shopper marketing study

SPECIAL ADVERTISING SECTION TO BRANDWEEK
Desperately Seeking
Collaboration
The Secret to Success
in Shopper Marketing
the PMA
A
new study commissioned by the Promotion Marketing Association’s newly
formed Shopper Marketing Center of Excellence identified broad and grow-
ing acceptance of the practice of shopper marketing among both retailers
and marketers, as well as a need for closer collaboration between them.
The comprehensive online survey, fielded in March of this year in conjunction with
Brandweek, Progressive Grocer and Convenience Store News, polled manufacturers
and retailers as well as the agencies and marketing service organizations working
with them.* The results provide a provocative glimpse into the current state of shop-
per marketing and vividly point out the gaps in achieving its promise.
The timing for this seems perfect: more than 60% of those surveyed reported that
they are currently practicing shopper marketing. A full 75% of retailers surveyed said
that some of their competitors are already practicing shopper marketing; 19% say all
of their competitors are.
Desire for collaboration emerged as a key theme of the findings. In general, retail-
ers and manufacturers say they want closer collaboration (aligned objectives, stronger
shopper insights, joint planning, activation and measurement) to maximize its poten-
tial. But as Rob Holston, the practice leader in shopper marketing for Deloitte
Consulting, put it: “collaboration is like a romance” and requires a lot of work from
both parties to succeed.
The benefits to collaboration are clear. Among retailers who responded that they
were collaborating “very well” with their vendors around shopper marketing, two-
thirds have seen increases in sales and improvements in profitability. Even more
impressive, among those manufacturers who indicated that they were collaborating
very well with retailers, all reported increased sales, enhanced brand equity, stronger
retailer relationships/greater cooperation and stronger consumer relationships. Two-
thirds of these manufacturers have also realized enhanced profitability.
Jesse Spungin, vp of shopper marketing at ConAgra Foods, reinforced the logic
behind collaboration. “Each stakeholder naturally has their own priorities. The new
common ground is the shopper. Nobody has an 80% share of the shopper.”
Retailers are hungry for programs—78% say they do not see enough and are looking
for more, while none reported that they are being offered too much. Some 44% of
retailers responded that they are more likely to support shopper marketing programs
than standard initiatives, and none indicated that they receive a lesser level of sup-
port. Nearly 6 in 10 manufacturers report that retailers are giving more support to
shopper marketing than they did just one year ago, although just one-third of retailers
What is SHOPPER
MARKETING?
There are several definitions in
widespread use, all grounded in
leveraging insights into shopper
behavior—as in, the consumer
while in a “shopping mindset”:
DELOITTE: All marketing stimuli... designed
to build brand equity, engage the shopper and
lead him/her to make a purchase.
CHRIS HOYT, president of Hoyt & Company:
Leveraging shopper insights to create retailer-
centric executions that delight shoppers and
benefit both brands and retailers.
LISA KLAUSER, vp consumer and customer
solutions, Unilever: Translating shopper insights
into actionable programs or solutions with our
retail customers that are going to drive business.
The PMA urges that any shopper marketing
definition include three essential elements:
1. Is grounded in an ACTIONABLE understand-
ing of the shopper (i.e. an insight that illumi-
nates how behavior can be influenced)
2. Involves reaching/connecting with consumers
when they’re in the shopping mindset,
whether within or outside of the retail envi-
ronment itself
3. Is a JOINT effort between manufacturers and
retailers.
Survey analysis by Rick Abens, director of advanced
analytics for Conagra Foods and vp of research for the
PMA; and Don Ladhoff, vp client solutions for
Seismicom. Both are members of the PMA's Shopper
Marketing Center of Excellence.
*For this article, we’ve reported the responses of agencies and marketing service organizations
working with manufacturers collectively as “manufacturers”, and likewise have reported agencies or
marketing service organizations working with retailers as “retailers.”
S1
pma_shopper_study_may08 5/14/08 11:57 AM Page 1
SPECIAL ADVERTISING SECTION TO BRANDWEEK
said they are seeing more support from manu-
facturers over this same period.
DIFFERENT STROKES
Retailers and manufacturers appear to set
out with different objectives for practicing
shopper marketing. While both identified
increased sales as their No. 1 objective, retail-
ers are more focused on the consumer, manu-
facturers on their retail customers. Among
retailers, 31% listed strengthening consumer
relationships as their primary reason, while
less than 10% of manufacturers had this same
objective. Some 22% of manufacturers report-
ed that their primary reason was to strength-
en relationships or gain greater cooperation
with their retailers, but none of the retailers
surveyed felt this way about their vendors.
However, the benefits that both manufac-
turers and retailers have realized from shopper
marketing generally went well beyond their
initial expectations. Among manufacturers
who responded that they began implementing
shopper marketing for the primary purpose of
increasing sales, 69% achieved the sales
growth they had hoped for. However, 58% also
experienced stronger relationships with their
retail customers, 33% felt they had gained
greater cooperation, 31% achieved increases in
brand equity and 28% attained profit growth.
Similar success was discovered by those
manufacturers who engaged in shopper mar-
keting for reasons other than sales. Among
those who began primarily for the purpose of
improving profits, five out of six reported
their mission was accomplished, while for
those who primarily sought to strengthen
retail relationships, 89% were successful.
Manufacturers who were striving for greater
retail cooperation were rewarded 78% of the
time, and for those who primarily wanted
stronger relationships with their consumers,
88% felt that this was achieved.
Retailers also reported a high success rate
from taking up shopper marketing. When
retailers were asked what benefits they had
realized, they responded (in order of preva-
lence) increased sales, stronger consumer
relationships, improved profitability, stronger
vendor relationships and enhanced brand
equity. Among those motivated by increased
sales, seven in eight reported success; for
retailers who sought stronger consumer rela-
tionships, 80% felt that this was achieved.
When retailers were asked why they will
continue to support shopper marketing, 31%
wanted to increase consumer engagement, 19%
liked how programs were tailored to their shop-
pers, and 25% aimed to increase sales. For this
last group, they were divided equally between
expecting category-wide impact and seeking
growth specific to the brands promoted.
PLAYING CATCH-UP
Almost two-thirds of the retailers said they
had been practicing shopper marketing for
more than five years, while only one-third of
manufacturers said they have been involved
as long. This could be key, since retailers seem
to prefer working with manufacturers who are
aligned in their marketing plans and strate-
gies, possess shopper marketing competence
and can deliver powerful shopper insights and
exclusive programming.
Joint planning is a key component to suc-
cessful collaboration between retailers and
manufacturers. One out of three retailers
reported that they do not practice joint plan-
ning with their vendors because their plan-
ning cycles do not coincide, although less
than 10% of manufacturers had the same
issue. It may be that there is a difference in
perceived importance, as manufacturers
reported that they are more than twice as
likely to have SVP/C-suite personnel attend-
ing shopper marketing presentations as retail-
ers were (35% vs. 16%).
On the positive side, manufacturers who
have practiced shopper marketing longer were
more likely to be planning with their retailers
further in advance. Nearly twice as many
retailers as manufacturers reported that they
were striving to plan together more than 12
months out (22% vs. 13%); at the same time,
almost twice as many manufacturers as retail-
ers said that they were working a bit closer in,
six to 12 months from launch (61% vs. 33%).
Anecdotally, there is nearly universal agree-
ment that shopper marketing is driven by
insights, and shopper insights are an area
where collaboration is often missing. While a
high percentage of manufacturers (two out of
three) report that they are conducting primary
quantitative and qualitative research to better
understand shoppers, the same two out of three
shopper marketing study
the PMA
0
10
20
30
40
50
60
What is the primary reason your organization has implemented
Shopper Marketing programs? Which of the expected benefits
of Shopper Marketing has your organization realized?
Reason Realized
enhance brand
equity
increase
sales
improve
profitability
strengthen
retailer
relationships
greater
retailer
cooperation
strengthen
consumer
relationships
What is the primary reason your organization has implemented
Shopper Marketing programs? Which of the expected benefits
of Shopper Marketing has your organization realized?
Reason Realized
enhance brand
equity
increase
sales
improve
profitability
strengthen
retailer
relationships
greater
retailer
cooperation
strengthen
consumer
relationships
0
10
20
30
40
50
60
70
MANUFACTURERS RETAILERS
%

O
F

R
E
S
P
O
N
S
E
S
%

O
F

R
E
S
P
O
N
S
E
S
Source: PMA 2008 Shopper Marketing Study
S2
pma_shopper_study_may08 5/14/08 11:57 AM Page 2
SPECIAL ADVERTISING SECTION TO BRANDWEEK
shopper
marketing
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San Francisco, CA 94107
www.prn.com
KEY EXECUTIVES
Richard Fisher, President
richard_fisher@prn.com, 415-808-3571
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mike_quinn@prn.com, 415-808-3557
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pma_shopper_adv_may08 5/14/08 12:06 PM Page 3
ADDRESS
Headquarters:
25200 Telegraph Road, Southfield, MI 48033
248-936-2200 / fax: 248-936-2764
Branch Offices: Atlanta, Bentonville, Cincinnati,
Chicago, Detroit, New York, Minneapolis,
Oakland, Scottsdale, Tampa and Toronto
www.marsusa.com
KEY EXECUTIVES
Ken Barnett, Chief Operating Officer,
barnettk@marsusa.com, 248-936-2267
Scott McCallum, Exec. VP/General Manager,
Southfield, mccallums@marsusa.com,
248-936-2360
Rob Rivenburgh, Exec. VP/General Manager,
Bentonville, Rivenburghr@marsusa.com,
479-553-6331
Joe Lampertius, VP, Retail Channel Team,
lampertiusj@marsusa.com, 248-936-2299
THE #1 SHOPPER MARKETING
AGENCY
As recognized by HUB Magazine (5/1/08)
Through our unwavering focus on the Shopper,
MARS fully understands what fuels a Shopper’s
story and brings her closer to your brand. We
fuse dreams and data, intuition and innovation,
big-idea thinking and sharp execution to make
the Shopper’s experience and your retail
marketing efforts both heroic and gratifying.
At MARS, the Shopper is the hero.
Our mission is to perfect the art and science of
shopping by going deeper into the minds of
Shoppers to find out what makes them tick.
Our single-minded goal is to delight the
Shopper, putting us in a unique position to
make a paradigm-shifting impact on the world
of retail.
We are constantly reimagining and
revolutionizing the landscape of retail
marketing through the creation of phenomenal
shopping experiences, partnering with high-
profile clients to become the industry leader in
building brands and serving shoppers.
ABOUT MARS
Our approach begins by conducting a thorough
analysis of a Shopper’s lifestyle, behaviors &
attitudes, and need states, enabling us to
connect with her emotional mindset. This
understanding serves as a lens that allows us to
see what the Shopper requires from the
particular retail experience. Melding insights
with intuition gives rise to strategy and,
ultimately, the big creative idea that guides
your brand through the Shopper’s retail journey.
Finally, we incorporate a wide range of
conventional as well as cutting-edge tactics
with best-in-class execution to deliver results
and build long-term relationships.
MARS maintains an integrated network of over
500 employees, in 11 offices in North America.
And while we’ve been in the Shopper Marketing
business for over 30 years, in many ways, we
feel we are just hitting our stride.
OUR CLIENTS
MARS serves manufacturers who want to build
brand equity, drive volume, enhance and
expand brand presence, as well as leverage the
retail space more effectively. We also work
directly with retailers looking to increase sales,
grow their businesses, and maximize their
financial return by optimizing their store
experience. We provide them with concrete
ways of activating Shoppers, building long-term
loyalty and help in the overall management of
their brands.
Our client list is an impressive roster made up
of Fortune 500 companies that are leaders in
their categories. They include Campbell Soup
Company, The Clorox Company, Abbott
Nutrition, GE Financial, GlaxoSmithKline,
Foster’s Group Limited, Pepperidge Farm, Ace
Hardware, National Basketball Association,
Hewlett-Packard and Sam’s Club.
S5
SPECIAL ADVERTISING SECTION TO BRANDWEEK
shopper
marketing
pma_shopper_adv_may08 5/14/08 12:11 PM Page 5
SPECIAL ADVERTISING SECTION TO BRANDWEEK
felt that their shopper insights could be stronger
(although four in 10 felt they have a “good
understanding” of their retailers’ shoppers).
In general, both sides feel that it is primarily
the manufacturers’ responsibility to bring
shopper insights to the planning table, though
a good portion of manufacturers want to see
more shopper insights coming from retailers.
Four in 10 manufacturers feel that they alone
have the primary responsibility for bringing
insights to a joint planning exercise, while only
one in seven retailers feel that manufacturers
bear this responsibility. Nearly half of manu-
facturers see bringing core insights to the plan-
ning table as a joint responsibility, while just
over one-fourth of retailers agree. Well over half
of retailers (57%) feel that the primary respon-
sibility for bringing insights to a joint planning
session should be theirs alone, while a mere
4% of manufacturers agree.
Shopper marketing planning cannot be dis-
connected from the business units’ strategic
planning process. The No. 1 change that man-
ufacturers plan to improve is requiring that
shopper marketing initiatives are an integral
part of the annual planning process. In today’s
world of integrated marketing, certainly the
strategies and plans for the “First Moment of
Truth” must be integrated into the brand’s
and banner’s strategic plans.
SHOPPER SEGMENTATION NOT
WELL KNOWN
Segmentation of shoppers is rapidly growing
as a tool for facilitating shopper marketing,
but understanding and utilization are uneven.
Almost half of retailers surveyed now have
shopper segmentations, although two-thirds
of manufacturers do not consistently build
their programming around them. At the same
time, 64% of manufacturers said they have
developed their own shopper segmentation.
Two in three retailers reported that manufac-
turers are aware of their segmentation but are
not well-versed, and feel that they could be
providing more information in this area.
Among manufacturers who are consistently
using the retailer’s segmentation models,
almost half said they have been practicing
shopper marketing for more than five years.
The survey says that 62% have seen increased
sales as a result, and the same percentage
experienced stronger relationships with their
retailers. Also, 87% stated that their retailers
are very willing to share information with
them, and half of that group claimed this even
shopper marketing study
the PMA
1. TURN THE WAR ROOM INTO THE
WIN ROOM. Get the key players from both
organizations together in one place and
embrace the practice of joint planning. Rob
Holston with Deloitte encourages partners to
focus more on the process up-front vs. all of the
focus on the programs themselves. Agreement
on objectives is critical so that each party
knows what they will be getting.
Since shopper marketing is still a fairly new
and evolving discipline, training and communi-
cation are key. PMA suggests that both sides
openly share the successes and lessons they’ve
learned with other programs. And shopper mar-
keting best-practitioners routinely include
agency representatives within their core
account teams to benefit from their often
broader range of experiences and allow more
decisions about budgets, production, etc., to be
made on the spot in planning meetings.
2. SCHEDULE THE CELEBRATION
NOW. The best-planned and executed pro-
grams still need to be measured, and the key
learnings must be gathered and shared. Set the
date for the post-program evaluation at the
beginning of the joint planning process and be
insistent that this critical meeting take place.
3. LEAD WITH INSIGHTS. Successful
shopper marketing begins and ends with the
consumer, so work from that point. Both retail-
ers and manufacturers need to contribute
meaningful, relevant understanding of the
shopper that invites action - the “aha!” behind
every powerful insight. Consider joint focus
groups, or investing together in primary
research to validate insights.
4. SPEAK A COMMON LANGUAGE.
If the retailer has a segmentation model, use
it–they are the retailer’s shoppers, after all. If a
manufacturer is able to further define or
improve on the retailer’s version, so much the
better. A “translation tool” for overlaying retail-
er and manufacturer segmentation models
could increase shopper marketing effectiveness,
as often the shopper and brand targets overlap
substantially and have similar insights.
5. FORGE A SHARED VISION OF SUC-
CESS, and agree how you’ll know when you
get there. The old saying goes that you can’t
market what you can’t measure, so be sure the
metrics are in place for every program and that
all parties are on board. Some best-practitioner
manufacturers are taking it even further and
aligning the bonus objectives of their teams to
the retail customer’s objectives.
6. DON’T WAIT—INTEGRATE. Shopper
marketing programs are even more effective
and efficient when they are planned and imple-
mented as a core element of the entire market-
ing mix. Align them with your larger planning
cycle and insist that they are locked down as
early as needed for maximum integration. Since
many retailers plan more than 12 months in
advance and manufacturers typically have a
shorter lead-time, manufacturers need to start
planning at least 12 months out to be in sync
with the retailer’s planning process. PMA sug-
gests using a rolling 15-18 month planning
schedule.
7. DOUBLE DOWN ON SURE BETS.
Shopper marketing has already proven to be
the better investment over the long term, so
take the lead from best practitioners and
make a strong commitment to ensure the max-
imum return. A true win-win approach, which
improves equity for both retailers and manu-
facturers, should take into consideration
mutual “pain points” and assign contributions
accordingly.
The Marketing Leadership Council’s bench-
marking study found that among manufactur-
ers, leading practitioners may spend as much as
40% of their consumer and trade budgets on
shopper marketing. However, it may not be nec-
essary to increase total spend; using a zero-
based budget approach can identify the least
profitable/efficient spending (eg. trade
allowances) and redistribute a greater percent-
age for shopper marketing.
THE
PMA
7
POINT
SHOPPER
MARKETING
MANIFESTO
Finger-pointing about who should do what
doesn’t get anyone closer to the goal. It’s
clear that deeper insights internally on
both sides and better understanding of the
other party’s objectives will go the longest
way toward making shopper marketing
efforts more effective, so here’s the PMA’s
prescription for success.
S6
pma_shopper_study_may08 5/14/08 11:57 AM Page 3
SPECIAL ADVERTISING SECTION TO BRANDWEEK
included information that was proprietary or confidential.
75% said the information they are getting directly from the
retailer was a key source of their shopper knowledge.
Interestingly, only 63% of manufacturers felt that they were
well-versed in the retailers’ segmentation, leaving the bal-
ance either not knowing the specifics or entirely unaware. By
the way, 31% of these manufacturers don’t even have their
own shopper segmentation model; they rely solely on the
retailers’.
Respondents’ views regarding activation and integration
into the retailers’ larger initiatives varied. A full 44 % of
retailers felt that shopper marketing programs were more dif-
ficult to implement than standard initiatives, and none felt
that they were any easier. However, it appeared that views of
the difficulty varied according to the success the practition-
ers were attaining. Of those retailers who felt that programs
were more difficult to implement, only one in six had real-
ized sales increases since implementing the practice; for
those who believed shopper marketing programs were no
harder to implement than others, five out of six had realized
increased sales. Also, 44% of retailers responded that shop-
per marketing programs were highly integrated into their
systemwide initiatives, while 38% said that they were only
integrating programs on an ad-hoc basis, and 19% were not
integrating them at all.
There is a gap in retailer-manufacturer alignment over the
use of shopper marketing as a tool to enhance brand equity,
too. Among retailers, 85% saw the practice as building their
brand equity, while less than two in three manufacturers
agreed (62%). Most manufacturers (72%) viewed shopper
marketing as a tool for increasing the equity of their own
brands, while just four in 10 retailers agreed with this point.
MEASUREMENT ANOTHER MISS
As with other media and marketing efforts, measurement is
another area of shopper marketing collaboration that needs
much improvement. Only one-third of both retailers and
manufacturers report that they agree on the metrics for eval-
uating programs even “most of the time.” Nearly two-thirds
of manufacturers said they only “occasionally” or “never”
reach agreement with retailers on how to measure programs,
while no retailers reported that they agree regularly with
their vendors. Says Chris Hoyt, president of Hoyt &
Company: “measuring is the only way to foster future
enlightenment of resource allocation.”
There is significant room for improving on follow-
through: only six in 10 manufacturers report that they consis-
tently performed a postmortem, and just 55% of the total
said they share these evaluations with their retail customers.
While the industry has not yet adopted a common measure-
ment system for shopper marketing activities, anecdotal evi-
dence would suggest that it could be a win-win for retailers
and manufacturers alike. s
What do you feel would make your Shopper Marketing
programs more effective?
common
goal setting
& planning
shared
consumer
insights
stronger
vendor
relationships
deeper
insights
developed
internally
deeper
under-
standings
by
vendors
greater
manpower
&
resources
increased
funding
from investors
0
10
20
30
40
50
What do you feel would make your Shopper Marketing
programs more effective?
common
goal setting
& planning
shared
consumer
insights
stronger
vendor
relationships
deeper
insights
developed
internally
deeper
under-
standings
by
vendors
greater
manpower
&
resources
increased
funding
from investors
0
10
20
30
40
50
60
70
80
How often do you and your key (retailers/vendors)
agree on the measurement criteria of Shopper Marketing
initiatives and build them into the programs?
all of the time most of the time some of the time never
0
10
20
30
40
50
60
70
Manufacturers Retailers
shopper marketing study
the PMA
RETAILERS
MANUFACTURERS
COLLABORATION ON MEASUREMENT
%

O
F

R
E
S
P
O
N
S
E
S
%

O
F

R
E
S
P
O
N
S
E
S
%

O
F

R
E
S
P
O
N
S
E
S
S7
Source: PMA 2008 Shopper Marketing Study
pma_shopper_study_may08 5/14/08 11:57 AM Page 4