What Builds Brands and Sells Products? Shopper Marketing

A recent USA Today article states: There’s a fundamental change in consumer behavior, and retailers have had to adjust.

The article goes on to say that as a direct result of the lessons learned from the Great Recession, shoppers, regardless of what they earn, are now more than ever focused on VALUE. This new American Shopper is changing the way retailers market, merchandise and maneuver.

The largest and most familiar retailers - from Walmart to Target to 7-Eleven - have been forced to bend to this new reality.

So how does a retailer get shoppers to find the values at the places they shop?

From our perspective, the most cost effective, best return-on-investment solution is marketing and merchandising at the point-of-sale (POS).  In one of the industries we serve — wholesale alcohol beverage distributors — the use of both custom and permanent point-of-sale signage is the primary marketing program for communicating the brand and the value to consumers and shoppers. We are finding that a similar Shopper (aka Point-of-Sale or In-Store) Marketing strategy works just as well for numerous other products that are sold in the stores.

We started delivering our first Point-of-Sale Marketing solution in late 2004. Our customers are typically high volume producers and placers of POS materials themselves. As a result of working closely with these companies, we have developed several key insights that support our conclusion that Shopper Marketing is the promotional tool to use if your primary goal is to increase brand awareness and product sales.

The Ideal Marketing Mix

First, let me suggest what appears to be an ideal marketing-mix or approach:

• Get your target shopper to the location where products can be found, examined and purchased
• Execute persuasive point-of-sale or point-of-purchase promotional campaigns
• Survey results (Correlate the POS placement expense to the resulting sales, and make adjustments as required)
• Repeat

Note:  Steps two and three represent “Shopper Marketing” where over 70% of the decisions to buy are made.

OnTrak Insights

Based on our experience with customers, and their extensive use of POS, we have come to the following conclusions:

• Brands and products that focus on POS initiatives outsell those that do not.

Retail sales decisions are overwhelmingly made at the point-of-sale (over 70%)

In-store marketing is growing faster than any other marketing approach — because it works better than all other forms of shopper marketing

• Brands and products that focus on POS initiatives report bigger and more measurable and manageable ROI than most other forms of advertising.

Today, consumers have more control over the marketing messages they receive. With a TiVo or DVR they can actively skip most marketing messages. POS Marketing is the exception. Consumers actively seek POS information, which then better translates to selection and purchase decisions

• Suppliers, Distributors and Retailers who track, measure and manage their Shopper Marketing initiatives are enjoying significant growth over their competitors who simply place POS materials and hope for the best.

Virtually every retail products category has been shown to benefit from a marketing mix that emphasizes Shopper Marketing, especially alcohol beverages

As you would expect, we at OnTrak believe most suppliers, distributors and retailers need to embrace and optimize Shopper Marketing by employing systems to help them organize, track, measure and manage its untapped potential. 

For more information on our products go to www.ontraksoftware.com/products or call 800.513.9194

— Mark Fullerton

USA Today Article:

Retailers respond as value mania hits the well to do

www.usatoday.com/money/industries/retail/2011-06-09-value-mania_n.htm

Other sources of Shopper Marketing information:

Delivering the Promise of Shopper Marketing, Grocery Manufacturers Association Deloitte Consulting, LLC, Whitepaper, (2008).

Shopper Intimacy, Rick DeHerder, Dick Blatt, (2011).

Why Shopper Marketing Matters More in the Current Climate, MARS (2008).