Brands Support Shopper Marketing: Study
Shopper marketing is becoming one of the most effective forms of in-store marketing, a new study released this week said.
Some 73% of consumer packaged goods manufacturers and 86% of retailers listed shopper marketing programs among their top four activities that deliver a meaningful return on investment, the study from Deloitte Consulting LLP and the Grocery Manufacturers Association found
According to the report, “Delivering the Promise of Shopper Marketing: Mastering Execution for Competitive,” manufacturers increased their shopper marketing organizations from 6% in 2007 to 29% this year; retailers increased their shopper marketing organizations from 0% in 2007 to 60% in 2008, the report found.
“Within the last year, there’s been an explosion,” Brian Lynch, GMA director of sales and sales promotion, said of shopper marketing. “Everybody is trying to get their head around this. Television ads and print aren’t getting people’s attention.”
The study also found that retailers and manufacturers that use shopper marketing are taking a step back to be more strategic in how they move forward with such programs, Rob Holston, Deloitte’s shopper marketing practice leader, said. While many companies dedicate resources to create pilot programs, they often fail to build the requirements needed to launch full scale programs across their portfolios, the report found.
The good news is that retailers and manufacturers that embrace shopper marketing and operate under a core principles grow 50% percent faster than the categories in which they participate, Holston said.
“Companies know there is value there,” he added. “There’s still a lot of learning going on.”
There are other challenges, too. For instance, 60% of retailers said insufficient technology was their biggest hurdle, while 70%of manufacturers said the cost of data collection and analysis were their greatest obstacles. But perhaps the greatest impediment is measurement.
“What is critical for the success of shopper marketing is the ability to measure it,” Lynch said. “We’ve got to develop a strong set of metrics everyone can understand and can meet the burden of proof for all the skeptics out there.”
The Nielsen Co. is working on such a plan. It’s rolling out its PRISM “Pioneering Research for an In-Store Metric”) service to measure in-store media in a method that’s comparable to traditional broadcast and print ads. It combines shopper traffic, the placement of in-store media and sales data to track how many shoppers were exposed to a display, and how many bought the product.
The effort was pioneered in 2006 by a consortium of retailers and packaged goods marketers including Procter & Gamble, led by the In-Store Marketing Institute.
As a result, companies will be allocating more money into shopper marketing program over the next three years, Holston said. Often, that will come at the expense of traditional media, such as print, TV and radio ads, he said.
“We’re finding people will continue to invest because of the ROI levels they are seeing,” Holston said.
Deloitte and the Grocery Manufacturers Association polled more than 100 companies for the report. It follows the 2007 GMA-Deloitte study “Shopper Marketing: Capturing a Shopper’s Mind, Heart and Wallet.”
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