Retailers have a natural advantage when it comes to shopper marketing.
They have the historical expertise of marketing to shoppers, they are in touch with their costumers on a daily basis, and they usually dedicate more resources to shopper marketing (headcount & money). In-store, they have the ultimate control over what brand can communicate to shoppers when and how (mobile devices might alleviate this to some extend). Finally, they benefit from superior insights as they can draw from transaction data (i.e. category sales) and behavioral data (i.e. loyalty cards).
In consequence, retailers got a head start in shopper marketing and manufacturers have to find ways to compensate for this discrepancy.
According to Deloitte´s “Delivering the Promise of Shopper Marketing”, retailers complain about manufacturers´ lack of commitment to shopper marketing¹:
“The same person is performing the same activities as before only with a little change.”
“Manufacturers often determine an objective, then go and find data to support it. They then attempt to sell the ‘insights’ to retailer.”
“The manufacturer´s account person is still being incented on short-term display placement, not on marketing success, category growth, and relationship”.
Although the sample from Deloitte’s study might be too small to draw universal conclusions, manufacturers should carefully listen to retailers´ concerns.
shoppernewsblog devised 10 ways for manufacturers to become more attractive for retailers.
- Understand retailer – To better collaborate, manufacturers have to first understand a retailer´s strategy. What are their corporate goals? How can you help them to achieve their long-term strategy? Who are their shoppers? What categories matter most to them?
- Think beyond brand – FMCG have to understand that retailers are more interested in categories than in a single brand. Hence, manufacturers should think about how to develop a category and how to increase cross-category sales.
- Partner up – Select only partners for which there is a fit between your brand´s strategy and the retailer’s corporate goals. Only if both have complementary objectives, a win-win situation can be established.
- Become an expert – FMCG can specialize in certain areas of shopper marketing and use this expertise to become more attractive for retailers. Unilever for example, intends to specialize in Trip Management, “the tactical usage of in-store marketing pieces (e.g., product assortment) to make the retail environment a solution to shoppers’ specific trip missions”¹.
- Tailor to client´s needs – Make your shopper marketing campaigns modular so they can be adjusted to retailers´ specific needs. In the modern retail environment one-size-fits all solutions are not appropriate anymore.
- Be innovative – Make use of new technologies (digital shopper marketing) and use them to achieve both your brand´s objectives and the retailer´s corporate goals.
- Share your insights – Although retailers might have a head start on shopper marketing, manufacturer still accumulate valuable insights. Share them with your partners to emphasize your goodwill!
- Offer a platform – Due to advances in digital technology, FMCG increasingly develop their own platforms (i.e. Kraft Food’s iFood Assistant). Manufacturers can offer retailers a participation in these platforms or even develop platforms specific to a certain retailer (SC Johnson´s Right@Home for Wal-Mart).
- Help on branding – As retailers do have an advantage when it comes to shopper marketing, manufacturers are usually better at consumer marketing. So why not help your partner to develop a successful brand?
- Deliver results – Still, the most convincing argument is success. If you can prove that collaborating with you contributes positively to a retailer´s goals, they will be more than willing to corporate with you in the future.
Applying a consistent mix of the 10 ways we recommend above, manufacturers will be able to successfully corporate with retailers. For a sustainable long-term relationship, FMCG must create benefits not only for themselves, but also for the retailer and ultimately for the shopper. Strategic fit, collaboration, and insight sharing is at the very heart of shopper marketing.
Next time you are developing a shopper marketing campaign, put yourself in the shoes of the retailer. Instead of merely thinking about your very own goals, also consider your partner´s interests. As in most negotiations where your counterpart has an advantage, you should first think about what to offer instead of what to ask for.
Do retailers really have a head start in shopper marketing?
Comment below and share your opinion with us.