Why Brands Need to Wake Up to Shopper Marketing

Posted in Consumer Promotions and Loyalty, Promotional Ideas, Promotional Mechanics, Promotional Gift Cards, Vouchers and E-codes

An intelligent approach to shopper behaviour 

Three of the big advertising agencies have launched shopper marketing divisions over the last year. One of those is M&C Saatchi, whose dedicated shopper marketing division, M&C Saatchi Shop, came to life in October, 2015.

We ask Michelle Whelan, managing director of M&C Saatchi Shop, why this area is so important to brands and agencies — and why now…

What does shopper marketing really mean?

It is a definition that is changing. Most agencies, brands and retailers are moving from shopper marketing 1.0 to shopper marketing 2.0. Traditional shopper marketing very much sat within the trade teams within client organisations, and it was about selling in your promotions – which were all very price related.

Now I think it is becoming a much more intelligent discipline. It is really about mining for those insights that drive shopper behaviours and motivations as people are actively making those purchase decisions. What has fundamentally changed is that the act of purchase decision making happens everywhere now — yes, stores still play a key role, but decisions can start in so many different places, from social channels to retailer websites to email push-outs, and that is all broadly shopper marketing.

Why is shopper marketing a buzz term now?

We just didn’t have the data before. Five or six years ago, people didn’t use mobiles the way they use them today to shop. Now you have that conversion of digital and physical. How can brands be relevant in those moments? Mobiles have driven a huge amount of change.

Social commerce is continually driving change too. How can brands optimise across digital and physical to achieve one single view of that shopper. How can they give consumers a seamless experience?

Shopper marketing is much more scientific today, and the data we are starting to gather about shoppers is going to start to inform content strategies and integrated marketing strategies in future.

Typically, when I work with brand managers, they don’t want to really consider any of this because it is not what they are used to. But brand and sales teams have absolutely got to integrate now because those moments of driving awareness and attraction are also transactional moments.

How is M&C Saatchi Shop set up to work with brands?

Agencies are all about driving preferences of the unknown consumer, and turning those into an unknown shopper. We are about turning that shopper into a buyer, but delivering all of the right content messaging, experiences, education, product information, etc., to that unknown shopper so that we convert them into a buyer.

We then take that known buyer and develop that into a highly valued, well-known customer. That is how we created our connected group offer, which makes sense to us, and resonates with our clients.

Can you share any examples of the way you work with brands?

One example is Pernod Ricard. We are working with its travel retail team in Europe to help drive conversion using premiumisation. Shopping spirits in duty free is a very complex category, and it is notoriously difficult to drive visibility, so this is very much about understanding how travellers engage with brands along that traveller trail, and how we engage the right type of traveller with the right brand using the right message at the right point.

How is shopper marketing integrated within wider sales and marketing?

It's all about organisation. Traditional organisations are divided into brands, and then their sales and trade team sit separately. In my view that is not working anymore, and needs to be changed.

Brand and sales absolutely need to align — decision making can happen anywhere, and that is the way that brand teams need to think.

Rather than just pushing out brand messages, which is what they are used to doing, it is about understanding shopper needs in different moments, at different touch points, whether that is social reviews, people looking for more information, or people wanting to experience products — those are traditionally things that have fallen into the trade marketing team, whereas the brand teams which are successful today are embracing that.

Brand marketing is no longer about the same brand message being pushed out at every touch point and channel – it is very much about understanding the need in that moment and knowing how the brand can best deliver against that need. Brands need to think about the way they are organised.

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How do sales promotions fit into shopper marketing and what do brands need to know?

There is always a need for real sales drivers – some more price-driven and some more value-driven, such as competitions – to give brands more presence on-shelf and to drive more value. It is the same with discount vouchers; there will always be a role for them.

But that role needs to fit into the brand’s strategic plan, which is knowing the optimum point to serve up that voucher, and the right way to deliver that to a shopper to make that sale.

I think BOGOF will probably have different titles – such as brand price matching, for example – but I think if we coin that as price discounting or volume-driving tactics, it will always exist. As long as it’s relevant to the shopper in that moment, BOGOF deals make sense, otherwise these promotions are just creating a set of behaviours that take all of the margin and equity out of the brand categories.

How important is the way that brands deliver such sales promotions?

It is crucial but it is also very complex for brands and retailers these days. They have to cater for a whole set of behaviours – some people are very forward thinking and like the latest technology, and others prefer more traditional mechanics and channels; to appeal to a wide variety of needs is very difficult.

There is a big opportunity for stores to think about blending the store experience with the online experience. There are a lot of retailers doing some great work in that space. It is important to remember that it is more about bringing that digital experience to the physical experience than necessarily driving people online to capture data.

Can you share any examples of best practice in bringing the digital experience to the physical one?

One example is Sephora, a drug store in Europe. They have opened a flash store in Paris as a trial, and it has been very successful for them. The store has different zones, from hair and nails to face etc., and in each zone there is a digital experience for consumers to interact with. For example, face-scanning technology that allows you to try on make-up, to fitting false eye lashes, or taking selfies and sharing them on social media.

Each touch point allows the retailer to collect data: they know exactly what people are doing in store, and if they go on to make a purchase. If consumers don’t purchase, Sephora now has the opportunity to re-target them.

At the high-end fashion side, you see Burberry doing similar things – they recently put Snapchat codes on some of their clothing in-store. You see a lot of these brands experimenting with digitising their physical store experience so they can give a rewarding experience to shoppers, while simultaneously gathering key data and working out how to best communicate with shoppers in future. It is about making the joining of physical and digital as seamless as possible.

What other key trends are you seeing?

Expectations are increasingly being shaped by shopper’s digital experiences. When people go into stores now they are expecting something digital, so for brands, understanding how shoppers are interacting with different technology in store is hugely relevant to them.

There are a lot of trends coming around connectivity. When we talk about the "connected shopper" we are focusing on effectiveness across channels – from digital to physical – as well as across screens on different devices. We know that what a consumer does on their laptop is different to what they might do on their mobile or tablet, yet people still want to be treated as one consumer, regardless of what screen or channel they use. Understanding connectivity is hugely important.

Another trend we are seeing really start to change shopper behaviour is smart products — from wearable technology to smart labelling. For example, Adidas have chips in some of their jerseys and shoes now, so when I buy a pair of Adidas trainers and leave the store and play tennis, they know exactly what I am doing and can serve up the right content or me.

Will smart products remain the domain of bigger brands?

Technology is becoming more affordable. RFID chips are not expensive any more, for example, but what is expensive is having the operations and people behind such technology to implement the communications, and understand what content to serve up.

I do think consumers have expectations of both large and small brands now. And in some cases smaller brands can innovate quicker than bigger brands.

Where do the biggest challenges for brands lie in shopper marketing?

It is often difficult to get brands to want to test these things – that is a challenge. Yet if they keep doing the same thing they get the same results and will be left behind. That comes with organisational change, and most brands are still very focused on immediate sales results — looking at the next quarter as opposed to looking at how a current investment might deliver key lessons and have implications for 2017.

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