To coupon or not to coupon – that is the question.

In driving your discount promotion campaign instore to achieve incremental sales from non-users of your brand – which POP method really works best?

Better yet, in putting your brand on “Special”, should one reduce the price across the board using Shelf Price Reductions or should one dispense coupons at point of purchase?

Again, its not so much what we, as marketers think will work best – it’s what shoppers perceive to be effective in talking to them about the latest deal or special.

According to research conducted by research agency, Markinor (September 2007):

80% of shoppers find coupons effective in influencing them to buy brands they did NOT intend to buy.

60% of shoppers are likely to switch brands and purchase those promoted as discounted offerings as a result of a coupon promotion.

What about Shelf Price Reductions? Are they not just as effective?

Well, Shelf price reductions talk mostly to shoppers who were going to buy the product irrespective of the discount. So, any incremental purchases there – are likely to come from these loyal one’s pantry loading.

Couponing on the other hand enables a 2-pronged effective advertising strategy of brand switching as well as awareness of brand at point of purchase in that:

Firstly couponing encourages 60% of brand switching purchases to your coupon-promoted brand.

Secondly, a shopper merely looking at your brand increases consideration of your brand by 30 – 120% and so shoppers get to be made aware of your brand visually, given the distinct packaging of your product on the couponed pop message on shelf.

So, with 86% of shoppers stating that coupons encourage them to buy promoted brands and 64% of shoppers citing that coupons help them buy brands they could not afford ….when is your next coupon promotion?

57% of Marketers predict increased instore budgets

52% of these execs also noted that, in the past year, their instore marketing-related budgets had increased.

This is according to the International 2008 Trends Report (www.instoremarketer.org) which asked marketers about the role of POP in their budgetary planning; their reasons for using POP and of course the sort of research insights shaping their activities instore.

It is interesting to note when looking at the data in the report, how buoyant senior execs & directors of marketing departments are about the current and future use of POP media (more so when compared to junior management).

The senior guys are now walking the talk when it comes to the value perceived in instore media.

What creative elements are mandatory in 2008 when creating POP displays?

The top four elements noted were product imagery, price promotion, description of product benefits and features. A seemingly obvious fact, often overlooked by some of us in South Africa is that instore advertising has to command attention in a cluttered environment, deliver a strategic message and close the sale in seconds.

Pretty obvious fact right?

While that may seem obvious to most of you, we could all do with these reminders:

Time is not your side – shoppers don’t have the time to “ponder” over your message to get it.

Shoppers are in a “what’s in it for me” mood – so your offer or benefit has to register within seconds in order to close the sale.

You want the shopper to look at your brand – after all international research cites that a shopper merely looking at your brand increases consideration of your brand by 30 – 120% and of course this POP message is intended to get them to notice your brand.

So, why we sometimes want to talk to shoppers like they are lazing about as couch potatoes beats me sometimes and I know I’m not alone on this one.

So, what else did these trend-setters have to say about this environment and the importance of advertising in it?

to “Sales/scanner data research results has the most influence on the marketing and sales departments’ decision-making when implementing POP activities.”

54% of those interviewed placed more emphasis on POP displays in 2007 – rating this media third after packaging (60% and internet marketing (59%) with traditional media following with 42% for print ads and 14% for TV ads.

54% of marketers are allocating more dollars to more displays vs. 20% who are placing only more dollars on fewer displays.

32% use POP displays primarily for driving communication on new product innovation, whilst 30% use it for brand building communication.

There was a time when the marketer’s first objective for driving POP activities instore was “to lift sales.” Ultimately, that’s everyone’s ultimate objective. But if these results are anything to go by, then marketers are starting to understand that just like traditional media, instore POP has a role to play in continuing (not just once-off bursts per year) to entice, remind and sway shoppers to buy their brand/s. Marketers are realising that losing market share is not because a competitor has stolen the market share away from them, but largely because they need to continuously maintain their brands in the minds of these shoppers.

That is brand building. And when you do it in the instore environment, you get the added benefit of enabling your brand-building POP message to close the sale.

So, with top management putting their stamp of approval on the increased use of instore media we should see companies charging ahead and achieving their ultimate objective – closing the sale with incremental purchases.

There is only so much money out there and when international trends are showing there is “greater emphasis on instore vs. outbound media”, it’s only a matter of time before we Mzanzi guys follow suit with what makes sales sense.

Interesting times ahead of us!

How will shopping change between now and 2015?

Certainly, the retail landscape will transform dramatically, driven by the rapid and almost incredible evolution of current technologies. In attempting a glimpse into the future of shopping, the following are some the questions that are being asked by industry experts:

• Which innovations could become part of everyday life?
• Do shoppers see themselves going online to participate in product development?
• Would they join massive online collaborative shopping communities to combine their buying power with other shoppers?
• Will they join social networks to share information about the hottest trends, stores and products?
• Is it likely that dressing rooms in clothing stores will become interactive?
• What role will mobile phones play in shopping decisions?
• How far away is the networked refrigerator that tells us when we are out of milk?

A dozen innovations were looked at during research done by TNS Research Surveys in 2008, which questioned more than 4 600 primary household shoppers in eight major retail markets across the world. These shoppers were asked to comment on each innovation; saying how appealing it was to them, the likelihood of their using it, the extent to which they found the innovation new, and the extent to which they believe in its use. They then voted for which should take first place.
The 12 innovations looked at were:

1. Biometric fingerprint payment which lets clients pay for purchases using their fingerprint;
2. Interactive dressing room help where customers use a digital touchscreen to speak to the sales assistant;
3. Smart carts which let shoppers locate products instore, check prices and promotions, upload recipes and even go speedily through the checkout;
4. 3D body scan whereby a customer’s body is scanned and recommendations made on specific clothes that are likely to fit well;
5. Online collaborations where buyers go online to tell the manufacturer about the products they want and post ideas on how existing products can be improved;
6. Buying power online in which shoppers join online collaborative communities to aggregate their buying power with other shoppers;
7. Networked shopping which enables networked devices in the home – like refrigerators – to monitor what products shoppers use, create shopping lists and communicate with other devices to arrange deliveries;
8. Interactive dressing room mirror which allows shoppers to see how they will look in an outfit without trying it on;
9. Shopping by mobile phone whereby customers in a remote location use their mobile device to activate a virtual ‘shopping trip’, place orders and arrange delivery;
10. Holographic sales assistant where shoppers interact with instore holograms that can answer questions and facilitate merchandise transactions;
11. Shopping social network websites which enable consumers to join a social network site to find the hottest stores, trends and products;
12. Product and sales info via cellphone whereby customers walking near their favourite shops will be told, via their mobile phone, about products, sales and special promotions.

After reviewing the survey’s results and discussing these innovations with industry players at the Instore Marketing Conference in Las Vegas late last year, it became clear that these innovations are not that far-fetched. If anything, quite a number of them are already a reality in some limited form.
With 2015 just around the corner, the question to ask ourselves as retail marketers is: are we being visionary enough to ensure that our shoppers will find our offering in line with their needs and desires?
Social networking
For example, with social network sites aimed at increasing association and interaction with global shoppers, it is important that FMCG manufacturers vigilantly monitor these sites to keep a finger on the consumer pulse. Even more important, though, is the need to act speedily on these insights of what to develop and stock. If the pace of producing from concept to on-shelf is not fast enough, it will be difficult to meet shoppers’ needs and maintain a competitive edge.
Another area which will demand some thought is that of networked home devices such as refrigerators. These will monitor what products shoppers use, create shopping lists and communicate with other devices to arrange deliveries. The question is, what will our packaging have to look like in order to facilitate these capabilities, and how do we introduce extensions of our existing offerings to cater for these devices?
According to Pat McCann, European head of TNS Retail and Shopper: “As this method of replenishing the home becomes prevalent, there will be a greater likelihood of new products failing. Innovation will come from new category invention and manufacturers’ product development processes will be very different – with potentially wide-ranging implications”.
One thing is certain, we are living in times of dramatic change. Siemon Scamell-Katz of TNS Magasin, the international shopper strategy consultancy, concludes with these apt thoughts on the future: “Each and every technological advance will have to be filtered through the lens of the shopper. What are you designing for these shoppers? And most importantly, are you looking at it through the lens of a shopper?”water!

By 2010 Shopper marketing budgets will have grown by 21% for FMCG manufacturers.

And even more interesting is that international retailers’ aim to have grown their shopper marketing budgets by 26% within the same period. Are international retail chains’ visionary eyes a lot sharper than ours when it comes to the value of spending in shopper marketing?
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The Grocery Manufacturer’s Association in the US engaged Deloitte Consulting to research and define an industry’s definition of shopper marketing and, amongst other insights, reverts with strategies being employed by top retailers and manufacturers in driving their leadership instore.

From this report titled “Shoppermarketing – Capturing the shopper’s mind, heart and wallet”;
3 noticeable international trends from top retailers and manufactures interviewed were:

1 Spending towards shoppermarketing activities will increase dramatically (as compared to the norm) against a decline of spends in other media.
2 Shopper marketing insights drive competitive advantage.
3 Shopper marketing organizational structures drive competitive advantage.

From this report titled “Shoppermarketing – Capturing the shopper’s mind, heart and wallet”; 3 noticeable international trends from top retailers and manufactures interviewed were:

Spending towards shoppermarketing activities will increase dramatically (as compared to the norm) against a decline of spends in other media.

Both manufacturers and retailers believe that by executing shopper marketing properly (read letting their spend in this environment be indicative of the value they have in the instore environment as a marketing media) they can gain a significant competitive advantage in the next 3 – 5 years.

While overall marketing budgets are growing by 2%, Shopper Marketing budgets are growing at 21% and 26% for both manufacturers and retailers respectively.
(Slides1 & 2 – on the graphs for second article power point presentation)

In light of this trend, have you started evaluating the effectiveness of your instore shopper marketing promotions spending and optimizing its effectiveness?

What is the cost to reach 1000 of your shoppers instore versus 1000 of them through other marketing media – more so given the impact of this instore environment to expose, influence & sway shoppers’ decision-making instore – where it matters.

2 Shopper marketing insights drive competitive advantage.

Both manufacturers and retailers are planning to increase their resources devoted to shopper insights generation over the next 3 years.
(Slide 3 – on the graphs for second article power point presentation)

This was emphasised more as a result of the need to revisit and clarify the distinction between shopper and consumer – clarification driven by marketers’ tendency to use the words shopper and consumer interchangeably.

In order to remain a leader in your brand’s category, inability to generate specific shoppers’ insights and continued investment in consumer research insights are going to have to be a thing of the past – after all consumer insights are not sufficient to understand the shopper ( i.e. consumer in shopping mode.)

Are you still thinking that gaining behavioural insights into your consumer is good enough to understand them as shoppers? Have you started reviewing your research mandate when it comes to insights generation i.e. looking into understanding how shoppers engage with your category and how you can improve the visibility of your brand during that process to catch their attention?

After all retailers acknowledge that shopper insights give them an advantage in stealing market share and customers from their competitors and other channels.

3 Shopper marketing organizational structures drive competitive advantage.

Leading manufacturers are creating more prominent shopper marketing functions that are fully responsible for shopper marketing processes, from insight generation to shopper interaction at point-of-sale.

The strategic objective here for companies is to review ways in which they can restructure their organization to ensure designated roles for driving shopper marketing activities. This is aimed at getting rid of the norm behaviour of “getting product listed in a way that keeps the trade happy and advising marketing of your brand’s gondola-end media schedule”.

And of course who can forget the numerous debates between sales and marketing and whose budget is meant to facilitate what activity instore..

Internationally and locally we are starting to notice this trend of advertising and media agencies creating dedicated teams with required skills to support their clients’ shopper marketing activities (Slide 4 – on the graphs for second article power point presentation)

Is your media/ad agency gearing its organizational structure towards this role?

Is your organisation making way for SHOPPER CENTRICITY by allocating dedicated resources, creating specific groups to focus on research, program development, relationship management and the execution of shopper marketing activities?