In the final article of our series on the findings of the Popai/GfK Shopper Marketing Industry Benchmark Survey we summarise below current industry sentiment and where the shopper marketing industry in Australia is heading.
First, the good news
Shopper marketing has moved beyond perceptions of being a fad. Although 23 per cent of retailers still remain unconvinced, this is down from 60 per cent three years ago.
For 4 in 10, shopper marketing is perceived to be integrated as part of category and customer marketing, this number is very similar to 2011 (42 per cent).
There has been a bigger shift in the perceptions of shopper marketing as core and a key growth driver, now four in 10 overall.
This has increased from 2011 to 2014 for retailers by 18 per cent (20 per cent in 2011 versus 38 per cent in 2014) and for manufacturers by 20 per cent (22 per cent vs 42 per cent).
Scepticism remains, but consistent measurement will help
Part of the remaining scepticism, the ‘prove to me it works’ mentality, is partly due to patchy measurement despite the professed increase in the amount of activity the industry classifies as shopper marketing.
Only around half of Shopper Marketing programs are measured. Half of retailers and one third of manufacturers measuring program effectiveness less than a quarter of the time. What is measured is basic, as it is mostly sales outcome focussed, without understanding the level of impact of program elements on the shopper. This has not changed greatly since 2011.
Retailers are measuring fewer things than manufacturers overall. Retailer focus is on dollars and overall shopper experience rather than behaviour change. Manufacturers are more likely to measure inputs and compliance given theirs is the majority of the instore spend in this area.
Retailers are unlikely to understand instore execution. This ties into retailers’ reluctance to accept accountability for compliance, as mentioned by many manufacturers in the face to face interviews.
Some of the remaining scepticism about shopper marketing’s effectiveness can be overcome if the industry can agree, and consistently implement, a holistic and standard set of measures for shopper marketing programs that encompass inputs, impacts and influence, and outcomes.
What are the pain points and success limiters?
Manufacturers and retailers are aligned on what they see as the limiters of shopper marketing’s success, and ironically one of these is insufficient retailer/manufacturer collaboration. The other two limiters retailers and manufacturers agree on are conflicting internal objectives and lack of business planning integration.
In addition, retailers mentioned insufficient expertise as an additional limiter. For agencies the limiters of conflicting client objectives, lack of collaboration, and lack of business planning were similar, but given agencies’ often executional role retailer clean store policies also rated highly.
The ‘prove to me it works’ and conservatism mentalities means that despite the perceptions of shopper marketing increasing innovation, in reality there hasn’t been much shift. To get off the ‘same old, same old’ merry go round, there needs to be agreement to at least trial new things (based on shopper insight), in the absence of proof.
Retailers need to become more willing to participate in trials and loosen the instore activation guidelines. Manufacturers need to ensure the activities they pitch to retailers are based on a shopper insight and shopper needs and not merely brand focussed messaging or creative ideas with no strategic grounding.
Where are we now, and where to next?
To circle back to the beginning of the series, below is the summary of what has changed in shopper marketing in the past three years, and what hasn’t.
Ultimately, realising the potential of shoppermMarketing means walking the talk. What is required, to move forward from the crossroads at which the industry currently finds itself, is:
- A common language and platform – that of the shopper
- Greater commitment by both manufacturers and retailers – starting at the top. Evidenced by increased dedicated activations and insights budgets
- Willingness to try new things, particularly by retailers increased dedicated activations and insights budgets
- A Test and Learn mentality by all parties, willingness to do different things in different places not one size fits all. These will help provide case studies
- Catch up to where shopper behaviour is at digitally
- Integrate shopper and category into business planning
- Manufacturer/retailer collaboration across multiple disciplines in each business (not just a key account manager/buyer relationship)
- A go to market process that integrates shopper programs across marketing, sales and where appropriate, customer marketing and category
- Accountability by retailers for executional compliance and analysis of what works
- A standard discipline definition and set of consistently applied measurement metrics.
Some of these activities are behoven upon individual organisations, and some are the role of industry associations such as Popai to broker.
Without a coherent and consistent industry-wide approach and set of applications, there is a risk that the momentum gained in shopper marketing over the past several years may fade.
Given the discipline’s proven success in other countries, that would be a shame.
Will Shopper Marketing in Australia realise its potential?
The Unrealised Potential of Shopper Marketing Popai/GfK industry benchmark report is available from Popai for members for $395 and non-members for $995. More information atwww.popai.com.au.
Norrelle Goldring is head of shopper experience and retail performance at global retail research house GfK. Norrelle can be contacted on 0437 335 686 or email firstname.lastname@example.org
Lee McClymont is GM of Popai Australia and New Zealand and has 15+ years’ industry experience in specialty retail, agency, and brand. Lee can be contacted on 0414 941 585 or email email@example.com.