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Saturday, November 7, 2009

Expo Keynote: A 'Roadmap' for Shopper Marketing

By Cristel Mohrman/Peter Breen

A group of leading retailers and industry supporters has been working this year to develop a blueprint of best practices designed to unlock the full potential of shopper marketing as a performance-boosting business strategy.

Called the Retail Commission on Shopper Marketing, the group had its official coming out party earlier this month at the In-Store Marketing Expo, where Dr. Brian Harris of The Partnering Group provided an overview of its progress thus far during a keynote presentation.

With the Coca-Cola Co. signing on as lead sponsor, the Commission was established by the In-Store Marketing Institute and The Partnering Group in early 2009 in recognition of the need for retailers to fully embrace the emerging discipline of shopper marketing, which until this point has largely been driven by the efforts of consumer product manufacturers, Harris said.

Marketing and merchandising executives from Food Lion, Giant Eagle, Marsh Supermarkets, ShopRite, Meijer, Schnuck Markets, Supervalu, Walgreens, Wegmans and Walmart have been meeting since April to help shape the Commission's ultimate takeaway: a white paper on best practices that can serve as a blueprint for the industry. Representatives from Campbell Soup Co., Clorox Co., Hershey Co., Kellogg Co., Kimberly-Clark, Johnson & Johnson, Sara Lee, Chiquita, Mars Advertising, Arc Worldwide and TPN came on board in late summer as strategic advisors to the project.

Without a full commitment from the retail community, and the development of a framework through which retailers and product manufacturers can effectively collaborate on shopper-centric initiatives, "the promise of shopper marketing will not be fulfilled," Harris told an audience of approximately 1,000 industry professionals. He compared the current situation with the emergence of category management, which was adopted industry-wide as an effective business strategy primarily because retailers quickly recognized its potential to drive sales and profits, and adapted their business practices to accommodate the new strategy.

Similarly, Harris explained, the Commission's goal is to present a "framework" of strategic, operational and organizational requirements that retailers can adopt to ensure that shopper marketing is integrated into their existing business practices (rather than adding more complexity), and to present a model for collaboration that will produce mutually beneficial results for retailers and product vendors -- "that wonderful combination of store and brand equity coming together," Harris said.

A necessary first step in the process was the development of a definition for "shopper marketing," which currently is still hampered by a "tremendous diversity of views" among practitioners, Harris said, before unveiling a "working definition" that may still change before the Commission's work is completed:
"Shopper Marketing is the use of insights-driven marketing and merchandising initiatives to satisfy targeted customer needs, enhance the shopping experience, and optimize business results for retailers and suppliers."

Harris also outlined six key principles that further define the discipline of shopper marketing:

1. First and foremost, it requires a shopper and consumer focused go-to-market strategy for marketing and merchandising that considers not only current realities, but also future possibilities, he said.

2. It must be retailer-sponsored and enabled so that it enhances the retailer's business objectives along with those of the partnering brand. "Otherwise, it will devolve into a great set of tactical programs" that won't deliver the necessary long-term results, he said.

3. It must deliver executional excellence in order to overcome the historic shortcomings of in-store marketing, namely that it often fails to be effectively implemented in the store.

4. It must be driven by a collaborative process that unites the intellectual and organizational strengths of manufacturers and retailers. "Shopper marketing, to us, is about connecting the brands that consumers ... love with the store that they love to shop at," said Diane Wallace, Coca-Cola's vice president of shopper marketing, who joined Harris for the presentation.

5. It must result in real shopper value that not only closes the sale but enhances the buying experience and fosters loyalty for both product and store. "We can't simply buy traffic each week," said Janet Sparkman, corporate vice president of customer strategy and management at Supervalu, who rounded out the keynote presenters.

6. It must create efficiencies and improved returns on investment in order to justify the organizational realignments and ongoing enhancements to current business practices that will be required. Sparkman said Supervalu's goals for shopper marketing include building customer loyalty (by increasing share of wallet) and identifying "selective selling" methods that will target the company's "most grow-able shoppers."

The Commission is also busy developing a model for collaboration that outlines the strategic foundations and core capabilities that retailers and manufacturers will need to bring to the table, as well as the various levels at which 
manufacturers will be involved in helping retailers develop their shopper marketing strategies.

Coca-Cola is hopeful that the work of the Commission "will help jumpstart the industry [by providing] a common view and a common language" for shopper marketing that all practitioners can use. "If we do this right, we are shaping the next wave of shopper evolution," said Harris.

The Commission's final report will be completed in spring 2010 and first presented to the industry at the In-Store Marketing Summit in April.

Published: October 2009