Shopper marketing provides a means for retailers to share insight and work with suppliers to grow incremental revenues for both parties. However, achieving success can be challenging and often requires a change in approach. Sarah Atkins, managing director of customer insight specialist, Emnos UK, examines why a strong partnership with suppliers is important in a retail landscape largely dominated by price and suggests five key steps for success
Digital technology is now creating a much more transparent and open landscape for retailing where the ability to browse, research and price compare is intensifying competition. This transparency, together with the current harsh economic climate, has led many retailers to focus on price as the main source of competitive advantage. While price is an important element in a mix of strategies for influencing customer behaviour, it does not provide the differentiation required to build long term sustainable growth.
Moreover, the price reductions are potentially harming a vital source of support. Suppliers have a deep understanding of their categories and can provide valuable additional knowledge as well as product innovation to help drive a strategic advantage. What’s more, in a more transparent environment where retailers have only a short window to correct mistakes or failures, a strong partnership with suppliers will be needed to help spot changes in consumer preference early and formulate effective responses.
Shopper marketing provides a means for retailers to share insight and work with suppliers to grow incremental revenues for both parties. However, achieving success through shopper marketing can be challenging and often requires a change in approach for both retailer and supplier. Experience gathered from around the world suggests the five key steps for success are:
1. Opportunity analysis
Retailers should use their ability to understand customer preferences, shopping missions and behaviours to identify gaps in their offer and therefore opportunities to create innovative and targeted propositions to meet specific needs.
Having identified potential opportunities, consider the most appropriate brands and manufacturers to work with on meeting the needs of the target segments. This should include considerations such as the additional insight they can provide and the strategic fit for such collaboration.
3. Insight sharing
One of most significant challenges to overcome is creating a unified approach to understanding customers and integrating a retail view with that of a brand owner. An ability to share segmented shopper insight through software solutions can provide a significant advantage in this process and enable the creation of joint objectives around a common theme.
4. Relevant execution
Ensuring all the tactics used to influence the consumer are relevant to the target group and enable competitive differentiation including trade and brand marketing as well as in-store layout and merchandising.
To be able to quickly isolate and analyse the effects of the campaign on the target group using a number of criteria relevant to manufacturer and retailer such as, changes in shopping behaviour, media effectiveness and sales uplift; together with any negative consequences within the brand or the category.
After a few years of focusing on price, we anticipate retailers will look for a more sustainable source of competitive advantage. Success will be found in differentiating their propositions and enhancing their engagement with relevant offers and communication. Shared shopper insights and collaboration with suppliers will enable the development of these propositions to drive long term competitive advantage.
Emnos contact details:
Tanja Josche, PR & Marketing, emnos GmbH
Tel: +49 89 205073 706
Email: Tanja.josche (at sign) emnos.com
Sarah Atkins, managing director, emnos UK
72 Lower Mortlake Road
Surrey TW9 2JY
Tel: +44 (0) 208 614 7700
Email: Sarah.atkins (at sign) emnos.com
(A Retail Times’ sponsored article)