Shopper Marketing in a Digital World

By Frank Kroger, Vice President Shopper Marketing, Valassis and Chris Saroka, Vice President Digital Shopper Marketing Sales, Valassis Digital
Published Thursday, Jul 21, 2016

Shopper Marketing in a Digital World
How Online and Offline Intelligence Can and Should Fuel Your Media Plan

A benefit of marketing and selling products in the grocery space is the availability of data. Retailers’ frequent shopper data has been available for years, but seldom used. Early pioneers of data use, including Wegman’s and Kroger/dunnhumby, helped define the role and opportunity for such insights. Many more retailers now make the list using data utilization to learn, apply and market to their targeted shoppers. However, as shoppers’ buying habits and diminished loyalty redefine who is – or should be – a top shopper, marketers limited to first-party data only are facing a challenge. Today, by using offline data sources and incorporating the depth of digital information, marketers are better positioned now more than ever to grasp this new world of insight that leads to endless opportunities.

The Need for Data Comes with Challenges

The challenge with any data is making sure that you are capturing the real shopper story, therefore understanding what people actually buy vs. what they say they bought. When done right, data can paint a precise, actionable picture of the shopper. Digital’s momentum and ubiquity in consumers’ lives has helped fill in some missing pieces and has allowed more data into the consideration set of marketers. Smart phones are a good example. According to Nielsen, they are used 51 percent of the 5.6 hours a day that consumers typically spend with digital technology1. Consumers share their lives and behaviors with marketers, whether intentional or not; an innocent surfing session on the internet is translated as “shopping.” And where the phone “sleeps at night” or where it “travels” during the day, offers insight to the many ways a consumer lives, shops, works and plays.

With these adjustments in consumer behavior come the important tasks of mining and evaluating data to more effectively impact brand and retailer shopper marketing plans. For example, making a shopping list – still key in the pre-shop phase of the path to purchase – has evolved from an exercise at the kitchen table to an ongoing process driven by activities and observations made throughout the day. Getting on that list and having the right messaging to the shopper is vital, as 90 percent who pre-shop and make that list don’t change their minds in store2. These are all challenges facing brands and retailers in addition to traditional price, assortment and competitive activity.

Evolved consumer behaviors also impact retailers. Consumers now shop at fewer locations (9.4 retailers shopped in the past four weeks in 2015 compared to 12.4 in 2007)3, even with so many more options available online. Younger shoppers are looking for experiences, not just price and items and retailers are responding with roaming “experts” such as beauty counselors in drug chains and “chicken dances” in some grocery stores like Lowe’s Foods. Price and assortment remain relevant, but are the cost of entry, not the right to win.

Change Drives Adoption

Technology and behavioral changes have led to adoption, not alienation. Historically, this has always been true – when television made its way into every home, radio didn’t become extinct. When online news became available, TV nightly news didn’t cease to exist. And when social media became a key source for information and guidance, friends and family didn’t disappear. Changes in media offer an expansion of behavior and thought, not a contraction. In fact Gfk’s “The Survey of the American Consumer,” reported on how mobile coupon users are “affluent and value-savvy shoppers who are more likely to try new brands, and will switch brands to use a coupon4.” Those attributes define coupon users – whether print, digital and now mobile. As shoppers and consumers we are accepting and adjusting to the new media environment regardless of past behavior.

Shopper Marketing Meets ecommerce

A new area for shopper marketing focus lies within the ecommerce platform.  Consumer packaged goods (CPG) products are now being sold on traditional ecommerce sites such as Amazon or retailer- branded sites such as Walmart and Target.  About 3 percent of total CPG sales will occur online in 20165, but the big potential is allowing for well-funded startups such as Instacart, Boxed and Jet to enter the market.

The introduction of ecommerce means investment by CPGs to treat this as an emerging channel with dedicated shopper, category and insight personnel such as they have today for traditional brick and mortar.  The consumer data available online allows for greater targeting and programming that is much different than in today’s offline environment.  Smart brands are figuring out ways to gain an advantage early on as online sales are expected to grow to 8 percent by 20215. It can serve as an opportunity for smaller brands to build share or larger brands to gain incrementality.  The laundry category seems to be there.  According to a MediaPost article citing estimates from 1010data, it’s the fastest growing ecommerce category, up 85 percent (YOY) with Tide holding a 48 percent market share.  Now compare Tide’s ecommerce share with its offline share of 40.2 (IRI7) and you can see how those types of shifts in shopper marketing can lead to an advantage.

What Next?

When designing and executing shopper marketing efforts, brands will succeed by effectively incorporating online behaviors and intelligence with offline intelligence to ensure a complete profile of the target consumer.  From there, pairing the right mix of media coupled with relevant messages and offers will help to influence that all-important shopping list, or those preferred shopping locations. Going forward, collaborating to drive strong results will be essential, for consumers, retailers and brands. And undoubtedly, there will be fewer unintentional disclosures as consumer messages are refined and data is embraced. 

1 Nielsen “What’s In Store - 2016 and Beyond,” December 15, 2015

2 Path to Purchase Institute, Special Report, “The Shopping List” by Sharon M. Goldman, January 25, 2016

3 Kantar Retail ShopperScape® data, January 2007–September 2015

4 MediaPost, “Mobile Food Coupon Users More Likely To Try New Brands”, citing Gfk MRI “The Survey of the American Consumer”, April 2016  

5 Kantar Retail analysis 2016, citing U.S .Department of Commerce data

6 MediaPost article, “Ecommerce Up 30% in 2015, CPG Up 42%,”citing estimates from 1010data, reported by Jack Neff for AdAge, February 2016

7 IRI data, All Outlet for 52 weeks ending March 2016.