Farewell Wobblerville

The rise of shopper marketing

Issue 25 | December 2012

Simon Hathaway, President, shopper marketing and retail operations. Cheil Europe 

"Humans strive to get more choice, but paradoxically the more choice we have, the worse we are at making decisions." Psychologist Barry Schwartz's take on consumer behaviour might first have been voiced in 2004, but it's perhaps even more relevant today, certainly for the marketing fraternity.

This ‘choice' conundrum is one most marketers grapple with. It's why we're obsessed with cut through, why we jump on every passing communication band wagon with a view to monetising it. It's also a factor in the erosion of the power of brand, as an increasingly choice-filled, multichannel world heralds the slow decline of tell-and-sell advertising in favour of engagement and conversation.

To address this conundrum, we're seeing the evolution of agencies built on three key pillars: brand understanding; digital capability; and shopper marketing.

The first two are straightforward - brand understanding and digital capability are the cornerstones of marketing today, even in adland. But shopper marketing? Isn't that the domain of those who were best known for their services to shelf wobblers?

Actually, no. Today, there are very few adland CEOs who won't talk about emotional connection, tell you that digital runs through everything at their agency and if they don't already have it, what their plans are to build capability in shopper marketing.

I see three big reasons for this.

The first, predictably, is money. A recent study from US-based Grocery Manufacturers Association found spend on shopper marketing across the retail sector stands at $50 billion to $60 billion, up from an estimated $35 billion in 2009. Clients are moving significant budget to shopper marketing as they begin to understand the competitive advantage it delivers. No surprise then that money man Sir Martin Sorrell is paying top bucks for the best talent from ‘wobblerville' and launching ‘Team WPP" solutions for clients shopping for services at the store.

To understand the second reason, you need to accept that the most important relationship the CEOs of the world's biggest advertisers have is not with their advertising agencies, but their customers.  So if you want to have a relationship with the C-suite, it's a big help if you get retail. And shopper-marketing folk do.

The third reason is creativity and awards. In 2011, both the US Effie's and Cannes International Festival of Creativity added categories for shopper marketing. Everyone wants to win awards and with the likes of the Effies and Lions, it’s not just an ego thing; those trophies represent best in class for effectiveness and creativity, the twin must-haves for any client.

But there's a problem. While it's relatively simple to set out the ‘why', the ‘what' is more complex.

In its relatively short lifespan, shopper marketing has suffered from an identity problem - no one knows quite how to define it. To have any meaningful view on what it is, you have to understand something about where it has come from.

The roots of shopper marketing

My journey started in 2004, when a little man from Northwest Arkansas walked into 80 Charlotte Street, home to Saatchi and Saatchi, with a big idea. Andy Murray had just sold his agency - Thompson Murray - to Publicis Groupe. Together, they were going to build the world's first network dedicated to shopper marketing, Saatchi & Saatchi X.

Murray's big idea was that shoppers behaved differently to consumers and that we should change how we communicated to people when they were in shopper mode. Today, the insight is blindingly obvious, but at that point for me, it was a revelation.

Of course shopper marketing's roots go much further than 2004, and many lay claim to being the discipline's true pioneers. I'm particularly fond of Sylvan Goldman, who noticed that when his customers filled their baskets they stopped shopping. So in 1937, he invented a trolley to carry two baskets. But none of that could have happened if Clarence Saunders had not created the first self-service grocery store in 1916,the wonderfully monikered Piggly Wiggly. That innovation meant shoppers chose their products themselves and that made packaging and brand recognition at shelf very important.

However credit for the rise of ‘shopper marketing', as we know it today, must go to Procter & Gamble. The brand owner changed its ways of working and brought new language to its marketers that enabled them to start exploring, and eventually strategise and implement, this medium. P&G's marketers talked about their target audience as ‘shoppers' as well as ‘consumers'. Most importantly, P&G introduced the world to FMOT:  The First Moment of Truth, that seminal occasion in-store when a shopper chose a brand at the shelf. If you did not win in-store there would be no consumer experience.

P&G started putting its theory into practice with some of its flagship brands and as it started to capitalise on its competitive advantage, CEOs started to sit up and take note: they too wanted a share of the action and wanted to know how it worked.

In 2007, Deloitte published its first shopper marketing to put the discipline on the map with growth figures that left no room for argument: shopper marketing was growing at a rate of 21 percent and 26 percent compound annual growth rate (CAGR) against overall marketing funds growth of 2 percent  CARG.  Importantly it also offered a definition: shopper marketing is ‘all marketing stimuli developed and based on a deep understanding of shopper behaviour designed to bring brand equity, engage the shopper (ie consumer in shopping mode) and lead him or her to make a purchase.'

For me, that big statement really highlighted the fact that brand activation when confined solely to retail should be consigned to history. That definition continues to evolve; at heart, it continues to be as relevant as any other and brings home the fact that the purchase journey now constitutes many and different touch points.

Ideas that move shoppers

While shopper marketing at its best successfully combines all of the disciplines that make up brand marketing strategy - planning, media, creative, market research, account management and performance, not to mention a real partnership between client and agency in creation and execution, there has been little more than a handful of shopper marketing award winners.

But it is not the traditional shopper marketing agencies that scoop both the Effies and the Lions for what at heart are shopper campaigns. 2011 was the first year we saw a category for shopper marketing at Cannes and it was Saatchi and Saatchi rather than Saatchi X that won. They picked up five Lions for the BGH instore campaign, Big Nose. This year, Crispin Porter + Bogusky and Digitas won the Grand Prix in the Promo & Activation Lions category for its Small Business American Express campaign, designed to give small businesses their own version of Black Friday.

The push first launched in 2010 and in 2011 CP+B and Digitas teamed up to give small businesses a powerful digital tool-kit that included a YouTube video maker, a Facebook page builder and a way to launch online deals through FourSquare. Half a million businesses used the kit. Meanwhile, consumers who registered their AmEx card on Facebook and shopped at a participating retailer got $25 credit. AmEx also recruited politicians to endorse the idea—from the local level all the way up to the national level. (The U.S. Senate unanimously declared Small Business Saturday to be an official day.)

The moot point is that this campaign is clearly a big idea – from concept creation to execution – that goes well beyond advertising to affect the very structure of commerce for small businesses. Significantly, shopper insight was a vital element in its success. Now in its second year Small Business Saturday has the potential to become a regular event in the retailers’ calendar along with all their other shopper platforms.

Another Cannes winner, the 2011 Grand Prix for media placement, came from my own agency, Cheil. It was a landmark campaign, delivering true innovation despite working to the same shopper issues we've been seeing in briefs for years, namely that ‘Mum' (85% of shoppers are women) has huge time pressure when shopping.

Instead of delivering a traditional shopper response - improving shopability, making navigation easier and categories quicker to shop, Cheil Worldwide took the store to somewhere where there was time, a subway station in Seoul. The Tesco Home Plus Subway store was a virtual shop, people could buy everyday items off the shelves using their smartphones and groceries would be delivered to their homes. The idea travelled well beyond Cannes, was picked up by bloggers and the world's press, even my Mum was talking about it. Here was true innovation in the digital shopper space. 

The convergence of physical and digital

Which brings us neatly to digital and shopper. Obviously digital isn't new to shopper marketing; everyone was talking about it and Google even came up with ZMOT - zero moment of truth. But the work from Cheil was real and driven by mobile; it was, and arguably still is, the signpost for the future.

Technology is proliferating as ‘digital natives' come of age: in the US, an astounding 45 million smartphone owners are using apps, according to Nielsen. In Europe, that figure is thought to stand at around 43 percent, according to comScore.

Clearly, mobiles and tablets have driven the explosion in wide-scale dual-screen adoption. Adding to what is already a potent cocktail are the fast-developing recognition apps which are set to redefine impulse - if you fall in love with someone else's shoes, you can use your phone not just to identify them, but also to buy them. Throw in near-field communication and simply touching a brand with your smartphone will access the product code and store it on your shopping list app to buy later.

That's not to say traditional shopper marketing skills are redundant. People continue to do many of the things they have always done. Shopping decisions are still made on the twin criteria of relevance and need and people still love to go in-store, to find what's new, to research and experience brands.

Nonetheless, what we're seeing now is the convergence of physical and digital on an excitingly real scale. Simply put, we now have access to 24/7 retail. And that's challenging every single marketer, regardless of category, to re-define when people are in shopper or consumer mode, and how we best communicate with them. Traditional path-to-purchase models - those that track the linear journey from initial need to subsequent purchase - have lost currency in the world of the ‘always on shopper'.

Now, there are three core pillars in the shopper experience: search, shop, social. And importantly, these are in no particular order because today, the customer experience is integrated across stores, websites, direct mail and catalogues, mobile platforms, social networks, home shopping, and gaming.

Moreover, with ‘digital information' influencing nearly half of store sales and online purchase itself on the increase (a December 2011 report in the Harvard Business Review put online sales at about 10 per cent in the UK, 9 percent in the United States, and that's set to increase as this Christmas approaches), it's not just the manufacturer/brand owner and agency make-up that's changing. It's also the top table at retail.

Ideas you can’t compartmentalise

According to a report from Korn Ferry, the world's largest C-suite headhunter, ‘the role of multi-channel director at retail typically includes profit-and-loss responsibility for sales over the Internet. But that individual is also tackling the challenge of integrating mobile, Internet, and telephone sales with stores. He or she is working with IT, marketing, product, supply chain and store teams to ensure that the brand experience remains consistent and the organisation is equipped to meet customer expectations. As a result, the multi-channel director is pulling the strings on much of the leading-edge innovation in retail at present.'

The recruiter predicts that the multi-channel's director's remit will expand to cover every aspect of the customer journey, encompassing everything from strategy, brand and all channel sales. It's a no-brainer that the power this remit brings with it will see the multi-channel director role as the most likely route to becoming chief executive of a major retailer. Korn Ferry certainly thinks so, and it's hard to argue, given the unrivalled skills set, experience and customer relationships - which as we've already pointed out are the most vital for the C-suite - that multi-channel directors will amass.

It's this development which, I believe, will lead to true, unavoidably integrated marketing that reaches customers at all touch points of their shopper experience and with relevant content. 

And just as the retail leaders of the future will be those with experience across a diverse range of skills, so will the successful agencies of the future be multi-disciplined with an innate ability to create and execute big ideas across all channels. The  less linear, more pragmatic search/shop/social view will give rise to an ethos that agencies such as Cheil are already building their businesses on: the belief that the right idea will move seamlessly across channels, because shoppers don’t compartmentalise bricks and clicks, they simply move seamlessly between platforms to achieve their missions.

Shoppers are already adept at navigating through the sea of choices; clever, creative, innovative and integrated shopper marketing will ultimately help not only rationalise those choices, but as Schwartz puts it, maximise them.  

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