Are Consumer Marketing, Trade Marketing and Shopper Marketing company departments, trendy terms, or concepts that leverage, in a different manner, the results of the great brands? Whoever has followed the evolution of traditional marketing and the exchange of power between brands and retail over recent decades is starting to perceive that the latter has lost control of the value chain to their very own customers, the shopper (as the consumer is now known while in the act of buying).
This natural trend of evolution is the result of the fragmentation of the offer of products and services, stimulated mostly by the Internet. Today, we can borrow money in household electrical stores, buy books in supermarkets, snacks in rental stores… and we have access to everything on the Internet. This is what we call the multi-channel environment.
In the midst of this scenario in which products are available in almost any place, the shopper has the power to choose where to look for the item he/she wants. This is the good old law of “supply and demand”, that gives the shopper the power over and above brands and retailers.
In the context of this new reality, brands and commerce need to adapt. In the era of Henry Ford, it was enough to simply have a product, one unique version and color was enough. Later it became necessary to advertise, make adverts, create new models. It was the height of consumer marketing. After this, retail became strong, it consolidated – it gained bargaining power and the industry created the Trade Marketing department. It was the age of management by category, which started with a win-win approach, retail-industry, with the aim of optimizing the trip to the store by the customer (making him/her spend more time walking around, spending on impulse, in other words, buying more than needed). In the end, it was no longer possible to place so many variations of products on the limited supermarket shelves space.
Right from the start of the 90’s this has been the keynote in Brazil. But now, the efforts to organize the sections and the products at the point-of-sale are no longer enough. Not even the great sales adverts show themselves to be effective any more. Who remembers the great margarine adverts, the Milka rucksack, Parmalat’s little animals? This no longer works, things have changed.
Shopper marketing is a necessary evolution of trade marketing. Just as it was necessary for industry to lose its bargaining power in order to understand that the retailer was important, so the waste of millions in ineffective actions has been necessary for everyone to understand that it is imperative to understand the shopper, to know how he/she thinks and acts, before investing in the points-of-sale.
Danone, Kimberly-Clark, Kraft Foods are companies that have innovated to create shopper marketing areas in order to understand behavior at the points-of-sale. They innovated because they were capable of conciliating all the communication expertise of the consumer marketing area, with decades of experience of trade marketing in order to discuss a win-win situation with the retailer. These companies took the concept of shopper marketing to a point of stability. They went beyond the “point-of-sale action”, and went after a set of actions aimed at leveraging the sales of retailers, their brands and provide a better shopping experience for the shopper. Because of all of this, they are now reaping the results, before other companies can.
The trend is worldwide (and even in Brazil, where many still do not even understand the concept of trade marketing): shopper marketing has started to flourish, starting with research sponsored by manufacturers and retailers interested in identifying how the consumer thinks and acts at the moment of purchase.
In the United States, Kimberly-Clark worked in conjunction with the Safeway chain in order to redesign the baby area, using virtual simulations; on a smaller scale, the experiment was also carried out in Brazil. Danone increased its display by 6 miles of shelving (on the 2008 total) to organize the shelf displays of American yogurt by benefits, basing themselves on how the shopper buys products in this category. These companies have already started to reap the benefits of years of studies at the point-of-sale.
By understanding the shopper, discussions between industry and retail becomes easier, as nobody is more interested in pleasing the customer than themselves. And the results in sales and margins can be easily measured. In fact, this is the great trump of shopper marketing: to make measurable results possible over the short and medium term. Hence the question: does anybody still doubt whether this trend is here to stay?
Originally published at Mundo do Marketing website in 9/24/2009