Jeffrey MaloySenior Vice PresidentCopernicus Marketing Consulting and Research

March 21, 2013

Mission Possible: Profiling Shopping Occasions for

Retail and Channel Partners

Who Am I?

Jeffrey Maloy

Senior Vice PresidentCopernicus Marketing Consulting & Research

Leading our CPG practiceFormer Director of Marketing, with multiple brand and shopper marketing assignments.Developing relationships with clients such as Kraft, P&G, Nestlé, and Hershey’s.

Helping my clients develop and execute transformational shopper marketing strategies

Get and Share ideas for developing a transformational shopper marketing strategy….

• Request this presentation and our white paper

• Send an email to: ami.bowen@copernicusmarketing.com

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SWAG!

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The Importance of Shopper Marketing

“Shopper marketing’s potential is rooted in its focus on gathering insights about shoppers when they are in the shopping mode and applying these insights to influence their purchase decision.”

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Multiple Stakeholders use – and benefit from – Shopper Insights:

Shopper Insights

Assortment Strategy Merchandising

Category Management

Selling Stories Promotional Strategy

Marketing Mix (incl. Shopper Marketing)

Creative Development

Distribution Strategy Account-Specific

Marketing IMC

Consumers and Shoppers are often different groups, requiring different marketing strategies.

Consumers Shoppers

Focus:How, when, where, why consumers use/consume the category

How, when, where, why shoppers shop/buy the category

Primary End User:

Consumer InsightsBrand MarketingR&D

Shopper InsightsShopper MarketingSales/Account Teams

Key End Uses:

MarcommInnovation

In-store, Path-to-Purchase influencers/ tactics

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Three Things You Can Do

Identify the most profitable shoppers

Understand the occasions when they buy

Isolate the “moments of truth” in their Shopper Journey

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Sunday Monday Tuesday Wednesday Thursday Friday Saturday

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Identify the Most Profitable Shopper

CREATE

Hundreds of Variables

1. Decision-Making Power

2. Attributes Desired in Store Experience, Product Category

3. Purchase Process/ Channel Preference

4. Shopping Habits

5. Demographics/ Psychographics

6. Links to Household Panels

7. Links to Shopper Card Databases

8. Links to Marketing Databases

TEST

To identify characteristics of

shoppers who offer high

opportunity: Decision-making

Power

Market Basket: Currently and Potentially

“Openness” to Brand, Retailer

PRODUCEOptimal Shopper

SegmentationFramework

Develop a Meaningful, Actionable Shopper Segmentation

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Identify the Most Profitable Shopper

In a Television Study, Five Unique Shopper Segments Emerged…

Techies Impulsives Sponges Settled Aspirers

Different Decision-Making PowerDifferent Economic ValueDifferent Demographically

Different Attitudinally and PsychographicallyDifferent Attributes Desired

Different Media HabitsVery Different in Shopping Process

Very Different in Channel Preferences

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Identify the Most Profitable Shopper

Shopper segments are distinct in terms of their “value” to manufacturer and retailer…

Series1

27%

21%

16%

11%9%

25%7%

18%

9%

16%

15%

19%

27%

22%44%

% of Buyers % of Revenues

Likelihood to Buy Potential ROI

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Techies Impulsives Sponges Settled Aspirers

Identify the Most Profitable Shopper

Shopper segments also are different in the ways to capture this “value”

Techies Impulsives Sponges Settled Aspirers

Search Process:

Involved (DIY)

In & Out (Instant Gratification)

Involved (Fact-Finding)

Uninvolved (Simple)

Uninvolved (Deal Seeker)

Channels:Online,

High-End Electronics

Big Box Stores Big Box Stores Mass Merch. Mass Merch.

Touchpoints/ Influencers:

Specs,Ratings & Reviews

Displays, Demos

Salespeople “Push,”Collateral Materials

WOM,EDLP

Deals/ Promotions, Payment Terms

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Three Things You Can Do

Identify the most profitable shoppers

Understand the occasions when they buy

Isolate the “moments of truth” in their Shopper Journey

? ?

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

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Why focus on Shopping Occasions?

People are busier than ever

Pre-trip planning is up

Of shopping trips are occasions-based (buying with occasion in mind)

62%

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The key dimensions in defining a shopping occasion:

Mission

Location

Why they shop?

Where they shop?

How they shop?

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Navigation

LAST TIME PURCHASED PERSONAL CARE ITEMS Day of the week and time of day Who with Mood? What did/errands before store All products purchased Which product(s) drove visit Which products on “list”? Which products bought on impulse?− Catalysts?

− Other in-store activities? Total dollars spent Total time in store Brand bought? If brand(s) bought were unavailable, what substitute? How selected store? Desires/wants for occasion? Desires/wants in personal store items? Post event activity—social media

Understand the Occasions When They Buy

The Shopping “Diary”

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When probing on occasions, be very thorough in your line-of-inquiry

When:

Day of week?

Time of day?

Who:

Who were you with?

Why:

What attributes and benefits are you looking for from the store and/or specific products?

Where:

Channels, Retailers, Websites

Pre-Trip: What “drivers” started the

shopping process?

What sources did you consult?

Did you make a list?

Did you talk to friends, family, colleagues, about it?

In-Trip: Where did you go first,

second, third, etc.?

What did you consider buying, at each stop?

How long did you spend in each section?

Key in-store influencers during trip?

Touchpoints most receptive to?

Decision-making process at shelf?

Post-Trip: Did you register any

products?

Did you tell anyone (face-to-face and/or via social networks)?

Did/will you review the product?

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Then use this data to develop an insightful, actionable segmentation of occasions

Collect data on several recent shopping occasions via diary

(or mobile app)X ~2,000 respondents = ~6,000 shopping occasions

Occasion 3Who?What?When?Etc…

Occasion 2Who?What?When?Etc…

Occasion 1Who?What?When?Etc…

Segment into 5-10 shopping “typologies” based on trip mission, location, and navigation.

Shoppers experience many different types of shopping occasions

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Stock UpWeekly

ReplenishmentJust In

TimeDash for

DealsTreasure

Hunt

I L L U S T R A T I V E

Different on: Sizing (opportunity) Trip mission (needs/drivers) Location (channels) Navigation (shopping behaviors/process)

Frequent Infrequent

Special Treat

The occasion will be different in terms of sizing and opportunity

It is imperative for Shopper Marketing to understand these occasions:

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I L L U S T R A T I V E

Frequent Infrequent

Stock UpWeekly

ReplenishmentJust In

TimeDash for

DealsTreasure

HuntSpecial Treat

% of Trips 28% 24% 20% 9% 11% 8%

% Spent 17% 33% 12% 17% 8% 13%

High FrequencyLow Spending

High FrequencyHigh Spending

High FrequencyModerate Spending

Low FrequencyHigh Spending

Low FrequencyModerate Spending

Low Frequency High Spending

When: Last Minute Weekly Weekly Monthly Infrequent: No Set Pattern

Infrequent: Quarterly

Why: • Immediate need due to out-of-stock

• Fill cupboard/ cabinet for week, get items on list

• Take advantage of hot deals

• Stock-Up on key staples

• Browsing for entertainment value

• Treat self to special products

Needs: • Store located close to home• Easy-to-find

item(s)• Get in/out

quickly

• Product variety• Reasonable

prices• One-stop

shopping

• Convenient store layout

• Special promotions

• Accepts manufacturers coupons

• Staple goods• Bulk sizes

• Low prices/ Value

• Enjoyable shopping experience/ environment

• Unique, hard-to-find items

• Prestige brands

• Personal selling• Ability to

sample/try

The different types of occasions will cater to different shopper missions

Just In

Time

Dash for

Deals

Stock

Up

Treasure

Hunt

Weekly

Replenishment

M I S S I O N

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Special

Treat

The different types of occasions will occur in different channels

Stock

Up

Just In

Time

Dash for

Deals

Treasure

Hunt

Club StoreGrocerySupercenter

DrugstoreC-Store

GroceryDollar Store

Mass MerchOnline

Weekly

Replenishment

L O C AT I O N

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Department Store

Specialty Retailer

Special

Treat

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The occasions also will be distinct in terms of the way shoppers navigate the Path-to-Purchase

Just In Time

Pre-Trip(Before shopping)

In-Trip(In-store)

Post-Trip(After shopping)

Make List

Review circulars

Online research (product specs, prices, etc.)

Perimeter and in-aisle

Coupons

Features, displays, TPRs, sampling

Shopper card

Loyalty programs

N AV I G AT I O N

Weekly Replenishment

In and OutOh shit!

By understanding what shoppers do inside the store, you’ll know what in-store communications vehicles are optimal during each occasion

What In-Store Communications Work? The “Last 3 Feet”

= Shelf talkers = In-store TV = Circulars = Displays = In-cart ad = QR Codes = Sales Associates

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N a v i g a t i o n

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Specifically, it is important to understand the shopper marketing tactics and/or programs that are influential during each step of the path-to purchase.

Pre-Trip: Advertising

Circulars

Digital

Direct Mail

In-Trip: Displays

Signage

Sampling

Manufacturers Coupons

Packaging/On-Pack

Promotions

Retail-tainment

Sales Associates

Post-Trip: Check-Out/Bounce-Back Coupons

Rebate Programs

Product Registration

Loyalty/Shopper Card Programs

Customer Ratings and Reviews

In-Pack Offers

Dina HowellCEO

Saatchi & Saatchi

Mobile devices have changed the path-to-purchase

Have used a smart phone while shopping in store:

77% at beginning of trip

61% in the middle of trip

43% at the end of trip

70%

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30% of US adults now have a tablet. Of these, 75% say they use it to “browse and shop for products.”

50% of US adults now have a smart phone. Of these, 38% say they use it “to compare prices while in a store.”

It isn’t about cardboard displays anymore – you need to accommodate the way shoppers behave now, and that means in stores and on-line.

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As a result, nowadays, mobile devices are being utilized throughout the path-to-purchase

Pre-Trip In-Trip Post-Trip

Mobile Advertising Mobile Coupons Entertainment

Search QR Codes Registration and Loyalty

Price Comparison Location-Based Apps, such as: Social Media

Store Locator Shopkick

Deals and Offers Foursquare

The “Shopper Landscape”

Overlaying the Shopping Occasions onto the Shopper Segmentation provides a “shopper landscape”… and insights into specific shopper marketing opportunities.

Just in Time

Weekly ReplenishmentDash for Deals

Stock up

Treasure Hunt

Special Treat

Shopper Segment

Shopping Occasions

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In each “cell”: Category $

Channels Used

Key Influencers/ Touchpoints

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The “Shopper Landscape”

Importantly, we can analyze each retailers’ opportunities using the “Shopper Landscape”

Where are they getting a good share of the buying?

Where are the growth opportunities?

What product portfolio/assortment is needed? And, by omission, which products/brands are less needed?

What shopper marketing tactics should be employed?

Dollars Movable to Retailer XRetailer X’s Current Sales

Seg 1 Seg 2 Seg 3 Seg 4

Just in Time $$$ $$$$ $

Weekly Replenishment $

Dash for Deals $$ $

Stockup $$$ $

Treasure Hunt $ $$$

Special Treat $ $$

Shop

ping

Occ

asio

ns

Shopper Segmentation

Seg 1 Seg 2 Seg 3 Seg 4

Just in Time $$$ $$$$ $

Weekly Replenishment $

Dash for Deals $$ $

Stockup $$$ $

Treasure Hunt $ $$$

Special Treat $ $$

Shop

ping

Occ

asio

ns

Shopper Segmentation

Three Things You Can Do

Identify the most profitable shoppers

Understand the occasions when they buy

Isolate the “moments of truth” in their Shopper Journey

? ?

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

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Two Ways to Identify the “Moments of Truth”

Ethnographies, ShopalongsA more novel approach: Co-Creation Sessions: Bring together in a “workshop” shoppers and marketers/agencies:

To further flesh-out the Shopper Journey

To enlighten marketers as to how shoppers really talk and how theyreally feel.

To brainstorm ways to better align the brand and experience with shopper needs, lifestyles, etc.

“Co-Creation Sessions”

COULD YOU MAKE IT SO

THAT…

I REALLY WISH THAT…

I REALLY HATE IT WHEN…

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Ethnographies and shop-alongs are the most common way to understand the “Shopper Journey.”

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Isolate the Moments of Truth

Three Things You Can Do

Identify the most profitable shoppers

Understand the occasions when they buy

Isolate the “moments of truth” in their Shopper Journey

Integrate Shopping and Consumption Occasions

? ?Sunday Monday Tuesday Wednesday Thursday Friday Saturday

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Extra

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Enlightened clients understand the “link” between shopping occasions and consumption occasions

ShoppingMissions(why they

shop)

Consumption Occasions(why they

use)

Need to understand the intersection

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You should try to connect the consumption occasion and shopping mission

Size the “cells” in grid below, and identify key products purchased/consumed

Consumption Occasions

Breakfast Lunch Snack Dinner Winddown

Shopping Occasions

Immediate Need

$ $ $$ $$$$

Regular

Replenishmen

t

$$ $$ $ $$$ $

Long-term

Stock-up

$ $$$ $ $

Browsing $ $$

Immediate Need Dinner = Easy Meal Solution:Mom shopping for products for tonight’s

family dinner.Low/no preparation required.Meal whole family enjoys.Total meal solution

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By understanding the underlying need and “market basket” during these occasions, retailers and manufacturers can develop powerful shopper marketing tactics and programs (e.g., cross-promotions)

Identify Need: Conduct Market Basket Analysis:

Deliver Shopper-Centric Solution

Easy Meal Solution Buy Frozen Pizza or Rotisserie Chicken,

Get Free 2-Liter Soda

Sources: Retail POS Homescan Panel Data Shopper Card Data Survey Data

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Conclusions

Shopper Marketing is increasingly complex: there are so many options

To develop an effective and efficient strategy:

Have a clear – and profitable -- target shopper in mind

Identify -- and value -- the different occasions on which they shop and buy

Understand the shopper “journey” and key “moments of truth”

Leverage the right touchpoints throughout the shopping process

1. Who? 2. When? 4. How?3. Where 5. For What?

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Conclusions

Offer a relevant solution to shoppers

At key “Moments of Truth” in

their Journey

Increased foot traffic and market

baskets

+ =

The Key to Success

Understand the “Shopper

Landscape”

+

Just in Time

Weekly Replenishment

Dash for Deals

Stock up

Treasure Hunt

Special Treat

Shopper Segment

Shopping Occasions

In each “cell”:

Category $

Channels Used

Key Influencers/ Touchpoints

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Understanding shopper occasions benefits all key stakeholders: a win-win-win

Shopper

RetailerManufacturer

/Brand

Better shopping experience

Increased foot traffic and market baskets

Increased brand purchase and loyalty

(203) 831-2375

Jeff.Maloy@copernicusmarketing.com

Jeffrey Maloy, Senior Vice President