Shopper Marketing: An Emerging Discipline
Shopper marketing is an exciting new discipline within the marketing and retailing domain. While many definitions exist, a simplistic one which captures the essence of the domain is “all marketing stimuli, developed based on a deep understanding of shopper behavior, designed to build brand equity, engage the shopper (i.e., a customer in ‘shopping mode’), and lead him/her to make a purchase.” While Shopper Marketing has been around in global markets for a while, it’s still in a nascent stage in India. The emergence of shopper marketing is an outcome of the shift in power from brands to retailers to shoppers. As shoppers are becoming more and more savvy with purchase decisions shifting close to the point of purchase, shopper marketing is going to take centre-stage in times to come.
From the perspective of the industry landscape, there are four group of entities that may be of interest for us as practitioners and students of shopping to understand.
The shopper is the decision maker at the point of purchase. In the world of omnichannel retail, a shopper's path to purchase may cover multiple touch points. She may notice a brand in a magazine, research on the internet or a mobile app, and decide to visit a brick and mortar store to get a feel before buying it. The dynamics could change once she lands in a store and she may completely change her decision on the brand or even the product. Research has shown that depending on the product category, 25-70% of the purchase decisions are actually made in the store. Shoppers are influenced by in-store placements, promotions, demonstrations, trial samples/ testers to name a few.
The retailer is the face of the brand/ product for the shopper. Depending upon the shopping mission, shoppers may choose different types of retailers. But retail in itself is a multi-sided market. While retail is a wafer thin margin business, retailers make money not only by selling the merchandise to shoppers but also by selling space to brand manufacturers. Prominent display areas like end-caps, floor fixtures come for a premium for brand manufacturers. Advertorial space on walls, windows, pillars etc. too earn substantial revenue for the retailers. All the streams of revenue, however, are connected and retailers aim for getting more and more footfalls. Once the shoppers are in the store, in-store activations are targetted to convert shoppers into buyers and increasing the ticket size by influencing them to buy more.
Brand manufacturers are looking at attracting shoppers all the time through a mix of ATL and BTL tools. However, for brand manufacturers, the retailer is the customer. Through the retailer, they reach out to the shoppers in the last stage of the shopper journey. Unlike many developed markets, the Indian retail segment is still very fragmented with the unorganised sector still contributing to 80-90% depending upon the category. We must also take cognizance of the fast growing online retail sector. In the era of omnichannel retail, there may be different segments of shoppers visiting different formats or there may be the same segment of shoppers visiting different formats based on their shopping missions. Many brand manufacturers conduct shopper research and share their findings/ recommendations with retailers. Brand manufacturers customise their marketing mix based on the retail formats.
Independent agencies have always played a critical role in the area of marketing. These may vary from consumer research agencies working on getting insights to advertising and media agencies involved in creating and distributing marketing messages to influence shopper behaviour and drive shopping. Further, there are agencies which analyse market movements and spot upcoming trends. The science of shopping is nascent but evolving, and hence there are specialists to understand complex shopper behaviour. India, as a market has its own nuances and global models cannot be directly applied. Both global and home-grown brand manufacturers, as well as retailers, are looking at specialist agencies to help them get shopper insights and develop favourable shopper experiences. Some of the global agencies like TracyLocke, Integer, SaatchiX, Ogilvy Action etc. are already present in India. With the increasing focus on shopper marketing by brands and retailers, more specialist agencies are likely to enter this segment.
In articles to come, I will explore more aspects of shopper marketing in the future: ranging from shopping missions, shopper journeys, retail environments, brand migration, in-store shopping influencers, changing power dynamics and more.
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Comments
SMART SHOPPING!!
SMART SHOPPING!!
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