The Definitive Shopper Marketing Guide

The Definitive Guide

THE DEFINITIVE GUIDE TO SHOPPER MARKETING Table of Contents 4 Shopper Marketing Tool Index 3 Exploring the Future of Shopper Marketing 66 1 2 Introduction: The Evolution of Shopper Marketing 4 67 Neuromarketing and Behavioral Insights 69 Tracking, Testing and Simulations The Essence of Shopper Marketing 11 71 Seamless Shopping Experiences What Shopper really is, what it isn’t, and who’s profiting 12 5 Final Thoughts 72 The key differences between consumers and shoppers 15 75 The incredible importance of shopper insights/analytics 17 Acknowledgements The Non-Linear Omni-Channel Shopper Journey 21 77 Bibliography Powerful statistics that make the business case 26 Case Study: Scotch Tape 31 78 Shopper Marketing Action Plan & Toolkit 3 The Nuts and Bolts of Shopper Marketing 35 36 39 41 43 46 Processes and best practices Know your shopper(s) before you begin Channels, trends, seasonal events and tactics Common challenges in the Shopper Marketing world Watching your competition closely for insights 47 Case Study: Allegra 49 49 50 55 60 What you need to succeed Digital & Social Acumen Budget, Roles & Organization Partnership with all levels (Retailer, Brand, and Agency) Essential Metrics you need to track Looking for a quick video overview? Check out the Shopper Marketing Video Infographic for a quick overview on the latest research. 64 Case Study: Alcon Eyecare

S H O P P E R M A R K E T I N G T L I N D E X The following list is a toolkit that will be mentioned throughout each section and is available as an action plan at the end of this Guide. Get access to all of these resources and more by visiting the Shopper Marketing Solutions Set. LEARN ANALYZE PLAN TECHNOLOGY EXECUTE MEASURE THE DEFINITIVE GUIDE TO SHOPPER MARKETING SHOPPER MARKETING CAPABILITIES APP SHOPPER MARKETING PROFILE TEMPLATE SHOPPER MARKETING VENDORS MATRIX SHOPPER MARKETING PROGRAM STRATEGIES SHOPPER MARKETING METRICS DASHBOARD SHOPPER MARKETING PROFILE INTERVIEW SHOPPER MARKETING VENDOR TOOL SHOPPER MARKETING COUPON PRACTICES SHOPPER MARKETING PEER BENCHMARKS APP SHOPPER MARKETING IMAGE INFOGRAPHIC SHOPPER PARTNERSHIP PRIORTIZATION TOOL SHOPPER MARKETING COMPETITION TRACKING SHOPPER MARKETING SYSTEM RFP SHOPPER MARKETING CONTEST PRACTICES SHOPPER MARKETING VIDEO INFOGRAPHIC SHOPPER MARKETING BUDGET TEMPLATE SHOPPER MARKETING INSIGHTS DATABASE SHOPPER MARKETING SIGNAGE PRACTICES SHOPPER MARKETING MATURITY MODEL SHOPPER MARKETING MOBILE PRACTICES SHOPPER MARKETING BUSINESS CASE SHOPPER MARKETING JOURNEY TEMPLATE SHOPPER MARKETING ROLES FRAMEWORK SHOPPER MARKETING STRATEGY WORKBOOK SHOPPER MARKETING PROJECT PLAN SHOPPER MARKETING JOB DESCRIPTION PROCESS STAGES PRACTICAL TOOLS GUIDES RESEARCH TRAINING

THE DEFINITIVE GUIDE TO SHOPPER MARKETING Introduction The Evolution of Shopper Marketing

THE EVOLUTION OF SHOPPER MARKETING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 5 The Evolution of Shopper Marketing In an age where we no longer grow our own food, and where we rely on sophisticated technology such as smart phones to communicate with each other, it’s very clear that we need Shopper Marketing and the products and services it offers, as much as it needs us. In the age of the Internet, the influence of Shopper Marketing is everywhere you go. It’s at the grocery store, in your email inbox, on your social media feed, it noti- fies you on your mobile phone, and if it was truly successful, it’s sitting deep inside your subconscious mind. We are inundated with offers, trials, and new products at every turn, from the more modern vehicles such as YouTube video ads, to traditional approaches like flyers in your home’s mailbox. But how did we get here? There was a time when the world was different, when advertisements were only in the newspapers, and catalogs were the dominant form of product discovery. What they all have in common is a hope that you will give up some of your most valuable commodity: time and attention. Sure, they want your money too, but it doesn’t start there. They are looking to become part of your plans, your thoughts, and ultimately your shopping list. They want you to take action, they want to inspire a need within you to purchase immedi- ately, and can we really blame them? There wasn’t a Walmart with every item ready for immediate purchase, and the product selection was tiny. The manufacturers of consumer products had a monopoly of sorts. A monopoly in the market but also a monopoly of the market’s attention. Then again, once radio advertising hit the marketing world, things began to change. The world has become one big shopping mall and everyone has something to sell, but everyone is also too distracted and too busy to hear these sales messages through the noise. Radio shows were directly sponsored by companies, such as soap manufacturers, that openly promoted their products exclusively and attracted millions of consumers with free entertainment. Yet, we all rely on the incredible convenience of consumer products and services to live our modern lifestyles, helping us save time by providing solutions to our everyday problems in life.

THE EVOLUTION OF SHOPPER MARKETING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 6 In fact, the ‘soap opera’ was such an invention that housewives would listen to these dramas during the day, and then became hooked in by the story lines while they cleaned the home and prepared dinner for their families. With only a few stations available, the advertisers really had a captive market. People became both consumers of products but also consumers of television content. It became easier to influence people and inspire them on what their lifestyle could be like if they enhanced it with modern products and technology. In fact, in the early days of the consumer revolution, demand was so high retailers couldn’t keep the products on the shelves, and manufacturers had the upper-hand in supplying what the people wanted; they owned the most popular brands. That said, people actually enjoyed hearing about products that could help them get results in their lives. As more technology began helping take the workload off of everyday life, from modern washing machines and blenders, to synthetic rubber tires and aerosol cans, society started to become ‘consumers’ of these products that made life ‘easier’. As time passed, the number of television channels increased where brands could advertise and single shows would no longer have exclusives for a product. Instead, commercials began running in between shows, to allow multiple sponsors to share what they had to offer, and the majority of consumers were watching them daily. As time passed, and the television found its way into our homes, the radio shows became visual, and the advertisements went from jingles you heard, to logos, mascots and demonstrations you could actually see. By the time cable television became unregulated in the 70’s, the number of channels became too diverse and the television ad models power began to evaporate. By the time the 80’s arrived, giant retailers such as Walmart and Tesco had strengthened their position in the market, and were no longer begging manufacturers to stock their shelves. The tables had turned, and now retailers had the upper hand. Not only did they have the ability to choose which brands they could fill their aisles with, but they also created generic private label products, built often by the same factories that built the brand name products.

THE EVOLUTION OF SHOPPER MARKETING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 7 The game was changing rapidly, and the margins for manufacturers were evaporating even faster. Retailers expected brands to advertise their products on television, and with rising tv ad costs, manufacturers margins became even slimmer. What started for manufacturers as an easy win, became a game of cat and mouse, chasing for space within the stores they once took for granted. With the right negotiation and team effort, brands could take over this effort and in partnership with the retailer, help to grow the category while focusing on their individual brands. It was a win-win relationship, and this tradition continues to this day. In fact, this relationship is at the core of what we call Shopper Marketing. By the early 2000’s, brands discovered just how incredibly important and valuable all of the powerful insights they collected were that they derived from their analytical data on shopping. As these insights were utilized to build even more powerful targeted marketing, brands and retailers realized that working together to optimize their strategy around specific shoppers, using these insights as the foundation, generated incredible results. By the early 90’s ‘category management’ was a dominant force in driving in-store activity, which was a discipline focused on facts and powered by the data from retailers. During this time sales had a greater role, which may also contribute to the middle ground between marketing and sales that still exists today. Over time, brands realized that to have a fighting chance at getting their products in the hands of consumers, they would need to start looking at things differently. They would need to coordinate promotions, along with retailers, to actively market their products together as a team with the common goal of providing value and making a profit in the process. With the arrival of the disruptive force we know as the internet and the mainstream acceptance of e-commerce, everything began to change. They would need to try new ways of presenting their products, in different locations both in store and out to increase sales; which was something everyone could agree on. This level of coordination and proactive strategic orientation became the central force for success for both retailers and brands. In the end, they really did need each other. A retailer couldn’t focus their time or resources required on each individual category within its store on its own (such as ‘Beauty Care’).

THE EVOLUTION OF SHOPPER MARKETING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 8 In this guide, you will discover a distilled best practice approach to Shopper Marketing that will superpower your strategy and lead you in the direction of success. Stores no longer had to rely exclusively on selling and promoting in-store, on tv, or with print ads. Not only did the options for buying change, but so did the behavior of the shoppers. They now had the ability to research and discover the best deals, share their opinions on products, and purchase from a distance thanks to increased capacity for worldwide shipping, in a way the old catalogs of the 1800’s would drool over. To achieve this we have partnered with some of the best industry experts, authors and speakers on Shopper Marketing, to include their valuable input, experience and insight. We now find ourselves in a modern world filled with incredible possibility. Never before has there been more ways to reach and influence shoppers to add a retailer or brand to their shopping list. Although the captive audi- ences of the past are now gone, we now have tools and insight collec- tion that help us understand how to rapidly optimize our approaches for increasing revenue growth in a way our ancestors could have only dreamed. THE RESEARCHER From virtual reality stores used to test product placement strategies, to eye tracking technology used to gauge emotional engagement with a particular offer, the opportunities for marketers seem endless. Sarah Gleason is a senior executive at Gfk, and is a master at developing and institutionalizing actionable consumer and shopper marketing strategies. Gleason spent 18 years in brand management, new product development and strategy at General Mills and Kraft General Foods. She was recently honored as one of 100 ‘Women of Excellence’ in the Shopper Marketing field.

THE EVOLUTION OF SHOPPER MARKETING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 9 THE THE PROFESSOR MARKETER Daniel J. Flint is Professor and Director of the Shopper Marketing Forum in the Department of Marketing and Supply Chain Manage- ment at The University of Tennessee, Knoxville. He is co-author of the book “Shopper Marketing: Profiting from the Place Where Suppliers, Brand Manufacturers, and Retailers Connect”, and regularly presents at global conferences. Carl MacInnes is a senior executive responsible for global shopper marketing practice at Fonterra, the world’s largest dairy exporter, where he supports the building of billion dollar brands by the introducing of neuromarketing practices in key global markets, and as co-author of the book, “Shopper Marketing: Neuromar- keting Strategies to Win the Battle at the Shelf”. THE THE ANALYTICS GURUS Rick Abens has been helping companies improve marketing productivity with practical analytics for over 25 years. Prior to founding Foresight ROI, the leading supplier of Shopper Marketing ROI measurement, he was Director of Global Marketing Analytics at ConAgra Foods, where he built the corporate marketing analytics function and measured return on marketing investment. Cory Rosenfield is the co-founder of Qoints, which uses real live digital marketing data from campaigns of many of the world’s largest brands, and provides statistics to advertising agencies and brand marketers, helping executives set truly objective campaign benchmarks. A serial entrepreneur, Cory had his first exit at the age of 21 in the IT services space.

THE EVOLUTION OF SHOPPER MARKETING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 10 THE THE AGENCY REPS CONSULTANTS Toby Desforges is an author, consultant, speaker and business leader with over 25 years’ experience working with leading consumer goods businesses including Mars, PepsiCo, Sony, Unilever, Danone, Fonterra and Kao. As the co-author of “The Shopper Marketing Revolution”, he is a globally recognised expert in Shopper Marketing and Customer Development. April Carlisle, Senior Vice President, Global Shopper Marketing, is Retail Strategy leader for the Shopper Marketing practice for various clients within the agency, Leo Burnett/Arc Worldwide, including Procter & Gamble, Coca-Cola, 3M, Kellogg’s, and Kraft, as well as new business initiatives and global training. April has been named “Who’s Who in Shopper Marketing” four years in a row. Elizabeth Harris is the EVP Strategy Director at Leo Burnett/Arc Worldwide, working across their brand and shopper marketing groups. She has 25 years of experience in developing insight- based marketing and advertising programs for clients such as Procter & Gamble, Walgreens, Kraft, and Sears. Elizabeth was also named “Who’s Who in Shopper Marketing” for the past four years. Christopher Brace founded Syntegrate Consulting with a 360-degree view of the challenges marketers face. He has held management positions in Brand Management, Adver- tising, Shopper Marketing, and Promotions on both the client and agency sides of the business, providing him a truly integrated foundation. Tammy Brumfield is Senior Vice President of Retail Marketing Practice at The Mars Agency. An accomplished Shopper Marketing Executive with extensive experience providing leadership in the Consumer Packaged Goods industry, Tammy has led and developed high-impact Shopper Marketing organizations for the world’s most visible brands.

Sales Tools Integration THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 11 THE DEFINITIVE GUIDE TO SHOPPER MARKETING The Essence of Shopper Marketing

WHAT SHOPPER REALLY IS, WHAT IT ISN’T, AND WHO’S PROFITING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 12 What Shopper Really Is, What it isn’t, and Who’s Profiting Retail marketing No retailer involvement So what is Shopper Marketing? Co-Op Marketing Minor retailer involvement “Shopper Marketing is the delivery category and channel solutions that create a win-win-win for brands, retailers and shoppers based on shopper insights.” Account specific promotion Limited retailer involvement Co-Marketing Association of National Advertisers (ANA) Increased retailer involvement Customer Marketing Increased manufacturer investment Shopper Marketing isn’t as new as some may think; it has evolved over time and has been called a lot of other things. (Perhaps a few of these terms listed in the corresponding chart sound familiar). Shopper Marketing Build equity for both brand and retailer You may recognize that some companies still call their shopper departments ‘Customer Marketing’ or ‘Retail Marketing,’ but ultimately the shift towards an integrated strategy and partnership between both the brand, and the retailer, has truly become the biggest differentiation in ‘Shopper Marketing’, no matter what the department is called. Source: Arc Worldwide/Leo Burnett Many different industries have jumped aboard the shopper marketing train, including travel & leisure, banking, insurance, and automotive. A shopper marketing strategy is truly applicable for any type of commerce for any industry, whether they are selling a product or service, and this is no longer just for CPG brands. It’s also important to note that although the consumer packaged goods industry (CPG) has been at the forefront of shopper marketing since its inception, they are no longer alone.

WHAT SHOPPER REALLY IS, WHAT IT ISN’T, AND WHO’S PROFITING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 13 All in all, Shopper Marketing is a sophisticated form of integrated marketing between retailers and brands, which run campaigns based on shopper insights and segmentation, using social and digital, apps, websites, online brand experiences, live experiences/events (in store, or at location), in-store visibility/POS (point of sale), as well as brand interaction and activation. Everything you want to achieve is seen through the perspective of the shopper, and what is most important to them. Unlike other marketing programs which focus solely on the company’s brand, in the world of Shopper Marketing, everything you want to achieve is seen through the perspective of the shopper, and what is most important to them. The focus is no longer primarily on the retailer, as more brands sell directly to shoppers via the internet and e-commerce. Thanks to the advent of modern technology and online shopping, the shopper has complete freedom to make the choice of where they complete their final purchase. That said, in most cases, brands do not work alone, and so a positive relationship between brands and retailers (or e-tailers) are often at the core of any successful Shopper program. Ultimately, there are four levels of engagement within Shopper Marketing that need to be separated, distinguished and understood before we can continue. If some of these terms are new, or you just want to understand the main terminology used in Shopper Marketing, check out the Shopper Marketing Glossary tool found in the Tool Index or Action Plan in this Guide.

WHAT SHOPPER REALLY IS, WHAT IT ISN’T, AND WHO’S PROFITING THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 14 The Four Levels of Shopper Marketing Engagement 3. Agencies To add to this mix, we have the consultants and agencies who often represent the retailers and brands, aiding them in crafting insightful campaigns that are designed to build engagement within shoppers seeking solutions. Although some brands and retailers have internal teams, more often than not, they require outside help to scale their marketing abilities. Agencies see shopper marketing as a technical program they bring to life for their clients. 1. Brands First, we have the brands that create the products or services that will be sold. Their main goal is to build the brand awareness around their offerings, and promote them so that they can increase sales and ensure continuous consumption occurs. Brands not only need to build a successful product or service, but in many cases, they also need to build strong relationships with retailers. Ultimately, brands have the most at stake ensuring they get their product or service to market. 4. Shoppers Lastly, we have the Shoppers themselves. These are the individuals who take the time to visit the retailer, choose a brand, and make a purchase. Every shopper is different. Some shoppers are quick to run through the store and grab whatever they see on sale, and others take the time to look at different brands to make their eventual choice. Some shoppers use planned shopping lists, and others are completely spon- taneous, but both are looking to solve problems using products, from shampoo to coffee filters, running shoes to rechargeable batteries; everyone has different consumption habits and needs. 2. Retailers / E-tailers Next, we have the retailers (and e-tailers) who sell these products to the shoppers. Retailers see shopper marketing as a tool to drive sales. Their main goal is to grow the success of product categories at their stores, and build loyalty from the shoppers, so that their store (whether online e-commerce, offline brick and mortar or a combination of both) is the primary place the shopper will purchase from, and that everything they need is available. This includes non-traditional retail locations where shopper marketing takes place such as at banks, hotels, or insurance companies. So what about consumers? Are they the same as shoppers?

THE KEY DIFFERENCES BETWEEN CONSUMERS AND SHOPPERS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 15 The Key Differences Between Consumers and Shoppers There is a big difference between a shopper and a consumer. While the consumer is the one who actually uses the product or service, it’s the shopper that makes the decision on what to ultimately buy. Although they can be the same individual, many times they are not. “Consumers and shoppers are not the same thing. They may be the same individual, but when you are consuming you have a set of behaviors that are different from when you are shopping.” For example, babies consume diapers, and pets consume pet food, but they will never directly influence a specific purchase (outside of their dietary or health needs and preferences which are interpreted by the shopper). In the end it’s the mindset of an individual that changes whether they are behaving as a shopper or consumer. Toby Desforges, the Consultant Behavior is a key differentiator between consumers and shoppers. Consumer behavior is focused on your needs, what is happening in your life, the things you desire, whatever is around you that you can access, and your likes and dislikes. Shopper: active intent and/or direct ability to make a purchase Consumer: User of a product category Consumes Purchases Brand focused Choice focused Desires a product Shops for a product Influences attitudes of shopper Influences shopping behavior Source: Arc Worldwide/Leo Burnett

THE KEY DIFFERENCES BETWEEN CONSUMERS AND SHOPPERS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 16 Consumers don’t drive brand awareness or build brand equity. Consuming is easy, and often gratifying. In fact, consumption drives shopping, as renewal products such as hand soap get depleted, and other products such as cellphones become outdated or require replacement. If you think about it for a moment this shouldn’t be too much of a surprise. It’s often women who purchase the groceries, or who go shopping in stores for their families. That said, those women often fully understand and are aware of the manipulation these kinds of ads are trying to influence on the men in their lives, and they may even resent it. It’s situations like these that show just how important it is to understand and apply the unique behavioral differences between shoppers and consumers in any Shopper Marketing strategy. On the other hand, shopping can be time consuming, and possibly even frustrating. Shoppers have a behavior that is focused on solving problems, they are searching for products or services that they, or others, will eventu- ally consume, and they are ultimately the people who make the purchase decision(s). In fact, it’s these insights about how people shop, who is shopping, where they shop and why they shop, that most often drive the decisions in a best practice Shopper Marketing program. They must make many more decisions than someone who is just consuming a product or service, including but not limited to, deciding on price, features, and availability. Sometimes, marketers themselves confuse who is the shopper and who is the consumer. For example, a well-known beer brand, while promoting it’s beer within stores, uses an image of a beautiful woman wearing a short dress (and often as a life size display). Collecting and analyzing these insights is where the real magic of Shopper Marketing unfolds. In some markets 95%of beer purchased for home consumption is bought by women, whereas90%of beer consumed in the home is by men. On the surface, considering men are the likely consumers of the product, this strategy seems logical: men are attracted to women and beer has long been sold using women to motivate men to purchase the product (with the implied experience of increased social confidence, and being seen as attractive by the opposite sex). The problem with this strategy is that, according to Consultant Toby Desforges research, in some markets 95% of beer purchased for home consumption is bought by women, whereas 90% of beer consumed in the home is by men. Source: Flint, Hoyt, Swift. 2014.

THE INCREDIBLE IMPORTANCE OF SHOPPER INSIGHTS/ANALYTICS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 17 The Incredible Importance of Shopper Insights/Analytics Analyzing and applying behavioral insights, on not only how people shop, but also factors such as those based on their values and the perceived benefits of the purchase, are an essential part of any successful Shopper Marketing program, and are in many cases a big part of the overall budget. These insights have become equity in the negotiations and collaborations between brands and retailers/e-tailers. Insights can be gathered in a myriad of different ways, but all lead towards the same goal of understanding behavior in such a way that a campaign, product, service or any other variable can be optimized to increase the possibility of a purchase being made. Collecting more insights about shoppers at the category level, is something that all retailers/e-tailers are doing independently, and so collabo- rating with brands to gather more data is an enticing proposition. The ultimate goal for these insights is to drive strategy according to how shoppers can be influenced at key points along their shopping journey. Insights can be gathered in a myriad of different ways, but all lead towards the same goal of understanding behavior in such a way that a campaign, product, service or any other variable can be optimized to increase the possibility of a purchase being made. For example, you may be familiar with how analytics are used to evaluate the success of a webpage. Using software tools such as Google Analytics, marketers are able to see how long a visitor was on any given page, what pages they went to next, where they came from to begin with, and whether they ended up actually making a purchase. This data can also be used to split test between two different page layouts for a landing page, splitting traffic equally in what is often called an A/B split-test, to determine which layout is the best at getting the desired outcome.

THE INCREDIBLE IMPORTANCE OF SHOPPER INSIGHTS/ANALYTICS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 18 Insights can be gathered both in and out of the store, from methods such as loyalty cards used during checkout, online behavior collected within a brand’s omni-channel environment, or from cameras tracking the move- ment of people in stores, and how long they stand in front of a specific display to understand engagement. That said, interpreting data is an art, as well as a science. “To start building a powerful Shopper Marketing program, you must first have powerful insights.” Carl MacInnes, the Marketer Perhaps someone is standing in front of that display because something they saw actually offended them in some way. On the other hand, maybe the messaging wasn’t very clear, or they weren’t looking at the display at all, but just happened to stop there for a moment to check their phone. Shopper insights follow the same logic. The more you know about how shoppers are reacting to your products both in a physical or online store, and how they are reacting to the layout of the store or webpage itself, the better decisions can actually be made. There is always more than meets the eye to what we see in terms of shopping behaviors. According to Professor Daniel Flint’s research, 70% of grocery purchases are made or influenced by women, even if the men are doing the actual purchasing. This research comes from the study of neurology, or more specifically, Neuromarketing. Researcher Sarah Gleason explained that in almost every case, A/B testing on its own is far too basic an approach for an effective shopper marketing strategy. Instead she shared that companies should be thinking about the whole shopping purchase journey, and understanding key points of insight along that journey at specific phases (such as early on, or close to making a decision). As Daniel shares, male and female brains are significantly different on how they process information, so marketing has to be very, very different for each. Due to the high percentage of female influence on purchasing decisions, this alone is a very big reason why there is more emphasis on HER vs HIM in the shopping world, even though they are both often in the role of shopper. This can include a shopper travelling within a companies omni-channel system, from physical store to online presence, back and forth. The ques- tion naturally arises, on which part of the journey has greatest influence for a shopper in that company’s category. This includes understanding at what location the purchasing behaviors are decided, whether in a physical store, online store or different location. Although neuromarketing shows the influence women have on purchasing decisions, Sarah Gleason, shared that this dynamic of focusing on the female buyer is changing depending on the category and channel.

THE INCREDIBLE IMPORTANCE OF SHOPPER INSIGHTS/ANALYTICS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 19 70%of grocery purchases are made or influenced by women, even if the men are doing the actual purchasing. “Consumers can give rationally sounding answers, where they believe they know how they came to their shopping conclusions, even though it may not actually be true; but with the help of neurological research, the marketer knows why.” Daniel Flint PhD, the Professor We now have the ability to speak to shoppers more specifically one on one, and this is causing marketing strategies to move beyond mass marketing (where you must choose one target over the other). In the past it was easy to assume the female would be buying or influence buying in most categories, but now its possible to customize and personalize marketing messages for a specific age or gender. Sarah mentioned that this now goes far beyond gender, into areas such as ethnicity, and generations such as millennials compared to baby boomers, as it is more possible to see who is the core target. Source: Flint, Hoyt, Swift. 2014. Digital technology is allowing marketers to speak directly to shoppers and individuals in a more tailored way, whereas in the past companies had to rely purely on a CRM or database marketing approach.

THE INCREDIBLE IMPORTANCE OF SHOPPER INSIGHTS/ANALYTICS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 20 Gathering and analyzing insights are a crucial part of ensuring Shopper Marketing success because results are driven by the ability to affect behaviors. That said, there are companies who are collecting data but aren’t quite sure what insights are hiding within. That said it’s the shoppers subconscious mind that is reading, analyzing and making decisions, which can be difficult but not impossible to track, using sophisticated measurement tools and techniques. For example, Professor Flint shared that Pilot (a large truck stop company operating in the USA, that also owns Flying J, known as the Walmart of truck stops), a place for cars to get gas and buy convenience items such as potato chips or beverages did some interesting tests. Later in this report we will be sharing some of the metrics you should consider tracking to start this important practice. The information in the data often leads to the fundamental understanding that many variables lead to a purchase, and in this age of the internet, many of these variables are no longer actually in the store the product is purchased; they’re in the omni-channel universe. 18 Wheelers use these locations to get supplies for a long trip, and even have a shower. Several tests were conducted on what drives people to do certain things within the stores. Pilot was interested in measuring digital signage within the store, and located a digital sign near the showers that told customers what they could expect in the store in the future. “If you don’t understand shopper behaviors and how they are affected, you can’t change them. Shopping insights give you an understanding of what motivates change.” In the end, customers were sharing what they loved about the store, and were sharing information that was only available on these digital signs. When asked about digital signage, the customers were unaware of any digital signs in the store; it was in their mind’s eye. Sarah Gleason, the Researcher If you’re looking for a place to store your consumer insights and behaviors, with some popular behaviors already filled out, check out the Shopper Marketing Insights Database tool.

THE NON-LINEAR OMNI-CHANNEL SHOPPER JOURNEY THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 21 The Non-Linear Omni-Channel Shopper Journey Purchases don’t just happen within a brick and mortar store anymore. “Omnichannel Marketing (also spelled omni-channel) is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience, whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store.” A customer may start their journey on your website sitting in front of their desktop computer at home, which leads them to call your support team via phone, and then follow up on their mobile device, in their hand, as they walk into your store with a digital coupon they got from an email, sent to them by the support agent. This journey can take many forms. A shopper could also start on a mobile phone to gather preliminary information on the subway, later moving to a bigger screen to get more detailed information (perhaps finding a coupon, or sale). Pre-Shopping If they end up, in the store, they might realize they are actually choosing between two different products, and want to pull up more information on their phone to decide. You need to be ready to affect shopper behavior in every possible situation. This is at the core of omni-channel marketing. Shopping Researcher Sarah Gleason shared that multi-channel marketing differs from Omni-channel marketing, in that multi-channel marketing’s focus is on different kinds of retail outlets such as club, drug and grocery stores. Post-Shopping Those channels tend to fulfill different trip types or categories, for example you might do a weekly grocery store fill-up trip and monthly stock up at club store (such as Costco).

THE NON-LINEAR OMNI-CHANNEL SHOPPER JOURNEY THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 22 Omni-Channel Experience On the other hand, omni-channel marketing is a combination of digital and physical shopping, using both digital and physical assets and influences to affect shopper behavior. SOCIAL WEB Although marketers have worked with both digital and physical shopping for some time now, sophistication in the technology running these systems have allowed for full and complete integration between online and offline purchasing. AGENT MOBILE The backend remembers all the customer information so that anyone, both in store, on the phone, or even the customer online can access the same information about past purchases. Omni-channel marketing is the ultimate integration possible for any store, and is essential for effective Shopper Marketing in the age of the Internet. Knowledge Management Case Guided Scripting Management Telephony Integration Document Management By having all systems working in synchronization, it is possible for the customer to use their mobile phone to check inventory at a specific location of a store, or check insurance rates, while the shopper is sitting in a coffee shop preparing for their next purchase. They could even make a purchase using their phone, either by using the ecommerce cart on the mobile website, or by calling a support number, and have the product set aside for pickup at the store, to save time looking for the item and waiting in line when they arrive. Experience Community E-mail & Secure Messaging KNOWLEDGE - INFUSED PROCESS Outbound Campaigns Experience Analytics Web Self-Service Live Chat & Co-Browse Agent Desktop Omni-channel marketing also helps greatly with collecting shopper insights, as past behaviors on the website, including pages visited, or support staff contacted, can now be used to add detail on how the ultimate purchase decision was made, and what the preferences of the shopper were throughout the shopping journey. Source: Kana

THE NON-LINEAR OMNI-CHANNEL SHOPPER JOURNEY THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 23 Pre-Shopping Shopper marketing using an omni-channel marketing approach has a big effect on all stages of the shopping journey. 1 In this stage you are gathering information, and there is something that is the catalyst that moves you into active shopping mode. Typi- cally used as a pre-store activity (pre-shopping is homework you’re doing before visiting a store) it could also be before visiting an online store to purchase. To further clarify, Sarah shared that pre-shopping is before shopping, and pre-store is the activities you do before visiting a store. Although most shopper marketing strategy has largely been centered on a linear approach or traditional ‘path-to-purchase’, the truth is that shoppers often travel between stages and steps in a non-linear fashion, moving back and forth as they make their decisions. Looking beyond old-school thinking, shopper marketing is actually based directly on feedback, integration, and loops with respect to any pre-shopping, shopping, and post-shopping activities. Each shopper journey is really cyclical and is more about loops than straight lines. Shopping 2 This is the actual active shopping process, including what you’re doing while gathering information in store. This journey is not limited to a linear journey, but is a non-linear, cyclical process where shoppers will repeat and loop multiple steps until they are ready to proceed to a different stage of the journey. Post-Shopping 3 This is the experience (often called the consumer experience), once you purchase and utilize the product or service. Sarah Gleason shared that this journey is simply not linear because you can be shopping for one item or service and go into a physical store or online shop, and then see something different, and start shopping for something else altogether. You may get part way through information gathering, and may start again, expanding your consideration set, gathering more information and doing more research. If you’re looking to customize your organizations specific shopper journey, leverage the Shopper Marketing Journey Stages Template. She broke this cyclical journey down into 3 key stages (as shown on page 21).

THE NON-LINEAR OMNI-CHANNEL SHOPPER JOURNEY THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 24 According to Consultant Christopher Brace, although the journey can be the same at a conceptual level: how fast someone moves through that path changes based on the industry. While the journey to purchase CPG (Consumer Packaged Goods) is generally fast paced, purchasing a vacation can take much longer, while buying a car or house can often span over 6 months or longer. No matter the length of the journey, the fundamentals remain the same, and with the advent of omni-channel marketing we have more data- driven insights then ever to understand this non-linear shopping behavior. To add some additional detail, Leo Burnett researched and surveyed 15,000 consumers that recently completed a purchase journey within the omni- channel structure, for a wide range of shopper categories, and over 146 varied touch points. The result was called ‘Decision DNA’ and it yielded a 12 step shopper journey based on motivations, and not the touch points themselves. As you review this list, think of it not as a linear journey, but as a non-linear process, that can contain loops and jumps from one stage to another. The results were an interesting view of the Omni-channel marketing experience: Decision DNA: 12 Step Non-Linear Shopper Journey 6 1 2 3 4 5 Take Control Checking out trends and insider information in order to gain an advantage Sift and Sort Weighing product pros and cons, comparing prices, functionality and availability Explore Get Comfortable Getting comfortable with the likely purchase choice Get It Done Reaching closure on purchase decision, including acting on a deal advantage Seek Inspiration Looking to find or experience something new to be inspired or motivated Gathering information and asking questions to satisfy curiosity 7 8 9 10 Advocate Championing a product and sharing one’s perspective on it with others 11 12 Anticipate Anticipating the purchase experience be inspired or motivated advantage Assess Firsthand Honestly assessing product post-purchase advantage Act On Inpulse Taking a chance and acting on impulse; going with feelings over facts Celebrate and Savor Savoring the experience of using the product in cel- ebration of the purchase Provoke a Reaction Showing off via the product, aligning oneself with exclusivity the purchase Source: ANA/Leo Burnett

THE NON-LINEAR OMNI-CHANNEL SHOPPER JOURNEY THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 25 Although omni-channel marketing is a massive undertaking, it has the ability to offer not only an amazing customer purchasing and support experience, but also offer an incredible amount of detail into the behaviors that ultimately lead to a purchase. One great example of sophisticated omni-channel marketing is what the team at Disney has achieved. Disney’s Magic Band allows you to enter your hotel room, order food, utilize your pre-chosen fast pass choices, and even store images taken of you within the park with Disney characters. The experience begins at their mobile responsive website, which allows shoppers to purchase everything from exclusive merchandise to a trip to Disney World with a single integrated account. The entire trip-planning experience works perfectly, even on a mobile device, and allows shoppers to fully customize their trip using the ‘My Disney Experience’ tool, which also has it’s own discreet mobile app. Using this tool, you can plan everything from dining experiences to choosing which ‘Fast Pass’ you’d like to secure when you visit the park to avoid lineups at popular attractions. When you arrive at Walt Disney World, they have a ‘Magic Band’ which acts as a bracelet with an RFID chip connected to your account. This allows you to enter your hotel room, order food, utilize your pre-chosen fast pass choices, and even store images taken of you within the park with Disney characters. You can also use the app to see wait times for each attraction as well as the ability to locate each attraction with directions on how to get there. Later when you get home from your vacation, the engagement continues with special offers to buy items on the Disney store website or to help you plan your next trip. In fact, effective data management is at the core of successful Shopper Marketing. Let’s take a look at what this data says about Shopper Marketing, as an industry, overall.

POWERFUL STATISTICS THAT MAKE THE BUSINESS CASE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 26 Powerful Statistics that Make the Business Case Not only is data important to gather during any Shopper Marketing program, it’s also important to understand what the data about Shopper Marketing says overall. The ANA (Association of National Advertisers) commissioned research, with the help of PQ Media, to understand how extensive the Shopper Marketing landscape looks like across both B-to-B and B-to-C companies. Separately ANA worked with GfK to conduct research among marketers about the future of Shopper Marketing. Investment in shopper marketing continues to grow. 1 Per PQ Media’s spending study, between now and 2020, investment in shopper marketing is expected to expand 5.8 percent to $18.64 billion, outperforming total brand marketing spend. Source: ANA/pqmedia U.S. Brand Activation Forecast 2016 2016 to 2020 Shopper Marketing* spend expected to expand 6.4% CAGR to $18.64 billion in 2020 Seven key findings were discovered. 1 Investment in shopper marketing continues to grow. The role of shopper marketing has progressed from driving short-term sales to motivating shopper behavior. 2 Shopper Marketing* spend expected to grow 6.4% to $14.95 billion 2016 A dedicated shopper marketing team is more likely to be viewed as a competitive advantage today than it was in the past. 3 When shopper marketing reports to marketing, it tends to be more strategic and is valued more highly within the organization. 4 Shopper Marketing* spend rose 6.6% to $14.04 billion Shopper insights are crucial to overcoming purchase barriers but are underfunded in many organizations. 5 2015 Shoppers are gaining more control over the purchase occasion via mobile/digital. 6 Shopper marketing has to be more informed, integrated, and focused on the overall customer experience. 7 *Represents Shopper Marketing Analysis channel within Retail Marketing Platform

POWERFUL STATISTICS THAT MAKE THE BUSINESS CASE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 27 The role of shopper marketing has progressed from driving short-term sales to motivating shopper behavior. A dedicated shopper marketing team is more likely to be viewed as a competitive advantage today than it was in the past. 2 3 While the primary role of shopper marketing has always been to convert shoppers, it now has to deliver a combination of short- and long- term benefits, including driving conversion among shoppers, motivating shopper behavior through levers beyond price, and executing solutions to customer challenges. It takes focus and time to build an effective shopper marketing department, but it’s worth the effort. Of the respondents in organizations that have a dedicated shopper marketing team, 51 percent believed that shopper marketing was a competitive advantage, and 55 percent believed that shopper marketing reflected the convergence of brands, shoppers, and retailers. Source: ANA/GfK 2016 Research: The Future of Shopper Marketing Source: ANA/GfK 2016 Research: The Future of Shopper Marketing Primarily drive conversion among shoppers 41% 32% Supported by other existing departments 42% Motivate shopper behavior through levers beyond price 35% Dedicated person/ team for more than 3 years Executive solutions on need states and causes shoppers actions 29% 17% 26% Drive short-term sales volume Person/team established 9% Shopper Marketing is entirely outsourced within the last 3 years Build brand equity of brand and retailer 21% Build retailer and manufacturer collaboration/relationships 20% 51% Shopper Marketing is a competitive advantage for my organization Grow categories by leveraging shopper solutions 55% 19% Shopper Marketing reflects the convergence of brand shopper and retailer 18% Drive profitable long term growth

POWERFUL STATISTICS THAT MAKE THE BUSINESS CASE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 28 When shopper marketing reports to marketing, it tends to be more strategic and is valued more highly within the organization. Shopper insights are crucial to overcoming purchase barriers but are underfunded in many organizations. 5 4 Shopper insights can drive program development, but only four in ten study respondents believed their organizations were adequately investing in shopper insights, which have been identified as the fuel for shopper marketing success and have been influential in shifting the perspective on the strategic value of shopper marketing. The category began to change dramatically as shopper marketers became more strategic and began leveraging shopper insights. As a result, it began reporting directly into marketing, which created greater opportunity for integration. The focus of shopper marketing shifted from the retailer to the shopper, and the percentage of marketers who felt that shopper marketing was a strategic initiative in their companies increased. Source: ANA/pqmedia U.S. Brand Activation Forecast 2016 Insights are used to develop programs designed to overcome shopper purchase barriers Source: ANA/GfK 2016 Research: The Future of Shopper Marketing 70% Where Does Shopper Marketing Report Into? Insights into a retailer’s shopper drive program development Marketing Sales Insights into a category’s shopper drive program development 27% 39% 2009 25% 38% 2011 40% 26% 40% 2013 My organization is investing adequately in its shopper insights foundation 53% 42% 2016

POWERFUL STATISTICS THAT MAKE THE BUSINESS CASE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 29 Shoppers are gaining more control over the purchase occasion via mobile/digital. Shopper marketing has to be more informed, integrated, and focused on the overall customer experience. 7 6 To connect with consumers, the brand strategy has to permeate through every touchpoint, digital and in-store. While most shopper marketers recognize that digital technologies are shifting the power to consumers, almost half have not established a digital/mobile team focused on the shopper space. The research predicts that shopper marketing will be more informed by insights based on actual versus claimed behavior, will better reflect that the shopping experience is part of the overall customer experience, and will include post-purchase communications to build loyalty. Source: ANA/GfK 2016 Research: The Future of Shopper Marketing Source: ANA/pqmedia U.S. Brand Activation Forecast 2016 8% Yes, part of another group 45% Have NOT Shopper Marketing will be more informed by insights based on actual versus claimed behavior 51% established a digital/ mobile group Shopper Marketing will better reflect that the shopping experience is part of the overall customer experience 43% 25% Yes, this is a separate group Shopper Marketing will include post-purchase communications to build loyalty 40% 22% Yes, part of Shopper Marketing Shopper Marketing will drive increased joint business planning with key retailer partners 39% New technologies such as facial recognition, beacons, and the Internet of Things will dramatically reshape 33% Shopper Marketing 30% Brand plans and shopper plans will be fully integrated Digital/mobile technologies are shifting the balance of power to shoppers and away from retailers and manufacturers 82% Shopper Marketing will be well integrated into my organization’s annual and/or strategic planning process 27% Shopper Marketing will become a required functional rotation to advance in the organization 20%

POWERFUL STATISTICS THAT MAKE THE BUSINESS CASE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 30 All in all, these findings define shopper marketing as a discipline at the intersection of marketing and sales with the primary purpose of creating a win-win-win for brands, retailers, and shoppers. Sarah Gleason, SVP from Gfk who wrote the report on this data, shares: Six key actions from the research that can elevate the strategic impact of your Shopper Marketing. Crystalize how you define shopper marketing and its role. 1 Establish a dedicated shopper marketing team that reports to or is closely aligned with marketing. 2 Adequately fund shopper insights to understand the inflection point when consumers ove come purchase barriers and become shoppers. 3 Ground your shopper marketing programs and solutions in shopper insights; change the focus to include long term business building as well as short-term sales. 4 Integrate digital and mobile into your shopper marketing program while staying on top of the changing lan scape and acquiring the necessary skills. 5 Looking to leverage these statistics? Utilize the Shopper Marketing Business Case presentation to help gain senior approval for a shopper marketing program. Carefully consider the future and its implications for how your organization needs to be prepared. 6

CASE STUDY: SCOTCH TAPE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 31 Case Study: Scotch Tape In the end, it is the Customer Experience that every Shopper Marketing program is looking to maximize. To understand what successful Shopper Marketing looks like, let’s take an in-depth look at a REGGIE Award Winning ‘National Consumer Campaign,’ courtesy of April Carlisle and Elizabeth Harris from the agency Leo Burnett/Arc Worldwide. The campaign was called ‘The Most Gifted Wrapper.’ Scotch tape wanted to grow their unit share, and the overall relevancy of their Scotch brand tape during their key season: the holidays. In fact, 80% of sales for tape are in October, November and December as people buy tape during the holidays. That tape can last for the rest of the year (before it is fully consumed). Through the use of shopper insights the agency team knew that shoppers, although savvy to the fact they need tape, often forget to buy it and it ends up as an afterthought, even when they’re inside a store that sells tape. Courtesy of Arc Worldwide/Leo Burnett

CASE STUDY: SCOTCH TAPE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 32 They also knew that the shopper felt that beautifully wrapped gifts showed others how much they cared, and that what was on the outside of the gift was often as important as the gift inside (as it was the first impression the receiver of the gift would have). From their insights, they also knew that the shopper is often also the consumer of the tape. Amongst the different possible types of shoppers, they chose not to concentrate on the shopper looking to run in and out of the store, but rather a brand aspirational, who appreciates the Scotch brand, and who is looking for gift wrapping inspiration and can be confused by the plethora of Scotch tape types. In the past, Scotch ran a public relations (PR) contest called the ‘World’s Most Gifted Wrapper Contest’. The contest was focused on rewarding Scotch tape consumers who loved wrapping presents in unique ways, with a chance to win a trip to New York City. The PR event was focused solely on brand awareness, and did not specifically or directly drive any in-store sales. In-store, there were in-aisle display units with the message ‘Don’t forget the Scotch Tape’. The tape was an afterthought once the consumer was in retailer shopping mode. The client wanted to both enhance their retail strategy, while still running the wrapping contest (which was a 20 year tradition). The strategy Arc/Leo Burnett focused on was to provide gift wrapping inspiration and ideas, to encourage shoppers to buy ‘one more roll’ of Scotch tape earlier in the holiday season. Courtesy of Arc Worldwide/Leo Burnett

CASE STUDY: SCOTCH TAPE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 33 Furthermore, they wanted to overcome the “choice confusion” shopper barrier to ensure shoppers could match the correct tape(s) with their wrapping project. The agency team decided that the ‘Most gifted wrappers’ weren’t just one person here or there, but they were actually elves at the North Pole because they wrap more presents than anyone. The clever tagline they ended up going with was: “The Most Gifted Wrappers, use the most gifted tape” to further encourage the superior quality of the Scotch brand. The team discovered that each tape style (double sided, transparent etc.) was not fully understood by the market, so they designed a character for each style of tape and created unique content for each elf/tape on how to inspire their shoppers/consumers to wrap their presents in different and interesting ways, using different tapes, or even using multiple tapes (to encourage purchase of more than one roll). The team also designed a fully integrated marketing communications program that included POS (point of sale) and Display Activa- tion in-store, a micro-site, videos, blogger content, social media posts, e-books and the original wrapping contest. Each elf had their own e-book and their own unique approach/style. Each elf also had their own workshop and a different type of present to wrap. They each had animated wrapping examples on social media (such as Pinterest) for further consumer engagement and to provide tips and tricks to the market at large, and bring further awareness to their campaign. Courtesy of Arc Worldwide/Leo Burnett

CASE STUDY: SCOTCH TAPE THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE ESSENCE OF SHOPPER MARKETING 34 They ran ads on Facebook that were designed to teach their market how to wrap their gifts beautifully, and to extend their reach past what Scotch had organically on their Facebook Page. 300% increase in retailer adoption and execution of their campaigns Using each retailer’s specific style guide, the in-store POS and display acti- vations were customized to meet the retailer’s expectations, while offering the brand continuity for the entire campaign. This required managing multiple relationships with different retailers to get their final buy-in and approval for the assets being deployed, and the campaign details overall. 32% additional incremental sales In the end, the results were phenomenal, especially when compared to the previous year: 40% increase in unit sales The agency team took home the ‘National Consumer Campaign’ award at the 2015 REGGIE Awards, a top industry award show presented by the ANA. Truth be told, there are an unlimited number of possible ways to execute a successful campaign, but they often share common best practices that guide the way. 850,000 extra rolls of tapes sold vs. the previous year Let’s discover how Shopper Marketing really works.

Sales Tools Integration THE DEFINITIVE GUIDE TO SHOPPER MARKETING | INTRODUCTION 35 THE ESSENTIAL SHOPPER MARKETING GUIDE The Nuts and Bolts of Shopper Marketing

PROCESSES AND BEST PRACTICES THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 36 Processes and Best Practices When it comes to Shopper Marketing, there is no single approach or process to quantify, but it is crucial to understand that a successful program ultimately relies on a strong process based on best practice research. It’s worth noting that, in Dr.Flint’s experience, without the proper amount of upfront insight development, a Shopper Marketing program simply would not have the information required to succeed. We asked our experts to share their experiences and research on how they see the fundamental processes working within Shopper Marketing. Consultant Toby Desforges has his own four phases to integrate shopper into marketing (which he suggests should be “used by every consumer goods company on the planet”). Professor Daniel Flint, based on his research, shares: Simple 4 phase process to any successful Shopper Marketing program: “Shopper Marketing is a business process that is integrated into the work of marketing and sales, it has a logical sequence and outcome, and that outcome is designed to influence purchase behavior.” Insight development/research (business/shopper insights, and consumer insights) 1 2 Strategic collaboration (between retailers and brand) 3 Executing the plan Metrics/measurement of the program 4 Toby Desforges, the Consultant Looking for a step-by-step overview of the stages and steps, required to launch a successful Shopper Marketing program? Check out the Shopper Marketing Action Plan and Shopper Marketing Tool Index for practical tools and step-by-step instructions.

PROCESSES AND BEST PRACTICES THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 37 Please note, Toby’s process is linear, requiring the first phase to be completed before moving to the second. 1 2 3 4 marketing mixes that’s implemented to give that outcome) It is worth noting that the last step also includes everything you want to achieve in both digital and traditional retail, including how you will incen- tivize retailers to make it happen. Identify what your consumer priorities are. (ie. Growth consumption based on insights) Both of these processes concentrate on the same principal; you must understand where the shopper is (and be able to support that with data- driven insights) in order to properly plan the steps ahead. Understand which Shopper behavior you need to create. (ie. Change purchase behavior in order for that purchase to happen) That said, it’s also incredibly important when beginning to discuss a Shopper Marketing program to start by fully understanding what level of maturity you are currently operating within. This chart below comes courtesy of Arc Worldwide/Leo Burnett. They use this spectrum when asking their clients where they are in terms of their Shopper Marketing maturity: Where do you stand? Ask yourself: “In which channels are we going to create that behavior?” Create a marketing mix that addresses the consumers, shoppers, and the channels we want to target. (ie. Develop effective Sophistication of Shopper Marketing Strategies - Less More Trade Promotions Customized National Promotions Promotional Alignment Differentiated Brand Platform Shopper Driven Marketing Offers customized by retailer, but POS is usually prescriptive or off-the-shelf Alligns manufacturer activity to retailer’s business priorities andretailer’s own promotional programs Leverage national brand promotions with some custom retailer offers Brand communication platform that is unique to the retailer Comprised of promotional and non-promotional solutions Source: Arc Worldwide/Leo Burnett

PROCESSES AND BEST PRACTICES THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 38 Agency reps April and Elizabeth shared that although a lot of clients still only do basic trade promotions (which are not usually associated or defined as part of a true shopper marketing program), it’s important to note that Shopper Marketing efforts are often happening in all or only some parts of this spectrum, it’s not a clear progression from left to right (from less maturity to more). Any brand could technically be doing all of these stages in a non-linear fashion, but it’s safe to say that if they’re only doing baseline trade promotions, they have lots of room to grow if their objective is to apply a larger shopper marketing approach to their marketing mix. No matter your maturity level, and level of program sophistication, all of our experts agreed that it all starts with truly understanding your shopper. I Are you looking for a deeper maturity assessment and/or maturity model? Check out the Shopper Marketing Capabilities Assessment App tool, and Shopper Marketing Maturity Model to help you and your team benchmark your capabilities as you grow your shopper marketing program.

KNOW YOUR SHOPPER(S) BEFORE YOU BEGIN THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 39 Know Your Shopper(s) Before You Begin These insights are based on data that not only validate the assumptions you may already have but may also give indications about otherwise unseen behavioral trends that you could leverage in an upcoming shopper campaign. Just as you must know your ideal buyer before constructing a targeted Demand Generation campaign, you must know your ideal shopper to build a successful Shopper Marketing program. Each shopper can be on a radically different shopping journey, as discussed in the earlier section on Non-Linear Omni-Channel Shopper Journeys. It’s important to start by planning out the stages of how each shopper will move along their shopping journey (keeping in mind that this journey, although seemingly linear, is actually non-linear in nature). Different companies profile shopper segments differently, but all of them are based on insights and behaviors. $50 This can become complicated very quickly as a company can have many different brands, and retailers have many different product categories, with each attracting a variety of possible shoppers. That said, in many cases, you may have a specific shopper that overlaps multiple brands and/or categories, that you may want to target. In the world of Shopper Marketing, there is no escaping the process of gathering insights about the shopper or shoppers you suspect, or already have some evidence, are most interested in your product, service, or category. Are you looking to define your Shopper profile and journey? Check out the Shopper Marketing Profile Template, Shopper Marketing Profile Interview Questions and Shopper Marketing Journey Stages Template to help your teams quickly leverage this best practice approach.

KNOW YOUR SHOPPER(S) BEFORE YOU BEGIN THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 40 In many cases, there are multiple shoppers that you must take into account that have different reasons for using a product, service, or category. For example, in an earlier example in regards to the purchasing of beer in a store, 95% of the shoppers were women. At any rate, it’s important to take the time to understand the shopper(s) for your brands and categories, and connecting data fueled insights to their profiles, to help your Shopper Marketing team (potentially with team members from the brand, retailer/e-tailer and agency working together in tandem) target the right individuals for their campaigns. These women may only be buying the beer for their partner to consume, but some of them may also be interested in consuming the product themselves. It’s important to note that shopper insights strategy work should be done first by the brand, and then leveraged together with the retailer/e- tailer to enhance and collaborate on the best strategy to apply for a true win-win-win outcome. Each of these women are different shoppers with unique behavioral attri- butes, and who are going to be driven by different triggers when seeing the beer. 95% of beer sold in stores is purchased by women. To add to this mix, we also have the men who traditionally buy this type of beer as well. If the male shopper goes to purchase the beer, he is travelling with that specific purpose in mind, and he is another unique shopper worth tracking and understanding. A shopper who visits a store to purchase alcohol is focused on that category more specifically and could be enticed to try other types of beer and perhaps purchase something else instead, or in addition, to their favorite beer. Source: Flint, Hoyt, Swift. 2014, This purchase decision could just as easily occur on-premise, at a bar or restaurant, instead of off-premise in a grocery store aisle.

CHANNELS, TRENDS, SEASONAL EVENTS AND TACTICS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 41 Channels, Trends, Seasonal Events and Tactics It should also come as no surprise that Shoppers can have a radically contrasting mindset when they are operating within different channels. The same person, placed into a specific shopping environment, will behave differently depending on where they are. That same person becomes a ‘smart shopper’ when shopping at a club, like Costco, and takes on an adventurous shopping persona looking for free samples and new arrivals. To aid in this discovery process, Leo Burnett/Arc Worldwide has shared their Shopper Mindset model which illustrates the changes in shoppers behavior in much more detail. For example, when shopping at a drugstore, as a ‘caretaker’, the motivation is centered on concern for your family’s well-being. GROCERY DRUG MASS CLUB DOLLAR C-STORE THRIFTY PROVIDER SMART SHOPPER VALUE SHOPPER IMPULSE SHOPPER ASPIRATION PROVIDER CARETAKER Anticipated weekly task; routine MOTIVATION Concern for family well-being Value & lifestyle Adventure shopping Value & need Convenience Planned purchases - moderate price impulse purchases - avg to high price Fresh food driven; moving to mass for commodity The deal, the steal; bulk savings Predictably low Size controlled MODE EDLP Fair but not a deal Low absorption, habitual shopping patterns Label reading high absorption Low on commodity; high on lifestyle Open to value oriented deals only; need driven OPENNESS Opportunistic Only if it’s right in front of me LOCATION IMPORTANCE Within neighborhood Within neighborhood Up to 10 mile radius Up to 10 mile radius Within neighborhood On commute path SERVICE IMPORTANCE CHOICE IMPORTANCE Breadth and depth or exclusive Limited to top 2-3 brands per category Generic with 1-2 brand leaders Limited breadth & size selection Essentials High choice expectations Navigational signage; clear- ly identified brand blocks; information at shelf; branded “destination departments” in certain banners Navigational signage; brand blocks difficult due to lack of depth; seens as expert and service oriented Cluttered, overwhelming aisles; little opportunity to stand out as brand Very small footprint, merchandise adjacencies confusing; little visual opportunity Small footprint; smaller pack sizes; immediate consumption oriented Controlled flow; opportunistic finds, sampling ENVIRONMENT Source: Arc Worldwide/Leo Burnett

CHANNELS, TRENDS, SEASONAL EVENTS AND TACTICS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 42 In the world of Shopper Marketing, each channel provides a different opportunity. CHANNELS TRENDS/SEASONAL TACTICS Apparel April Fools’ Day Account-Specific Club Stores Back to School Co-Marketing To further illustrate the incredibly diverse variety of opportunities, take a look at this additional chart which summarizes the channels, trends, seasonal events, and tactics that can be used as part of a Shopper Marketing program. Convenience Stores Black Friday Coupons/ Rebates/ Pricing Department Stores Breast Cancer Awareness Cross-Merchandising Dollar Stores Cinco De Mayo Digital Marketing Drugstores Cyber Monday Displays & Signs E-commerce Easter Entertainment Tie-ins / Licensing Electronics Earth Day Events Fashion Accessories Father’s Day Games/ Contests/ Sweepstakes Footwear Halloween In-store Media Health and Beauty Independence Day Interactive vending Housewares Memorial Day Loyalty Marketing Centers/Hardware Mother’s Day Mobile Marketing Mass Merchants Movember Packaging Office Supply New Product Launches Paid Media Pet Stores New Years Eve Premiums/ Incentives Services Summer Holidays Product Placement Get your campaign planned out with set objectives, KPI’s and timeframes using the Shopper Marketing Strategy Workbook, and lay out your overall plan using the Shopper Marketing Project Plan presentation to gain approval from senior leadership for your ideas. Specialty/Other Super Bowl & Football Private Label Sporting Goods Thanksgiving Relationship Marketing Supermarkets Valentines Day Sampling Toy Stores Veterans Day Social Media Warehouse Clubs Winter Holidays Video Displays

COMMON CHALLENGES IN THE SHOPPER MARKETING WORLD THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 43 Common Challenges in the Shopper Marketing World No matter which channels, trends, and tactics are employed, each Shopper Marketing program comes with it’s own unique issues and challenges; some clear, and others not. From new product launches to visibility, capturing shopper attention to being in context to shopper needs, there are a lot of areas that need careful attention for a Shopper Marketing program to have success. On the other hand, some of the experts we interviewed, have their own specific concerns and areas they look out for in ensuring a Shopper Marketing program is successful. Marketer Carl MacInnes shared that the lack of organizational understanding of how powerful Shopper Marketing can actually be is a major issue, where Shopper becomes a forgotten discipline (even given information on how much decisions are made in store, and how consumers and shoppers can be nudged in-store towards different brands). It’s critical to engage senior management in understanding the strategic importance of Shopper Marketing at the CMO level and below. According to the research in a recent ANA report entitled ‘Shopper Marketing: The Next Generation’, the key challenges of Shopper Marketing are: Taking an omnichannel approach to reach end users at all touchpoints Consultant Toby Desforges agreed that the biggest issues often lie within the organization, and in his case, he specifically focused on the C-Suite’s reluctance to support a Shopper Marketing function. He shared that the C-suite gets bombarded with new buzzwords or new ways of doing things, and Shopper Marketing is thrown into this confusion, asking questions like: Why should we do it?, What does it deliver? and, How do we deliver results using it? 1 Making brick-and-mortar visits mirror the effectiveness of the online environment 2 Using social media to drive traffic to retailers and develop online communities afterward 3 Tapping into mobile in shopper marketing campaigns, to engage consumers pre-store, in-store, and post visit Professor Daniel Flint added more specifically that there are two very targeted problems within the simple four step process he shared earlier (which included Insight development/research, Strategic collaboration, Execution and Metrics/Measurement). According to his research and experience, the last two steps in his process are causing the biggest problems: 4 Utilizing software solutions to monitor shopper marketing campaigns and help drive ROI metrics 5 Execution Metrics/Measurement

COMMON CHALLENGES IN THE SHOPPER MARKETING WORLD THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 44 When it comes to ‘Execution’, strategic collaboration, and trying to get multiple functions and silos (such as brand and sales) working together, not to mention multiple agencies, it can be a daunting task. Shopper Marketing is only executed correctly 45% of the time. On top of all of this, coordination within the brand’s team and resources is required, and there is still the very important job of working with the retailers/e-tailers team to execute the events and be on the same page regarding objectives. Getting all the digital media (social, websites etc.) and print media integrated and playing nice together, and then executing the project correctly in a store is also not easy. It’s key to engage and discuss all of this early on during the planning process. Professor Flint shared that according to Sorenson’s data, just in brick-and- mortar stores, Shopper Marketing is only executed correctly an average of 45% of the time. Researcher Sarah Gleason shared that often this happens because the campaign is not insight driven, or there is not a perspective or understanding that the team is trying to target, including what is truly meaningful to the shopper. For example, a parent buying a birthday or Christmas present for their own child may visit a specialty store, whereas if that same individual is buying a gift for a childs friend they may have a budget in mind and shop at a different location. Source: Flint, Hoyt, Swift. 2014 Simplicity in communication can also be an issue, as often point of sale material is trying to say too much and do too much, with competing visuals and copy.

COMMON CHALLENGES IN THE SHOPPER MARKETING WORLD THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 45 There can be a creative execution element that can cause the campaign to fail, and often this may not have been pre-tested as most companies do not pre-test their copy. The other big challenge in any Shopper Marketing process is the Metrics and Measurement required to truly understand what is going on. The truth is, that getting what was planned by/with the retailer/e-tailer, to actually happen in store, is very challenging, because sometimes the store manager has a different idea on what would work in that local market, or other time because multiple ideas were sold to the retailer at the same time, and both teams didn’t know it, causing overlapping or redundant campaigns. Professor Daniel Flint also shared that the other big challenge in any Shopper Marketing process is the Metrics and Measurement required to truly understand what is going on, with lingering questions such as: How do I justify my budget in shopper? And, How do I show that this is as effective or more effective than doing something else? Ultimately collecting the appropriate metrics to answer these questions can be the saving grace to justify the decisions made.

WATCHING YOUR COMPETITION CLOSELY FOR INSIGHTS THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 46 Watching Your Competition Closely for Insights Another important area to measure and track is the activity of your competition. The ideas they execute via shopper marketing campaigns (which are around us at all times in the marketplace) are great places to validate an approach you may have not yet tried. There is no need to always reinvent the wheel, especially if according to your tracking documentation of competitor behavior, a campaign has been repeated. If your competitor is running a campaign a second time, even if it is a variation on the first campaign, this is an indication the first campaign was successful in some regard. For example, when a new Call of Duty video game was released, Target’s team, knowing the ideal shopper was a gamer who would be playing on their couch and eating snacks, placed bags of Doritos chips and cans of Mountain Dew soda directly beside the game in the electronics section. They also repeated the same setup in the grocery area including the game itself alongside the chips and soft drinks. By tracking your competitions behavior, you can discover crucial insights into their behavior, and perhaps even forecast or anticipate their next move, allowing you to position yourself in a way that is not overshadowed by their next competing campaign. Although it is difficult to adequately track the results of a competitor’s campaign like this (especially while watching it from the outside), it does lend to an idea that could be used again either in that exact category (gaming and snacks) or even inspire a different combination altogether such as pairing furniture such as a shoe rack, in the shoe section (where it will be in context when noticed), or placing batteries beside a popular toy that does not have batteries included (to ensure the batteries are purchased with the toy, and not lost to a later purchase in a dollar store when it is realized that batteries were missing). Are you looking for a fast way to track your competition? Check out the Shopper Marketing Competition Tracking Database to help you and your team keep track of the ideas and insights you discover from analyzing your competitors.

CASE STUDY: ALLEGRA THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 47 Case Study: Allegra When you encounter strong competition, it’s important to stand out. Tammy Brumfield, from The Mars Agency, shared a case study that show- cases how being aware of competitor marketing activity can be incredibly helpful in launching a new product. After Allegra went over-the-counter, making it the fourth Allergy Rx to OTC switch following Benadryl, Claritin, and Zyrtec, they knew would need to step up their game in order to fend off the competition, grow their brand and ultimately the category. Existing competition already was dominating the category, and this provided The Mars Agency and Chattem the opportunity to find a niche-messaging opportunity that the others were not currently pursuing. Beyond national marketing efforts, Allegra partnered directly with CVS to achieve their goals. The Mars Agency targeted allergy sufferers shopping in the beauty aisle, and taught CVS shoppers that Allegra is their new “not so obvious beauty secret”.

CASE STUDY: ALLEGRA THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 48 This unique angle offered a disruption to the normal shopping behavior in the beauty aisle and a non-competitive space to announce Allegra’s over-the-counter availability to female shoppers who want to both look and feel good. The Mars Agency’s objective was to capture the CVS shopper’s attention for Allegra and gain incremental sales in May to round out the allergy season. Their KPIs were Allegra brand impressions and sales during the month of May. Allergy sufferers often seek lower cost options from other channels, so their challenge was to interrupt their ideal shopper while she was shopping at CVS and give her a reason to buy Allegra. Program results were driven by Allegra brand impressions and sales. In-store Allegra/Lumene partnership displays created a compelling experience while a comprehensive 360 pre-media campaign including the Allegra Makeover Video Game, blogger outreach, direct mail, Facebook sharing and banner ads delivering over 143,000,000 impressions and 2,977 incremental displays. This program exceeded goals at every touch point- Shoppers, Retailer and Brand. The Mars Agency’s big idea opened up the door to have a relevant conver- sation with shoppers while growing the brand and ultimately the category.

DIGITAL & SOCIAL ACUMEN THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 49 What You Need to Succeed Digital & Social Acumen Digital solutions include the following technologies: It is no surprise that the digital revolution has fully taken over Shopper Marketing. From mobile apps to social media platforms, and to email coupons to virtual store simulations, the power of leveraging the latest technology has empowered the modern marketing team to push their boundaries and integrate more heavily with other solutions. Mobile Apps Social Media Tracking and Engagement Loyalty systems In-store behavior analysis Analyze store displays using algorithms It’s not only important to have access to this technology, but for your marketing team members to be fluent in applying these digital tools to solve a myriad of difficult problems such as tracking, automation and data synchronization. Ensure your team is keeping on top of the latest trends, and that they are given the time to occasionally test new solutions to give your company a major competitive advantage. Advanced couponing Digital Assistants (such as Alexa) Beacons VR Stimulation Customer profiling Marketing Automation (with lead scoring) A/B and Tracking cart abandonment Eye-tracking multivariate testing In this modern age of Shopper Marketing, the advances in what is possible, from gathering insights using eye tracking, to integrating all systems tightly together into an omni-channel system, are all found in the software and hardware you utilize. That said, choosing the right tools can be difficult, with many factors such as scalability, data integration, and price, playing an important role in ultimate decision making. In the end, what is most important overall, is that your team has a commitment to achieving on-going excellence in both digital media and social media skills. These tools will be doing the heavy lifting for you and your Shopper Marketing program. Looking to find and select the right Shopper Marketing vendor? Use the Shopper Marketing Vendors Matrix to start finding leading vendors for selection, and then use the Shopper Marketing Vendor Selection Tool to compare them to each other and discover which one suits you best.

BUDGET, RULES & ORGANIZATION THE DEFINITIVE GUIDE TO SHOPPER MARKETING | THE NUTS AND BOLTS OF SHOPPER MARKETING 50 Budget, Rules & Organization Most people think that Shopper Marketing relies on an additional budget with a dedicated team that will support the program, and while this is defi- nitely helpful, there may be a lot of overlap and alignment within your existing marketing efforts and resources (including sales and consumer promotions). Her research discovered that a dedicated team with three or more years of experience was more likely to embrace shopper marketing as a competitive advantage, and were more likely to see it as the convergence of brand, retailer, and shopper. In fact, she outlined new organizations should not expect any immediate change, as three years was the critical milestone in her study findings. It often took three years of team collaboration to build out the processes, relationships and insights required. Some companies outsource all of their shopper marketing activities, to ensure they don’t miss anything important, and to leverage existing experts and best practices as they begin to grow the function. More often than not, your existing marketing or sales team is already able to run a Shopper Marketing program for you, without any extra resources required. “You don’t only need different roles and responsibilities for successful Shopper Marketing, you also need different processes, and attention to get the right insights.” This is only possible, of course, if you have the processes in place to empower their efforts, and the insights needed to build an effective plan. That said, depending on your company’s situation, you may need to hire additional resources. Researcher Sarah Gleason, shared that nearly 60 percent of the organizations she recently surveyed had a dedicated shopper marketing group. Toby Desforges, the Consultant Are you looking to hire a Shopper Marketing team? Check out the Shopper Marketing Roles Framework to build your team, and use the Shopper Marketing Manager Job Description to hire them.

The Definitive Shopper Marketing Guide

The Definitive Shopper Marketing Guide

Presentation Transcript

The Future of Shopper Marketing 4-22-2010 Shopper Marketing Share Group

THE WAY OF SHOPPER MARKETING

Shopper Marketing Program EVALUATION

Understanding Shopper Marketing How Shopper Insights Build Results

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