Shopper Marketing Evolves Into Strategic Priority: ANA Report

With spending expected to reach $18.64 billion annually by 2020, shopper marketing—and the consumer insights it generates—has become a tool for shaping customer behavior, according to the study’s findings.

Shopper marketing is evolving into a more strategic function to reach consumers at a wider variety of touchpoints and influence their behavior long-term, according to a new report by the Association of National Advertisers (ANA), in partnership with market research firm GfK.

Brands’ investment in shopper marketing has expanded with the adoption of mobile and social media; spending is expected to reach $18.64 billion annually by 2020, the report stated.

“The good news is shopper marketing has grown,” said Sarah Gleason, senior VP in the shopper and retail strategies group at GfK, who presented the findings at the 2016 ANA/BAA Shopper Marketing Conference, in Amelia Island, Fla., on Tuesday. The past 10 years that GfK has been surveying the sector “shows a long and challenging road,” with factors including wide changes in the retail industry and fragmentation among shoppers and shopping channels. “It’s a constantly moving target,” Gleason told CMO.com in an interview.

At the same time, spending has increased more than 6% annually, and shopper marketing has become a tool for shaping customer behavior, according to the study’s findings. While driving price-based conversion remains the top goal of shopper marketing—with 41% of respondents naming it a primary role—motivating shopper behavior beyond price was the second most-cited goal, with 35% of responses.

The expansion of smartphone use for research and to plan shopping is a factor in that development, but its influence is “very category-dependent,” Gleason said. Shoppers won’t spend time researching a small, cheap item, such as a can of peas, before buying, but for products such as consumer electronics and cars, where the prices are higher, that factor plays differently, she said.

The study also found shopper marketing’s importance has increased as companies leverage its insights and shift focus from the retailer to the consumer directly. Eighty-two percent of the 185 marketers polled said digital and mobile technologies are shifting the balance of power away from retailers and manufacturers and toward consumers.

Like many other consumer-facing functions, shopper marketing is increasingly connected with brand marketing within the organization. The percentage of marketers who consider shopper marketing a strategic priority nearly doubled to 53% in 2016, up from 27% in 2009.

Marketers who see the shopper marketing channel as a strategic priority are leveraging customer insights in an omnichannel focus and evolving the practice, Gleason said. Improving data capabilities are helping the industry better understand consumer behavior as a shopper moves between channels, but “the challenge is you can lose track of the ‘Why?’ behind it,” Gleason said. “You can just see what they did, but you can’t see why.”

Marketing needs to become linked with shopper data to meet that challenge and bring to bear a greater focus on understanding shopper behavior, she explained.

“There has to be more connection, a more holistic view,” Gleason said.

The report concluded that shopper marketing will need to evolve further, becoming more focused on the customer experience and better integrated. Fifty-one percent of marketers said shopper marketing will become more driven by insights based on actual behavior rather than reported activity, and 43% said it will better reflect the shopping experience as part of the overall consumer journey. Some developments will include post-purchase communications and joint planning with partners to reshape marketing and drive loyalty.

However, the study found only 40% of respondents think their organizations are adequately funding the search for shopper insights. The insights focus is still relatively new and competes with other marketing functions for budgets and influence, so spending sometimes has to come at the expense of other activities, Gleason said. She noted one of the panelists at the ANA conference said his organization has phased out its shopper marketing insights practice and simply looks at consumer insights as a whole, focusing on the particular consumer question that needs an answer.

“It’s plugging ahead. It’s moving along, “Gleason said. “We see very positive change, but it’s not a slam dunk.”