To Reach Today's Shoppers, Add Value

Give to Get: Motivating Consumers Where and When They Make Purchases Is More Critical Than Ever

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One of the most recent examples of a strong heads-up message for today's CMOs is last month's naming of Joe Tripodi as chief marketing and commercial officer of Coca-Cola Co. As reported in the July 30 issue of Advertising Age, Mr. Tripodi represents a different kind of choice for the iconic beverage giant. He's "a nuts-and-bolts guy ... expected to espouse sales drivers over image campaigns."
Because many consumers are practicing 'selective shopping behaviors,' providing added-value dimensions during the retail experience is crucial.
Because many consumers are practicing 'selective shopping behaviors,' providing added-value dimensions during the retail experience is crucial. Credit: istockphoto, Kativ

Mr. Tripodi's post reflects Coke's having identified point of sale as an important area where it can continue to augment growth. As a CMO with oversight not only of traditional advertising but of point-of-purchase marketing and in-store sales, he "will go back to basics [and] focus on in-store efforts" in seeking to boost Coke sales. A champion of point of sale, he recently slammed advertisers who seek only to dazzle and are "more concerned with production value than consumer value."

Consumer value is the cornerstone of any marketing challenge and yet many CMOs fail to recognize that today's shoppers are becoming ever more selective, seeking ever more value, and that reaching them in stores calls for some added-value dimensions.

Shopping, undeniably, is one of the most common activities in the world, with households averaging between 150 to 200 shopping trips per year. Recognizing that fact, the shopper's return on investment -- or what the shopper gets, along with a product and brand, as a return on his or her investment in time, effort, and expenditure in the shopping experience -- is a measure of growing importance for marketers to heed.

Ground zero
Nowhere is the need for shopper's ROI more important than in retail environments, where an estimated 80% of all purchase decisions are made. With more than 58 million retail establishments worldwide and an estimated 94,000 new stores to open by 2011 in the United States alone, successfully motivating consumers where and when they shop has never been more critical.

Further complicating the retail-shopping experience is the fact that there are approximately 1 million active UPCs in the U.S. today, with the average supermarket now carrying 15,000 to 25,000 UPCs and the average household purchasing about 800 to 1,000 UPCs in a year.

Not surprisingly, as the number of product choices has increased, the choice processes of consumers have changed.

Time, the unreplenishable resource, has affected the way consumers think and act about shopping. Time-starved shoppers are looking for ways to manage their shopping time. According to a study reported on earlier this year by IGD, an international food and grocery research organization, there is a wide range of shopper behaviors that can be labeled "selective shopping." These behaviors include visiting only needed aisles, minimizing the number of shopping trips, avoidance of browsing and limiting the amount of time spent in the store.

Relevance key
Whether at the grocery store or the mall, shoppers are engaging in "selective shopping behaviors," making it critical for marketers and retailers alike to ensure that when vying for shoppers' attention, they deliver on the obligation to provide something relevant.

Simply put, shopper ROI is all about what shoppers get for giving marketers and retailers their attention.

Think about it. Marketing at the national level can lead shoppers into a store, down an aisle, to a shelf and a brand. But what totals up and translates into a sale at that point? As a shopper stands before a shelf or display case, what prompts him or her and provides the desired reaction? What activates the shopper's senses and results in a good return on his or her investment in terms of time, effort, thought and expenditure? What, in fact, constitutes that shopper's ROI?

More than at any other time in history, shoppers in today's online era may be well educated about a product or service before they even reach the store. Having invested a good deal of time in that education, shoppers look for -- and deserve -- a return on their investment that goes beyond simply the product or service they are buying.

Six leverage points
Identifiable today at the critical point of purchase are six leverage points now emerging as increasingly important. Each affects shoppers' senses. Ranging from rational to emotional, these sense-points each contribute to an assessment akin to shopper's ROI.

And while consistent effectiveness on all six may not always be desirable or possible, marketers need to recognize and evaluate each one.

The decision as to which points can and should be leveraged and implemented in some fashion must be determined by the product and/or brand marketer, in many cases along with the retailer. Choices are often dependent on a variety of factors including season, geographical location, timeliness, popular topics, sports events, healthcare issues and charity events.

Equally important is what is happening in other arenas reaching the shopper such as TV, print, online and other media campaigns, and packaging. Shopper ROI efforts should be consistent with these activities so that all of the consumers' expectations are taken into account and met at the shelf.

Don't forget retailers
Both branding and the shopping experience today are increasingly controlled by retailers, who do much more than simply distribute goods and services. Retailers are initiators of value-added activity that can create their own brands and encourage frequent return visits, as well as inform and educate shoppers.

Beyond traditional supermarkets and retailers, specialized retailers such as banks, car dealers, fast-food restaurants and insurance agencies also need to understand the mindset of their customers and assess their shopper ROI. The most recent retail trends, such as pop-up stores and experience stores, indicate retailers are seeking to learn about what consumers want and need so they can find better ways to reach them (as well as affect and leverage one or more of the six senses).

Shoppers want the retailer to better understand who they are and what they need. It's not about selling just a product, but about products that include all components of the value equation -- price, quality, time and convenience -- to better fit the shoppers' lifestyle.

The bottom line is this: How a brand, company and retailer trigger purchases at the shelf level can be a powerful indicator of whether they are effectively motivating shoppers -- and creating a positive shopper ROI.
Building blocks of shopper ROI
Up the likelihood that your target consumer will find value in and buy your product by executing against these six key attributes -- or at least come close to scoring high on each:

piggy bank
Photos from top: Kativ, Roberto A. Sanchez
PRICE VALUE
Today everybody delivers on price. It's a key factor in most sales, but it's not always the primary leverage point at the shelf level. Price, in the form of savings or a special offer, can be implemented to surprise and reward a core consumer while at the same time also pique the interest of the competitive set or the brand skeptics. Marketers need to pay attention to value and price from a variety of purchase viewpoints. In reality, value and price are now the "greens fee" for playing the retailing course.
shopping bags
SHOP-ABILITY
Shop-ability (often referred to as the cost of shopping) should not be underestimated. Is the product easy to find on the shelf? Are out-of-stocks infrequent and limited? Does the retailer have the size or flavor the consumer is looking for? If the product is on or in a display, is it easy to find, to reach, to extract? Retailers and brands sometimes make it easy for shoppers; other times would-be customers are frustrated and shopper ROI is negatively affected.
baby wipes
CONVENIENCE
Facilitating added convenience for shoppers can include advantages such as bulk packaging; value packs offering more product or a gift of some kind; or cross-sell opportunities (for example, buy three boxes of cereal and get a carton of free milk). Similarly, solutions that meet shoppers' expectations at the shelf add a measure of shopping convenience. These solutions can include providing at-shelf recipe cards, cross-product value packs (such as diapers co-packed with wipes), or nutrition/product information takeaways. Solutions provide differentiation and convenience.
trader joe's
SMILE FOR THE MIND
Does the product provide an emotional reward for the shopper? Does it do anything to make shoppers feel good before the purchase? Does it make them feel nostalgic? Take him or her back to a fun time in the past? Offer a free gift? Make a joke? Solve a problem the customer's not expecting? Think of Trader Joe's, where shelf tags and chalkboards all carry campy local references that can make shoppers laugh out loud at the shelf.
smart start cereal
EMPATHY
Being sensitive to a shopper's personal concerns can ratchet up shopper ROI. Making a very personal connection elicits emotional affinity and opens new paths to connect well with the shopper. Women concerned about their health and well-being and maybe the possibility of heart disease, for example, can feel good about finding products such as Kellogg's Smart Start cereal on store shelves. Or the staging of a "tea" for new parents to educate them on how organic food can make them better parents develops strong empathy between the retailer and shopper. Microbiotic products, nutritional information, or participation in charity events such as the Susan B. Komen breast cancer "Race for the Cure" are other examples of empathy.
ipod family
EXPERIENCE
Does the shopper get to taste the product, participate in an in-store event, win a prize? Experience gives shoppers the chance to feel like they have bought or received more than just the product. Stores such as Whole Foods or Costco often resemble amusement parks for adult shoppers. Apple stores, which deliver the opportunity for education, trial, customer service and entertainment -- all targeted to shoppers. And Ikea, curator of lifestyles, serves up inspiration and enablement and provides a lifestyle affinity.
Jim Lucas is exec VP-director of the Shopper Marketing Division at DraftCB, Chicago. He is a 20-year industry veteran, the founder of science of Retail Ecology and an expert on consumer action in retail environments.
Howard Klein is senior VP-customer specific marketing at DraftFCB, Chicago, where he develops and directs programs that maximize in-store marketing effectiveness for clients such as Brown-Forman and Kellogg Co.
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