Big Data in Shopper Marketing

Streams Collide

It’s high time we started thinking about the implications of Big Data on Shopper Marketing. For the last five years, the promise of Big Data has begun to influence marketers’ thinking on how they might improve targeting, investment planning and the evaluation of execution. Concurrently marketers have also embraced the fundamental idea that just marketing to consumers just isn’t enough to secure a purchase.

These two streams of thought are about to collide in interesting and important ways that many marketers have yet to consider.

Shopper Marketing depends on Big Data

Shopper Marketing remains a misunderstood practice, many still labor in the mistaken belief that Shopper Marketing is all about executing activities in shops. This is wrong. Shopper Marketing is the Marketing process of determining a marketing mix which will change the purchasing behavior of a targeted group of shoppers in order to deliver specific consumption opportunities.

By its very nature, Shopper Marketing is complex: there may be numerous opportunities to drive consumption of a brand, all with different target shoppers who’s behavior might be influenced in a wide range of retail environments (both online and offline). Getting this right requires a great deal of insight.

Developing such insight requires a lot of data, from a number of sources. This data must be effectively combined and analyzed. Let me give you an example, we worked with Sony to determine the optimum mix of in-store investment required to drive TV sales in China (see The Shopper Marketing Revolution for more information). Based on behavioral research we identified over two million combinations of in-store activity might have an impact on shoppers’ behavior. Defining which combinations might be optimal, in which outlets, is a big data challenge.

Big Data means big changes in Shopper Marketing

Today’s Shopper Marketing teams are often too fixated on the execution of activity, much of which differs very little from sales promotion and merchandising tactics that have been used for decades (though perhaps now they have a few more bells and whistles). These activities are often procured from creative agencies who are briefed on the basis of scant information. The agencies themselves almost always lack the ability to develop insights for clients independently, so their process is driven by creative ideation which takes place in a data vacuum. The result is nice ideas that win awards but not shoppers.

The convergence of Big Data and Shopper Marketing is likely to make the entire process much more scientific. This doesn’t negate the role of creative thinking at all, what it means is that creative ideation will take place in the context of truth rather than assumption. Further it will shift the current power base away from the agency and toward the marketers themselves as they create better briefs and seek out better quality agency partners.

Big Data in Shopper Marketing demands big changes

This is all a tall order. According to our surveys (we’ll shortly be publishing our findings in South Africa and Ireland), Shopper Marketing teams believe they lack the capability to deliver even against today’s shopper marketing challenges. The introduction of massive data sets is likely to make things worse not better.

I’m concerned about the extent to which organizations have started to consider the implications of this. For instance we’re working today on a relatively simple brand and channel prioritization project which requires managers to combine easy to access data sets and many managers are finding this challenging. As channels proliferate and micro targeting becomes essential, the data science requirements will far outstrip the abilities of these managers.

Greater volumes of better quality data and greater complexity will demand the use of the sort of data science that is currently in play in the financial sector. The practical implication of this is that a great deal of tasks will become automated leading to widespread changes in working practices internally and in the interactions between manufacturers and retail partners.

What is to be done?

It seems to me that change is inevitable (it always has been) so I’d urge leading marketers to actively plan ahead. If you’re in this space, here’s four things I believe you should be doing now:

  1. Learn more about the implications of big data and shopper marketing – understanding the potential opportunities that are at hand and the potential pitfalls ahead will help you plan for the impending change.
  2. Act as if the change has already happened – lead the organization towards embracing big data and shopper marketing as an imperative rather than waiting to be led by your competition.
  3. Recruit better people than you – if, like me, you are in your 40’s the chances are you will never master the skills needed in the future, so it’s time to bring people into your team who already have those skills, or could develop them quickly.
  4. Demand better service – Seek out those agencies who can demonstrate their ability to drive insight from data and can show how their creative responses to this have delivered actual behavioral change.

At the very least, marketing leaders should be provoking a debate within their organisation, if you want help with that, contact me.

Image accessed from http://jalle-astro.fr/wp/tag/universite-de-bordeaux/

2012 – The end of retail as we know it?

the end of retail as we know it?

So if you are reading this, the world hasn’t yet come to an end. The end of the Mayan calendar hasn’t yet heralded Armageddon and yet another doomsday prophecy has hopefully been put to rest.

Since the world has not come to an end, I’ve been thinking about other prophecies that have been made in 2012. One such prophecy is that offline retail is dying. I most recently heard this from Piers Fawkes during the “2013 Trends Predictions via @PSFK” Hangout when he was heard to say “The big story is that retail is dead” [Read more…]

Does your shopper marketing begin and end in-store? Big mistake!

Shopper marketing is gaining momentum as consumer and trade marketers recognize the potential to gain sustainable results in terms of profitability, brand value, and customer relationships. And that’s great! We’re thrilled that the industry is waking up to the reality that the old system isn’t working. We’ve been working at shopper marketing long enough to know that, when done correctly, the results are transformational. [Read more…]

The current approach to marketing has broken down.

Driving a car that spews fumes, stalls out, and guzzles gas like a tractor-trailer doesn’t make sense. It’s hazardous to you (and anyone in your path), unreliable, and expensive.

Many of today’s consumer goods companies are driving these vehicles. Well, not literally, but their approach to marketing is just like these broken-down cars that should be scrapped. Handing over money and discounts to retailers just for the privilege of letting them make money is illogical when you, the consumer goods company, receive nothing in return. No profits. No brand loyalty. In fact, quite often, your brand erodes at the hands of marketers who are not fully vested in your brand’s integrity. [Read more…]

The shopper rules. How will you serve them?

Every ad, every commercial, every billboard screams a message to convince consumers why they need to experience, discover, re-discover, or invest in a brand. Your skin will be softer, you’ll be the envy of your neighbors, you’ll look great, you’ll feel great, your kids will like you—there are lots of promises made to influence the consumer.

But what about the shopper? Have all these marketers forgotten who goes to the store, chooses, and pays for these products? Is your marketing message stopping short of the checkout?

Here’s an example. Studies show that 80 percent of the beer that is consumed at home is purchased by women but consumed by men. Does it make sense, therefore, to use life-sized cut-outs of attractive women for the in-store displays to tout these brews? Do you think a woman is going to be impressed by a sexy vixen pushing an alcoholic stimulant at her man?

And yet that’s what one brewery after another continues to do—except the smart ones. These are the brands that recognize that the woman makes the ultimate choice. Sure, she is influenced by the consumer, but she can tell him it wasn’t available, the price was too high, the carton was too heavy, or she couldn’t find it. And you know what? If he is relying on her to stock up the fridge, he’ll drink whatever substitute is there—assuming it’s not foul tasting.

So what are you doing to influence the shopper? Are you making it easy for her to find your products? Are you placing them where she can see, reach, and grab them? Do you even know where she usually purchases the product you are trying to get in front of her?

In today’s shopping culture, the shopper rules. She can choose from countless outlets to get what she wants. If she is in a rush, she might pop into a convenience store. For buying in bulk, the hypermarket is a good fit. In instances when she doesn’t want to take the time to head into a store, she buys online. Shopper marketing will give you the edge you need in a competitive marketplace and connect you with your shopper, as well as consumers and retailers.

Invest in your shopper. Invest as much research into knowing who buys your products as you do in who consumes them.

What are you doing to address the needs of your shoppers?