What happens when that is wrong?  What does marketing do when it STARTS with the purchase?

This is an extreme version of what Procter calls “store back”.  However, based on shopper insights research I have conducted, I believe that, for grocery products, over half of first-time purchases are unplanned; in fact, the shopper might not even have been aware of the product before buying it.  In those cases, it all STARTS with the purchase and ENDS with awareness.  The purchase funnel is totally flipped.

When it all starts with the purchase, the role of marketing communications changes.  Now marketing must get the product noticed at shelf and impart meaning to it instantaneously for the shopper.  Packaging, shelf placement, thematic displays, signage, mobile messages that are location-aware, shopper offers based on that shopper’s history, and master brand familiarity become the main vectors for creating meaning.  In this communications model, when someone encounters a product they were unfamiliar with they should be able make sense of it instantly; to tell YOU (the marketer) what the product is about, rather than you having to tell them in a concept statement.  After the product is bought and being used, there is more sense-making that occurs.  If the consumer is really into the product as they are using it, now you have an opportunity to build engagement:  they might join a community, become a fan in Facebook, share comments, start seeking out advertising and recalling it, seek out the brand’s “creation story”, etc.  In this scenario, the impact of brand narrative, brand values, social media engagement, etc. come AFTER the purchase, so they solidify rather than precondition the brand-customer relationship. 

Could it really be that it all starts with the purchase?  Well, for certain types of products and retailing situations, I believe it does.  Consider this:

• Conduct a study to measure the percent of products bought for the first time that are discovered in-store (I got 50%+)
• Do you think the products bought for the first time on impulse in a Kroger’s, Trader Joes, Costco, Target, etc. are all the same and were previously known? If not, then you believe that brand adoption can START via the shopping experience.
• Consider shopping styles that people have, reflecting their relationship with a product category.  Can you imagine categories (e.g. artisan cheeses) where shoppers like to explore and find new interesting products to buy?

This last point is perhaps the most important.  People have different shopping styles for different product categories which means that the heuristics they use to make decisions are systematic.  You might not ever buy carbonated soft drinks the way you buy interesting dips that you just tried at a tasting station.  This is where behavioral economics intersects marketing; the study of how people decide is often more interesting than theoretical purchase intentions.  Hence, some products will predominantly be bought via a process that starts in-store.  Others will be bought based more on the traditional marketing model requiring awareness built via mass media. You need to study HOW people decide in order to understand when to start from the traditional end of the funnel and when you start from the other end of the funnel.

When it all STARTS with the purchase, everything that you thought was upstream becomes downstream and the thing that was the most downstream of all, the purchase, becomes the most upstream event. 

This is “store back” on steroids.

Now, the researcher in me has to ask the rhetorical question, “Does the marketing community have the research tools to act on this new way of thinking?”  Rhetorical because, I don’t think we do.

Online research panels proven to produce different results

The ARF foundations of quality research compared results from the exact same questionnaire across 17 online research panels (including all of the big ones) fielded at two different points in time (2 weeks apart).  We found that the test retest reliability of each panel was high but that results differed across panels by more than you would think based on sample sizes (n=2,000 per panel per wave).  This insight led to the ARF Quality Enhancement Process, a series of metrics, planning, and reporting templates intended to control for this effect.

Cell phones are primary for close to 40% of US households

The most recent CDC NHIS survey found that 23% of all US households are cell phone only (46% of those aged 25-29) and another 15% have landlines but are cell phone primary.  We are changing the way we connect.  Landlines have become less important than cell phones and for many, talk is becoming a less important method of communication than text and social media updates.

The Media Ratings council has said that media research must have a solution for this, implying that landline-only research can no longer be equated with probability sampling.  Nielsen, Arbitron, and Knowledge Networks have all switched to addressed-based sampling methods to restore probability sampling properties.

Listening becomes a source of insights and marketing intelligence that anyone can access

Listening is a way of hearing in real time what people WANT to talk about, rather than what marketing wants to talk about.  People express themselves in their own words rather than the interviewer’s vocabulary.  Google’s team of economists proved that what people are searching for predicts many things from the geographic spread of the flu to auto sales right down to the brand.

Marketing research is no longer a gatekeeper to rich consumer insights as marketing, customer care, corporate communications, agency of record planners can now can tap into Twitter, forums, etc. directly. Only by listening would J&J have known they needed to pull the Motrin campaign.  One of the Ogilvy Award winners, the NBA, needed listening to find the way fans’ express and share their passion.  The research team must embrace listening as well as asking (i.e. surveys) to remain relevant and get to the front-end of marketing innovation.

Marketing research still struggling to be recognized as having significant impact

The ARF research transformation initiative has brought many leaders together and conducted executive interviewing in 2009 among 20 research leaders.  The consensus is that the research team is often brought in too late in the process, viewed by many below the C-suite as an expense rather than an investment, and as an impediment rather than an enabler.  We must prove that research creates an indispensible runway between the consumer and the boardroom that leads to making the right calls on big, future-focused issues that result in business growth.

Media companies and advertisers form CIMM

The leading media companies and advertisers came together to create the Coalition for Innovative Media Measurement, making a clear statement to the industry that they intend to turbo-charge innovation in media measurement.  Why?  They believe existing media metrics are not keeping up with the fast-paced evolution towards the multi-tasking, multi-platform, long-tail way that people consume media.

Shopper research takes center stage at understanding the effects of the recession

Numerous studies about the effect of the recession focused on changes in shopping patterns and increases in buying store brands.  In other words, shopper research became as important as consumer research this year, especially on the big issue that was keeping marketers up at night.  Marc Pritchard (leading marketer at P&G) has been emphasizing “store back” marketing.  The ARF formed a shopper insights council to inform media planning and the new era of winning at retail.  We foresee a powerful convergence of mobile and shopper marketing.

Marketers have always been more focused on brand-building than what happens at retail.  Marketing research has always been more comfortable with consumer research than shopper insights.  This must change.

Six big wakeup calls in 2009 are doing our profession a favor; refocusing us on what it will take to conduct trustworthy research, find unexpected feedback, provide anticipatory insights, measure media in a way that people now choose to experience it, and properly rebalance our understanding of how people choose brands by placing more emphasis on understanding the shopper.

• Media habits approach: How does a marketer’s target consumer spend time with media and specifically, which media properties are “target rich” environments?  For example, online publishers often use a media habits argument to explain why they should get a share of ad dollars that is closer to share of media time.
• Touchpoints influence approach: Services like Integration or Compose are centered on self-reported approaches to prioritize which brand communication touchpoints influence someone’s brand choice regarding a particular type of product/service or in conveying a certain brand benefit.

Let me add a third approach to the mix that comes from the field of shopper insights that would have a big impact on the allocation of media spending.

• “Path to purchase” approach:  Understand the journey by which shoppers come to buy a particular brand, product, or service.  Did they decide before or after entering the store? Did they do research as they started their shopping process? How did they research their purchase?  What are the media touchpoints that best map to each leverage point in the path to purchase process?

Understanding “Path to Purchase” will change marketing and media priorities.  In most cases, it is likely to increase the budget for search, comparison shopping, and particularly in-store shopper marketing vs. using a media habits approach because those places don’t have a big share of media time but they are where the “lean-forward” action is.  Shopper insights research shows that, for many products, 50% or more of purchases and brand choices are decided on right in the store.  For such products, to put it in terms that media planners can relate to, shopper marketing is like recency on steroids.

The touchpoints influence approach might miss the mapping of a touchpoint to a brand objective.  Brand teams should have two broad classes of communication goals: creating and maintaining desired brand meaning, and reminding people of the brand as close to the decision point as possible (recency). If different touchpoints best map to specific marketing goals, the logical implication is that impressions and “reach points” across media platforms are not interchangeable or additive; this suggests that multi-platform reach calculations, a main purpose of media habits studies, become more of a media insight than a quantitative measure needed for creating a media plan.

A more important media calculation might be to create meaningful recency and  “likelihood to see/hear”  (LTS)factors for different media.  For example, in comparing TV to shopper marketing, TV might have a higher LTS factor (20 or so commercials in a show vs. 40,000 SKUs in a grocery store) but a lower recency factor vs. advertising that is right at the point of purchase.  Hypothetically, cinema advertising might have the highest LTS of all touchpoints (you’re sitting in the theatre waiting for the movie to start) but a really low recency factor.  However, the recency factor itself might be less important when marketing’s main objective is “imparting brand meaning” (say during the launch of a brand).

To address these issues of how to begin integrating shopper marketing and off-premise advertising into a well-informed media strategy, on August 20^th, the upcoming ARF Shopper Insights council will bring together gurus from their respective worlds who have not been on the same panel before to discuss this issue.

• Herb Sorensen –  Ph.D., Global Scientific Director, Shopper Insights TNS-Sorensen Associates (legendary shopper guru)
• Erwin Ephron – Partner, The Ephron Consultancy (father of recency)
• Paul Donato – EVP, CRO, The Nielsen Company (media industry leader)
• Mike Hess – Director of Research, Carat Insight (branding, shopping, and media expert)

ARF members can register for this event at no charge by going to MyARF.  For those who can’t make it, I’ll report back via this blog on what should be an amazing and long-overdue discussion.

Here is my list of 10 reasons you should care about the shopper.  Please add your own reasons to the list.

#1:  50% or more of product and brand decisions are made in-store; numerous shopper insights studies agree (e.g. POPAI, Ogilvy Action). When shopping for a new car or consumer electronics, people consider multiple brands. Why isn’t brand equity enough? Why are people still deciding in-store?  What is influencing them? You need to learn how to win more than your fair share of purchases that are up for grabs.

#2: Shopper marketing offers immediacy and reach and is projected to be the fastest growing part of the media mix over the next few years.  Wal-Mart offers a bigger audience than any prime time show. Target is up there too. In the era of fragmented media audiences, delivering a huge audience, right at the “first moment of truth” should not be ignored.

#3: What people care about as shoppers is different.  As shoppers, people are in action mode.  They are making many decisions during the course of a shopping trip, filling their cart with diverse products, taking only seconds per decision.  When people are shopping they are motivated by different messages than they are as consumers (more price-related and solution-based).  Shoppers want a highly shoppable environment which is tricky because 99% of the products in the store are irrelevant to the shopper’s mission on a given trip.

#4: Shopper marketing gives you unique opportunities to be relevant. Retailers have different store formats that are geared to serve their local clientele. Some formats match the local ethnic concentration. How will your brand presentation be customized in each store format?

#5: Product marketers are getting into retail. Apple, Coach, Estee Lauder have all been successful.  Procter just bought specialty retailer chains and a number of marketers have been using pop-up stores. If you do not study shoppers, you will not see this opportunity.

#6: Shopper insights are currency for building strong customer relationships.  Retailers are battling for shoppers and seek manufacturer partners who bring insights about how people shop that translate into ideas that increase traffic, category and aisle sales.  Manufacturers must master shopper insights or they will not be chosen as “category captain”.  That means that a competitor of yours will work directly with the merchant to determine your place on the shelf…if any.

#7: Advertising agencies must master shopper marketing to have a complete offering: those who do not offer shopper marketing services will be viewed as incomplete in their messaging and media planning approaches.

#8: Shopper insights and consumer insights are different things. Consumer insights study the relationship and expectations a person has regarding brand alternatives.  Shopper insights study how people put preferences into action in the context of replenishment needs, search for solutions, promotional offers, and the retail environment.  The research tools, questionnaires, and mental models are all different.

#9:  Studying the path to purchase offers a new approach to media planning.  Some product categories are characterized by brands being decided on before entering the store (e.g. cigarettes, soft drinks, iPhones).  For them, shopper marketing is less important and off-premise is more important.  Other brands are chosen in-store mostly (store brands, lower priced alternatives, impulse items) and shopper marketing is a must.

#10: The recession is leading to big changes that are SHOPPER-centered. For example, how people plan their shopping trips, their increasing purchase of store brands, retailers de-SKUing all reflect economic pressures.

If you’re still not sure how important shopper insights are, consider what was just reported in Ad Age:  “Walmart has launched an aggressive push to have marketers divert their consumer media and marketing budgets into the giant retailer’s growing ad budget and in-store marketing programs, using a simultaneous push to clear underperforming brands off its shelves as extra leverage.”

Shopper marketing is real and the need for shopper insights is acute.