OAK BROOK, Ill. - Retailers should embrace shopper marketing by developing the capabilities, and sharing insights with manufacturers, among other steps, according to a white paper that will be released this week.
“Retailers must play a key role in further developing the concept and the processes required to carry it out,” according to the 20-page report, to be presented for the first time Wednesday at the In-Store Marketing Institute's In-Store Marketing Summit here. The paper is scheduled to be available for free on April 21 on the Institute's website, www.instoremarketer.org. A video of the keynote session during which the white paper is discussed will be available on the same website sometime next week.
Called “Shopper Marketing Best Practices: A Collaborative Model for Retailers and Manufacturers,” the paper is designed to guide the collaborative process.
The Retail Commission on Shopper Marketing — established last year by the In-Store Marketing Institute and consulting firm The Partnering Group — authored it. Coca-Cola is the lead sponsor.
The Commission includes 10 retailers: Food Lion, Giant Eagle, Marsh Supermarkets, ShopRite, Meijer, Schnuck Markets, Supervalu, Wegmans, Walgreens and Wal-Mart. Representatives from about 10 consumer packaged goods companies — including Kellogg, Campbell's and Hershey — serve as strategic advisors.
Shopper marketing is the next evolutionary stage in retail marketing, according to the paper.
While certain retailers are actively involved with shopper marketing, manufacturers for the most part have shouldered the bulk of responsibility.
“We need to broaden the base of retailer involvement,” Brian Harris, founder and chairman, The Partnering Group, told SN. “Retailers need to collaborate and develop shopper marketing as a strategic platform for their businesses, rather than relying completely on manufacturers to come up with all the ideas.”
Take RCSM member Meijer, Grand Rapids, Mich. Meijer has been present at all major RCSM meetings and conference calls, helping the commission identify how retailers and manufacturers can align and benefit from shopper marketing, according to Michael Ross, Meijer's vice president of marketing, consumer insights and pricing.
“Success of shopper marketing will be driven by retailers and manufacturers collaborating on insights and linking business plans toward a common customer growth strategy,” Ross told SN.
Such collaboration will result in a stronger return on investment, compared to traditional marketing practices, according to Ross.
“Measurable results will be a powerful drive in the adoption and growth of shopper marketing,” said Ross.
A key aspect of the paper is a formal definition of shopper marketing: “Shopper marketing is the use of insights-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience and improve business results and brand equity for retailers and manufacturers.”
The white paper outlines the necessary strategic, operational and organizational requirements the industry needs to adopt to make the shopper marketing concept a reality.
Among other recommendations, it stresses that shopper marketing should identify shopper segments and produce personalized messages that speak directly to the target audience.
“Shopper marketing is turning the lens away from the shelf, and onto shoppers,” said Peter Hoyt, the Institute's executive director and chief executive officer. “It helps determine what shoppers' needs and priorities are, and blends that into the shopping experience.”
The white paper will help manufacturers and retailers identify shared objectives, agree on the strategies to move forward and keep all parties focused on the shopper, said James LaRue, Kellogg's senior director of shopper marketing.
“The white paper can provide a common roadmap for the discussion among retailers and manufacturers to move beyond focusing just on pricing,” LaRue told SN. “We're only going to achieve our mutual business objectives together.”
Wal-Mart, Giant Eagle and Walgreens are the first to put the findings into practice. Their efforts are part of three pilot studies that implement RCSM's learnings, according to Harris.
“They're taking the approach that's laid out in the report, and putting it into action,” he told SN.
Walgreens is collaborating with Hershey; Wal-Mart, Johnson & Johnson; and Giant Eagle, Kellogg, according to Harris.
All three pilots just kicked off and will run through September. The results will be part of a final RCSM report issued in the fall.
As it works with Giant Eagle, Kellogg builds on its shopper marketing experience. It has worked with customers to develop insight-based shopper solutions that enhance the shopping experience and mutually build its and its retailers' businesses, according to LaRue.
“We work collaboratively with our customers and leverage the strengths of the entire Kellogg organization,” LaRue said.