The Promise of Shopper Marketing
Questions surrounding marketing effectiveness are persistent and pervasive in the North American consumer goods and retail industries. Branded manufacturers continue large and sustained investments in traditional marketing practices such as advertising and trade promotion. Yet brand loyalty, product innovation success rates, and sales lifts remain elusive. Marketers need something more – and the shift in thinking brought about by shopper marketing is a critical part of the solution.
As a result, consumer products and retail marketing is in the midst of an evolution. Mar- keters and retail partners are embracing a new go-to-market strategy, a strategy focused on in-store elements of the marketing mix that are delivering superior returns on market- ing investments. This new strategy is shopper marketing.
Focusing on shoppers delights customers and yields brand equity and sales
Kimberly-Clark and Target Go-To-Market with Shoppers
“We are moving beyond a transactional relationship into a strategic collaboration to improve shopper experiences and drive category and cross-category growth.” – Kimberly-Clark
Harnessing a shared strategy and innovative technology, Kimberly-Clark and Target jointly designed a new solution to celebrate mothers and children as they graduate from diapers to training pants.
Kimberly-Clark and Target recognized that a child (the consumer) and a mother (the shopper) transition from diapers to training pants in a similar way. As the child feels he/she is ”growing up,” the mother also experiences a sense of achievement that the diaper stage is over. A combined Kimberly-Clark and Target team used this insight to develop several new in-store Training Center concepts that would be physically separated from the diaper aisles. Training pants shoppers would have a focused store sec- tion, drawing from several relevant categories, which uniquely caters to them. This section would help shoppers feel less overwhelmed by the merchandising and reinforce the graduation to a new life stage.
To test the effectiveness of this new idea, Kimberly-Clark and Target created a cross-functional team and utilized the virtual shopping technology of Kimberly-Clark’s Innovation Design Studio to simu- late every detail of the proposed shopping experience. Target’s merchandising and operations team members worked to bring the details of the virtual store to life, all the way down to the lighting and flooring. Observing test shoppers’ traffic and purchase patterns through the virtual store, Kimberly- Clark and Target were able to quickly and efficiently test different layout, merchandising and mes- saging options with quantitative rigor. Only the best designs were rolled out to in-market testing for final proof of concept. Use of this technology-enabled innovative collaboration technique has allowed Target and Kimberly-Clark to jointly develop, and cost-effectively test, a solution that has proven to delight Target’s guests, enhance brand equity for both partners, and drive incremental sales across the relevant categories.
Sources: 2008 GMA/Deloitte Shopper Marketing Study Interview; IndustryWeek
Traditional Marketing is No Longer Enough
There is a variety of surface-level observations – widely cited and accepted – that point to the need for change in consumer products marketing. In theory, effective consumer and trade marketing increases sales, builds market share and margins, increases consumers’ loyalty, and delivers an effective win rate on new product introductions. However, evi- dence points to the contrary. In reality, more than 70% of consumer goods categories had lower sales lifts from promotions this year, market share of the top ten brands is declining, the percentage of shoppers loyal to brands has decreased over the past ten years, and fewer than ten percent of the more than 30,000 new products introduced per year remain on shelves after three years.1
Clearly, the marketing strategies and tactics of the past are not sufficient to meet the chal- lenges of today’s consumer goods markets.
A confluence of trends diminishes the effectiveness of traditional marketing strategies and tactics:
As the North American market evolved, traditional marketing guideposts such as
brand and category management remained relatively constant. Today’s market is