Shopper Insights: The State of the Science

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In this ebook, Copernicus’ Peter Krieg and Jeff Maloy take direct aim at the points in the shopper research process that frequently hold back the profitability and ultimate performance of shopper marketing programs. They offer the current lay of the land in shopper insights, explaining problem areas in the research process and offering specific fixes to improve the actionability and relevance of results.

Text of Shopper Insights: The State of the Science

  • 1.The CopernicusMarketing GeniusSeries Shopper Insights: The State of the Science By Peter Krieg and Jeff Maloy1

2. Introductionlevers today than they ever had to before. All of us are consuming media inWhile many consumer companies may have initially turned to shopperso many different wayssome people are only online, some only watch TV,marketing as a practical idea of the moment during a recession, its Dina Howell, CEO of Saatchi & Saatchi X, the agencys shopper marketingmeteoric rise in budget size and importance continues even as the economy arm, told the Wall Street Journal. The bulk [are] somewhere in the middle,shows signs of improving. The evidence: and thats whats making it harder to determine what is the correct formula. A recent survey of over 300 marketing executives across variousFactor in the emergence of omnichannel retailers and varying trip missions, retail and manufacturing sectors found more than 80% say shopper and shopper marketers have got themselves one tough nut to crack. marketing is vital to their brands long-term success. Lucky for shopper marketers they have at least one well-established practice In many consumer companies, shopper marketing beats outworking mightily in their favor as far as delivering to expectations in a very digital for fastest growing area of marketing spending.challenging business environment goes: grounding decisions in insights. Annual spending on shopper marketing in 2011 totaled The Path to Purchase Institute, a leading industry organization, lists the$50$60 billion. reliance on research and data as one of the defining characteristics ofWed define shopper marketing at its most basic level as activities along the shopper marketing: Shopper marketing is the use of insights-drivenpath to purchase designed to inspire a visit to a retailer and the purchase marketing and merchandising initiatives to satisfy the needs of targetedof a manufacturers brand. Not surprisingly, it emerged from the realization shoppers. Practitioners also appreciate this embedded feature of this armthat influencing consumers when they are in a shopping mode can enhance of the marketing mix. When asked in an interview with The Hub Magazinesales and return on investment (ROI), or so maintains Booz & Co. Of course,if shopper marketing is here to stay, for example, Tia Newcomer, generalas more and more companies increase their budgets for shopper marketing,manager, retail publishing solutions, HP, replied, Absolutely. Its here to staythe competition for shoppers feet, dollars, and heartsnot to mention thebecause it starts with insights how can that go wrong?pressure on shopper marketers to deliver those enhanced sales and ROIThe solid history of using research and insights to guide decision-makingratchets up more than a few notches. is most definitely one of the fuels of shopper marketings fire. As Booz &Of course, the explosion of digital media certainly hasnt made it any easier Co. once put it, shopper marketings potential is rooted in its focus onto answer what were already pretty challenging questions: gathering insights about consumers when they are in shopping mode Which group of shoppers is the best target for programming?and applying these insights to influence their purchase decisions. How do you drive them to retailers?Whether its fine-tuning merchandising and promotions at specific store When and how is the best way to reach and engage them to inspire a locations to appeal to a particular shopper segment as Con Agra did atpurchase?campus convenience stores; designing an ecommerce website aroundIt also doesnt help that identifying which of the exploding number ofinsights into the needs of the most profitable online shoppers as Underopportunities to influence purchase decisions will have the greatestArmour did; or developing a communications plan where research indicatedeffect on traffic, sales, and loyalty has become a critical and often shoppers were most receptive to the brand as Benjamin Moore did, shopperfrustratingly complex process. The reality is marketers have to pull moremarketers routinely draw on insights.2 3. As these examples demonstrate, an understanding of which shoppers and requirements of the end-users of research from an afterthought to ato target with marketing efforts remains one ofwe might even go so forethought.far as to say themost important insights marketers need in order tolaunch successful shopper programs and expand channel relationships. As Shopper Insights:Phil Kotler, dean of American marketing professors, wrote in Ten Deadly Who on the Organization Wantsand Will UseThemMarketing Sins, the first commandment of marketing is to segment the As shopper marketing has definitively moved way beyond the first moment ofmarket, choose the best segment, and develop a strong position in eachtruth at the store-level, programs involve far more elements of the marketingchosen segment. With multiple challenges to deal with as they try to takemix and media than ever before. It stands to reason then, that shoppershopper marketing to the next level, nailing the targeting decision becomes research will need to encompass a wider set of considerations in order toall the more important. produce insights that different groups in the organizationbe it the shoppermarketing team, the sales team, the in-store marketing agency, the ad agency,Extracting readily useful, big picture insights such as identifying the bestmedia planners, digital marketing manager, or mobile agencycan use.segment to target and where in the purchase and post-purchase processto reach them that can guide the development and ease the execution ofIts just not enough anymore, as Ron Park, a senior director at databaseshopper programs, however, is not a given by any means. In fact, if we hadmarketing firm Merkle, put it, to assume that a better understandinga dollar for every time weve heard a shopper marketer tell us, we cant of customers will yield results applicable to a variety of marketing issues.figure out how to apply the insights we have to the decisions we need toMarketers need to actively frame the discussion by getting rid of themake, and, its not clear how to use them to work better and smarter with conventional up-front meeting with a very narrow set of people to establishour retailers to drive traffic and turns, we wouldnt need to play the lottery research requirements, replacing it with an open forum that draws from allanymore.areas of the marketing and sales organization.To our way of thinking, explained our colleague Kevin Clancy, chairmanTo stress the essentialness of including the sales organization in aof Copernicus and winner of the Advertising Research Foundations Great marketing research discussion, Jeff Maloy, co-author of this chapter,Minds Award in Innovation, a truly state-of-the-science shopper insight is explained to a client that, shopper marketing requires a group effortas much about its relevancy and applicability to the fundamental strategicbetween sales and marketing, much more so than brand marketing. Becauseand planning decisions at hand as it is about the complexity of the algorithm brands and retailers share the ability to influence consumers during theor analytical technique used to generate it in the first place.purchase process, like it or not, marketers depend on the sales oraccount team to bring a retailer on board and run a marketing orTo finally put a sock in the on-going complaints about themerchandising program in stores. When the sales team has theactionability of shopper insights and bring them up to state-of-the-opportunity to provide input on what they need or would like toscience standards, wed suggest shopper researchers and marketersfind out about shoppers that would help them with their retailalike take direct aim at the points in the research process whereaccounts, the insights coming out of the research are far more likelysomething isnt happening and, as a result, its holding profitabilityto have a positive impact on channel relationships and successfuland performance back. First and foremost: converting the needsprogram implementation.3 4. The same holds true for agencies and the other tactical groups that will beincreasing frequency as more and more companies jump into the shopperinvolved in creating and executing programs. Unless data gets collectedmarketing fray.to help them better understand and identify the messages, products, and Ive got reams of consumer insights, he exasperatedly explained. Andtactics that will most effectively drive traffic and motivate a purchase, theyre Ive got tons of shopper insights. Problem is, its just not clear to me which toleft to guess at what will work best. use, when, or how they can help me most effectively maximize sales of majorAn anecdote from one of our colleagues, a veteran marketing researcher brands in key categories.in retail and consumer categories, underscores this point. He recountedto us an uncomfortable situation at a recent client meeting.His counterpart on the shopper insights side of the researchcompany they both worked for was presenting the findingsof a major study. While it was a thorough report with plenty ofCONSUMERSSHOPPERSinteresting nuggets of information, our colleague had no ideaFOCUS: How, When, Where, Why ConsumersHow, When, Where, Why Consumershow the client could use it to select a profitable target andUse/Consume the Category Shop/Buy the Categorybuild shopper programs for its retail accounts. PRIMARY Brand Marketing Team Shopper Marketing TeamEND USER:R&DAgencies Sales/Account TeamI just kept wondering, Who [in our clients organization] can use this? How KEY END Marketing Communications In-storeare they going to use this? he told us. Posing these questions and lettingUSES:Innovation Path to Purchase Influencers/Tacticsthe answers determine what we need to know about shoppers at thevery beginning of the process will make a tremendous diffe