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Progress Report from the Retail Commission on Shopper Marketing

By Steve Frenda

Here's a progress report, in the form of FAQs, on the groundbreaking work of the Retail Commission on Shopper Marketing (RCSM).

First and foremost, save the date: April 21-23 is the Institute's annual In-Store Marketing Summit. This year's theme is "Conquering the Path to Purchase." At the Summit, The Partnering Group's (TPG) Dr. Brian Harris and John Clutts will unveil a "Shopper Marketing Best Practices" Industry Report that will outline the Commission's findings to date. TPG has led and facilitated the Commission's work in partnership with the Institute and its other members.

What is the Commission?

The Retail Commission on Shopper Marketing, comprised of leading U.S. retailers, exists to develop a new model of collaboration for consumer product marketers and their retail partners. Unlocking the power of shopper marketing through a rational, deliberative process will enable retailers to effectively leverage manufacturers' insights, data and other resources in transformative initiatives that will enhance the shopping experience and increase customer loyalty while driving same store sales and profits improving business results for both parties.

Why is it significant?

Shopper marketing is expected to reshape the future of retail, but until now, there has been no "road map" to guide the collaborative process. Hence, the retailers on this Commission, in collaboration with key strategic advisors, seek to establish and develop a meaningful, new industry standard for such a process.

What will be the Primary deliverables of the Commission?

A "Shopper Marketing Best Practices" Industry Report will be presented at the In-Store Marketing Summit in Oak Brook, IL on April 21-23, 2010. Through this report, the Commission will:

  • Define the philosophical underpinnings and business methods driving shopper marketing
  • Identify what's at stake and address how to harness the shopper-marketing energy now available from manufacturers
  • Define retailer requirements: strategic, operational, organizational
  • Demonstrate how to outline the strategic, operational and organizational requirements that retailers will need to harness the potential of shopper marketing, and discuss the importance of integrating this new discipline into current business practices
  • Discuss the vital role that consumer packaged goods companies have in helping their retail partners develop effective, differentiating shopper marketing programs
  • Establish a new industry standard for collaboration to drive sales growth and shopper satisfaction

Who "owns" the Retail Commission on Shopper Marketing?

The RCSM is "owned" by its Retailer members. It was formed through the generosity of The Coca-Cola Company as primary sponsor, and it is supported by 12 other manufacturers and agencies. But the manufacturer and agency "advisors" are just that. While it's vital to obtain input from all industry constituents as we establish a new framework for collaboration, the Retailers have been (and will continue to be) driving this project.

The Commission will continue to meet and review the research and analysis being completed by The Partnering Group as they compile findings into the industry report. Pilot studies will continue throughout the spring and summer and will be appended to the industry report throughout the balance of 2010. It is important to note that while this work will be copyrighted by The Coca-Cola Company, TPG and the Institute, it is intended to be distributed as "open source" to achieve wide adoption in the industry.

Key Entities Involved

  • The 10 retail chains at the core: Food Lion, Giant Eagle, Marsh Supermarkets, Meijer, Schnuck Markets, ShopRite, Supervalu, Walgreens, Walmart and Wegmans.
  • The Coca-Cola Company is the original and primary sponsor of the Commission.
  • The Strategic Advisory Group comprises nine manufacturers and three shopper marketing agencies that serve as strategic advisors and financial supporters of this initiative. They include representatives from Campbell Soup Co., Clorox Co., Hershey Co., Hewlett-Packard, Kellogg Co., Kimberly-Clark, Johnson & Johnson, Sara Lee, Chiquita, Mars Advertising, Arc Worldwide and TPN.
  • The In-Store Marketing Institute is the organizer and facilitator of the year-long initiative.
  • The Partnering Group is leading the discovery process and the development of the new model. Its chairman, Dr. Brian Harris, is renowned as the "father" of category management, which revolutionized the retail industry during the 1990s.

If you have hung on this far, bless you! Here are some additional operational questions regarding how a fully developed Shopper Marketing (SM) program might be manifested. More in-depth answers to all of these questions will be included in the workshop on 4/21.

Here are some additional FAQ's regarding how a fully engaged Shopper Marketing (SM) program might operate:

  • Who is responsible for the SM process at the retailer and at manufacturer? Since SM is a cross-functional activity, process responsibility and accountability within each organization must be communicated to the respective partners. Care must be taken to ensure that the empowered individuals are involved and the appropriate commitments to the plan are obtained.
  • Once an SM plan is established, how will it be communicated? This is an issue of both a socialization and change management. Both partners make commitments to the plan and those commitments must be communicated within the two organizations. While this might seem obvious and related to the previous question, with several departments involved from both partners, a process for ongoing SWOT communication is necessary.
  • How will the issue of silo behavior be addressed? Organizational silos and resulting competing objectives must be pacified. At many manufacturers, individual business units and functions may take a myopic view of business relationships with retailers that optimize their particular areas but diminish the overall business opportunity. Some retailers do not effectively leverage their full merchandising and marketing capabilities, thereby missing more strategic opportunities or reducing effectiveness. Aligning these various factions around Shopper Marketing will be a critical requirement for success on both sides.
  • How will we handle the issue of shopper segmentation? Manufacturers and retailers employ different shopper segmentation schemes that reflect their core customers. Agreements must be made, and processes developed, to align the data.
  • How will we define success? Desired outcomes must be clearly spelled out along with the measure metrics: Increased sales, margins, shopper satisfaction, etc.
  • How do we achieve transparency about the funding for SM programs? Will funding be shared, or will the retailer expect the manufacturer to bear most of the costs -- in addition to any existing trade and customer-marketing spending? Can the industry reach an understanding of SM as an opportunity to optimize existing funds and assets to change shopping behavior for the mutual benefit of retailer and manufacturer?
  • What's the process for establishing a framework for timing? It's critical that sufficient time be allocated for strategy alignment, program design and execution.
  • How important is confidentiality and what role does data sharing play? The success of the SM relationship relies on strict confidentiality of shared information between retailer and manufacturer. It will be important to realistically assess the capabilities and responsibilities of both sides to provide key data (e.g., shopper insights and information).
  • What best-practice recommendations will the Commission make in terms of specific marketing services (panel, segmentation, modeling mix, field organizations, etc.) or vendors? The Commission's work has deliberately stopped short of that, for now. It is hoped that by using the framework being created, the data and tools available in the marketplace will be refined to meet the resulting needs as outlined in the Commission's report. We see the post-April time period as critical for refining these downstream activities.

Finally, here is a link to a presentation (.pdf) on the subject that was given by Dr. Brian Harris of the Partnering Group, Diane Wallace of The Coca-Cola Company and Janet Sparkman of SUPERVALU. This will provide you with a great overview of the conceptual framework that is being developed as well as some of the perspectives of Commission Members.

Please feel free to contact me, Peter Hoyt at the Institute, or Brian Harris or John Clutts of The Partnering Group, if you would like further information on this critical industry initiative.

I hope to see you at the In-Store Marketing Summit in April.

Best Regards,

Steve Frenda
Managing Director, Strategy and Development
The In-Store Marketing Institute



Published: March 2010

Source: In-Store Marketing Institute

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