As brands rush to make their online experience as in-store like as they possibly can we take a look at shopper marketing and how it will make a huge impact on the FMCG industry...
According to the Grocery Manufacturers Association, 70% of the average customer’s purchasing decisions are made in the store. This means that in spite of the billions spent annually on TV, radio, print, and online marketing which aim to create a brand identity and subtly influence spending decisions, the best way to reach consumers is in the confines of virtual or brick and mortar stores. Traditionally, shopper marketing has been focused on 4 P’s: price (think sales and coupons), place (lighting, music, and display), promotion (samples, ads, and TV displays) and product (the actual look, feel and packaging). But as eCommerce begins to dominate the marketplace, how can brands optimize their strategies for reaching consumers at the point of purchase? Let’s take a look at the opportunities arising in shopper marketing in the shifting grocery landscape.
The rise of Amazon had a massive impact on the way brands approached shopper marketing. The corporate behemoth was the first retailer to be seen as both a store and a marketing platform. Amazon surpassed Google in terms of searches for products by the mid-aughts, and it’s now estimated that half of all searches for products in the USA begin on Amazon’s platform. This sea change has blurred the lines between shopper and brand marketing, and has dramatically expanded the role of online retailers. As consumers have migrated away from brick and mortar stores, old media networks, and even public spaces, brands have realized that they can no longer dictate the terms of engagement.
According to Mike Mantagna, SVP of commerce at Starcom and former head of e-commerce at Kraft Heinz. “Brands can no longer dictate how or when they interact with the shopper. They have to go where the shopper is, which means using more shopper marketing tactics, from retail sales data to purchase based data.” As retail has moved online, the advantages in shopper marketing have become apparent. You can reach customers at the point of purchase, you can find them in the moments when they’re making purchasing decisions, and you can precisely track the effectiveness of your messaging.
The line between eCommerce marketing and shopper marketing have always been blurred, and the trends created and accelerated by the pandemic may have erased the distinction entirely. Shoppable marketing is but one example of how the two approaches have dissolved into each other. If everyone is constantly absorbed in their devices, and purchases are always just a click away, it could be argued that any digital form of advertising is in fact shopper marketing.
But at present the options for reaching consumers during their digital shopping journeys are limited. Most eCommerce shopper marketing comes in the form of sponsored searches and banner ads, and the amount of digital real estate in these areas is limited. As experts at Bare International have concluded, as “demand continues to increase faster than the supply can accommodate, brands with the largest budgets will win out, forcing smaller and emerging brands to get creative.” They conclude that shoppable and retailer specific influencer and micro-influencer campaigns are the way to go for brands without large marketing budgets.
Amazon’s advertising sales showed strong growth during 2020, growing by 41% and accounting for more than 10% total US ad spend last year. There’s no reason to expect that this growth won’t continue this year. Amazon continues to roll out new advertising products, and integrate more video content, and it is a proven way to reach consumers. However, there are a few good reasons to avoid putting all of your eggs in the Amazon basket.
Amazon has always proven that it will be ruthless in undermining and swallowing up competitors. And their expansion into the FMCG business means that they could see your sales statistics, smell profit, and move to steal your customers. Reaching your audience exclusively through Amazon ads will also make them dependent on the platform, so if Amazon were to decide not to sell your products, it would be unlikely that a majority, or even a significant minority, of shoppers would follow you to another retailer. Relying on Amazon will leave you in the same position as the Gingerbread Man riding on the snout of the wolf.
We would implore FMCG brands to immediately move to create a shoppable online platform. By turning websites into shoppable hubs, you can merge all of your online messaging into shopper marketing. Every potential customer who searches for your product will be a click away from a purchase.. You’ll also get the data you need to determine which campaigns are driving conversions, data which will allow you optimize your approach and decision making.
It’s also imperative that you partner with a variety of retailers to offer your customers the opportunity to buy from a trusted store, rather than a website. For older shoppers who are experimenting with eCommerce, the presence of a trusted intermediary like Wal-Mart or Tesco can make a huge difference. Adding “buy now” buttons, shoppable recipes, and “where to find” functions to your messaging can keep your online audience from complete dependence on Amazon’s platform.
As the COVID pandemic pushes the grocery industry further and further into the digital realm, shopper marketing has taken center stage. As FMCG brands have come to realize that it is absolutely crucial to success in 2021, we expect to see the discipline evolve rapidly. It’s imperative that you dig deep on sales data and nimbly shift your strategies and approach as we learn what shopper marketing tactics are most effective. Every brand also needs to search out marketing partners who understand the fundamental importance of sharing, mining, and taking instantaneous action on customer data. Throwing money at Amazon might yield some short-term benefits, but it’s a fatally flawed approach. If you’re looking for a partner to help forge a forward-looking shopper marketing strategy, get in touch with Adimo today!