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Seventy-three percent of participating consumer packaged goods manufacturers and 86 percent of retailers placed shopper marketing programs among the top four activities that deliver meaningful return on investment, according to a study conducted by Deloitte Consulting, LLP for the Grocery Manufacturers Association and released yesterday at the trade association's Merchandising, Sales and Marketing Conference in St. Petersburg, Fla.
The study, "Delivering the Promise of Shopper Marketing: Mastering Execution for Competitive Advantage," additionally found that the percentage of manufacturers and retailers with significant shopper marketing organizations grew dramatically from 6 percent in 2007 to as high as 60 percent in 2008. Respondents expect shopper marketing investments, as a percentage of the overall marketing mix, to continue to rise for at least three years.
"Nearly every major manufacturer and retailer in the industry is dedicating resources to shopper marketing," noted GMA director of sales and sales promotion Brian Lynch. "This report outlines lessons learned to date and puts forth a game plan to help companies become more sophisticated in their operations and thus more fully realize the enormous potential of shopper marketing."
Successful shopper marketing programs have a three-stage lifecycle, according to the report. While many companies have allocated resources and established pilot programs (stage one: incubating), they often fail to develop the capabilities needed to perform with scale (stage two: scaling), and rarely, so far, succeed in culturally embedding this new way of thinking and working (stage three: embedding).
"Retailers and manufacturers who are embracing shopper marketing and executing against a core set of principles are growing 50 percent faster than the categories in which they participate," said Deloitte's shopper marketing practice leader, Rob Holston. "This speaks to the promise shopper marketing holds for those who do it well."
Key to the long-term success of shopper marketing across the industry will be the development of tools to gauge performance. There are many perceived resource and constraint obstacles to measurement, but 60 percent of retailers said that insufficient technology is their biggest roadblock, while 70 percent of manufacturers said the cost of data collection and analysis is their greatest obstacle. Regardless of the specific challenge, companies have to plan for and work around these problems to ensure they don't retard overall shopper marketing progress.
The study is based on the input of over 100 CPG companies, including interviews with more than 40 shopper marketing executives and an online survey of over 100 shopper marketing managers and executives. The two entities earlier collaborated on "Shopper Marketing: Capturing a Shopper's Mind, Heart and Wallet," which came out in 2007.
In other GMA conference news, interim president and c.e.o. C. Manly Molpus yesterday spoke of a renewed emphasis on customer and channel collaboration at the co-located Merchandising, Sales and Marketing Conference and the Joint Industry Unsaleables Management Conference.
"The time is right for a new model of collaboration," said Molpus. "GMA is committed to working with the Food Marketing Institute to undertake a full-scale evaluation of all industry affairs initiatives, committees, and conferences to find synergies and new and better ways of working together. This effort is currently underway."
Molpus additionally provided an overview of other GMA priorities, among them the infusion of more resources into the organization's "food before fuel" initiative. Molpus also discussed prospects for the bipartisan FDA Food Safety Modernization Act pending before Congress, along with the success of industry self-regulation on advertising targeting children, and changes to the association's annual Executive Conference.
Besides "Delivering the Promise of Shopper Marketing: Mastering Execution for Competitive Advantage," other reports scheduled to be released during the conferences are the "2008 Customer and Channel Management Survey-Doing More with Less: Winning Sales Strategies to Navigate a Challenging Market" and the "2008 Joint Industry Unsaleables Management Study: The Real Causes and Actionable Solutions."