Shopper Marketing Strategy Promises to Boost Grocery Aisle Purchases

Habits can be hard to break. When I began working at Pace Communications, I had to shift my thinking from old-school journalism and learn how to think like my client—an ability critical to success in custom publishing. But you can’t stop there. Even clients can get stuck seeing things from only one perspective, and sometimes it helps to have someone from the outside ask: “What do your customers or donors really want to know?” That’s custom content at its best.

Similar questions are asked of the supermarket industry in Shopper Marketing: How to Increase Purchase Decisions at the Point of Sale, edited by Markus Stahlberg and Ville Maila of Phenomena Group. Their book presents more than 30 articles from retailing and marketing experts worldwide who propose a new strategy for approaching shoppers. Given Pace’s interest in exploring how custom content can be integrated into grocery store marketing strategies, I spoke with Markus Stahlberg about his insights into helping the supermarket industry break a few habits of its own.

Stahlberg is the group managing director for Phenomena Group, in charge of the company’s global operations. Phenomena was the first shopper marketing company founded in Europe and specializes in shopper marketing campaigns and promotions in more than 40 countries.

Wes Isley: Tell me a little about your inspiration for Shopper Marketing.

Markus Stahlberg: At Phenomena, we recognized a clear need for defining what shopper marketing really consisted of. We saw that there were specialist companies emerging that represented an extensive spectrum of marketing- and sales-related services, from packaging design to shelf-space optimization. We began contacting people we knew around the world and also approached previously unknown companies about their interest in contributing to the book. 

Isley: Perhaps the main takeaway point is that there is a difference between “shoppers” and “consumers.” Are grocery retailers embracing this distinction? 

Stahlberg: Categorically speaking, retailers are much more interested in shoppers, not in consumers. Shopper marketing is actually a built-in ideology to retailing; retailers have always practiced shopper marketing. I think a better question would be, should the retailers pay more attention to consumers as well? 

Your question applies much better for manufacturers, who generally haven’t seen a difference between the shopper and consumer. When the manufacturers [held] power in the ’90s, the consumer ruled the scene; once retailers took over, suddenly shoppers became important. 

Isley: Your book stresses that shopper marketing is different from traditional grocery store advertising and marketing. It seems to aim for understanding shopper behavior and responding accordingly, rather than directly attempting to change behavior. Is this correct? 

Stahlberg: From a shopper behavior point of view, the key benefit of shopper marketing is to make it easier [for the shopper] to make purchase decisions. A key insight about shopper marketing is that shoppers are somewhat [unaware of their purchasing choices] in the store, and so if the brand [manufacturers] did not try to change their behavior, shoppers would always buy the same products.

Isley: Are supermarket retailers and manufacturers adopting or resisting this approach?

Stahlberg: On a general level, I don’t think retailers object to shopper marketing as such. After all, it means that manufacturers are investing in shoppers in the [physical] store instead of [in a] target group outside the store, and they’re [helping] to increase purchase decisions instead of building [their] brand. The only reason for retailers to object is, of course, one of the main drivers of shopper marketing [at] the manufacturer end, [which is the push to] gain more space and attention in the store for their [own] products.  

Isley: As a shopper, I like the emphasis on improving the supermarket environment because it seems that the basic design never changes. Why are grocery retailers and manufacturers slow to make these kinds of changes?

Stahlberg: Logistics rule in fast-moving consumer goods (“Every Day Low Price” is the most efficient method of gaining shopper loyalty). You can ask yourself: If there was a supermarket chain with 30% higher prices because of fancy, logistically inefficient store design, would you shop there? It’s all about getting the stuff in and out as efficiently as possible. I would not foresee drastic changes to supermarket layouts in the near future. 

Isley: But I like the idea of breaking out of the traditional category approach to grocery store design. Currently, I must travel the entire supermarket to get ingredients for just one meal. So you don’t think we’ll ever see a “breakfast solutions” section, for example, that includes milk, cereal, bacon and eggs, all together in one spot?

Stahlberg: This is a nice idea, but what if somebody wants eggs for baking? Where should she go? Would there be eggs in multiple locations within the store? It would be a logistical problem and [shelf usage] would not be very efficient. I doubt whether a person wanting do her baking would really see why she has to visit the breakfast section to find eggs. There could be some niche store concept that supports this kind of ideology, but I don’t think it is in sync with logistics-driven mass retailing.

Isley: I confess that when I shop, I’m on a mission to get in and get out, so I’m unlikely to watch TV screens or otherwise linger at the point of purchase. How can shopper marketing successfully address that kind of behavior?

Stahlberg: We have been [taught] to follow the ideology of efficient logistics. This varies between different markets, however. For instance, in China and in Asia in general, shopping is considered to be entertainment, which of course has a drastic effect on which concepts succeed. 

Regarding shopper media, I do think it has huge potential in helping shoppers make their purchase decisions. When considering shopper marketing, it is all about volumes (actually it’s very similar to other media). The idea isn’t that 50% of shoppers will buy the product because of an ad; it could be considered very efficient if only 1% responded (e.g. from 30,000 shoppers, 300 would buy). 

As a remark, it is important to understand that there are very few SKUs that are purchased by more than 15% of all shoppers. I recently saw an analysis of one major retailer’s customer data, which showed that out of their 15,000 bar codes, there were only 50 products that were bought by more than 15% of shoppers and, of these, many were unbranded products, such as [produce]. 

The key elements of success, in my opinion, for shopper media, are that (1) it be considered a sales-building tool instead of a brand-building tool, and (2) that it be optimized for the purchase-decision process, which takes five seconds. 

Isley: You stress gathering accurate research data and using it effectively to be successful at shopper marketing. What would you say to the argument that “times are tough, and we can’t afford it right now”?

Stahlberg: I would ask, what can you afford? Shopper marketing aims for increasing purchase decisions and, as such, is a sales-building tool producing immediate results. So I would ask, where do you put your money? 

Isley: In the case of some other grocery marketing strategies, sharing personal shopping habits with retailers and manufacturers has not translated into tangible benefits for the shopper. How will a shopper marketing approach differ? 

Stahlberg: Shopper marketing aims to understand shopper behavior and to make it easier to make purchase decisions. This will be beneficial for shoppers only if the shopper’s purchase decisions result in consumer satisfaction. So it is all about giving [shoppers] the correct reason to buy a product that [they] will potentially like. In the end, successful shopper marketing should result in repeated purchases, or loyalty towards the product and brand. 

Isley: Another key to shopper marketing success is getting support between all stakeholders: retail, manufacturing, marketing, sales. What advice would you give to someone who sees the potential of shopper marketing but who needs to persuade skeptical team members?

Stahlberg: I don’t think retailers or the sales team [need much convincing]. For the marketing department, however, it definitely requires the biggest change in mindset. Marketers should understand that they must focus on two completely different worlds, that of consumers (of which they are already masters) and that of shoppers. Succeeding in both requires mastering two arts instead of one. The biggest and most common mistake is to apply the rules of consumer marketing to shopper marketing. 

For manufacturers, shopper marketing means bigger volumes, which is hardly a problem. However, the most efficient medium for shoppers is the package; it reaches 100% of the target group. Using packaging as a medium involves manufacturing as well [as] tricky and costly design changes. For manufacturers, the best guideline is to compare the investment (through labor and direct costs) to buying media. Media is expensive, and [manufacturers] pay a high premium to an external media owner. [However,] packages are owned and controlled by [the manufacturer] and they only pay the direct costs associated with the work and materials, with no premium at all. Therefore, efficient use of packaging as a medium should usually be a better investment than traditional media.

Isley: Markus, thanks for sharing your insights about the supermarket industry and shopper marketing. 

So what do you readers think? If you’re a grocery retailer, manufacturer, marketer or sales person, let us know your thoughts on influencing shopper behavior or the future of in-store media. Have you heard all of this before? What grocery marketing strategies are working for you?

Posted By: Wes Isley