-By Sven Risom and Ginny Valkenburgh

Make no mistake: Retailers and manufacturers are talking about the shopper. One retailer recently told us that well over 75 percent of the top-to-top meetings conducted over the past three months included a major discussion on shopper marketing. Each manufacturer and retailer is trying to understand how to win over the shopper, and while new definitions, organizations, approaches, insights, and capabilities are being developed, few are putting shopper marketing in context.

The Path-to-Purchase has become the industry model that frames the consumer-to-shopper transition and identifies the critical stages of the "trip." As presented in the March issue of Progressive Grocer, the Path-to-Purchase captures the critical consumer and shopper touchpoints. Consumers and shoppers go through five steps along the Path-to-Purchase: Step 1 centers on creating demand, Step 2 is about choosing the outlet, Step 3 addresses shopping the store, Step 4 includes selecting the product, and Step 5 is focused on consuming, using, and repeating. These five steps provide a context to best understand shopper marketing.

Each of the five steps within the Path-to-Purchase offers the manufacturer and retailer an opportunity to drive the shopper engagement in an attempt to increase conversion, ring, basket, or store, aisle, or category traffic.

Shopper marketing is the strategic marketing approach for Steps 2, 3, and 4, as manufacturers and retailers focus on influencing a shopper's selection regarding the store (where to shop for that category or need), how to navigate the store, how to convert the shopper to that category, and how to get them to select the product from the shelf. While this sounds easy, it's not.

 Rather than introduce a new definition of shopper marketing, we've revised the 2007 GMA definition to include an attitudinal and emotional aspect. Shopper marketing therefore includes "all marketing stimuli, developed based on a deep understanding of shopper behavior, attitudes, and emotions, designed to build brand equity, engage the shopper (i.e., consumer in 'shopping mode'), and lead him/her to make a purchase."

This change is important, as great shopper marketing must reflect the attitudinal and emotional as well as the behavioral shopper elements. Understanding what will engage shoppers to pick up one more item, or what communication impacts their choice at the shelf, is key to success. While it's interesting to know that shoppers don't frequent an aisle or category, retailers and manufacturers are now asking "why" and "why not," so they can develop programs that will change behavior.

The whys and why-nots are best ascertained qualitatively and quantitatively, by talking with shoppers -- through shopalongs, in-store intercepts, and online studies. These insights can then be combined with insights on shoppers' behaviors.

To win with the shopper, manufacturers must build insights along each Path-to-Purchase step. They do this with shopper insights based on the shopper, the trip, and the customer or channel. It's the intersection of these three segments that drives shopper marketing excellence.

The shopper (or shopper segment) is at the heart of this effort. Choosing an outlet is all about the trip, whether it's a stock-up, fill-in, or quick trip. To change behavior, the shopper marketing program must address the shopper or shopper segment during a trip with a relevant message.

While the words trip, shopper, and customer are easy to say, manufacturers and retailers need to develop insights to understand them. It's for this reason that approximately 10 major CPG companies have begun using iCUBE, a new analytical platform that establishes behavioral insights based on the shopper segment and trip type for a customer or channel.

This analytical approach combines panel data with frequent shopper card data to provide both breadth of insight (where shoppers shop and where they don't), along with item-level granularity to understand the impact of a category, brand, or SKU on the purchase. Given the quality of the shopper card data, analysis can be conducted to understand the impact a brand can have on driving shopper behavior.

The iCUBE approach establishes an all-outlet shopper and trip segmentation structure. In this approach, 10 shopper segments have been quantitatively identified that range from "up & coming families" to "golden oldies." Each shopper segment has unique needs, desires, and habits that must be reflected for the shopper marketing program to be most effective.

Trip segmentation is also an essential component of shopper marketing, as shoppers don't all shop the same way every day. Therefore, it's critical to understand the needs and desires of shoppers while on different trips.

Based on all outlet purchases, 15 trips have been identified that range from quick "vice runs" to large stockup trips.

While it's important for a manufacturer to have a clear viewpoint on shopper segments and trips, it's paramount that manufacturers employ a retailer's segment structures, if they exist. Many retailers have developed their own segmentation approach, given the historically limited shopper insights supplied by manufacturers. The fact that retailer segmentation structures exist only further reinforces the need for manufacturers to have a clear understanding and point of view regarding shopper segments and trips.

Analytical tools like the iCUBE are being developed so that manufacturers and retailers can gain insights during each step of the Path-to-Purchase. Output from the iCUBE enables retailers and manufacturers to have a healthy discussion regarding category or aisle growth.

Building shopper insights is a critical component to successful shopper marketing. Once the insights are uncovered, the customer or shopper program can be developed.
While the Campbell's gravity-feed shelf structure is often referenced as a best-in-class shopper marketing execution, two other programs also demonstrate the power of shopper marketing along the Path-to-Purchase:

The first case is a category solution developed by Procter & Gamble entitled "Relax. Renew. Revive." P&G designed the program to bring personal care/cosmetic trips back to the grocery store, by creating a special shopping environment that addresses shoppers' emotional needs.

Shopper marketing isn't easy. It calls for training a new lens on the consumer, and establishes a different approach, mindset, and solution vis a vis the consumer and the shopper. In addition to new research and insights, shopper marketing also requires a category, aisle, or department viewpoint.

Retailers aren't interested in brand share games, but want to know how your brand can help increase their performance. Most importantly, shopper marketing must bring insights to action through impactful in-store programs.

While shopper marketing is a buzzword today in the CPG industry, successful manufacturers are moving beyond talk to develop insights, identifying critical platforms, and designing programs that drive conversation, ring, or traffic. In essence, they're following the shopper steps within the Path-to-Purchase.

Retailers rate P&G, Kraft, PepsiCo, General Mills and Unilever as the "best-in-class" shopper marketers (five top-rated companies in Cannondale Associates' 2007 PoweRanking study) because they follow these core steps and work with retailers to find mutual wins.