P&G, GSK heighten focus on shopper marketing

08 December 2009

NEW YORK: Major marketers like Procter & Gamble and GlaxoSmithKline are making increased use of shopper marketing in an effort to reach consumers at the decisive stage of the purchase process.

A new study from Nielsen, the research firm, found that 9% of Americans "dislike" or "hate" grocery shopping, while 38% regard it as "a chore, but not difficult," and 53% either "like" or "really enjoy" it.

Some 30% of items are now being bought on promotion, according to Nielsen, with the number of high-income and middle-income consumers following this route having risen by around 10%.

Similarly, even though planning is becoming more important, around 50% of people are comparing prices when buying grocery goods.

Irvinder Goodhew, a principal at AT Kearney, the retail consultancy, argued that up to 70% of purchase decisions are now made in-store, while over two-thirds of acquisitions are "impulsive."

Among the organisations attempting to tap into this trend is Proctor & Gamble, the FMCG giant, which recently formed a partnership with Wal-Mart to reassess the way its baby-care brands were being sold.

As a result of this process, Wal-Mart's baby-care centres were redesigned to correspond more closely with a child's view of the world, such as by adding a mixture of interactive and more colourful displays.

The consumer goods arm of GlaxoSmithKline employed a similar approach when launching its innovative Isoactive toothpaste, which turns into foam when used, in Wal-Mart outlets.

Alongside more traditional activities like live product demonstrations, the company used the Arkansas-based firm's in-store media service to broadcast TV ads for the brand at the end of aisles.

From a retailer perspective, Tesco, the UK-based supermarket chain, discovered from an assessment of its data that one segment of its customer base was frequently buying nappies and beer in one trip.

In response, it worked with brand owners to produce a detailed profile of this cohort, made up of young fathers, who were picking up items for their family and a treat for themselves at the same time.

Goodhew further suggested that shopper marketing schemes can benefit from information drawn from sources ranging from ethnographic insights to online and in-store statistics.

"Notionally, outside of the store you are considered to be a consumer. As soon as you enter the store you are a shopper, and can behave in entirely different ways," she said.

"To take these insights to the next level, data from retailers and external market insights are overlaid to develop a 360-degree view on the purchasing environment in which the person exists." 

Areas of focus should include presentation, the tactical use of promotions, and a realisation that the web is playing an increasingly important role in shaping behaviour.

"The channels used to reach consumers are less immediate and less targeted: after you see an ad on TV, it's often some time before you make a purchasing decision based on it," said Goodhew.

"Shopper marketing goes beyond traditional consumer marketing to engage shoppers at the 'moment of truth' - which is instore."

Brands that have been the "first-movers" in this space have enjoyed growth 25% above the category norm, while over two-thirds of retailers have seen long-lasting sales gains from implementing these types of initiatives, she added.

Data sourced from Inside Retailing; additional content by Warc staff