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Fulfilling the Promiseof Shopper Marketing

An Industry Report from theRetail Commission on Shopper Marketing

Dr. Brian Harris

April, 2010


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Objectives

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Commission Overview

Report on Commission Deliverables

Next Steps

Fulfilling the Promise


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Shopper Marketing Current Status

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Numerous definitions and approaches exist

Primarily manufacturer-driven to this point

and supported by growing investments

Strategic opportunity not well understood

by most retailers

Retailer organizations not enabled

Efforts mostly ad hoc collaboration

hamstrung by lack of a common process


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The Retail CommissionOn Shopper Marketing


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Purpose of the Commission:A New Vision

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Retailers and manufacturers increasing emphasis on

improving shopping experience Rising demand for new

collaboration model

Develop a retailer enabled platform for Shopper

Marketing Growing base of knowledge about shoppers

to enhance the shopping experience and improve

business results

Leverage willingness and energy of partners to

collaborate on and activate new insight-based retail

marketing programs


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Objectives of the Commission

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Define retailer requirements for Shopper

Marketing - strategic, operational, organizational

Integrate Shopper Marketing into currentbusiness practices

Establish new collaboration model for growth &

shopper satisfaction

Define organizational capabilities and animplementation roadmap


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Commission Member Companies

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Strategic Advisor Companies

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Focus of Commissions Work

Shopper

Retailer ManufacturerheSweetSpot


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Commission DeliverablesThe Shopper Marketing Best Practices Report:

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Retailer-centric Shopper Marketing principles

and definition

Best Practices model for Collaborative

Shopper Marketing

Enabling capabilities for retailers

and manufacturers

Roadmap for retailers and manufacturers


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Key PrinciplesTo succeed, Shopper Marketing must 1. Be shopper and consumer focused

2. Be retailer embraced and enabled

3. Deliver execution excellence

4. Be driven by a collaborative process

5. Deliver real shopper value

6. Create efficiencies and improved returns

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Shopper Marketing: DefinitionShopper Marketing is the use ofinsightsdriven marketing andmerchandising initiatives to satisfy theneeds of targeted shoppers, enhance theshopping experience, and improvebusiness results and brand equity forretailers and manufacturers.

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Collaborative Shopper Marketing ModelManufacturer

Strategic

Foundation

Core

Work

Key Enablers

Retailer

Core

Work

Key Enablers

Strategic

Foundation

Shopper

Marketing

Plan

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Shopper Marketing Planning

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Provide a common approach

Be collaborative

Be comprehensive yet not exclusionary

Not be over template-ized

Provide framework for aligning retailer

and manufacturer objectives


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Shopper Marketing PlanningIn Shopper Marketing,Retailers must address 4 core questions.

What does winning mean?

Who will we win with?

How do we make winning happen?How do we bring it to life?

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Components of the Collaborative ProcessStrategic FrameworkShopper Segmentation

Shopper TargetingShopper Marketing Strategies

Platform

Program17


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Strategic ContextDevelopment

Retailer Inputs

Corporate Strategies Division Strategies Department Strategies Tactical Area

Business Strategies

(Pricing etc.)

Manufacturer Inputs

Corporate Strategies Business Unit Strategies Category / Brand

Strategies Customer ManagementStrategies Innovation Strategies

SuccessMeasurement

PolicyClarity

StrategyClarity


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Retailer Inputs Shopper Insights Shopper Segmentation,

Value, and OpportunityGaps

Target Segments Shopper Segment

Expectations Shopper Segment

Objectives

Shopper & ConsumerInsights Target Consumer Target Shopper

Segment Customer Opportunity

Gaps Shopper Marketing

Best Practices

StrategicAlignment

Manufacturer Inputs

SegmentValuation &Prioritization

ShopperSegmentation

AlignmentShopper

Segmentation

ShopperStrategyCreation

ExpectationSatisfactionAssessment

ShopperExpectation

Identification


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Shopper Segment Alignment

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Components of the Collaborative ProcessStrategic FrameworkShopper Segmentation


Platform

Program21


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What is a Platform?

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Objectives & insights

Key messages & themes

Target shoppers, stores,

departments, categories

Performance targets & measures


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Retailer Inputs Shopper Insights

Target Shopper

Segments

High Affinity Categories

/ Brands

Platform Ideas

Platform Evaluation

Criteria

Shopper & Consumer

Insights

Brand Strategies

Brand Equity

Expectations

Brand Treatment

Criteria

Platform Ideas

Manufacturer Inputs

Performance

Measures

Platform

Targets

Platform

Definition

Platform

Development


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Retail Choice

Exposure Need/Entry

Research

List

Discover/Locate

Review

ConvertSelect

Purchase

Ancillary

Selection

Install/Store

Prepare

Utilize

Evaluate

Express

The Shopper Behavior Cycle provides a framework for the development ofShopper Marketing Platforms

Shopper Behavior CycleHow can we influenceShopper ConsumptionBehavior?

How can we influenceShopper PlanningBehavior?

How can we influence ShopperPurchase Behavior?


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Shopper Marketing Platform ExamplePlatform Definition

Name:Get Fresh With Us

Description:Delivering fresh, healthy alternatives that are good

tasting and good for you.

Objective:Drive penetration and frequency in perishables with coreand mid-loyal shoppers.

Key Message / Theme:Our food is so fresh, youll think we grew it outback

Platform TargetShopper Segment(s):Foodies, families, young health-minded

couples

Geographies / Store

Clusters:Upscale urban and suburban stores

Departments /

Categories:Produce

Prepared Foods

Performance Targets & MeasuresSales:

+ 7%

Profit:

+10%

Shopper:

Two additional trips per

month


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What is a Program?

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Program objectives

Communication hierarchy

Target brands

Tactical elements: marketing,

merchandising and operational

Performance targets Implementation plan


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Retailer Inputs

Platform and Program

Scorecard

Sales Based

Information

Shopper Based

Information

Operational Based

Information

Program Ideas

Manufacturer Inputs Research Based

Information

Sales Based

Information

Brand Tracking

Information Operational Based

Information

SM ROI and Budgeting

Program Ideas

Performance

Measures

ProgramDevelopment

Program

Definition

Program

Targets

Program

Tactics

Implementation

& Review


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Program ExampleName:Fresh & Ready To GoShopper Insights: 48% of targeted shoppers plan dinners the

day of the meal. 32% eat out two more times weekly.

Objectives: Drive increased purchases in the FreshDepartments among loyal shoppers and increased penetration

among less loyal shoppers.

Target Shoppers: High Loyal & Mid-Loyal Time StarvedFamilies

Target Markets: Upscale Urban and Suburban MarketsCommunication:Simple meal solutions your family will love

made from quality fresh products in less than 20 minutes

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Target Brands: Market Leader Premium Brands and Own BrandTactical Elements: Circular

Website Menu Planning

Moms Discussion Blog, Facebook Posts, Twitter Tweets

Email meal of the day

In-Store way finding signage

Solution Tables with Sampling

Meal Bundle promotion pricing

Menu Cards and meal planning guides

Performance Targets: High-Loyals 3% basket size increase and 1 more trip per

month.

Mid-Loyals - 8% Penetration increase in Fresh departments, 5%

basket size increase, 1.5 more trips per month

Contd

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Program Example


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Program Scorecard


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Collaborative Partner Involvement

Le1Pan

Le2Pan

L

3

Pan

Strategic FrameworkShopper Segmentation


Platform

Program

Strategic

Tactical


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Key Enablers for Shopper MarketingStrategy

Process

Excellence

Information, Insights

& Measurement

Organization

Capability

Best PracticeCompanies

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Retail Commission Next StepsQ4, 2009 Q3-4, 20101-2, 2010

In-Store Expo Commission Introduction

Strategic Advisory CompanyDiscovery & Working Sessions

Interim Report Publication

In-Store MarketingSummit

Collaborative Process Development

Joint CommissionWorking Session

Final ReportPublication

Collaborative Pilots


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Fulfilling the PromiseWhats Required

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Organization understanding, commitment and

alignment (internal and external)

Common definitions and processes Building the enabling capabilities

Investing in the strategic vision versus funding the

tactical opportunity

Sharing shopper information and insights

Implementing the plans

Measuring performance


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Fulfilling the Promiseof Shopper MarketingAn Industry Report from the

Retail Commission on Shopper Marketing

Thank You

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