Shopper marketing: new territory, new opportunity

Simon Ford, director of Shopper Tracker at Advantage Australia looks at how leading Australian companies are building competitive advantage by challenging traditional shopper marketing techniques...

"Do just once what others say you can't do, and you will never pay attention to their limitations again." - Captain James Cook.

I'm pretty sure he wasn't talking about shopper marketing as it evolves in the Australian grocery industry in 2011 but its sentiment is nonetheless as relevant today, as successful companies are challenging the status quo within shopper marketing and shopper research and changing their business performance as a result.

First, I'm delighted to see increasing levels of sophistication amongst Australian grocery retailers as they more effectively position shopper insights at the heart of their operations.

Second, intensifying category and shopper disciplines, particularly from the US and UK, are working their way into Australian supplier structures and processes.

Third, re-invigorated post-GFC budgets are facilitating these new structures and processes.

Here are my three main observations on how leading companies in Australia are building competitive advantage in this way - food for thought if you're looking for ways to improve your business performance:

1.    Focus on category and shopper as much as on brand and consumer

If 'point of purchase' is the moment of truth where the interests of consumers, manufacturers and retailers all coincide, shopper marketing and shopper insights is the glue holding it all together.

Companies winning here are positioning their shopper marketing department at the centre of their business (not on the periphery). They're placing their best people in these roles and ensuring the processes and output surrounding the department are integrated and high up on the strategic food chain (not simply a tactical interpretation of pure consumer and brand led strategies).

2.    Measure less of what shoppers do and more of why they do it

If you always do what you've always done, you'll always get what you've always got. And so it is with shopper research.

For years I've seen companies measure only what shoppers do (for example, EPoS data, scan data, behavioural observations). Whilst these are all useful in understanding where a category is winning or losing, they are less useful in understanding why or, importantly, what to do about it. A classic example is the metric "time spent at shelf is 3 minutes" - is this great because of high engagement or poor because of high confusion? Even if you knew the answer, it does little to tell you what to do to fix it and how.

Successful companies are looking to measure why shoppers behave as they do (i.e. what's important to shoppers and how well is the retailer delivering on this). Crucially, they understand how this fits with what the retailer is trying to achieve in the category and benchmark themselves against other retailers. The research is much more directive, actionable and relevant to the way the retailer makes decisions.

3.    Understand how retailers define and measure their category and their shoppers, use the same data, talk the same language.

"Enough about me, what do you think about me?" Many manufacturers centre their presentations and pitches on their business. It's all about their shoppers, their brands, their research. But as we know, you can build a research question to tell you what you want it to tell you, so retailers always have an inherent level of distrust of research that isn't their own.

Companies that are succeeding in this area are focusing on the retailer and using the same data the retailers use. They frame their arguments around that of the retailer's strategies and category objectives, and they use the same market research data sources as the retailer to speak the same language.

If you can talk "Everyday Rewards loyalty card" data to Woolworths or "Shopper Tracker" data to Coles, you're using the same metrics as the buyers. Don't underestimate the value of using this same established data source. Credibility, relevance and familiarity are critical to buyers aligning with your proposals - common data sources, common shopper definitions, common category benchmarking perspectives all drive this.

So if you want to explore new territory with your shopper marketing strategy and improve your business performance, here are three simple tips to get you started:

  1. Focus as much on category and shopper as on brand and consumer
  2. Measure less of what shoppers do and more of why they do it
  3. Understand how retailers define and measure their shoppers, use the same data and talk the same language.

Simon Ford is director of Shopper Tracker at Advantage Australia, which consults to some of Australia's largest FMCG suppliers and retailers. This includes working closely with Coles category and buying teams on Shopper Tracker, a shopper research benchmarking programme covering 150+ categories in the Australian grocery retail sector. Please send any comments or questions you have in relation to this article to: Simon.Ford@AdvantageGrp.com.au