basket of the worlds’ shoppers. And then the Internet came along and that changed everything. The internet made shopping around easier. It also completely changed the economics of niche marketing. Specialists once had to limit their reach to nearby households. Today a specialist butcher, for example, can market across the country, and yield the economies of scale once limited to the big grocers. Shoppers have discovered that one stop shopping also means one size fits all – and that simply doesn’t fit with how shoppers view their shopping. It appears that the shopper genie is well out of the bottle. Do retailers have what it takes to tempt the genie back?

Retailers are trying to turn back the clock

Retailers appear to be fighting a battle with the discounters, without really recognizing that the reality appears to be that shoppers actually seem to be enjoying the choice they have, and perhaps that shoppers no longer want to have their entire grocery (and beyond) shop, limited or controlled by one retailer. A quick look at some of the key strategies of some of the major retailers shows some of these limitations.

Shoppers like choice

Waitrose’s CEO was recently quoted in the press bemoaning the fact that discounters are offering fresh lobster for a few dollars each. Apparently shoppers are ignorant, and don’t understand that the quality might be different. I beg to differ. Most of the shoppers I have spoken to (and I’ll admit it isn’t a representative sample) understand that what they buy isn’t of the same quality as Waitrose, but buy it because it is affordable, and gives them an affordable choice that they simply didn’t have before. It isn’t that shoppers have changed, and not necessarily that shoppers don’t understand. It’s that shoppers now have choices that they simply didn’t have before

Shoppers are questioning retailers

Shoppers, armed with a broader set of retail offers to compare, are beginning to question the idea that the big retailers always offer the best value. Tesco’s latest attempt to keep a hold on the one stop shopping basket is the launch of seven new ‘brands’ of value product is a response to this. Each brand is named after a fictitious farm, suggesting that the produce comes from some quaint establishment nestled in the English countryside. The reality is far from this: product is sourced from all around the world, and many of the farms are far from the quaint image suggested. The launch has created a storm in the press – perhaps Tesco has misjudged the shopper of today?

Destroying the point of difference

Asda also has set its sights on discounters as enemy number one: and is cutting costs to try and compete on price. Those cost cutting efforts include reducing staff benefits. If the goal is to compete on price, then this might work, but surely in the front line against a broader retail threat, front line staff should be seen as a key competitive advantage, not a cost to be cut?

The battle lines are drawn, but perhaps they are drawn in the wrong place. While superstore retailers are fighting the discounter enemy, they seem to be failing to realize that these trends are not driven by discounters alone. One stop shopping worked for a time. It worked when it there was little other choice open to the shopper. It worked when the superstore was the most convenient way of shopping. Today’s shopper has more choice about what to buy and where to buy it than ever before – and shopping across channels is much more convenient. The trends we see today are driven by shoppers discovering that there are alternatives to one stop shopping, and that those alternatives work really well for many of them. Manufacturers and retailers need to really understand shoppers, and what they are looking for from the channels that exist. Those that choose to adapt their business models to the needs of shoppers will be the winners. For more on winning channel strategy in the age of the digital shopper, check out this free e-book.


Image: Flickr

Buying behavior is changing rapidly – how should you respond?

buying behaviorIt’s never been a more exciting time to be involved in retail or shopper marketing. It’s also never been more dangerous or risky to be marketing a consumer goods brand. The industry is about as dynamic and unpredictable as it has ever been. Discounters are going from strength to strength. E-commerce is booming. Convenience stores seem to be growing faster than any other channel. Many major retailers, with their historic dependence on large stores in supposedly great locations, are struggling. And in all of this, shopper buying behavior is changing significantly, and fast.

All of this spells danger for brands and manufacturers. All of this rapid change means it’s easy to be investing in the wrong channels and retailers. As shopper buying behavior seemingly shifts continuously, there is a need to continuously shift our perspective and our investment. So what should brands do to ensure that they are on top of the challenges that shifts in shopper buying behavior bring?

See through the myths about shopper buying behavior

If we are to believe everything we read, shoppers are obsessed with price, and everyone and everything is being bought online. Neither of these is true. If shopping was all about price, why would convenience stores be booming? They are rarely the cheapest place to buy anything. Why is it that specialists are growing too? Why are craft beer and organic foods booming?  While price is important, and the endless discounting by major retailers and brands isn’t helping, shopper buying behavior and decisions are clearly making decisions based on more than price. And yes, there is a lot of online action, and e-commerce is growing fast. But globally the share of total grocery is still tiny. While in many markets the majority of shoppers do now shop on line, few are doing the majority of their shopping online. Buying behavior is changing, but most shopping still takes place in-store, and that will be the case for some time to come.

Start understanding shoppers – your shoppers

Shopper buying behavior is changing in fundamental ways. Shoppers are finding that they are more choices about where to shop than ever before. These new channels often also create new options of what to buy. Different shoppers are shopping in different ways. It is no longer sufficient to understand consumers and consumption. There might have been a time that shopper understanding was optional. These changes in retail dynamics mean that today, shopper understanding is mandatory for brands.

Change your approach to developing an understanding of buyer behavior

That’s all very well, but understanding shoppers is often a painful, expensive process. Shopper research projects often take months and months – not least because of the challenge of convincing retailers to allow fieldwork in their stores. Projects which can take up to six months, and often cost a small fortune are prohibitive to some manufacturers, and are increasingly inappropriate in a rapid changing environment. What is required are fast, simple, and cost effective approaches to understand shopping behavior.

Integrate shopper fully into the marketing planning process

While shopper marketing has now entered the lexicon of many organizations, the planning process seems too often to leap from consumer brand plans to customer plans. Shopper understanding is dripped into the process at best. At worst an understanding of shoppers and buying behavior sits outside the ongoing operation and planning processes, somehow residing within separate projects or forgotten soon after the research project is completed. To be effective, planning processes need to be revised to become faster and more flexible, and shopper-oriented.

Start zero-based budgeting

Even assuming that the current way of spending marketing funds is optimized (which, if we are honest, is unlikely!) it will be optimized for yesterday’s shopper, not the shopper of tomorrow. The best way to respond to this challenge is to follow the example of Unilever, who recently announced that they would instigate a zero-based marketing budgeting process. This, in theory, should force the organization to re-evaluate all of its spend based on an up to date view of the market conditions and dynamics.

Review retail trade investment urgently

Customers are in flux. Changes in the competitive environment and shopper behavior are leading to convulsions across retail. Some will win, some will lose. Many will become increasingly demanding as they struggle. Retail trade investment must be reviewed frequently, (I’d recommend a zero-based approach to this as well!) and spend should be made in ways which are flexible and avoid longer term commitments unless absolutely necessary. There was a time when big retailers would always continue to grow. Continuous, long term investment commitments under those circumstances was less risky. That is far from a certainty today.

The future is difficult to read, but it appears clear that the trend towards a fragmented shop will continue for some time. Shopping behavior will continue to change. More technology will come along to influence and disrupt and while much of it may fail, some will work. Critically, some will work for some shoppers. Shopper behavior will become more heterogeneous. Understanding this will be, arguably, the key to brand success. For more, please download our free e-book “Managing Channels in the Age of the Digital Shopper”.

Image: Flickr