CPGs Get Better at Organizing Around Shopper Marketing

Change can be slow. Yes, there are CPGs making positive strides toward building shopper marketing departments, but experts believe most companies have a long way to go.Case in point: The latest Futurescope survey, conducted by Westport, Conn.-based Interscope LLC, found that of the 300 marketers from more than 150 companies who responded, only 37% say they work in an established, dedicated shopper marketing function. While 43% say they support the practice within existing functions, 20% still don't have anything in place. The study goes further to report that 46% are operating in a department that is less than two years old, while 28% have been actively developing shopper marketing programs for between two and three years, and 26% for more than three years.When building a department, some of the fundamental challenges that organizations face include deciding where the discipline should sit (marketing or sales?), gaining proper funding to build it, and establishing a way to measure ROI. "The level of change needed to truly become a shopper marketing-driven organization is significant, and change is never easy," said Joe Beier, a principal with Interscope, in a company release. "But the energy and focus are there, and companies are figuring it out. Shopper marketing is clearly a discipline with a bright future."In fact, 85% of respondents to the Futurescope survey agree that having a shopper marketing program is vital to their company's success. The Current LandscapeAt Englewood Cliffs, N.J.-based Unilever -- voted "best of the best" in shopper marketing excellence in The Hub's 2010 "Top 12" -- the shopper marketing department is part of marketing on the organization chart. "But in day-to-day practice we are completely aligned as business-building partners with our customer development teams, our brand teams and our customers," says Marc Shaw, director of shopper marketing.The strong collaboration among the company's shopper insights, category management and shopper marketing teams has led to "breakthrough concepts," Shaw believes. "And over time we have learned how to tailor our marketing mix models and use proprietary analytical tools to hone in on and improve our initiatives."Kristine Abrahamson, director of shopper marketing for Sara Lee, Downers Grove, Ill., whose team is also aligned with marketing, believes that the growth and sophistication of the discipline within her organization has been driven by increased senior management support. She says the integration of shopper insights is critical to the organization of a department. "Understanding the in-store component needs to happen at the beginning of the process to ensure smooth and strategic integration." Rachael Norton, vice president of shopper marketing at Omaha, Neb.-based ConAgra Foods, says her team is part of a unique, integrated customer marketing function that includes category leadership, shopper insights, shopper marketing and in-store marketing. "We really believe that that organization enables us to pull together the expertise in all the core centers of excellence to bring the best integrated work to our retailers."ConAgra's goal is to continue to develop proprietary shopper insights and uncover the deeper motivations behind shopper behavior, which feeds shopper marketing as well as several other functions within the company. "We do know that matching the program with the insight is really what drives success," Norton says, adding that evolving its partnerships with carefully chosen retailer partners -- to fully understand how the two sides can develop the relationship and the process together -- is another key initiative.Tia Newcomer reports into sales as the director, Americas shopper marketing at Vancouver, Wash.-based Hewlett-Packard. She echoes that the use of an insights-led strategy, whether shopper or consumer insights, has helped drive the charter from senior management down through the organization. "There's a tremendous amount of interest in what we're doing because of the way we're selling it with the insights-led approach, specific not only to our category but also to the retailers we're working with," she says. The shopper marketing department at Camden, N.J.-based Campbell Soup Co. also reports into sales, which Geoff Jackson, director, integrated shopper marketing, says gives his team a tremendous connection with its customers and key partners. "We also work hand-in-hand with marketing to ensure connection back to our overall strategies and relationships, and provide dedicated support to our customer and brand teams."Broomfield, Colo.-based WhiteWave Foods, makers of Horizon Organic, is a newer player in this space. Its shopper marketing team, according to Chad Marston, director, shopper marketing and insights, is strategically aligned within the sales function to be closer to its retail partners and the shopper, he says, adding that the department has "a very strong bridge to both the marketing and consumer insights departments to ensure the best possible cross-functional collaboration and results."Marston says the company has set an "aggressive timeline" for better understanding the in-store environment, engaging its field sales teams, further deepening its retailer partnerships, building strategic agency partnerships, and identifying the key shopper principles and behaviors it wants to address.What's the Right Fit, Does it Matter?Whether reporting to marketing, executive management or sales -- the three largest concentrations in Interscope's survey -- there are still different philosophies, as evidenced above, about where shopper marketing makes the most sense."There's no right answer about where it goes," says Alison Chaltas, also a principal at Interscope. "However, we do see that folks that rate themselves as best in shopper marketing are putting it in marketing," she says. "We think that by placing it there, it becomes a more strategic function and it's more integrated into data as opposed to specific retail initiatives." Matthew Egol, vice president of consumer, media and digital practice at New York-based Booz & Co., says that "shopper" has begun to shift from being a sales function to a marketing function within the past three years. "We've seen it go from 56% of groups reporting to sales to only 24% now," he says.Egol and many others agree that regardless of the structure, what leads to successful shopper marketing is a cross-functional nature. "A lot of shopper marketing grew up around trying to stamp out the complexity associated with custom promotions, and the answer to that was you can't make promotions go away, but you can get better at collaboration and figuring out when to do it and what to do."Anne Chambers, CEO and founder of The Capré Group, Atlanta, agrees. "Companies are realizing that shopper marketing is a capability that transcends across the organization and goes far beyond a department orientation," she says," and this "has contributed to its growth.The alignment and synthesis of research from all perspectives -- consumer, category, shopper, retail -- across the organization must also occur, adds Patrick Fitzmaurice, principal, The Capré Group. "In the best companies, shopper insights are not the domain of one department," he says. "All insights that are needed to create both impactful in-store marketing and drive greater retailer/manufacturer business collaboration are integrated across the business."Booz & Co.'s Egol stresses that the organizational issue is not the primary one. Instead, he believes the most important focus for companies should be on building distinctive insights about the categories they are in and about how people shop along the path to purchase."That's the currency for having a great dialog with the retailer," he says. "If you don't have a foundation with insights, it's very hard to figure out what programs to do and how to collaborate with the retailer effectively."H-P's Newcomer says that companies have to keep talking about the entire shopper journey and not just be an in-store solution. But that requires budget shifts in favor of these efforts. "Right now our budgets are very much centered around the last five feet," she says. "So how do you start shifting, for example, dollars from worldwide or brand management to mobile use in that shopper journey? We're making tremendous progress there and taking some pretty big risks in using current dollars as trade-offs." Newcomer also challenges others to recognize the gaps that impact the shopper journey or the shopper/customer experience and create consistency along the entire path. "We should champion it and link the right people within our organization to make it happen. That, in and of itself, will also help shopper marketing really stand out as a place where things are happening and where strategy for shoppers is being built." Chris Hoyt, president of Hoyt and Co., Scottsdale, Ariz., whose company works with The Hub magazine to publish its "Top 12" report on shopper marketing, believes that the silo differences that used to exist between sales, marketing, consumer insights, shopper insights, customer marketing and shopper marketing are going away. "People are getting around to the point where marketing is sales and sales is marketing, and retailers really appreciate that because it adds a perspective to the retail interface that wasn't there before."Proprietary research, he stresses, will continue to define the leaders in this space. "Retailers don't want to hear about the brand's consumer. They want to hear about their shopper," he says. "The only way I can tell them about their shopper with any kind of intelligence is to do some research. Shopper insights and research are the biggest components of shopper marketing."Agency PartnershipsHaving a dedicated shopper marketing agency has become a critical factor in many of the biggest CPGs' early success in this space. Rob Rivenburgh, COO of Southfield, Mich.-based MARS Advertising, says a main focus when working with CPG clients is optimizing the message for the medium. "Instead of just throwing tactics out on a surround-sound basis, we're looking to identify different communication messages and tactics that are hitting that shopper on their path to purchase at every single step." ConAgra's Norton says RPM Connect, Minneapolis, a wholly owned subsidiary of D.L. Ryan Cos., is a core strategic partner. In fact, Tom Brown, executive vice president, "sits on my staff as if he works for ConAgra," she says. Brown adds, "Being lock-step in the planning process is key, all the way through to post-event analyses that are done so we can really understand together where we need to go the next year."Brown says RPM Connect works to help ConAgra and its retailer partners grow their categories, but not at the expense of another retailer. In other words, it's finding a way to leverage how each retailer goes to market, slightly differentiate them and make sense to the shopper. "That's a key area that we're very conscious of and that not a lot of people are in yet as shopper marketing teams."Mark Scott, vice president of shopper marketing and business development at Kimberly-Clark, Neenah, Wis., says his team's partnership with OgilvyAction, Chicago, is important because "they get both ends of the equation. They understand the brand strategy piece, but they also understand -- because they have had people out in the field -- what it takes to get stuff done from a customer standpoint and what the customer needs and wants are."Scott McCallum, managing director of OgilvyAction, says a fundamental change happened in the last year at Kimberly-Clark. "Now we see brand people who aren't just thinking about the consumer, but about the consumer and shopper and how that will apply at retail." McCallum applauds K-C for the communication, training and education efforts it has committed to the discipline. "It's not just about organizational structure, and not all about where you allocate resources," he says. "They've also invested in education in a big way. That has separated the men from the boys, so to speak, among the CPG manufacturers."

P2PI MEMBERS

JOIN P2PI

You May Also Like

Hall of Fame Profile: Pamela Velarde

Hall of Fame Profile: Stephen Bettencourt