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April 11, 2012

New Trends in Shopper Marketing

Two weeks ago, a few folks from the agency attended the American Association of Advertising Agencies (4A’s) Transformation conference in Los Angeles. Prior to the general session, a more intimate group of ad executives from small and mid-sized agencies heard from multiple speakers regarding trends that are most impacting our profession. Perhaps the most enlightening (and frightening) presentation was from G2 USA, whose speakers Tom Conti and Ted Flinn had much to share on the topic of Shopper Marketing.

It used to be that 70% of purchase decisions were made at the shelf. This was after consumers moved through a linear purchase funnel that began with awareness and ended with brand loyalty.

Today, however, there are many more steps involved in the path to purchase, and these steps can be forward, backward and lateral. There is no longer a predictable flow and most marketers have no idea at which point purchase decisions are most impacted. This is not all that surprising considering the latest statistics reveal consumers to use an average of 10.7 sources of information before buying, and that 83% of purchase decisions are made at home. Converging forces have empowered consumers to redefine the moment of truth—or what Google has coined the ZMOT (Zero Moment of Truth).

These converging forces consist of three areas:

  • Search – 90% of consumers start with search, and 75% of lower-involvement CPG purchases are researched online
  • Mobile – 55% of consumers are using their smartphones when shopping, and this percentage will only increase as the number of smartphones overtake feature phones
  • Social – 90% of consumers trust the opinions of friends (of course!), and 70% say they trust opinions posted online regardless of whether they know the contributor

The result is that by 2020, two-thirds of all purchase decisions will be influenced by digital. Marketers must adapt or they will lose out. Target, Wal-Mart and Best Buy are ahead of the curve. They have already implemented measures to combat showrooming—that is, when shoppers come into a store to see a product in person, only to buy it elsewhere, frequently at a lower price. Apps like RedLaser have made price transparency as visible as ever and in real time. Shifts in pricing strategy and product assortment as well as enhancements to customer service and the in-store shopping experience are top priority for brick-and-mortar stores looking to stay relevant.

So what are we supposed to do? Rethink Shopper Marketing as “Omni-Channel” Retailing. Here’s how…

  • Target consumers as shoppers while they live, plan, shop, consume and reflect
  • Technology changes everything, but use the right tools (i.e. don’t chase shiny objects)
  • Integrate utility with messaging as shopping can occur anytime, anywhere (as this example demonstrates)
  • Plan in the context of the new purchase decision journey, rethinking the framework of traditional advertising

Knowing and understanding the transformation that is occurring in the realm of Shopper Marketing is half the battle. Responding to it, however, is up to us. Let’s get to it!