Shopper Marketing: Past, Present & Future

Thought Leadership

BY Bill Rodi, VP, Shopper Marketing

Shopper Marketing: Past, Present & Future

Shopper Marketing: Past, Present & Future

Thought Leadership

BY Bill Rodi, VP, Shopper Marketing

Recently, I had the honor of contributing to a new college-level textbook and with their permission I’m sharing the excerpt with the broader marketing community via the Mosaic Journal.

What is Shopper Marketing?

It probably depends on whom you ask, or at what point in its history you were to do so.

Relative to other disciplines, like Advertising, it remains a fairly new and ever-evolving specialization. With the growth and investment surrounding it in recent years, it’s an elusive one to define: varying based on the stakeholder employing it, or even the organization in which it resides; to some, a tool to spark measurable sales of select products, to others, a strategic enterprise designed to grow brands and product portfolios.

In the classic 4-P’s vernacular, one often thinks of Shopper Marketing simply as ‘promotion’—conveying an offer or incentive to purchase a given product, at a specific time and place. While this definition wouldn’t be completely incorrect, classifying what’s become a much more nuanced, strategic marketing discipline today in such blunt, tactical terms would be unfairly limiting. Today’s best-in-class Shopper work does so much more: building brand awareness and equity, complementing other marketing activities and, most importantly in this new age of near-limitless choice and information, uncovering deep human insights to engage shoppers in thoughtful 1-on-1 conversations.

To fully answer this question, it’s helpful to consider it in terms of Past, Present and Future: tracing its arc from its origins as a brand-driven promotional tactic of the 60’s and 70’s, its efforts to drive loyalty among retailers in the 80’s and 90’s, to the collaborative shopper-centric effort it’s become today. We can then extrapolate that arc to envision where the industry is headed next in its ongoing evolution.

Past – ‘Recognizing the Store as a Medium’

In the golden age of marketing, CPGs followed a much less complex playbook predicated on ‘pushing’ messaging out to consumers through broad, mass media and then intercepting and ‘funneling’ them into store aisles with incentives to purchase their product.

For example, Procter & Gamble’s Tide detergent made its debut in stores across America by broadcasting through mass media outlets like radio and TV to a target audience stated simply as “anyone with a washing machine”. Most brands regarded shoppers as a homogeneous audience to merely be spoken to in different ways, across different ‘touch points’ along a linear ‘path to purchase’, typically using little more than logos and colors to decorate it in a consistent, recognizable way.

And it worked, for a while. As money poured into routine weekly FSIs (or Sunday newspaper circulars), timed to advertising media buys and supported with trade dollars (price discounting), driving a steady stream of extra measurable sales to a given retailer or chain. Thus, solidifying a manufacturer’s position on-shelf, and currying favor with retailers by connecting shoppers to their stores in measurable ways.

However, this would eventually be co-opted by the retailers directly who seized upon their newfound customer intimacy and set out to own the shoppers themselves, holding the upper hand over their CPG vendor partners as well. Producing a prolonged battle for shoppers’ love and attention, that, in turn, also birthed the concept of stores as de facto media platforms and customer-loyalty programs leveraging new CRM technologies and the oceans of useful new information on shoppers they yielded.

Once retailers and manufactures tired of wrestling each other, they joined hands in a resounding truce of collaboration and information-sharing that placed the shopper at the center of both their efforts. Together, improving experiences, tailoring offerings, and delivering creative new solutions that went well beyond the early days of coupons, circulars and limited promotions to truly engage with Shoppers as distinct from Consumers. This helped build brand connections at every stage of their purchasing process, as opposed to just driving short-term sales through offers and tactics at the retail ‘point-of-sale’.

Present – ‘Always-On/On-Demand’

Fast-forward to 2019 and what’s changed [for Shopper Marketing today]? Two things really: Technology, and the importance of brands to help shoppers navigate the increasingly complex world it has created.

Contrary to the bygone era of FSIs and coupons of the past, today’s new generation of shoppers view the world, and their path through it, in entirely different ways that have upended much of marketing’s established beliefs about how to ‘manage’ them. Flipping the script entirely on brands and manufacturers, the shopper is putting an end to any ownership dispute, now firmly in control of the shopping experience.

With exponentially fragmented media, product choice has exploded through online shopping and ecommerce platforms, both with near-universal mobile device use. Putting today’s shopper squarely at the center of this complex new commercial ecosystem, and marketers increasingly at odds about how best to navigate it, as well as serve an always-on, on-demand audience with access to endless information and choice.

‘Push’ tactics like coupons and sales promotion have been replaced by ‘Pull’ strategies, wherein brands seek to position themselves as a like-minded or favorable friend who enjoys a relationship with the consumer. Ironically, all this new media and technological complexity has only reaffirmed the vital importance of a building and managing of brands people understand, trust and favor.

Future – ‘Curated, Tailored Commercial Experiences’

With any eye towards the future, these same forces will continue to play themselves out and shape the next era of Shopper Marketing. Resulting in a much more singular view of ‘commerce’ that delineates less between ‘in-store’ and ‘online’ and leverages technology to create more seamless, intuitive experiences.

Retailers today are already re-thinking ways to keep up with “always on” shopper behavior. Looking ahead, they’ll only continue to evolve into a dual-role approach that marries complementary digital shopper marketing and physical activities in ways that highlight the different roles of each, creating shopper experiences that differentiate them from other stores.

To do so, retailers will first attempt to create unique in-store experiences, assortments and offers that cannot be replicated digitally, giving the shopper a reason to visit a store versus buying online. For all the talk of brick and mortar stores becoming extinct, the reality is that they’ll continue to play a vital role in the shopper mix—but a more specific one. Smaller, more curated and creative environments will be designed to build loyalty with targeted audiences versus sell mass volumes of product like the big-box formats in decline today.

Retailers will then complement the physical environment with enhanced online availability of products, making it convenient and easy to shop online, while providing dynamic unique pricing and proprietary content to again differentiate themselves from competitors. Supporting this will be increasingly personalized and tailored offers and messaging, driven by vast streams of data and technical platforms to help interpret and manage it.

Regarding further technological advancements, digital shopping will become easier and more interactive with the expansion of voice activated and virtual reality technology, resulting in a world where, through interactive VR, you can perhaps one day visit the grocery store and pick your preferred products right off the shelf from the comfort of your couch.

Delivery options, in turn, will also become more efficient with drone and on-demand services, while retailers will also find efficient ways to automate inventory control for improved back-of-store efficiency. For example, evolving robotic automation to complement, or even replace, human labor services from warehouses to increase efficiencies.

Admittedly, the future of Shopper Marketing, like anything else, remains conjecture at best. It’s anyone’s guess how the technology, trends and operational investments described here will come together, or how the Shopper industry will continue to evolve ahead, as it has for decades.

But at the end of the day it seems safe to say that any ‘Shopper 2.0’ model will embrace two things reflective of its strategic foundations, and the arc it has followed since its humble beginnings. Namely a relentless focus on the shopper—their emotions, needs and behaviors—and the power of immersive physical and digital brand experiences designed to meet them anywhere they live with the right message, the right offer and the right reason to engage with a brand: at the moment of purchase, and beyond.

Edited and re-printed with permission from Global Brand Management: A Guide to Developing, Building and Managing an International Brand, published in Nov. 2019 by Kogan Page.