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Booz & Company

Booz & Company. Shopper Marketing Opportunities for Store Brands. Chicago July 19 th , 2011. The Shopper Marketing opportunity: influence malleable brand preferences along the full path to purchase.

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Booz & Company

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  1. Booz & Company Shopper Marketing Opportunities for Store Brands Chicago July 19th, 2011

  2. The Shopper Marketing opportunity: influence malleable brand preferences along the full path to purchase Shopper marketing: building insights about consumers when they are in shopping mode and applying these insights to influence their purchase decisions Timing of Brand Selection (% of total items purchased) Room to influence brand selectionin the aisle Room to firm up preference before the store Brand on List, Purchased in Store Brand on List, Switched in Store Item on List, Brand Selected in Store Item Not on List, Impulse Purchase Source: Survey of 3,600 shoppers for Shopper Marketing 3.0 study conducted Fall 2009 by Booz & Company In collaboration with Grocery Manufacturers Association Source: Booz & Company, SheSpeaks survey of 2,200 shoppers completing post-shopping survey 1 Booz & Company

  3. Shopper marketing spending already accounts for a significant share of the A&P mix and is one of the fastest growing spends CPG Marketing Mix 2010 Spending, 2011-2013 Growth $108B $22B $338B $198B $60B Size 9.0% 6.3% 0.6% 0.6% -0.8% Traditional Media Digital Media Trade Promotions Consumer Promotions Shopper Marketing &Co-Marketing Advertising: $130Bn 2.4% CAGR Promotions: $616Bn 2.1% CAGR Source: eMarketer, AdAge, GMA, promoMagazine, Booz & Company client experience Booz & Company

  4. Shopper marketing evolving as part of an integrated approach Evolution of Shopper Marketing Stages of shoppermarketingevolution “The New Integrated Marketing” Using the full range of marketingactivities with store back insights “Shopper Solutions” Insights and solutions tailored to the shopper’s occasion “The Shift to Shopper” Distinguishing between consumer and shopper Engagement & Branded Experiences Marketing ROI Closure Rate • Focus on owned andearned media • “Store back” filter for creative • Consistent themes, customized elements Basket Size Category Growth • Insights to inform retailer calendar (e.g., shopper psychology and need states) • Multi-brand and multi-manufacturer programs (e.g., spring flu, summer BBQ) Sales Lift Value drivers • Trade overlay • Buy-in to retailer events • Planogram design Time 3 Booz & Company

  5. Pre Store In the Store Post-Purchase At its best, it plays a complementary role in reinforcing brand attributes and motivational “cues” along the P2P • Develop emotional connections with consumers’ motivations • Be “relevant” to consumers’ lives • Reinforce shoppers made the “right decision” and sustain branded experience • Grow “loyalty” and “advocacy” • Reinforce equity and motivational “cues” • “Activate” equity with consistent imagery Brand Marketing • Catch consumers at moment when shopping behaviors begin • Target shopping and lifestyle “triggers” • Build insights about shopping mode to influence decisions • “Stop, hold, close” in the store • Influence next trip with cues that tap into motivations • “Reward” behaviors consistent with brand Shopper Marketing Traditional Focus Expanding Focus 4 Booz & Company

  6. In store video, kiosks, scanners Direct to card, e-circular E-newsletter, personalized storefront WOM, reviews, branded community Sponsored results, virtual display Retailer sitelet, how to video Barcode scanners, shopping lists A broad set of platforms can be integrated into the playbook, increasingly via digital vehicles Adoption of Shopper Marketing Platforms “On Average, to what extent are you usingthe following shopper marketing vehicles?” Example Digital Vehiclesby Platform Displays & In-Store Advertising 17% Deals 19% RelationshipMarketing 30% Social Media 37% Search 40% Thematic Content 47% Apps 49% Never Use Use Source: Booz & Company analysis for GMA Shopper Marketing 4.0 Study 5 Booz & Company

  7. Unlocking the potential of shopper marketing capabilities requires sustained commitment Holistic Capability-Building Reliably and consistently delivering a distinctive outcome by applying processes, tools, knowledge, skills, and organization National Brands specific 1 2 ShopperInsights Skills Organization RetailerIntimacy 7 ShopperMarketing Capabilities 3 Processes Tools Knowledge ROI andBrandHealth Strategy andBrandDevelopment • Outcomes • Insights across seasons, occasions, formats • Strategies that integrate across advertising & promotions mix, across the full P2P • Scalable platforms with clear playbook for where to focus customization efforts • Larger share of programs measured with insights incorporated into brand planning 6 4 ProgramExecution CreativeDevelopment 5 PlatformDesign andCollaboration Source: Booz & Company analysis for GMA Shopper Marketing 4.0 Study 6 Booz & Company

  8. What does that mean for store brands? Challenges Strengths • Competing internal agendas • Strained funds and collaboration with national brands • Resources vs. national brands • Misaligned metrics(sales vs. margin) • Full transparency / ownership of consumer purchasing data • Higher speed to market as the owner of the “theater” • Flexibility to pilot & run shopper marketing initiatives 7 Booz & Company

  9. Opportunity #1: Build own insights to tailor the events calendar and marketing messages for greater effectiveness Example Calendar of Events for ConAgra “Seasons of Mom” PostHoliday Spring Summer Back toSchool OctoberFling Holiday January, February March, April, May June, July, Mid-August Mid-August, September October November, December Nesting, decompressing after stress, getting back into routine, eating out less High energy, more time outdoors, senses awakening, reconnecting with friends Freedom, looser schedules, outdoor activity, no rules, fun Overwhelmed, balancing schedules and tasks, new routines Steady routines, family time, creativity, eye on the holidays Joyful traditions, extravagant parties, Fun pulling it off “Little Extras” campaign featuring brands in occasions unique to season with emotional connection around reduced stress Make mom a “Financial Hero,” give her good deals on easy-to-make, lighter meals that are easier to eat in shift “Anytime Entertaining” with focus on being prepared for informal parties “Prepare for Success” campaign delivers on need to save time and money while make family advantaged “Creative Comfort Food” leverages mom’s change in cooking techniques and menu, providing relevance for brands “Time to Celebrate” focuses on brands that meet high expectations for holiday events

  10. Opportunity #2: Serve as “anchor tenant” for category solutions Discussion • Leverage advantageous position of “owning the theater” to access consumer data and ensure rapid cycle time • Work with national brands to develop co-promoted events when applicable • Deliver much better execution for shopper marketing events (compliance, quality) • Leverage test & learn opportunities to define right playbook • More effective cross-category merchandising • Dial Flu Season (with Clorox and K-C) 9 Booz & Company

  11. Opportunity #3: Leverage digital to drive traffic and add call to action to in store displays and packaging Deals Embedded in Ads Paid Search & Digital Shelf Database Marketing Mobile Call to Action In Store • Leverage loyalty database for targeted offers • Communicate via shoppers’ preferred channels (e.g., email, mobile, social) 10 Booz & Company

  12. Opportunity #4: build a learning agenda with waves of pilots Building the Learning Agenda for Shopper Marketing • Assess data environment and lay out a road map to build the required capabilities and discipline to systematically prioritize opportunities • Bring external experience and expertise on the analytical and managerial dimensions of leveraging data sources for online shopper insights • Use in-house data repositories to develop hypotheses and mine the data for insights that can be used to filter opportunities in terms of impact and doability • Engage the organization to select sets of pilots that can be launched in waves to validate opportunities and build moment around the business case • Define the new data, analytics and processes required to operationalize learnings from the pilots and embed them into way the various parts of the organization get things done • Provide a perspective on key capability levers (e.g. talent, processes, metrics, technology) required to cultivate a stronger culture of innovation 11 Booz & Company

  13. Putting it all together — What to do “Monday morning” Suggested Areas of Focus Build the WinningEcosystem — Lead Your Partners, Build the Talent, and Score Results Define Strategic Ambition and Capability Gaps Redefine Approach for Insights to Enable More Integrated Planning Across Path to Purchase Shift from “Simultaneous Equations” to “Waves of Pilots” 12 Booz & Company

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