The internet is driving both sales and feedback from shoppers who traditionally preferred bricks and mortar stores, according to Colin Harper of Storecheck Marketing, who explains why a lack of this kind of positive change usually represents a failure on the part of the marketing department.
Change is endemic in the marketing world. It is arguably the true raison d'etre of the marketing function within most companies: creating demand and driving sales to meet business goals.
Agents of change
The process of marketing concerns itself with maximising the chances of bringing people and products together over a period of time, both physically and attitudinally. There are a range of actions and tools that can affect this process, all of which are really "agents of change". The challenge, Harper says, is for marketers to identify which agents or tools are of most benefit at any given time.
But this is complicated by an increase in the ways and channels in which shoppers can look for and purchase any given product - a trend that is growing rapidly. As a result, it is becoming harder and harder to both reach and influence the shopper, within a reasonable budget at least.
Point of sale's influence
This tends to place much more importance on point of sale appearance. Not only does the product have to be there but it also has to be seen to be there. This may also help to explain the recent rapid growth of so-called "experiential marketing".
One challenge for today's marketer is to know which technology or technique will most improve the chance of making multiple sales to both new and existing customers. For example, consider a big grocery chain's product range, and the millions of people who walk through the door to fill a shopping basket. Many of these shoppers already have a shopping list and will be less inclined to experiment than other more impulsive shoppers, so they will fail to buy if the product is either not there, or is in an unexpected location.
Marketing investment strategy
The immediate focus of most current marketing investment is on this area. Broadly speaking, this fits into two main areas:
- Planned adjacencies and shelf location
This is where companies research what might be best, and then try to influence buyers and the supply chain to make this a standard.
- Actual adjacencies, shelf location, and availability
This is where the standard is variably applied (this occurs about 50% of the time, according to figures from IGD).
Considerable investment is applied in these areas to bring about short term changes within the boundaries of categories laid down by retailers. But the approaches they take are seldom measured accurately, and these processes have not changed for many years.
New benchmark standard
Most of these investments fall short in a number of ways and so, working with POPAI (Point of Purchase Advertising International), Storecheck Marketing has created a benchmarking measure to track the reasons for these failures. In doing so, the company's main concern was the use of new technology and new approaches to institute long-term positive change in shopper purchase behaviour.
There is one constant factor that marketing can usually exercise control over, no matter which channel the product is sold through (i.e. bricks-and-mortar, by catalogue, or online): the product itself. This is not necessarily underused in terms of brand promotion, but very few sales use the product itself to link the customer to the purchase, or even to a loyalty reward.
For example, if you apply a unique code to a product (either as a permanent packaging element or as a temporary sticker), and place a web address next to that code, some 60% of all homes (in the UK at least) will be able to act on an offer associated with that code. The combination of the pack's code and the internet IP address of the claimant's computer are sufficient to provide a unique, one-time opportunity to offer a loyalty reward. And, of course, linking the reward to a correct answer to something unique on the product itself (such as the bar code or a serial number) makes a link with the original purchase almost foolproof.
Linking this purchase back to an individual store gives also the benefit of ePOS tracking, which over time allows the retailer to build up a customer-specific picture of long term purchase behaviour, which in turn provides the option of targeting further offers and actions.
Maximising purchase potential
One of the many uses of data gathered in this way is to target specific groups of customers who may be interested in a specific product or category, and to notify them when products arrive in-store in their local branch. In this way the retailer can bring together everyone of importance to maximise the possibility of a purchase, since advising a manager that there are 20 people in his catchment area who will go somewhere else if the product is not on display is a great motivator.
According to Harper, a product turning over an average of 30 per week in a supermarket would justify a broad distribution, and this level of sales per store would be supported by as few as 10 local families, on average. So the addition of only one more product per week to these stores is likely to be significant not only to the stores but to the customers.
Web-based customer insights
This effect could be achieved through web sites such as Storecheck's recently launched service, YouSay.org, which conducts the online acquisition of customer data based on pack codes. The site also links with current store lists to allow retailers to examine their campaigns' return on investment at store level.
This technique allows the retailer to build a database of actual product users, their attitudes, and their preferred source of purchase. With this insight alone the sales department can go into buyer meetings knowing that, for example, 56% of their shoppers will defect if a particular product is not on the shelf.
The marketing department also gains direct access to shoppers for new product research, product launches, member referral schemes, test marketing, and advertising research, among other business development activities.
Downsides and upsides
Response rates do vary according to the type and value of incentive offered, as well as with the length of time the offer is available for. Unlike a buy-one-get-one-free offer and other types of in-store promotion, you will eventually run out of eligible shoppers to acquire. But, as a guide, Harper reports that the company has observed that up to 20% of existing shoppers will identify themselves thanks to a pack-related inducement.
The technique has an added bonus as well: if, at some point in the future, the retailer can't continue to supply goods that its customers currently purchase regularly, the company can communicate with shoppers who have identified themselves to let them know where they can continue to buy those items - or even to introduce them to another similar product that is still available at the store where they actually do most of their shopping.