Shopper insights help us prioritize better sales and merchandising opportunities. The best way to capitalize on them is to write a powerful shopper marketing strategy by using valuable shopper insights.
The shopper marketing guide
Just like any other guide used in marketing communication, this strategy needs to be concise, enlightening and to allow supermarket in creatives to propose great in-store concepts.
The structure of a shopper marketing strategy is standardized in four chapters: the business challenges, the target group, shopping motivations and the strategies to influence purchase decisions.
I will detail them in order below:
1. The Business Challenge
In the first chapter of the shopper marketing plan, we have to answer important questions in order to identify and measure the real business challenge. Here is a comprehensive toolkit for you:
- What is the level of brand awareness?
- How popular is the category in retail?
- What does the research say regarding the buying intention and brand preference?
- Are there any challenges related to the frequency of buying or with the buying cycle?
- How does the customer base can be split in terms of loyalty?
- What is the penetration of the respective category?
- What is the basket size and what is the average purchasing frequency?
- How important are promotions in this segment and what types of promotions drive sales best?
- How many in-switchers, loyalists and churners does the respective channel have (whether is a hypermarket, supermarket or any other size)
- What is the share of pocket of the category, the respective channel and our brand?
- What drives shoppers into the respective channel?
- How can the basket size be increased through shopper marketing actions?
- Can we compare with other product or service categories?
- Can we benchmark the respective channel against other retail?
- How do other brands in our portfolio perform on this channel?
The team contribution
There are several potential contributors to this section from which the person in charge of the presentation needs to get input:
- Brand Managers
- Commercial Excellence
- Marketing Director
- Research Team
- Trade Marketing
For the business challenge, a shopping funnel will be very useful by splitting people into Consumers, Shoppers and Customers.
Furthermore, the research team could split people into price-driven customers and value-driven customers and compare them with other brands.
Run the numbers
Shopper marketing is a lot about research, insights, and creativity but most of all it is about sales and numbers.
Here are some of the variables you could run to check the business challenge quantitatively:
- How many customers ideally could the respective channel reach?
- How many buyers are in the category?
- How many of them have bought your brand in the past 30, 90 and 365 days?
- What is the purchase frequency?
- How much does a buyer spend on average per transaction?
These questions can be used also process a market’s potential, replacing in the questions above the shoppers and buyers both households.
Running these numbers on households will give you more insights into the brand and category geographical penetration.
The approach for multiple retail channels
If you are supposed to have a shopper marketing campaign in more than one channel you can run the numbers and ask the questions for each store size.
Conclude with the growth potential
At the end of this section, besides the challenge, it needs to be very clear what is the potential to grow your brand’s sales in that channel.
2. The target group
The second part of the strategy must clarify what are the most valuable shoppers and to help us define a buyer persona.
Not every person that enters the store or browses the section where they can see your brand will be convinced to buy. In this respect, you need to identify the barriers but also the motivations to choose your brand.
How many of them are actually rejecting the whole category? How many use the category? How many of them are early adopters?
These are only three questions that you would have to answer in order to decide which are the most profitable groups of shoppers.
Run some more numbers
You need to know before writing this strategy how many customers in the category are considering your brand and how many are rejecting it. Moreover, you need to know the ratio and volumes of switchers and loyalists, their buying patterns and how much they contribute to your brand.
Keep in mind that the hierarchy of effects looks simple on paper but in real life (retail marketing) it might be too costly to change some buying habits for a segment of buyers (such as switchers).
Last but not least, try to assess the potential revenue of each segment of shoppers, but also the costs to acquire these buyers and the average lifetime customer value (LCV) of each segment.
Learn from the past campaigns
It’s very important for each sub-segment of shoppers to know the general rules of what influences them best:
- Did loyalty offers work?
- What type of offer was the most successful?
- What messages brought you more in switchers?
Try the two-layer segmentation
If the data allows you to split further the sub-segments of buyers, go for it. For example, you could split the brand switchers based on the frequency:
- High-frequency brand switchers
- Low-frequency brand switchers
- Non-buyers (which bought in the past, before or after the period analyzed)
The two-layer segmentation offers you the chance to become more creative but also more relevant by segmenting your messages and shop displays deeper.
3. Shopper insights
What is a shopper insight?
It is a deep human truth of which a person is not aware that is influencing her or his choices. The shopper insight can be either behavioural or psychological and most often it is discovered through observational research, as it biases less the subjects’ reactions. But simply put, insights help us convert shoppers into buyers.
This section is probably the most interesting for the marketing team, is it tries to discover human truths.
There is lots of observational research besides statistical data that we can extract from retail studies. For example, we could observe how occasional vs. regular shoppers buy, and what influences their behaviour in front of the shelf.
Also performing shopping trips with the customers could bring more data regarding:
- how they realize what they need to buy
- how they plan the shopping trip
- how do they choose where to buy from
- how they actually behave in the location.
4. Influencing strategies for shoppers
If you do your homework correctly by filling out the first three sections of the strategy, it will be much easier to find the right strategies and tactics for your shopper marketing campaign.
Create a model of shopper journey and fill it out
The first thing that you have to keep in mind is that every customer, shopper or buyer goes every time through a buying journey.
By mapping the journey completely you will have the chance to find faster shopper actions for each stage of the journey.
- Need: When the customers realize they need the product or service
- Preparation: Preparing stage to go shopping, how the list is created
- In-store experience: When the consumers turn into shoppers (how they browse the store, how they choose the brands, successful triggers)
- Post-buy: How they relate to the acquisition after usage
Do your best to detail how decisions are being taken and what influences them. Try to identify shopping patterns, navigation routes in the store, how much time a shopper spends browsing vs. buying, who influences the brand choice, but also how purchases are evaluated afterwards.
Read more about shopper marketing:
An introduction to shopper marketing – Definition, role and insights