Study Reveals Shift Toward Shopper Marketing, Agencies Adapting

MediaDailyNews
Friday, Aug12, 2011
by Steve McClellan, Yesterday, 6:30 PM

Digital channels and gadgets are making consumers savvier about where, when and why to purchase goods and services. At the same time, it's sometimes harder for manufacturers and retailers to reach their target audiences with sales pitches.

To reach consumers, manufacturers and retailers are sharply ramping up their efforts in the shopper marketing space, according to new data from shopper research specialist GFK Interscope.

This marketing subset includes how shoppers decide which retailers to consider before making a purchase; why they decide on a retailer or brand and which media channels influence those decisions, among other concerns.

In June, the firm surveyed 300 marketing executives across various retail and manufacturing sectors. Seventy-six percent of them indicated that their companies were now devoting 5% or more of their total marketing budgets to shopper marketing initiatives.

While that may not seem like much, Alison Chaltas, executive vice president, GFK Interscope, says the finding suggests a radical transformation from just five years ago, when -- with a few exceptions -- there were no such budgets.

Interest in the space has not peaked yet -- the survey also indicated that 47% of the respondents said their companies would be significantly upping their shopper marketing budgets within the next two years. "It's a remarkable shift," said Chaltas.

As marketers have focused more on the shopper marketing arena, so have agencies and their corporate parents, most of which have acquired or started shopper marketing specialists. Last year, for example, Interpublic Group's Mediabrands started a new agency called Shopper Sciences, designed to help retailers improve their results.

According to Chaltas, most of the money being earmarked for shopper marketing programs is coming from traditional media budgets, such as TV and print. It will flow to various arenas, including research, in-store channels, email marketing and mobile. The study did not cite specific amounts; each retailer exercises individual choice.

The primary driver, said Chaltas, is digital technology, which is making shoppers more discerning and "harder to communicate with because there are so many more touchpoints and so much clutter." Those touchpoints include dozens of online, mobile, in-store, word-of-mouth and direct mail channels. That makes purchasing-decision behavior more challenging to understand, she added.

"Everyone is still learning about the decision-making process," she said -- and how and why shoppers form relationships with particular stores and brands.

But while the media landscape is always changing, said Chaltas, "the one constant is point of purchase."