ShoppersMarketing | Retail Sales Accelerator

Shopper Marketing Part 3

The PMA Shopper Marketing Study: Part III
May 26, 2008

SHOPPER SEGMENTATION NOT WELL KNOWN
Segmentation of shoppers is rapidly growing as a tool for facilitating shopper marketing, but understanding and utilization are uneven. Almost half of retailers surveyed now have shopper segmentations, although two-thirds of manufacturers do not consistently build their programming around them. At the same time, 64% of manufacturers said they have developed their own shopper segmentation. Two in three retailers reported that manufacturers are aware of their segmentation but are not well-versed, and feel that they could be providing more information in this area.

Among manufacturers who are consistently using the retailer’s segmentation models, almost half said they have been practicing shopper marketing for more than five years. The survey says that 62% have seen increased sales as a result, and the same percentage experienced stronger relationships with their retailers. Also, 87% stated that their retailers are very willing to share information with them, and half of that group claimed this even included information that was proprietary or confidential. 75% said the information they are getting directly from the retailer was a key source of their shopper knowledge. Interestingly, only 63% of manufacturers felt that they were well-versed in the retailers’ segmentation, leaving the balance either not knowing the specifics or entirely unaware. By the way, 31% of these manufacturers don’t even have their own shopper segmentation model; they rely solely on the retailers’.

Respondents’ views regarding activation and integration into the retailers’ larger initiatives varied. A full 44 % of retailers felt that shopper marketing programs were more difficult to implement than standard initiatives, and none felt that they were any easier. However, it appeared that views of the difficulty varied according to the success the practitioners were attaining. Of those retailers who felt that programs were more difficult to implement, only one in six had realized sales increases since implementing the practice; for those who believed shopper marketing programs were no harder to implement than others, five out of six had realized increased sales. Also, 44% of retailers responded that shopper marketing programs were highly integrated into their system wide initiatives, while 38% said that they were only integrating programs on an ad-hoc basis, and 19% were not integrating them at all.

There is a gap in retailer-manufacturer alignment over the use of shopper marketing as a tool to enhance brand equity, too. Among retailers, 85% saw the practice as building their brand equity, while less than two in three manufacturers agreed (62%). Most manufacturers (72%) viewed shopper marketing as a tool for increasing the equity of their own brands, while just four in 10 retailers agreed with this point.

MEASUREMENT ANOTHER MISS
As with other media and marketing efforts, measurement is another area of shopper marketing collaboration that needs much improvement. Only one-third of both retailers and manufacturers report that they agree on the metrics for evaluating programs even “most of the time.” Nearly two-thirds of manufacturers said they only “occasionally” or “never” reach agreement with retailers on how to measure programs, while no retailers reported that they agree regularly with their vendors. Says Chris Hoyt, president of Hoyt & Company: “measuring is the only way to foster future enlightenment of resource allocation.”

There is significant room for improving on follow through: only six in 10 manufacturers report that they consistently performed a postmortem, and just 55% of the total said they share these evaluations with their retail customers. While the industry has not yet adopted a common measurement system for shopper marketing activities, anecdotal evidence would suggest that it could be a win-win for retailers and manufacturers alike.

For more Shopper Marketing coverage:
Part I: Desperately Seeking Collaboration
Part II: Playing Catch-Up
Part III: Shopper Segmentation Not Well Known