How to get
the most out of
Retail Marketing
“For a long time we focused on what we termed the Second
Moment of Truth, the point at which the consumer uses the
product. But we realised we were missing half the story by
not looking at the First Moment of Truth when the consumer
actually chooses the product.”
Matthew Parry
Head of Customer Shopper Marketing & Commercial
Innovation UK & Eire, P&G
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Introduction
This white paper has come from bringing together
some of the best minds in the retail marketing
industry1 at the 2010 Instore show to shed light on
how to get the most out of retail marketing.
We were united in our understanding of the four truths
about retail marketing:
1. Retail marketing positively influences shopper behaviour
towards brands.
2. Retail marketing increases sales for all products in store,
whether or not they are on promotion.
3. Retail marketing is measurable in terms of its sales impact.
EPOS data tells you that you have either sold more as a result
of your retail marketing or your have not – this information is
pure and irrefutable.
4. Retail marketing is widely undervalued and under-utilised
in comparison to other media.
The challenge, and indeed the opportunity, for brands and
their agencies is to create a rule book for the integration of
retail communication channels with traditional above the line
media to deliver cohesive and effective campaigns.
To this end we agreed that there are five key
areas you need to understand to get the most
out of retail marketing:
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Matthew Parry P&G, Anthony Hopper Saatchi X, David Norbury REL,
Dave Buckingham LMG, Stuart Tiedeman rmi.
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1. Retail marketing is about more than just
sales promotions and point of sale; it’s about
emotion and stand out.
“Shoppers make decisions based on emotional reason,
which will often be supported by rational thoughts. Buying
a house – although a little larger than an in-store purchase
– is a prime example. People buy based on a feeling they
get when they walk through the door, while it may be
underlined by rational requirements (number of bedrooms,
size of garden etc) it is still an emotional purchase… the
reality is that all purchases are based on this process.”
Anthony Hopper
UK Managing Director of retail and experiential
agency Saatchi X
There have been fundamental shifts in the way shoppers
behave and their attitudes to brands over the past 10 years.
Furthermore, shopping environments have developed. This
means that brands have had to evolve the way they think about
their communications.
Understanding
the
shopper mindset, their
needs and how they
make their decisions
is crucial.
Shoppers
are much more in the
moment and on-task
than a consumer at
home watching the TV.
Shoppers are not looking
for brands to tell them
all about themselves and
why they’re great, they
are looking for brands
to help them solve their
specific needs.
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Connect with the shopper’s emotions
Emotional connections play a key role in the purchase decision
even in a busy retail environment. This means a brand’s
approach to retail and marketing communications needs
to focus it on driving an emotional connection between the
shopper, the environment and the brand. If a brand can show
how they can improve a consumer’s life it is likely to make
them buy.
The store is one of the only places where shoppers can have
real, visceral, multi-sensorial, interactive experience with
brands. The problem is, clean store policies, especially in the
UK, mean that brands can lose control of how their brands are
merchandised and marketed in this environment.
However, there are examples
of where brands and retailers
have collaborated to make
a difference. For example,
Pampers reinvented the
Babycare
category
in
Walmart China by removing
50% of the product from
the shelves, and saw a 50%
sales increase of the whole
babycare category and over
85% growth for Pampers.
They gave more time for
information and inspiration
and created an environment
where people wanted to
spend time exploring.
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There are also plenty of examples
of where brands have taken
control of the retail environment
by setting up their own retail
outlets. A trend that is likely
to continue to grow. Apple is
a great benchmark: it decided
that its brand experience was so
important, it had to regain control,
so it opened its own stores and let
shoppers experience it in the way
they, the shoppers, wanted to.
Once Apple had gained this experience, built the business case
and the consumer demand, it then took the whole model to
Currys as a store-in-store concept, and it’s been a big success
there too. You might say that’s all well and good for Apple, but
many less “sexy” brands are also doing it: Nespresso cafes;
Nivea in Dubai Mall; National Geographic on Regent Street; and
now Cadbury’s going into coffee shops.
The important point here is that brands and retailers need to
design the experience around the shopper, because ultimately
it’s the shopper that decides what’s best by voting with their
feet and their cash.
Flash: an answer, not the answer.
Another example of how brands are starting to use retail
marketing for branding and awareness activity retail space
is P&G’s rebrand of Flash where P&G worked from the “shelf
back”.
The Flash rebrand was a formula upgrade, including new look
packs, logo and a national TV campaign; everything you would
expect from a big FMCG brand.
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The brand benefits focused on the
“shine” as the proof of a clean,
and this was also the key denoter
of the product’s performance. The
key visual and the holistic “glue”
for the campaign was sunglasses;
in other words cleaning with Flash
leaves surfaces so shiny you need
sunglasses. Instead of creating
everything around the TV campaign,
however, P&G started with shoppers
and all visuals were looked at from
the perspective of whether they
would work in or easily transfer to
the in-store environment.
Everything down to the colour choice was driven by in-store
standout. P&G even built in flexibility so it could work with all
of its retail partners (working with the system and not against
it) however making sure that a consistent look and feel was
maintained to help bind the in-store and out-of-store brand
experience for the consumer and shopper.
Key points
• Understand the shopper mindset and how people make
purchase decisions.
• The store is one of the few places where shoppers can
have real interactive experiences with brands and is fast
becoming the only remaining mass communication channel.
Brands must look at ways to bring experience into the retail
environment.
• Ensure you are talking to people in the right way and
delivering messages that target the correct mindset.
• Do not just focus on driving a sale, think about how you are
driving an emotional connection between the shopper and
the brand so make sure everything is on the brand benefit.
• The first moment of truth is when a shopper chooses
the product so plan from the shelf back, but make sure
messaging is consistent across all media.
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2. Work with the system, not against it
Traditionally brands have seen retail marketing as something
that the sales team owned. But, as marketing teams have
become more accountable they are starting to realise that it is
an important part of the marketing mix which they need to be
involved with.
Manufacturers like P&G have been on a long journey in terms
of their understanding of retail marketing. They understand
that the challenge now facing brands in the retail space is how
to make products stand out on the shelf. This is particularly
true when you deal with relatively low-interest function
categories where shoppers are on autopilot, such as laundry,
cleaning etc. These are areas where shoppers just want to put
the product in their basket and go, but where top brands often
spend millions of pounds every year driving awareness of their
product through above the line (ATL) spend.
However there are a number of barriers that make retail
marketing difficult for marketers to access, such as the
fragmented nature of what media formats each retailer has,
the multiple routes to accessing the media and retailers’ clean
store policies.
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The Co-operative Media Centre
The Co-operative is one of the best examples of how a retailer has
sought to minimize these barriers by setting up a centrally run
retail media centre with a database of all retail media inventory
and a web based booking system. The Co-operative media
centre, powered by planmymedia allows advertisers to have
direct access to all the retail media options available to them
at a press of a button saving a huge amount of time and effort
in planning and booking their retail-based communications.
It also enables the retailer to have flexibility and control over
what messaging goes out and where, ensuring consistency and
cohesion in its delivery of its central in-store marketing plan.
“Brands are now able to access, plan and book all their
multi retailer, in-store media campaigns via one access
point.”
Stuart Tiedeman
Managing Partner, rmi
Key points
• Use the power of your brand to create stand-out at the point
of purchase.
• Work with the environment you’re working in not against
it. We’d all like the supermarkets to be open to letting us do
everything we want to do, but that isn’t going to happen. We
need to understand the environment and what works and what
doesn’t.
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3. Customer loyalty offers powerful
opportunities to enhance retail marketing
activity
“Too often consumers are ignoring brand promotions as
they are not relevant to what they want to buy. Indeed,
many shoppers work on a tactical strike mentality and
don’t have time to browse around, so brands and retailers
need to be able to deliver relevant offers directly to
shoppers; and this is where loyalty schemes can be a real
boost.”
Dave Buckingham
UK General Manager, LMG (Loyalty Management Group)
Today’s retail market is complex and confusing, and the
marketing noise for shoppers both in-store and out-of-home
can be deafening. Loyalty information can help retailers and
brands accurately target promotions and give them the best
possible chance of cutting through this noise.
There are five key ways loyalty information can help brands
do this:
Understanding customer segmentation.
There is no longer any point in doing segmentation on a socioeconomic basis as it doesn’t produce specific customers.
Loyalty card information can drill down further and base
segmentation on anything from frequency of shopping, to
loyalty to store and brands, or even propensity to buy various
products.
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Shaping in-store experience with customer
angle.
Without loyalty information, retailers are blind to very subtle
but powerful data about how important different products are
to different types of customers or even where to place various
ranges in store. For example, based on sales data there may
be a number of products that look to be niche from raw sales
figures, but are bought by a select, high-spending group of
customers in the store who also buy a number of other highvalue items.
Shaping personal experience.
Through direct mail, online communications, email offers and
smart coupons delivered on high-targeted information a very
personalised interaction with the consumer can be built and
maintained.
Driving a more collaborative relationship with
suppliers.
Working together with suppliers, retailers can help build a
more customer-centric journey.
More effective media management.
When brands and retailers know who buys what and where,
they can also deliver highly targeted media campaigns across
the store and out-of-home environments, and this has a major
role to play in the retail marketing arena.
On top of this, there are lots of areas where loyalty data can
help retailers and brands test and learn in store, increasing
campaign execution efficiencies and understanding what
kind of shopper behaviour those campaigns create. We’ve
highlighted four key areas where loyalty data can do
this:
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• Integrated brand planning.
Driving consistency in terms of messaging for shoppers, without
adding to the confusion. This data can also help retail marketing
campaigns move from tactical quick wins to a more strategic
vision, driving longer-term campaigns that will create better value.
• Media selection.
This is an area where customer data plays a significant role.
Currently, the targeting that goes on is limited - such as the
top 200 stores based on turnover. Customer data can get much
more granular, delivering a higher proportion of shoppers that
brands are trying to hit. It will also give an understanding of
what media would be most appropriate for that audience as
you can track the impact of campaigns over time.
• Store selection.
Much more detailed information about stores means brands
know what customers come in and for how long. This means
those brands are able to ensure that their campaigns are ticking
all the right boxes in terms of audience profile and that they
are putting money in the right place.
• Campaign evaluation.
Loyalty schemes not only allow retailers to track sales data, but
they also give them access to a group of customers that will
answer their questions about the success and impact of any
campaign. This can then be used to inform future campaigns
and retail marketing activity.
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Key points
• Loyalty schemes can help retailers and brands accurately
target promotions.
• Loyalty data can help brands understand customer
segmentation, shape in-store experience with customer
angle, drive personalisation, create a more collaborative
relationship with suppliers and more effectively manage
media.
• Loyalty information can help increase campaign efficiency
by creating integrated brand planning, improving media
selection, improving store selection and giving better
campaign evaluation.
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4. Make sure you have the basics in place
“The reality is that a lot of in-store problems can be down
to placing or inadequate spacing. Field marketing can
help fix these systemic issues. Getting it wrong in terms
of promotional availability can cause significant negative
emotions in the shopper and that can be extremely
damaging for the brand.”
David Norbury
chief executive of field marketing agency REL
Offering shoppers a risk-free trial at the moment of purchase
in store or a more immersive brand experience is an effective
use of retail marketing spend. It’s highly targeted, and brand
awareness can be tracked immediately and over the longer
term. But whatever creative ideas and approaches the brand
may have, there is one stark reality: unless the in-store
fundamentals are in place any campaign may well be worthless.
Getting the basics right is a journey not the destination, and
it’s a journey worth investing in to ensure that retail marketing
spend is not wasted.
One of the biggest barriers
to the potential growth
of retail marketing is
compliance; which can
range from 42% to 85%
across the industry, with
“out of stocks” currently
running at around 8%.
Indeed, IGD research
shows that products on
promotion not being
available is the biggest
single
concern
for
shoppers.
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Many brands are still not getting what they’ve paid for in
terms of compliance in the retail environment. Employing
field marketing techniques and other incentives such as
internal promotions is a simple way of ensuring retailers
execute promotions correctly and on time. This can make a real
difference to the bottom line for brands and retailers. Having
the right space and visibility can make a huge difference. This
requires joined-up thinking and a thorough planning process
and field marketing is the glue that binds this together.
Key points
• If a product isn’t available in-store, brands and retailers are
undermining their own potential profits. IGD research shows
that products on promotion not being available is the biggest
single concern for shoppers.
• Getting the basics right ensures that your retail marketing
spend is not wasted.
• Brands and retailers should focus on ways to enhance
compliance across their network.
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5. Making use of the technology that
consumers know
“Screens present a real opportunity, but we’ve been focused
on the messages and probably on the wrong screens.
Over 85% of shoppers have a mobile in their pocket when
they’re shopping. This is a screen that they have a good
relationship with. A screen they want to look at. A screen
the customer, not the retailer controls. So we need to look
at ways to use this as part of the shopper journey.”
Anthony Hopper
UK Managing Director at retail and experiential
agency Saatchi X
While technology may be ever increasing in our daily lives, it’s
still not being used enough in retail and not in the right ways.
Digital technology really can improve the retail experience
for the shopper and therefore for brands and retailers, but
delivering brand and product messages to screens on shelves
is not the only answer.
There is a real opportunity here
for brands to get messages and
information direct to shoppers’
mobile phones either when they
are away from the store or when
they are in store. This is a powerful
way of getting their attention
and engaging them with a brand.
One interesting application for
today’s smart phones is price
comparison.
How many times have you walked out of a store because you
think you’re going to get it cheaper someone else, only to end
up buying it for the same price somewhere else? This barrier
can now be overcome instantly in store with price comparison
information delivered direct to the customer’s mobile.
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Another application is providing shopper with knowledge and
information. With so many products and brands to choose
from, shoppers get confused and frustrated and if they can’t
find a good sales assistant, they’ll leave. The reality is that
retailers and brands could provide shoppers with as much
or as little information as they want at the touch of a button
through mobile or interactive screens. Clearly the additional
benefit is that this sort of interaction is not limited to just the
in-store environment and the opening hours of a shop. Brands
and retailers can now be open 24/7!
Key points
• The mobile represents the biggest retail communications
opportunity for brands and retailers as it is a screen that a
consumer wants to look at and has a positive relationship
with.
• Digital technology can really improve the in store
experience for the shopper by providing customer service
and advice.
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Summary
Although Retail marketing has been around for many years it
represents a massive growth area. The industry is beginning to
look past the tangible benefits of retail marketing and build a
common “rule book” of how to integrate retail marketing into
their brand marketing.
There is no doubt that technology is also playing an increasing
role in enabling consumers, retailers and advertisers to access
the opportunity, with the likes of shopper focused apps on
the mobile, planning software (planmymedia.com), digital
signage, loyalty data and targeted field marketing. However
getting the basics right, particularly availability is crucial as
Retail marketing, more than any other media channel delivers
sales... but only if the product is on the shelf.
If you want to know more about the retail marketing sector
and what it can do or your brand(s), or would like advice or
guidance on how to improve the effectiveness of your current
activities, please contact rmi.
Dominic Rowbotham
Head of Business Development,
Retail Marketing International Limited
2 exmoor street, London W10 6BD
T - 020 8962 2300
D - 020 8962 2338
M - 078 0287 8542
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