All parties involved in shopper marketing know it’s a collaborative process—or should be. But collaboration is a matter of degree. Consumer goods marketing executives report that about one-fourth (26%) of their programs qualify as “true” collaborations between their organizations and retailers, according to Shopper Marketing magazine’s 2019 Trends survey, whereas 41% are driven mostly or completely by their own objectives and 33% are driven by retailer objectives. This means that most of the time, either the retailer or the CPG marketer has a stake but not much say in a program’s aim and target.
That’s too bad, because true collaboration is of course more likely to lead to a win-win for both parties. And when a win-win is aimed for and achieved, the ROI for shopper marketers tends to be even higher than if they had focused mostly or solely on their own objectives.
In other words, ensuring a retailer win can work to the shopper marketer’s advantage and is, ultimately, a matter of self-interest. Working with our CPG clients, Foresight ROI suggests they come right out of the gate with event proposals that will clearly and measurably benefit the retailer by driving category growth. For their part, retailers can help their CPG vendors by providing more in-store support and better merchandising.
Shopper Marketing Isn’t the Same as Sports
Though we’re fans of sports metaphors, the best shopper marketing events from an ROI standpoint don’t result in one party winning and the other consoling themselves because there’s always next season. There are no losers.
For win-win results, an event must be specifically designed to grow the category, not just the brand. CPGs must help drive category growth by bringing more people into the store and increasing basket size. This curries favor with retailers, but more importantly, we know from measuring some 25,000 shopper marketing events that it increases ROI.
There are many actions CPGs can take to drive category growth. Here are three:
1. Leverage shopper insights. One of our CPG clients found that many adults planned to attend or host a Halloween party, and therefore they would not necessarily be shopping just to stock up on big bags of bite-sized candies. They used this insight to create an inspirational recipe campaign for Sam’s Club, featuring foods that fit the occasion but aren’t typically associated with Halloween. (Your standard “pigs in a blanket” ingredients can be made into “mummy dogs,” for example.)
2. Co-create shopper solutions. Two CPGs partnered to create a meal solution campaign driving shoppers to multiple categories. This campaign drove high ROIs for both companies and increased category sales, for a win-win-win.
3. Invest in pre-store ads. By bringing shoppers to the store for a specific category or brand, pre-store ads are a proven and consistent driver of category sales. Digital shopper marketing ads have proven to be effective for both parties, especially when integrated with in-store media. The digital ads also drive online purchases. Generally, CPGs find that a full path-to-purchase approach with multiple touchpoints, though costlier and more complex, yields a much higher ROI—30 percent on average.
Though shopper marketing is, at its best, truly collaborative, let’s not forget its competitive nature. CPG brands compete for prominence on key dates, such as the upcoming Super Bowl. The brand that presents the retailer with an event and analytics-based forecast showing a win-win will get the most retailer support and display space during such critical times.
The Only Way to Define a Win Is by Keeping Score
Foresight ROI measures shopper marketers’ joint events over time and plots them on a matrix to see who comes out a winner, based on brand ROI and category growth. A win-win situation (upper right-hand quadrant) occurs when both category growth and brand ROI are high.
It’s important for shopper marketers to identify their best retail partners because these customers typically generate returns three times greater than the lowest-ranking customers. Marketers who fund their best customers through small reallocations increase their total returns upwards of 5 percent on average, just by reallocating 10 percent of the budget, and double-digit increases aren’t uncommon.
In addition to winning retailer support, a truly collaborative approach, guided by predictive analytics, gets the shopper marketing team, the brand marketing team, and marketing agency on the same page. When these internal stakeholders along with retailers, shoppers, investors, and even complementary CPGs all come out as winners, the shopper marketing team takes home the prize—a bigger slice of the marketing budget.
Predictive analytics helps drive true collaboration. Contact us to learn more.