It’s a term that’s referenced more and more these days, but still misunderstood by many. What, exactly, is shopper marketing?
According to Jeremy Pagden, chairman of Integer, a shopper marketing firm with offices in 18 countries around the world—including one in Canada, which officially launched in Toronto yesterday—shopper marketing exists at the intersection of branding and selling.
At the Canadian launch of Integer, part of the TBWA group, Pagden explained that shopper marketing starts with a deep understanding of current shopper behaviour, and then uses any marketing approach that effectively engages shoppers to lead them to purchase.
If that still sounds esoteric, Pagden later summarized for Marketing, “Shopper marketing is any marketing stimuli that’s derived from a shopper insight that will drive purchase behaviour while enhancing the brand.” Integer puts the emphasis of its efforts on shopper insight (i.e. overcoming purchase barriers). “It’s a shopper insight-driven business,” he said.
Of note to brands and agencies alike, it’s a growing field. Pagden said 28% of organizations are raising investment levels in shopper marketing, and 47% plan to do so in the next two years.
The biggest misconception Pagden hears about shopper marketing is that it’s about coming up with the perfect piece of POS in a store. But it’s much more than that, he said, stressing that shopper marketing covers the entire shopping continuum, from intent to actual purchase.
He shared several statistics about shopping behaviours and technology:
- 70% of all purchase decisions are made in-store
- Only 5% of people are loyal to one brand
- 58% will leave an aisle empty-handed because they can’t find what they’re looking for
- 79% of smartphone users use their phone to help shop
Addressing some of Integer’s tenets of shopper marketing, Pagden stressed the importance of understanding the audience. He used an example from work Integer did with one of its clients, Clairol. With more than 400 SKUs in the hair colour aisle in Walmart, the brief was to simplify the aisle. The problem was that when shoppers intended to buy hair colour—considered a high-involvement purchase that takes 15 minutes—38% of them left the aisle empty-handed.
Research showed shoppers needed three things to buy hair colour: segmentation, education and shade selection. So while the aisle was originally organized by brand, Integer broke up the brand blocking and divided it into segments such as grey coverage and vibrant colour.
Integer also added a virtual in-aisle consultant by means of a touch-screen kiosk to give browsers a non-biased authority. (Walmart bought into the kiosk, said Pagden, since competitors like L’Oreal were also used in the kiosk program. “Retailers don’t care about your brands, they care about the category,” he said.)
The kiosks fuelled impressive results for Clairol: in seven weeks, sales volume grew 10%. Plus, the entire Walmart hair colour category grew 5%.
Keeping with the retail theme, Pagden also listed what differentiates suppliers in the eyes of retailers:
- Those who are best aligned with their marketing plans and strategies
- Those who can deliver powerful insights on the shopper and consumer
- Those with whom they have a highly productive relationship
- Those who posses advanced shopper-marketing competence
- Those who develop unique and exclusive programs
