The 5th annual Grocery Manufacturers Association (GMA) shopper marketing research study focuses in on what is really important in shopper marketing and POP display and advertising – creating motivation, value, and driving sales instore. Of course, marketing has always strived to achieve these goals, yet many manufacturers aren’t doing it well enough. The 5.0 study hopes to enlighten with a “solutions based approach.”

The key point of shopper marketing for you as a brand manager or product entrepreneur is in how you are engaging the shopper and focusing your promotional efforts to capture more shoppers who are making their purchase decisions in the store.

Shopper Marketing 5.0: Creating Value with Shopper Solutions is an informative study by Washington’s Grocery Manufacturers Association, a group of 300 food, beverage, and consumer product companies. For small to medium brands, insights from the study may help you establish and improve your brand leadership.

Shoppers Shopping and Deciding in the Store

Whether it’s at Sears, Shoppers Drug Mart, Sobeys, Canadian Tire, Target, or Walmart, many manufacturers and retailers campaigns are focused on price or brand promotion. And price-based competition requires little consumer insight and is more about distribution channels and trade promotion. To avoid price-based strangulation, marketers need more in-depth insight into customer profiles and motivation in 2012.  This study provides hope and direction on consumer promotion strategy.

According to Booz & Co, Shopper Marketing 5.0 was conducted to:

• Identify the characteristics of winning shopper solution events and programs
• Provide tangible examples of effective solutions and their objectives, insights, vision, execution, and results
• Define the capabilities needed to deliver customizable-at-scale shopper solution programs
• Highlight future opportunities in shopper solutions

If smaller companies are going to compete, and this research study says they can, they need to identify the key drivers of instore sales and the type of packaging, displays, and sales strategies that work best. To achieve that, they will need to innovate and deliver new value to shoppers by using new information, convenience, promotional pricing, and a clear call to action. Other research studies such as the POPAI 2012 Shopper Engagement Study also offer insight you may find valuable.

The Shopper Marketing 5.0 report doesn’t mention instore advertising, consumer packaging,  and POP display design yet we know these are the mediums for getting the value proposition across. The positive experience shopper marketing alludes to is highly dependent on packaging and instore display. The POP packaging is where the innovation has to take place and the messaging’s hook and call to action makes its impact. Currently, much POP packaging lacks a hook or a call to action. Changes in this area alone may be revolutionary as far as design is concerned.

Manufacturers and marketing departments are increasing their shopper marketing budgets by more than 20% so a lot of industry people are seeing the value of shopper marketing. The report states that shopper marketing is estimated between US$50  billion and $60 billion annually, and many major CPG manufacturers now have shopper marketing organizations of 20  or more dedicated staff.

Shoppers at the Point of Purchase

Consumers are making more buying decisions instore, in fact, the last research shows a record 76% of purchases were affected by instore messaging. Although pricing is a primary factor in shopping decisions, consumers are looking for value. Those brands that can enhance brand value with great merchandising, packaging, and instore promotional techniques stand a chance to minimize price consciousness and get consumers to switch brands.

Shoppers have a different mindset at the point of purchase than they did at home or while driving to the retail store. The closer they get to a purchase decision at the checkout counter, their decision making process changes. Manufacturers and retailers as yet aren’t fully clear on how their mindset changes. The study of shopper marketing is attempting to provide answers.

Previous shopper marketing studies by GMA found that creating greater value for shoppers would be the key to delivering better sales and ROI. It’s the identification of shopper’s frame of mind, values, and decision points as they exist while the shopper is shopping and buying that counts. General consumer shopping insights haven’t keyed enough on shopper’s impressions, perceptions and decision making in the store. Creating these insights will provide a considerable competitive advantage for retailers and for retail POP marketing companies.

Increasingly, marketing companies are questioning everything in their marketing arsenal including store layout, navigation, promotional displays and advertising, packaging, and sales training. We realize that influencing shoppers means adapting our understanding and strategies to instore shopping behaviour. Not all shoppers have the same values, mindset, and behaviour instore. Even the same customer may behave differently and hyprocritically during their shopping trip.  They may splurge on one item and bargain shop for another, and this behaviour may be specific to their shopping experience instore. Their behaviour has nothing to do with planned or intentional goals, however many shoppers may experience guilt that they have deviated from shopping plans. One more psychological facet to explore.

An important objective of Shopper marketing is the drive to deliver and capture ever greater value from manufacturer and retailer collaboration. The report suggest that over the next 5 years, manufacturers will benefit more from this collaboration, yet retailers will still benefit.

The goal of shopper marketing is to create shopper solutions – which they describe as insight-driven events that often feature two or more products that shoppers can purchase together. That might be the reason why product bundling works well. In this case, greater value is a more powerful solution and may override brand power and price sensitivity.

Key insights and findings:

1. The best shopper solution programs actuate the full potential of shopper marketing by enhancing the purchasing and product experience for shoppers. They serve as catalysts for stronger, more collaborative retail relationships, through easily customizable program designs that create differentiation and sales for retailers.
2. Best-in-class solution designs combine motivation with a reason to act. They provide easy-to-digest information and enhance convenience by bringing products together for a complete solution.
3. Shopper solutions require that the dictates of scale be balanced with demand for customization.

The Shopper Marketing 5.0: Creating Value with Shopper Solutions report also found that shopper solutions:

1. enhance the purchasing experience and deliver new value to shoppers by using new information, convenience, promotional pricing, and a clear call to action.
2. fuses brand marketing and trade promotions to boost brand value, sales volume, and profitability.

The Shopper Marketing 5.0 study is an interesting read and provides signposts of shopper marketing that can help marketers, manufacturers, and retailers better respond to consumer’s actual needs and frame of mind while they’re shopping. The end result may be better collaboration between manufacturers and retailers and new market winners will rise in the retail sales wars.

Read more on POP strategy, multichannel integration, innovative product launches, and brand lift from POP.