Shopper marketing continues to grow in importance for CPGs and retailers, but its effectiveness is being limited by insufficient integration with out-of-store marketing and media channels, according to a new study from the Grocery Manufacturers Association, Booz & Company and SheSpeaks.
"Shopper Marketing 3.0" involved a comprehensive survey of 3,600 shoppers across the food and beverage, household products, and health and beauty categories, and across multiple retail formats. In addition to filling out pre- and post-shopping surveys, shoppers participated in online forums.
The researchers also interviewed 25 senior executives from leading shopper marketing agencies, CPG manufacturers across categories, retailers across formats, measurement and analytics firms, and in-store media service providers.
Overall investment in shopper marketing -- defined by the Marketing Leadership Council as in-store advertising, promotion and design initiatives intended to extend brand equity and provide the retailer with differentiation -- is estimated to be growing at 21% annually, according to hardknoxlife.com.
However, this new study concludes that CPG manufacturers have yet to align shopper marketing initiatives with the advertising and promotions that reach consumers at home and on the go. That results in disconnected marketing messages, wasted spending and missed opportunities to drive purchases.
"This measurement gap makes it hard to decide whether and where to focus investment across the range of shopper marketing opportunities out-of-store and in-store, as well as to establish priorities for the marketing mix overall," the researchers added.
Integrating and quantifying results from shopper marketing is becoming even more critical. Retailers increasingly seek to tap into CPGs' budgets beyond trade promotions, pushing manufacturers to shift spending into ads on retailer Web sites and in-store video networks, as well as participate in retailer database marketing programs, GMA and Booz point out.
The surveys probed the factors that drive consumer purchases in the store, including the relative influences of in-store and out-of-store marketing.
Even with the documented growth in private-label buying, this study found brand preference to be the most important out-of-store factor influencing which products go on a shopping list. More than two-thirds (68%) of shoppers ranked "long-standing brand preferences" as a 4 or a 5, with 5 signifying "very influential." Nearly half (48%) gave coupons one of these top two rankings, and 43% gave friends/ family the top rankings. Advertising and media content were given top rankings by just 19% and 16%, respectively.
The study also found that nearly half of food and beverage shoppers and nearly 60% of health/beauty and household goods shoppers purchase their preferred brands even when a less expensive alternative is available. Many -- 48% of food and beverage shoppers, 58% of household product shoppers and 59% of health and beauty shoppers -- use coupons or price promotions to "justify buying the brands they want" rather than as the key factor driving their decision making, the researchers report.
Other key findings:
* Shoppers choose 59% of the brands they buy in the store, and 41% before they enter the store. This points to opportunities, even in the current down economy, to influence their brand choices before they go shopping.
* For the 59% of items for which brands are selected in-store, 85% of shoppers perceive in-store factors as more influential than out-of-store marketing. After price, communicat¬ing benefits on packaging is most influential, whether for reinforcing existing brand preferences, driving competitive switching, capturing purchase when there is no strong brand preference, or creating impulse sales.
* While confirming that most shoppers (81%) do research before shopping, this study -- unlike some other recent consumer surveys -- found that 77% of shoppers do not take detailed shopping lists into the store. Instead, most shoppers have "mental lists" that include "brand consideration sets," but evolve as they are exposed to more marketing at home, in transit and in the store.