The impact of shopper marketing on the consumer

This article was written in 2012. The Author has upgraded to an iPhone 6s and faith has been restored.
Why are so many FMCG companies focussed on shopper marketing and category development? Let’s find out.
How many times have I been on Facebook to read that some of my mature and highly gifted friends are jumping around like school children waiting for “the event of the week.”

It has to be said that my friends do have families, they do hold down very big jobs and are highly professional employees. But get them talking about this ‘next big thing’ and they revert back to four-year-old children on Christmas Eve.

As soon as I mention the phrase, I get the death look from their partner as my friends launch yet again into a game of “I know more than you do top trumps.” It ends up in me, looking apologetically at the ever patient partner as their eyes glaze over and they tune out. In their mind they are drawing up a highly detailed project plan for the weeks washing, just to keep sane.

But something strange happened this week. The hype that surrounded this apocalyptic moment was interrupted by another phenomenon, and it had nothing to with Hurricane Sandy and everything to do with obi wan Kenobi

It was announced on Wednesday that George Lucas had sold Star Wars to Disney for $4bn. This “top trump” event, was the only topic over the last seven days, that stopped my friends talking about Skyfall, the new James Bond movie, released this week in the UK.

And that got me thinking about what other big brands could gather so much global chat in 7 days.

God had a go when he created Earth (but the audience was a bit thin on the ground) and Hitler managed it when he invaded Poland. You could argue that the Russians did it when they let the Berlin wall come down, as did China, hen they entered Tiananmen Square. But the most talked about events in the western world was the death of Kennedy, Princess Diana and Americans landing a man on the moon. And no I haven’t forgotten the Twin Towers or the Titanic. These were much more apocalyptic that Lindsey Lohan going to jail or the OJ car chase.  But all covered the global news headlines for weeks.

If you had arrived on Earth in any one of these weeks you would have thought this was the next big thing, that these were just the events that shaped our world.

Where was the fanfare when the Scandinavians discovered North America way before Columbus? Where was the global excitement when the first indigenous Australian set foot on Hawaii having jumped the Pacific Islands from Brisbane to Honolulu. Not a mention!

We all heard about the FaceBook share price dropping like a stone when it opened in its first week on the NYSE, or when Boo took a bath, signalling the death of the dot-com boom worldwide.  (http://en.wikipedia.org/wiki/Boo.com)

In this global communication age, news travels fast. Sometimes too fast, but none the less, it is now fuelled by our need to be ‘on message’ all the time. Meal times are not complete without a quick look at email, Facebook or Twitter.

This world-wide behaviour is driven by the fear of failure, of being left behind.

And so it is with fads. We’re already looking for the next Facebook, hoping it doesn’t become a MySpace or Bebo.

Remember the Blackberry? Or the Psion (my personal favourite) and it’s taken over 15 years for the iPhone to get close to the user functionality the Psion had in 1995.

And what happened to the Palm Pilot? Will the same thing happen to iPhone and is Windows on its way out, despite the launch of Windows 8.

These are mega brands that are struggling or have died,  as they try to keep up. The Samsung Galaxy and Google seem to have the edge in the mobile space today. Is the launch of the IPad mini a defensive measure against Kindle, Nook, Google Nexus 7, ASUS Transformer Pad, Acer Iconia Tab A200 or the Leveno ThinkPad tablet.?

I am a huge fan of Apple as a platform, but I am writing this in Word for Office:Mac on my iMac. I love my iPhone 4S and I could upgrade but I choose not to.  I don’t see the point. The iPhone 5 doesn’t have enough to tempt me.

I gave my IPad 2 to a family member because I couldn’t be bothered to carry it around. My iPhone has become my business weapon of choice. But it’s a useless phone when I compare to my all time favourite, the Nokia 6310. This was iconic and it did the job first time every time. I had instant communication at my fingertips.

The iPhone isn’t a phone. It’s a very small handheld PC with Internet (that does voice) and I love it, as much as I delight in my iMac. I despise my HP laptop with Windows 7. Not that I loathe HP. In my mind, the HP printers can’t be beaten. But I would never buy any Dell product. In the 90’s every device in my house was Sony. Now even the PlayStation is a doorstop.

It’s about fashion. It’s about the zeitgeist. It’s about finding the next big thing.  So is Shopper Marketing the next big thing?

By definition, it can’t be because it’s already here. It’s morphed over the last three decades.

In the 1980’s it was brand management, and brand management was all about product innovation and keeping the name planted in the consumer’s brain. In the 1990’s this evolved into category management as all markets became more competitive, more global and shelf real estate become more expensive. Now the emphasis has moved again. Now it’s all about shopper marketing and category development.

To summarise, in 1980 it was all about the brand and the product. (whatever happened to the Filofax). In the 1990’s category, management and trade marketing were all about the outlet or retailer. Today it’s about satisfying the shopper.

It is predicted that 83% of FMCG companies will increase their investment in shopper marketing whilst 55% say it will be their number one priority, increasing spending by more than 5 percent annually¹. It is estimated that Shopper Marketing will be worth U$ 60 billion ².

Deloitte warned as early as 2008 of the widening gap between companies that become more and more sophisticated at shopper marketing and those that fall behind³. Accordingly, leading FMCG companies to try to position themselves as experts in particular areas of shopper marketing in order to be more appealing to retailers.

But, what about the consumer?

No, this isn’t such a stupid idea. Person to person selling (P2P) is here to stay. Just ask Argos or Comet.  Argos are adapting to this change whilst others such as Comet failed to comply and died. Time will tell if Argos have got this right but they have cash in the bank and the right idea to have a go. They are investing in 700 ‘click and pick” stores over the next 5 years in an effort to remain in the game.

Hobbycraft, a UK high street chain, went bust earlier this year with the threatened closure of 51 stores. They now plan to open up to 250 stores across the UK under the new ownership of investment group Bridgepoint. Tactics like “Pop up” stores and “click and pick” will drive the proposition to the screen., but at the same time breath new life into the High Street.

However, no one has addressed the problem of the browsing wars.

When was the last time you bought a book? Where did you buy it? Why did you buy it? Did you know you were going to buy it before you clicked it?

How many times have you visited Amazon and clicked away with nothing, because you hadn’t been inspired? The more experienced we, the consumer, become at using the internet, the less opportunity there is for an impulse purchase.

Isn’t it about time we all become expert in appealing to the consumer? Is that what Apple did when the launched the iPod? The iPhone was designed first, but they stripped it down to an MP3 player to appeal to the Luddite consumer. Now look at us, and look at the size of that market.

Apple wasn’t the first with the technology, but they were the first to make us fall in love with the freedom it offered.

How are we going to address that in the future?

 

Source:

¹Stahlberg, M. (2012). Shopper Marketing – How to Increase Purchase Decisions at the Point of Sale, Second Edition. London, England: Kogan Page Limited.

² http://www.booz.com/media/uploads/BoozCo-Shopper-Marketing-5.0.pdf

³ http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810.pdf

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