Delivering your growth agenda: Shopper Marketing – a shared capability

Quantic’s core principle is that connected organisations outperform their competition. By connected, we mean those businesses whose commercial functional strategies are aligned behind one consistently understood growth agenda.

Our previous two posts have looked at the necessity to align these cross-functional strategies behind a common growth agenda, initiated by the Marketing function setting clear consumer-centric Growth Drivers.

In this post we look at the transition from consumption to purchase and provide our point of view on the often misunderstood Shopper Marketing capability.

If you are running or working in a typical Customer Marketing function in a CPG organisation, you will likely already have responsibility for Shopper Marketing. This post aims to demonstrate why Quantic believes Shopper Marketing is a company capability and not the responsibility of a single function. We believe it necessitates the full involvement of both Customer and Consumer Marketing functions. The best Shopper Marketing typically requires considerable strategic objective setting and a significantly greater focus from Marketing.

Quantic’s key Shopper principles

In this article we will build on three key principles:

1. Shoppers only shop to fulfil the needs of a consumer. This means that everything the organisation does should always be connected back to a Growth Driver’s targeted consumption behaviour change.
2. Organisations must have complete clarity on where the barriers to purchase occur across the full consumer-shopper journey.
3. ‘Shopper’ is understood to be a core capability across the organisation. Ideally, we believe the capability is led by Marketing and strongly supported by Customer Marketing and Sales teams.

Shoppers only shop to fulfil the needs of the consumer

In our last article we talked about where to look for growth, using a category/consumer-centric approach rather than a brand-centric one. It makes sense that if you have invested effort into understanding where consumption growth will come from in the form of a set of quantified Growth Drivers, your subsequent efforts with shoppers need to be 100% aligned to these identified behaviour changes.

Too often, activation work is misaligned and fails to drive against the barriers of change to existing behaviours. Getting more shoppers to spend more or to buy more is an objective, not a strategy. To achieve the targeted behaviour change, strategies have to be anchored in delivering more of the reasons WHY shoppers will be prepared to either spend or buy more.

So, with our Growth Drivers setting the targeted consumer behaviour change, and assuming our brands have the right positioning, brand values, product quality etc., we can now turn our attention on how to close what we call the Shopper Conversion Gap. In other words, helping shoppers to buy products which fulfil the needs of the consumer they are shopping for.

Everyone is talking about Shopper Marketing, but what is it?

In our last post we touched on Byron Sharp and the importance of driving penetration as the primary source of growth for a brand (and ultimately a category), through the frequency of consumption against new occasions or usage needs. So, when a brand doesn’t have an issue with awareness and consideration, growing brand penetration requires closing the Shopper Conversion Gap.

This means making brands more relevant to the occasions and needs that shoppers are looking for on any given shopping trip. This is how Quantic defines Shopper Marketing.

Closing the gap between awareness and consideration versus actual purchase relies on identifying the barriers preventing the purchase. This needs to be considered along the full consumer-shopper journey on any given shopping trip. It requires clarity on where the different barriers occur on that journey, so that the right solutions can be created for the barriers and activated at the right times and places. Are the barriers ones of Relevance? Are they Find and Engage barriers? Or are the issues at the actual POP itself, preventing Choose and Buy decisions? Depending on the answers to the questions, Shopper Marketing tactics will need to vary.

So how do we close the Shopper Conversion Gap?

Being clear on your objective is the first place to start. Targeting new penetration for your brand with price promotions on either the main fixture or at a secondary location is often not enough, especially when they are primarily associated with routine shopper missions. We’ll touch more on effective promotions in a subsequent article, but for now let’s focus on understanding how to understand shoppers in more detail and how different missions set the context for different tactics.

Quantic advocates a new approach. Rather than segmenting shoppers into complicated typologies, we look to segment them according to the kind of purchase we want them to make. Let us explain…

Shoppers can be classified into three types using The Purchase Outcomes™ Framework developed by Barry Lemmon from First Purchase Research Limited:

1. First Purchase Shoppers: those buying a category, segment or brand for either the first time, or after an extended lapsed period.
2. Repeat Shoppers: those buying the same product again.
3. Repertoire Shoppers: those buying a different product from the same category or segment.

When it comes to growth, following Sharp’s principles, the First Purchase Shoppers are more important than the others because they increase critical penetration levels.

The implication for brand strategy is clear: if you want to grow your brand, resulting in category growth rather than short-term share steal, you must increase buyer penetration and category frequency. For large, established brands who have high levels of awareness and consideration, this means allocating your brand’s resources towards achieving more first purchases.

How you do this has major implications for both the Consumer and Customer Marketing functions that bring the activities to life and typically involves Shopper Marketing activation.

Overcoming Relevance Barriers

First purchases are achieved by making your brand more relevant to latent, new usage or consumption occasions, wherever they occur on the consumer-shopper journey. We call this addressing shopper mental availability, and it sits between the consumer mental availability created by Marketing and the physical availability created by Sales.

You get some clues about how to do this from the research that led to The Purchase Outcome™ Framework. For example, it proves that first purchases often happen on a non-routine shopping mission; that they are usually unplanned and therefore the purchase decision is often made at the point of purchase; and that the first purchase decision is influenced by different factors to routine purchases.

So, there are plenty of implications on ‘what’ and ‘where’ a first purchase strategy is implemented, which impacts both Marketing and Customer Marketing/Sales’ functions. This demands the greater joint work and ownership of Shopper Marketing strategy and execution that we stated at the start of this post.

In terms of ‘where’, the channels most associated with the routine purchase of your category are not necessarily the prime target for first purchase as they typically serve a different mission when a shopper is less likely to buy something new. Convenience stores are often better at attracting first purchases than Supermarkets. Food service channels may be better still at seeding a new product. Think beyond today’s routine purchase channels!

In terms of the ‘what’, the actual activities required to stimulate a first purchase differ from re-purchases, because their barriers are not the same. Traditional price mechanics can be effective against re-purchase barriers (see the right-hand side of the following diagram), but they rarely drive first purchases (the left-hand side), unless clearly linked to a reason to believe in the ‘new’ proposition.

The messaging required to attract a first purchase needs careful consideration; in order to overcome a Relevance Barrier, the message has to be relevant to the different missions being shopped in different channels. This can only be achieved if Consumer and Customer Marketing teams are working collaboratively in the design of market activations.

So, to grow your brand, we must understand how to create shopper mental availability typically by overcoming Relevance Barriers in conjunction with Find and Engage and Choose and Buy Barriers.

Identify and remove barriers to purchase and consumption

Let’s suppose a young coffee lover is in a convenience store buying their lunch for today. Rather than the usual drink, on this occasion they really would like to buy a coffee-based drink to give them a boost for the afternoon ahead. Critically, they are looking for a product which also gives them the coffee shop experience that they are used to from their favourite coffee shop.

Creating the mental availability of these products is not enough. Knowing that products exist that meet their needs doesn’t help if they aren’t stocked. But simply fixing the physical availability of suitable products in the same convenience outlet that this shopper has bought their lunch, is not enough. Although not being there at all is the most obvious barrier to purchase, for a product which has already achieved general mental awareness and consideration, Shopper Mental Availability and then Relevance, Find and Engage and Choose and Buy barriers still need to be addressed if the supplier of these drinks is to maximise the opportunity.

Shopper Mental Availability straddles mental and physical availability – is the potential shopper more than just aware of your brand? Do they recognise that it’s available in the correct format for their immediate lunchtime need? In other words, has the supplier’s messaging connected their product solution with the occasion the young coffee lover is shopping for on that specific mission?

Find and Engage barriers are immediately put up if the products are merchandised on any fixtures unconnected to the front of store – the quick lunch purchase mission. Choose and Buy barriers are likely to remain if the product isn’t included in a lunch time meal deal bundle.

Five steps to becoming consumer and shopper focussed to influence more purchases

To summarise, Quantic recommends that suppliers follow these five steps to target and influence shoppers to buy their brands:

1. Treat ‘Shopper’ strategically.
2. Invest your marketing budget to overcome shopper mental availability issues.
3. Be clear on where the barriers to brand growth lie: first purchases create growth and should be prioritised.
4. Be clear on the most relevant shopper missions and where those missions are fulfilled – first purchase target channels which may not be the more obvious ones!
5. Develop brand plans to overcome the most relevant barriers and ensure these are the focus of the commercial planning process and I&R efforts.

So, this new omnichannel environment requires all functions, including marketers, to be much clearer and more involved beyond traditional brand building strategies and promotional objectives. By doing so, brands will be in the right format for specific shopper missions, with relevant content and messaging to address barriers along the full consumer-shopper journey. In this way, Shopper Marketing becomes a key strategic enabler of a growth strategy.

Thanks for reading. In next week’s post we move to the role that a Customer Marketing Team plays within a connected organisation. A fascinating function, balancing the need to understand channels, customers, shoppers and consumers and one which has a dual role against operationalising the work of today and balancing the strategy of tomorrow.