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Kwan Ho Lee
Posted in January

Article:

Retail Commission Aims to
Enhance Shopper Marketing

By Dale Buss

CPG companies and retailers are more interested in – and more experimental with – shopper marketing than ever, but so far their successes have been relatively hit-or-miss. The goal of a new industry-wide initiative called the Retail Commission on Shopper Marketing is to come up with a retailer-driven model that will make shopper marketing effective for manufacturers and shoppers as well as retail chains.

Led by charter members Coca-Cola Co. and 10 major chains, and advised strategically by the Partnering Group and the In-Store Marketing Institute as well as by a number of other CPG giants, the commission was launched last spring. Members aim to establish some specific shopper marketing pilots by spring as well as unveil some of their initial conclusions, best practices and guidelines at the In-Store Marketing Summit, to be held at McDonald’s headquarters in Oak Brook, Ill., in April.

Some of the industry pioneers who initiated category management a generation ago now are behind the creation of the Retail Commission. But unlike the highly successful practice of category management, retailers in general haven’t initiated a thorough-going approach to shopper marketing.

“Shopper marketing primarily has been on the manufacturer side,” said Brian Harris, president of the Partnering Group, based in Cincinnati, and one of the fathers of category management as well as of the new shopper marketing initiative. “Manufacturers have been bringing in creative and good ideas to retailers for several years, but retailers are overwhelmed – they don’t know where shopper marketing goes or where it fits.

“To change that, we had to get retailers to put their stamp on [the commission], otherwise there would be lots of wasted money, and disconnects. Retailers needed to understand it and shape it and feel good about it.”

Wal-Mart, Walgreen’s, Supervalu, Wegmans, Schnucks, Marsh, Shop Rite, Food Lion and Giant Eagle are the group’s other charter members. CPG advisory members are Campbell Soup, Chiquita, Clorox, Hewlett-Packard, Hershey’s, Johnson & Johnson, Sara Lee, Kellogg and Kimberly Clark.

Coca-Cola stepped up as the sole CPG sponsor of the new shopper marketing group. The beverage giant has been accelerating its attention to shopper marketing and understands that retailers can do a better job of selling Coke if they could leverage shopper insights into more effective in-store marketing.

“Whatever we put in outlets with those retailers today has to be as productive as possible
to generate the velocity and credibility with their shoppers and have a return to their bottom line,” said Diane Wallace, Coca-Cola’s director of shopper marketing, last fall at an industry conference.

Coca-Cola has been active already in ramping up shopper-marketing initiatives with the likes of Meijer, the Grand Rapids, Mich.-based mass discounter, and other retail chains. Kraft also has been proactive about shopper-marketing experiments with Meijer – one of the retail commission’s charter members – and with other retailers.

But so far, effective shopper marketing collaborations like these have been the exception rather than the rule.

The problem often begins with a disconnect between shopper insights and shopper marketing. “There’s a lot of unproductive work being done, when it’s not plugged into a comprehensive models of how shopper insights should be gained and where the biggest gaps are that need to be bridged,” Harris said.

“The trend is to budget more money into in-store activities and influencing shopper behavior. That’s great for retailers, but if there isn’t a disciplined approach, [shopper marketing] will be a money pit. Investments keep getting bigger, and you can spend a lot of money – poorly – if you don’t understand that and don’t have a platform that’s manageable.”

Retail Commission founders want to make the entire discipline of shopper marketing more reliable and repeatable.

“We’re trying to convey to retailers the notion that there’s lots of energy, creativity and resources on the manufacturers’ side that can be tapped into if [retailers and manufacturers] would get some thought alignment on this issue,” said Steve Frenda, managing director of strategy and development for the In-Store Marketing Institute in Skokie, Ill.

The Retail Commission was launched with the overall goals of defining retailer requirements – strategic, operational and organizational – for effective shopper marketing, integrating shopper marketing into current business practices, and establishing a new collaborative model for growth and shopper satisfaction.

Already, commission members have come up with several general principles that they’re recommending to serve as the foundation of an effective shopper marketing program.

First, any plan should be shopper and consumer focused. It should be retailer-sponsored and enabled. It must deliver “execution excellence,” including creation of a “critical linkage” between category management and shopper marketing. The planning process needs to be collaborative and strategic, linked to retailer and manufacturer business plans and bolstering the brand equity of each. It should deliver real shopper value “as promised” at the “moment of truth.” And it must create efficiencies and improved returns on investment.

Beyond inculcating and spreading these principles, the Retail Commission on Shopper Marketing wants to provide a common approach to wielding the practice effectively, which is collaborative and comprehensive – but not exclusionary. In other words, it should be robust enough to help the leading shopper marketing practitioners, but be applicable to novice practitioners as well. And charter members want to make sure that the “program” they come up with isn’t “over-template-ized,” providing room for flexibility for partners to leverage their unique capabilities.

To test its principles, the commission is launching what a handful of what Frenda called “smallish” pilots between specific retailers and manufacturers who already are part of the commission. Harris said that members are to “develop approaches – and get excited about
the potential.”

Still, Frenda conceded an obvious challenge for a group that purports to be working only for the best interests of both sides of the supplier-retailer equation: The concerns of manufacturers and supermarkets don’t overlap completely. One area where this is clear is branding.

“This new model of collaboration is needed in the wake of retailer-branding efforts – and I’m not just talking about private label lines of merchandise,” he explained. “The ultimate [practitioner] of that is Target, which is taking control of virtually every piece of branding that goes on in their store. And other retailers are starting to follow suit.”

All in all, said Harris, the Retail Commission on Shopper Marketing should help put the practice for retailers on a pathway similar to that blazed by category management.

“It builds on the infrastructure of category management, but it has taken a different path so far,” he said. “There’s no doubt that shopper marketing is the next wave, and we’re putting together a model for it. Like category management, until there is a method, people don’t do it.”

Found at <http://www.cpgmatters.com/ShopperMarketing0110.html#anchor_143>;">http://www.cpgmatters.com/ShopperMarketing0110.html#anchor_143>;

Commentary: What I really find interesting and would like to raise a point of discussion is regardless of retailers pushing for the perfect experience for the end consumer, is it really the right time during an economic crisis?

 
Kwan Ho Lee
Posted in January

The other aspect of branding should be highlighted since retailers now need to adopt the perfect strategy towards encouraging greater sales figures while working with a countless variety of individual products with distinct names and connotations attached to them.


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