We are witnessing phenomenal transformation in shopping behavior across the globe. The development in online and digital, the momentum of discounter stores, the growth of specialist retailers and new innovative ways of interrupting the shopping journey have all led to a much more fragmented approach to shopping in terms of what, where, when, how and why shoppers buy.
The following are some thoughts on what does this mean for suppliers and retailers who want drive better shopper engagement in the future.
Shopper engagement requires focus
Considering the degree of change in shopping behavior what is coming apparent is we cannot win with every shopper, on every mission, everywhere, all the time. Ensuring there is ruthless focus of activity, investment and effort on key channels where the target shopper can be engaged is becoming the only way to achieve a decent return on investment. The all- or omni-channel approach has generally become too costly, complex and unnecessary. On the contrary, we have witnessed brands gain significant traction through a much more focused channel approach. For example Xiao Mi, a mobile brand in China, became market leader in less than 3 years with no offline presence at all!
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Shopper engagement requires three-way Insight – Consumer, Shopper & Channel
Driving shopper engagement needs insight. In today’s market insight has to be developed three dimensions – Consumer, Shopper and Channel. Insights for growth will not be found solely in focus groups. More emphasis on understanding target shoppers along their path to purchase, and especially in the relevant shopping environments can help shape a more effective mix of marketing and sales activity. For example, Sony in the APAC region identified a key target group of potential consumers who were big advocates of the brand. 90% of these shoppers engaged with the Sony brand in-store. However two thirds of these people walked away from these booths without buying! Research was undertaken to gain insight into their purchase journey and understand their behavior and experience in store. It was found even though these people were big advocates of Sony, and the brand was their first choice, the in-store purchase triggers and reasons to buy were not compelling enough. Sony readjusted their mix of marketing activity to focus on building more compelling reasons and triggers to buy in these outlets. The brand USP in terms of being the best color experience was brought to the forefront of the in-store experience. Stores were redesigned, point of sale and brochures were re-written, and in-store sales teams were re-trained. By understanding the shopper journey better and focusing their investment in on the key purchase trigger points Sony was able to actually save just under US$2m in total marketing spend, while achieving $30 million additional revenue through this channel.
Shopper engagement requires new skills
The skill sets needed to make ‘engaging the shopper’ happen are evolving. Robust sales and marketing skills are still as necessary as before. However the teams who make it happen must also implicitly understand the path and shopping environment of their target shoppers, be strategic in where they focus to win, analytical in understanding how to win and creative in engaging the shopper in the relevant environments. We find more companies are building these competencies into their team development plans.
To sum up, based on the degree of change in shopper behavior today, and as expected for the future, we are finding more companies are reassessing their marketing and sales approach. Focusing more on key channels, developing 3 way insight, testing and learning more in-store and adding the essential competencies needed in the new era of shopper engagement’.
By Stephen Rust, CEO of engage Ireland
Image: Flickr