SHOPPER MARKETING
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Five Keys to Success in Shopper Centricity
Shopper centricity is one of the fastest growing and most proven strategies for
manufacturers and retailers to increase their long-term competitive advantage through
greater relevance.
“Companies that have implemented this holistically have been able to see a 5% or more sustained increase in sales and profit,” says Brian Ross, president of Precima, a shopper-driven insight and strategy firm.
From Precima’s benchmark studies, the percentage of companies identifying shopper centricity as a top-three strategic imperative has grown from 75% to 90% in three years. Ross presented five keys to success in implementing a shopper-centric strategy:
Organizational commitment to shopper centricity
Most executives tend to want to talk about successes, but it can be more valuable to consider why things didn’t work. Universally, the cause of success or failure is not because of problems with insights, it’s because of execution, and in most cases, challenges in execution have to do with having the right organizational commitment. This is critical and has to be the starting point.
An enterprise shopper strategy built on insights
It may sound obvious to say that if a firm is going to go down a shopper centric path, it needs a shopper strategy. But there are many companies that would consider this step done because they have a segmentation, or they have shopper insights, and they think that is the same as a strategy. It’s not. In Precima’s view, companies have to go one step beyond knowing who their shoppers are before they can start to determine how they are going to use the insights from different shoppers to fundamentally change how they do business. It has to extend beyond segmentation and insights, and translate into a blueprint for building a shopper strategy, as well as getting that shopper strategy aligned across the organization.
“Change management” to transform the organization
There has to be a phased implementation in change management plan to accomplish this. Some companies talk a lot about the core disciplines of the science of change management. Those are critical. But when we talk about change management in most organizations, it means significant change to process, people, organizational structure and decisions. That can’t be done overnight. More often than not, a lack of success is caused by trying to do too much too fast, and not having a measured plan. This typically takes three to five years, and the patience required to do it goes back to the need for an organizational commitment. Also, for all of those who are responsible for implementing some part of shopper centricity, they will benefit by making sure that there is a plan, and that plan is communicated upwards so management understands this is a phased evolution.
Integration of shopper strategy and insights into all facets of the business
This is the most critical aspect. If there is a new insight, that insight has to deliver a new decision. Companies have to translate shopper insights into specific decisions and tactics, whether that is assortment, pricing, promotion, one-to-one marketing, targeted marketing, loyalty, store experience, store layout, store service, store format, or competitive response. Whatever the tactic is, to make shopper centricity work, companies have to connect the dots between strategy and execution. They need a very specific plan of how they are going to translate a broad, high-level strategy into a series of actions.
New capabilities, resources, processes and tools
For organizations to change in accordance with that plan, they have to build out their capabilities, resources, processes and tools. This doesn’t mean that they have to make the entire investment up front. Often companies try to implement a vastly different way of doing things with the same resources, processes and structures. For example, today’s category manager becomes tomorrow’s shopper-centric person. That’s a very difficult translation to make for the individual and the teams because the skill sets are different, and there have to be supporting capabilities.
Why do companies go through all of the effort? “Simply put, because shopper centricity works,” Ross says. Shopper centricity results in increased sales, profits and competitive advantage through an integrated strategy aligned to the most important shoppers.
“This will transform the way in which retailers and manufacturers work, and the time now is to build those capabilities. Those who have done it have seen massive advantages. Those who don’t do it risk being left behind and not being able to catch up. There has never been a better time to be in this space. There is an opportunity to both understand and engage with shoppers in a more meaningful way,” he concludes.
This article was abstracted from a seminar at the third annual LEAD Marketing Conference in Chicago hosted by the Shopper Technology Institute. The presenter was Brian Ross, president of Precima, based in Toronto. Precima is a shopper-driven insight and strategy firm operated by LoyaltyOne, an Alliance Data company. More information can be obtained at www.Precima.com.
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