A blog series on Shopper Marketing.
By Cyndi Pyburn
The history, goals and needs of the manufacturer and retailer are unique and different. Understanding these differences can help to build a true partnership between both parties. To start, the CPG manufacturer and retailer have much in common. Both strive for:
Yet, often times, they are so far apart in terms of their ability to collaborate. Let me explain.
The CPG world is all about marketing. In fact, the marketer is king. Why? Marketers are responsible for P&L and growing revenue. Marketing in this world is very button-down and methodical – it is a ‘science’, a profession requiring marketing training. In contrast, the retail world is highly entrepreneurial with a ‘learn-as-you-go’ mentality — one could say learning from ‘the school-of-hard knocks’. Retail is fast-paced and decisions made require both ‘art & science’.
In addition, the goals and needs of CPG manufacturer and retailer are quite different. As a CPG marketer, your day-to-day efforts are focused on the goals of:
- Increasing brand awareness
- Increasing brand growth
- Increasing brand revenue
In order to successfully do so, CPG marketers must:
- Understand the consumer mindset
- Develop strong brand marketing to beat out the competition
- Develop a long-term strategy for future growth via innovation
CPG success metrics are all about:
- Increasing category share
- Increasing volume
- Increasing profit
Retailers on the other hand are focused on very different goals:
- Differentiating themselves from the competition
- Managing margins
- Winning store by store
Retailer success therefore depends upon:
- Understanding the shopper to drive category sales
- Understanding adjacencies
- Understanding multi-channel avenues
Success metrics for retailers include:
- Increasing penetration
- Increasing frequency
- Increasing basket size
The competitive set is also quite different. Differentiation for the manufacturer comes at the brand level — brands align to a good, better, best strategy. For the retailer differentiation is seen at the banner level – conventional, discount, specialty.
Enter the role of shopper marketing
While CPG marketers are responsible for different brands, the CPG sales team is responsible for the entire portfolio of brands. Most often, sales and marketing are silo’d. The sales team interfaces with the retailer and has the keenest understanding of their needs. Ideally they need to secure granular shopper insights that marketing cannot provide as marketers collect information on the consumer. Therefore, the role of shopper marketing in CPG organizations is on the rise. Its success is rooted in what we at SW+A call Triple C™.
Defining Triple C™ success considers the retailer (gaining new category shoppers), brand (gaining new brand buyers) and end-user (gaining fair price for shopping & brand experience) = a triple win.
This is one simple framework that when understood, helps to pave the way for a successful CPG-Retailer partnership. CPG manufacturers that understand the need for a Triple C™ win can build a strong retail partnership by:
- Understanding the retailers’ issues and point-of-view
- Thinking beyond brands with insights that increase store traffic, boost category sales and build loyalty for the retailer
- Thinking strategically and not always tactically
- Bringing customized and innovative plans & programs to the table
- Providing shopper insights about the category
- Collaborating with other brands
Shopper marketing is about the hard truths of categories and sales. Thinking of your business relationships, do you have a Triple C™ view to partnership and success?