Shopper marketing: Afterthought or strategic imperative?

In many organizations shopper marketing is still just an afterthought:  There is some money left in the budget, so why not spend it on shopper marketing? However, there are a number of compelling reasons for marketers to consider shopper marketing as a strategic imperative, says Peter Steidl.

First, let’s consider ad fraud. Reports suggest that ad fraud could cost brands more than $16 billion globally this year, and that nearly 20 percent of total digital ad spend was wasted in 2016. Ad fraud is not an issue when it comes to shopper marketing. The first step is to integrate the promotional message with the product offer, the second is to use the sales results to monitor the effectiveness of the message.

This provides a realistic assessment of the promotional message, an assessment that is hardly ever feasible with mass media advertising. To top it off, the shopping environment typically allows for A/B testing which can further validate the findings.

Second, think about ad blocking, an arguably even more significant threat to marketers, estimated to cost marketers many billions this year as the incidence of ad blocking rises. What may be seen as annoying interruptions when a consumer is engaging with social media, playing games or exploring the internet become acceptable – sometimes even welcome – communications when the consumer is in shopping mode. Would this suggest that it is worthwhile moving some of the mass media spend into the shopper marketing budget? We certainly think so.

Third, a longer term perspective: an increasing number of consumers use a personal/ home assistant such as Amazon Echo’s Alexa to get their shopping done. Here we have to differentiate between ‘doing the shopping’, i.e., the chore of necessary but boring and unrewarding shopping such as buying groceries and tyres, and ‘going shopping’, i.e., the pleasure of engaging in a desirable, rewarding shopping expedition.  

It is not surprising that consumers delegate a significant and growing share of their ‘doing the shopping’ tasks to their personal/home assistant. It is, after all, much easier to ask Alexa to get it done. Importantly, shoppers often do not specify the brand they want when they do this. Think about grocery purchases: many consumers habitually buy the same brand. But habits do not suggest brand loyalty – what we are observing is habitual buying, not an actual brand preference. Similarly, consumers can instruct their personal assistant to get the best deal for the total basket rather than specifying the retailer.

Clearly, manufacturers have to develop strong, emotional relationships with consumers to ensure their brand is asked for when the shopping task is delegated to a personal assistant. Equally important, a retailer has to develop a shopping experience that is rewarding and exciting, even if the purpose of shopping is simply to restock grocery items.

Today’s online catalogue store typically only delivers convenience rather than an engaging shopping experience. It should therefore not come as a surprise when shoppers focusing on convenience end up delegating the whole shopping task to a personal/home assistant, leaving it to the device to decide where to place the order.

It is impossible to do this topic justice in a short opinion piece. The message is this: Shopper marketing is already an effective way of dealing with ad fraud and ad blocking. But it has a truly important long-term role to play: to turn boring, must-do shopping expeditions into rewarding and exciting experiences the shopper wants to repeat, rather than delegating the shopping task to a personal/home assistant.  A powerful, creative approach to shopper marketing is essential to survival in the emerging, technology driven environment. Without it only the price leader will survive.