I love the way sites like Vimeo and YouTube give me access to shopper marketing cases from around the world. The thing is, how do you know the cases you come across are examples of ‘great shopper marketing’?
Let’s take two examples. The first is a case a friend shared with me from P&G in the UK a couple of weeks ago, titled “P&G Neat Cuts – Win 1 of 100 £100 haircuts – Shopper Marketing by Capture”. The offer is simple – buy any hair care product at a 33% price discount and claim the opportunity to win a free haircut.
Is this ‘good’ shopper marketing?
In our new book, “The Shopper Marketing Revolution“ Mike Anthony and I lay out the case for shopper marketing to be defined as:
“The systematic creation and application of elements of the marketing mix to affect positive change in shopper behavior in order to drive consumption of a brand”.
At first blush, you could argue this promotion is an example of a marketing activity targeting shoppers: it targets shoppers of hair care brands, gives them an offer (which is part of a marketing mix) to induce them to buy from a selection of brands which presumably will be used by consumers in the home. Is it shopper marketing though? Well not really, it’s only actually an example of part of the potential marketing mix used to change a purchase behavior. This is a bit like saying that advertising is ‘consumer marketing’ – it’s just not!
But semantics aside, is this case actually any good?
Well, if the goal of shopper marketing is to increase consumption of a brand, one has to test this by asking, “how many existing consumers will use more of the brand more often?” or “how many new consumers will it acquire?” The answer to the first question is “unlikely”: Giving me a price cut or indeed, a haircut is very unlikely to drive me to wash my hair more often, so no new consumption will come from this.
The activity may attract new consumers, BUT, what sort of consumers will it acquire? Deep price cuts appeal most to a segment of the population known as ‘deal buyers’. These guys either choose the cheapest product on offer, or choose from a portfolio of brands based on the best available price. In most cases this means that the ultimate consumer who uses the product is not likely to be brand loyal. The net effect then is a temporary blip in market share that is quickly eroded as the next brand in the portfolio offers a deal.
You might argue that this is a reasonable short-term outcome, but since most brand managers are responsible for brand profitability, this sort of activity can have pretty ruinous effects on the bottom line. P&G is a profitable company, delivering a 23.5% EBITDA margin, but slashing prices by 33% guarantees a loss of at least 9.5%. This is a heavy price to pay for short-term market share gain don’t you think?
What is great shopper marketing then?
Now my second example, the Old Spice “I’m on a horse commercial”; of course the appeal of this advert is it’s bizarrely fun, but behind it is a fantastic shopper marketing case study.
It’s such a good example because it meets the four criteria I lay down for great shopper marketing:
- Great shopper marketing is insight led: Clearly the team behind the Old Spice ad had two killer insights which drove the campaign:
- Women buy shower gel for their male partners, and;
- Males in a relationship with females will often wash with whatever is in the shower, even if they end up smelling like a girl!
- Great shopper marketing encourages a change in purchase behavior: This campaign, and the many that followed, encourages the girl to buy something specifically for her guy. This increases her portfolio as a shopper, driving new sales.
- Great shopper marketing encourages new consumption: Whether guys saw the ad or not, and indeed, whether they liked Old Spice or not, with a ‘male’ product in the shower, they are likely to use this instead of the ‘female’ one. This drives new consumers to the brand, a sure-fire way to boost consumption.
- Great shopper marketing delivers superior returns on investment: The Old Spice team choose to use prime-time TV and viral videos as the lead element of their marketing mix, which indicates heavy investment. But think about what this investment delivers: literally hundreds of thousands of incremental purchases of shower gel. These new sales, and the profits they create massively increase the probability of real ROI.
What’s great about this case is that it shows that getting shopper marketing right is not rocket science; it’s simply about knowing what consumption you want to create, how shopper behavior needs to change and then defining what activities will make that happen.
Read “The Shopper Marketing Revolution” (available for the Kindle now on Amazon.com) to get practical, step-by- step advice on how to make your shopper marketing great.