Global Retailing Trends: World View

From Asia to Europe to Australia to South America, Shopper Marketing queries consumer packaged goods professionals who work outside the United States about shopper behavior, retailer relations, path-to-purchase activity, etc., in their particular markets.Ken Whitaker, Vice President, Sales and Marketing,Kimberly-ClarkExperience in Market: 10 months in China, 12 years in Asia.Market Nuances: "It's a vast, complex market that is growing rapidly. Shoppers are spoiled for choice both online and offline, are curious about new brands, and are willing to experiment with new ideas and concepts. Perhaps the biggest nuance, though, is the growth of e-commerce and how quickly Chinese shoppers are adopting this channel for selected categories such as disposable diapers."Shopper Marketing: "The idea started only a couple of years ago, and most manufacturers are still in the early process of understanding their shoppers and how they make decisions. A few retailers (mainly foreign) are now beginning to utilize data to better understand the path to purchase, and they invite their vendors to help analyze and recommend solutions that could be better applied to the discipline."The Shopper: "The channels and store formats in urban China seem to evolve and change weekly, and this fast rate of evolution at retail brings constant change. Chinese shoppers go to stores frequently, and most Chinese consumers are very open-minded and willing to learn about and try new things. However, as traditionally pragmatic and value-conscious shoppers, they do exercise fair judgment in pricing vs. the product quality. We're seeing an increasing trend from established brands to weave an emotional component into their brand positioning. Since there are dozens of competitors, if not hundreds in most categories, it's a challenge for marketers to differentiate effectively."Working With Retailers: "It's a highly fragmented market in which the top 10 retailers account for less than 10% of retail sales. Most retailers are focused on expanding their geographic coverage and building their retail brand as a first priority. They're increasingly open to vendor insights about shopper behavior, but since retail execution continues to be an ongoing operational opportunity, themed promotions, imported brands and in-store 'promoters' are the most widely used vehicles of cooperation between vendors and retailers."Path-to-Purchase Activity: "Online forums facilitate the Chinese reliance of word of mouth as validation of a brand's quality and value. Chinese consumers are inundated with an enormous amount of branded messages every day – by some estimates, up to 3-4 times the impressions that an American consumer witnesses."Coupons: "Couponing is used very little in China."Specific Activity: "It's not unusual to walk into a packed hypermarket teeming with shoppers on a weekend and see 15-20 'promoters' engaged in product demonstrations and assertive consumer intercept techniques attempting to both sample and sell. It creates a carnival-like atmosphere with product, people and promotions galore. Large hypermarket retailers run free shuttle buses from housing estates to their stores to encourage greater awareness of what they offer – and to sell more merchandise."Sarah Lonorgan, North West Europe and Nordics Knowledgeand Insights Director, The Coca-Cola Co.Experience in Market: Three years.Shopper Marketing: "Shopper marketing is a cornerstone of the Coca-Cola business in Northwest Europe and the Nordics."The Shopper: "Shopping habits vary massively by market based on the trade structure that exists and cultural norms. Shoppers in markets with a high proportion of convenience outlets, such as in Great Britain, shop three times as often as those in markets like France, which has a much greater hypermarket culture. There are also significant differences that exist based on the growth of discounters and online shopping. When compared with U.S. markets, we see similarities in the types of missions conducted, but both the amount in the basket and the types of products in the basket vary greatly."Working With Retailers: "From a creativity perspective, it really depends on the customer rather than the market."Coupons: "Couponing is the No. 1 money-saving strategy adopted by consumers in France, Great Britain and Sweden."Specific Activity: "The upcoming Olympic Games in Great Britain will be a once-in-a-lifetime event. We will make sure our consumers and shoppers get to experience the magic of the Games."Olga Sokolova, Category Management Manager-Food, Unilever RussiaNadezhda Butrimova, Senior Category Manager-HPC, Unilever RussiaExperience in Market: Sokolova, seven years; Butrimova, nine years.Market Nuances: "The Russian market is quite unique, differing by channel and by category. Modern trade is not yet highly concentrated, and the traditional channel plays a great role. Russia is a huge territory, so many trends are different in different regions."Shopper Marketing: "Shopper marketing is a discipline that evolved quite recently. Producers and retailers started seeing the shopper as the center of their work and began concentrating their plans and activities around shopper needs. In 2009, retailers and manufacturers started to analyze shopper behavior in different channels and categories."The Shopper: "Russian shoppers are less demanding than American shoppers. The most important criteria for choosing the store are proximity, assortment and pricing. The level of service in stores is not very high. Russian shoppers are very sensitive to promos and are not focused on buying multipacks, even in hypermarkets."Working With Retailers: "The situation is improving; key retailers in Russia are willing to share information about who their target shoppers are. But sales data and trends are not something they want to share."Coupons: "Coupons are not popular and are hardly ever used. Retailer loyalty cards, however, are very popular."Damian Pirichinsky, Shopper Marketing Director,Colgate-PalmoliveExperience in Market: Two years.Market Nuances: "Despite being the largest economy in Latin America, Brazil has one of the lowest per capita incomes. Over the last five years, more than 17 million Brazilians migrated from poverty to 'C class' – which now represents 53.6% of the population. It's important to note the increasing amount of women entering the workplace, which has created a boost in family income and a big change in the shopping behavior."Shopper Marketing: "Shopper marketing is a fairly new discipline in Brazil but is rapidly growing and getting traction with FMCG companies and retailers. In-store shopper marketing initiatives represent the bulk of the shopper activities. Digital is emerging but has a long way to go compared to the U.S."The Shopper: "During the last two decades, the country experienced strong economic growth that has transformed shoppers' expectations. They're no longer looking for just basic products to meet their needs; they are interested in and willing to pay for product innovation that will make their life easier and help them feel better. Today's Brazilian shopper is becoming more demanding and less loyal, and tends to plan less. She's shopping across more retail outlets and is not afraid to try new brands or pay more for added-value products."Working With Retailers: "Retailers are placing an increasing value on insights that are specific to their region and retail environment. Colgate has built a solid trust and strong relationship with our retail partners. We have completed several initiatives with our customers such as aisle reinventions, strategic merchandising system programs and category demand solutions to increase category relevance and interaction/engagement with shoppers."Coupons: "Coupons are not prevalent in Brazil and, in our experience, are not used across Latin America. There's an emerging trend of digital coupon services like Groupon.com, but it has yet to become a common practice."Metrics: "Typically we use a combination of the following metrics to determine the success of our retail marketing activities: sales growth (category growth and brand growth), share of market growth (Colgate and customer), basket analysis/mix, shopper satisfaction (shopability, ease to navigate/shop, engagement, likability), conversion to the category and subcategories, customer satisfaction and ROI."Jane Hoban, Vice President, Global Drug Channel and AS Watson, UnileverExperience in Market: 12 years.My Job: "I own delivery of drug channel sales globally, lead beauty-based customer marketing activities, build capabilities and showcase best practices."The Shopper: "I believe consumers are 80% the same. The differences are cultural, social, wealth-based, geographical, etc., and can be influenced by the current retail landscape and access to technology in any given market."Working With Retailers: "Retailers worldwide are hungry and very receptive for shopper insights. Generally speaking, though, retailers are reluctant to share their own insights unless suppliers agree to pay for the privilege. In developed markets like the UK, we get immense value from this arrangement. But in developing markets, it's less due to the capabilities of people on both sides of the fence to do anything with the data. I believe it is harder to work with U.S. retailers who are more sophisticated. Retailers in developing markets are far more likely to take risks and learn and adapt from implementation."Path-to-Purchase Activity: "Digital adoption varies across markets, with many developing countries skipping desktops and accessing the Internet via smartphones. The use of digital also varies across categories. For example, a very high percentage of health and beauty purchases are made online in China – a rate significantly higher than any other country worldwide. The reason is same-day delivery for top China online sites."Agustin M. Otero, Customer Development Centreof Excellence, UnileverExperience in Market: 15 years.Market Nuances: "Argentina has very fragmented channels, with relevant presence of hypers and supers [i.e., global customers Walmart and Carrefour], strong wholesalers, big traditional trade and drugstores, so we need to build specific plans by channel and by geography as we also have big differences by region."Shopper Marketing: "Since 2001, shopper marketing has been a core part of the business. In recent years, shopper marketing has become more mature, linked to joint business plans, and category management processes are shared with retailers. It's a key element in every meeting; a guideline for business decisions."The Shopper: "Housewives rule the roost. Her awareness about brands, prices, benefits, quality, competitive advantages, etc., gives her authority in the household. Eighty-one percent of shopping trips in Argentina are to make small purchases. Even at hypermarkets, most shoppers make small purchases. Ninety percent of payments are in cash. Location is the main reason to choose a shopping place. 'Close' means near their home, or along their usual itinerary. Location does not only mean convenience, it also means saving time and money."Working With Retailers: "Local context forces everyone to be creative to win the shopper's wallet, so there are constant promotions by season, geography – different types in order to differentiate and add value."Coupons: "Couponing is not a strong habit in Argentina. Some retailers have couponing programs, but it's not widely spread across the market, and redemption rates are low."Metrics: "Share of market is the key KPI to measure success. Other KPIs are also tracked depending on the type of promotion. For big promotions, there's also shopper engagement research in-store."Hamish McLeay, Director, Category Solutions,Campbell Arnott's Asia PacificExperience in Market: 14 years.Market Nuances: "There are two retailers [Woolworths, Coles] that hold the majority share of the dry grocery market. There are also a large number of independent stores, while Costco [three years] and Aldi [11 years] have emerged recently."Shopper Marketing: "Shopper marketing is now its own discipline within the market – albeit a fairly new area of focus that has evolved rapidly over the past five years. Historically, it has been labeled 'trade marketing' where the focus and span of scope existed within the four walls of the store. Today, it takes on a much more holistic approach – one that puts both the shopper and consumer at the heart of commercial planning."The Shopper: "The typical shopper profile would be similar to the U.S. Main grocery buyers are aged 25 to 54 years. This definition is sharpened significantly when defining shopper targets for a specific brand or category."Working With Retailers: "Both Woolworths and Coles are reasonably well resourced with category and shopper marketing/events teams that have a strong focus and desire to innovate in this space. Our retailers are receptive to the insights [both local and global]."Coupons: "Couponing is in its infancy in the Australian marketplace. Thus, unlike the U.S., it is certainly not an entrenched behavior."Cecilia Hidalgo, Shopper Marketing and Trade Events Director, PepsiCo MexicoExperience in Market: 16 years.Market Nuances: "Mexico's market is highly fragmented with an important percentage skewed toward traditional trade stores [down-the-street stores], where shoppers can find an array of categories ranging from food and perishables up to personal care and house products."Shopper Marketing: "It is only beginning. While there are companies that have been doing trade marketing for several years, there are only a handful, mainly multinationals, that have actually been doing shopper marketing and/or programs and initiatives based on a deep shopper understanding and their behavior."The Shopper: "There is no typical shopper. Trip missions and socioeconomic levels influence shoppers and their behaviors. Shoppers with lower income levels, and who receive daily payment, tend to do more daily purchases for perishables and more urgent trip missions, largely due to smaller houses with less room for storage. The middle classes, who visit supermarkets, mainly do this for pantry-loading with biweekly visits."Coupons: "Couponing is not big in Mexico. Shoppers would rather get free product and instant-win promotions than have to go through the hassle of using coupons. However, some shoppers prefer using loyalty cards, which allows them to get discounts on specific products and points to later exchange for collectibles such as dish sets, knife sets, cookware, etc."Yanira Cordova, Associate Category Advisor for Walmart Puerto Rico, Newell RubbermaidExperience in Market: 11 years.Market Nuances: "In one of my categories, hair accessories, some segments are bigger than others because Puerto Rico has hot weather and most women use elastics, jaw clips and twisters to roll up their hair. With brushes, the bristle is important because Latin women have thick hair."Shopper Marketing: "Shopper marketing is a discipline in Puerto Rico because Walmart is in our market, and this customer is looking for marketing opportunities and behaviors every day. Walmart is the largest chain on the island. For a category advisor, shopper marketing is imperative for category review and to understand shoppers' behaviors."The Shopper: "Ads are very strong, and customers look for ads before they go to shop. Stores being open 24 hours started recently, and we're seeing that customers are going to shop all the time. This was a test for Walmart that worked and will stay. A special characteristic for Puerto Rico is that every event, from boxing to the Miss Universe pageant, is an event to celebrate. People love to share with friends, have BBQs, cook, and have fun with their families."Working With Retailers: "Outside of Walmart, local retailers do not share POS data to validate customer product sales. They don't have a complete system, for that matter, and what they do have, they don't want to share with suppliers. They believe more in space management. The U.S. is more creative, but we have good programs for our market and size. Multinational companies try to bring best practices that apply to our market. Walmart came in and is still expanding, especially the supercenters. An important point is that Walmart's culture has been modified to our market, which is very different than the U.S. Walgreens is evolving to satisfy our culture also. Stores are changing and bringing more local items."Path-to-Purchase Activity: "The U.S. is more advanced with technology, while in Puerto Rico much of it is evolving. Our shoppers like to visit retailers better than shopping online."Coupons: "Our market is not coupon-friendly; shoppers rely for the most part on weekly ads."Alexander Cruz, Associate Customer Marketing Manager Foods, UnileverExperience in Market: 14 years.Market Nuances: "Nearly 64% of Puerto Ricans are overweight, so shoppers are looking for healthier options when buying their groceries. Couponing is not as popular as in the U.S.; less than 20% of shoppers use them."Shopper Marketing: "It depends on the company you work for. Unilever of Puerto Rico has a shopper marketing mindset."Retailer Relations: "We have retailers that are easier to work with than others, but that is a fact of life. We can be as creative as in the U.S. or another country. It's a matter of what works in your market and how to make it bigger, bolder and relevant for your shopper."Path-to-Purchase Activity: "Typically, our shoppers' path to purchase consists of having a need, choosing an outlet after carefully studying retailer's weekly ads, visiting the store and buying the product there. With a 45% Internet penetration, the digital influence is gaining momentum."Metrics: "Besides internal sales and syndicated market data, we have developed a series of internal audits that allowed us to determine how successful a retail marketing activity was – all of this behind Unilever's "Perfect Store" concept, which challenged us to ensure that our shoppers get the right products, at the right place, at the right quality, at the right price – all the time."Mabel Martinez Ortiz, Customer Marketing Manager – Personal Care and Foods Categories, UnileverExperience in Market: 25 years.Market Nuances: "We have a full menu of national stores, and they are expanding and new ones are arriving. Recent openings: Forever 21, Victoria's Secret, Sephora and even a PF Chang restaurant. Walmart is the island's leading retailer. Walgreens, the leading retail drugstore chain, marked the 50th anniversary of its local operations in 2010."Shopper Marketing: "Our market has been evolving from a mindset of consumer behavior to the holistic view that shopper marketing brings a new retail approach to connect with consumers at the point of sale. National retailers have included shopper understanding as part of their growth agenda, especially Walmart. Additionally, for the last 2-3 years top local key retailers have strengthened their focus on shoppers."Retailer Relations: "Our top retailers are now more open than before to leverage the business partner relationship where both may win. They are asking their suppliers to have a more focused attention and transparency in terms of category strategies and how they will impact positively their overall sales."Path-to-Purchase Activity: "With digital, we have been really evolving a lot! More local retailers are creating their sites, posting features, promotions, announcing special events."Specific Activity: "The launch of Dove Men was a best practice – well-rounded. In foods, Knorr bouillons line extensions were a success, integrating a local chef and aligning to the trend of cooking more at home and acceptance of celebrity chefs."Robert Visconti, Director of Shopper Marketing, Kimberly-ClarkExperience in Market: 10 years.Market Nuances: "Retail trade is more concentrated in Canada than in the U.S., allowing for more concentration of shopper marketing resources. In many of the biggest categories, a handful of Canadian retailers own a significant share of the market, so we have to get the messaging right in these locations."Shopper Marketing: "Shopper marketing has made significant strides in Canada over the last three years, albeit not yet at the same level of sophistication as in the U.S."The Shopper: "A multi-screened, multitasker who seeks to get the most value out of every dollar while satisfying the needs and wants of her family. Canadians are more optimistic than their American counterparts, but they're motivated by many of the same factors, with value being the most important. Our shoppers are researching more and making shopping lists and sticking to them. They're also very concerned about the environment and are adopting mobile tools and smartphones with great speed."Working With Retailers: "Our retail partners are very receptive to shopper marketing programs. Some are very supportive of collaborating on activation of brand commercial programs, while others focus more of their efforts on their own corporate brands in conjunction with CPG vendors. In-store shopper marketing vehicles are generally less accepted at Canadian retailers vs. their U.S. counterparts."Path-to-Purchase Activity: "Circulars are still a primary shopper driver, and all major retailers use this vehicle 52 weeks a year. E-commerce remains significantly underdeveloped here, and the digital/mobile retailer path doesn't yet have the same importance as in the U.S. However, digital/online use in Canada over-indexes vs. the U.S., so shopper marketing in the digital environment is expected to rapidly expand in the near future."Coupons: "Retailer consolidation has led to more reliance on trade promotions, generally reducing the impact of coupons at shelf. Canadian shoppers are at a disadvantage from Americans in that they don't have the ability to take advantage of the 'coupon-stacking' phenomenon currently seen in the U.S."Specific Activity: "The U by Kotex back-to-school program in 2011 was customized for a variety of retailers in Canada. Walmart Canada's experiential program hit our target where they live and play. During this program, 25,000 samples were handed out at the Katy Perry Canadian concert series in Toronto, Montreal and Ottawa. The program was such a huge success that we had to shut down the microsite due to overwhelming demand. It had a positive halo effect on our regular Kotex branded products."Melissa Martin, Director, Customer and Shopper Marketing, Kraft CanadaSteve McGraw, Director, Customer and Shopper Insights, Kraft CanadaExperience in Market: Martin, 15 years; McGraw, 19 years.Market Nuances: "The Canadian marketplace is somewhat unique. Five retailers make up almost 73% of all groceries sold, and Walmart is not No. 1, 2 or 3. Private label is mainstream in Canada and has had approximately a 20% share for more than 20 years. In relative terms, there is no such thing as a Hispanic market in Canada; we have two national languages, English and French. Eighteen percent of Canada's population is considered visible minorities, and 50% are of Chinese or South Asian descent."The Shopper: "The Canadian shopper is much more discerning than our counterparts to the south with respect to the perception of value. To Canadians, value is much more than a price/quantity relationship. Canadians seek significant value in the lifestyle perception of the foods they purchase. For example, do they project a healthy lifestyle, or are they fresher, less processed foods? Are they grown locally? The key here is that they do not want to feel marketed to; there has to be a story that demonstrates how a food or a brand fits into their lifestyle. To Canadians, it's all about being authentic. If a manufacturer's communication is not one of authenticity, shoppers will not buy into the proposition. Additionally, once they buy the product, it needs to deliver quality in order to be considered again for repeat purchase."