Shopper Marketing

Introduction

Juan Morillo Bentué, PhD

Learning Objectives

1. Basics key concepts: retail, shopper marketing, consumer, retail

management, channel, trade marketing
2. Importance of retailing and shopper marketing
3. Current situation, trends and data
4. The future of retail and challenges
Basics key concepts
Basic & Key Concepts

Retailing
All the activities involved in selling goods or services directly to final consumers for
their personal, nonbusiness use.

Retail management
The various processes which help the customers to procure the desired
merchandise from the retail stores for their end use.
Retail management includes all the steps required to bring the customers into the
store and fulfill their buying needs.

Marketing channel (or distribution channel)

A set of interdependent organizations that help make a product or service
available for use or consumption by the consumer or business user
Basic & Key Concepts
Trade Marketing
Trade marketing is a wider marketing discipline that aims to increase demand with
supply chain partners such as wholesalers, retailers, or at the distributor level,
rather than just at the customer level

Consumer Marketing
Consumer marketing is defined as creating and selling products, goods and
services to individual buyers, as opposed to trying to appeal to businesses.

Merchandising
Merchandising includes all the promotions done at a retail store to make the
consumers buy the products at the store. In other words, merchandising is
planning the marketing of the right products at the right place and right time in
the right quantities to help the retailer reach his goals.
Shopper Marketing

“Shopper Marketing is the use of insights-driven marketing

and merchandising initiatives to satisfy the needs of targeted
shoppers, enhance the shopping experience, and improve
business results and brand equity for retailers and
manufacturers.”

• Insights-driven
• Targeted shoppers
• The shopping experience
• Improve business results and Brand equity
PRODUCT CONSUMER SHOPPER
Retail & Marketing Mix
Marketing channel
(or distribution channel)

Promotion Product
Producer

Wholesaler

Retailer Place Price

Consumer
The traditional process of Distribution of Goods and Services

Manufacturer Wholesaler Retailer Consumer

The retail system involves all the business activities that are concerned with selling
goods and services directly to ultimate consumers.

The utility of the retailer’s offering and price jointly determinate the value the
retailer creates for its customers. Since the perceived utility of an offering
determines how much a customer will be willing to pay for it, the greater the utility
relative price, the higher the value of that offering to the customer.
Importance of retailing
Retailing
• It offers direct interaction with customers/end consumers.
• Formalized and Brand-dominated activity
• Important activity in the economy and its impact on society
• Customer service plays a vital role in the success of retail business.
• Sales promotions are offered at this point only.
• Location and layout are critical factors in retail business.
• It offers employment opportunity to all age groups irrespective of age and
gender, qualification or religion etc.
• In almost all countries, retail outlets are more than any other form of business.
• Sale volume is comparatively large in quantities but less in monetary value as
compared to exporting/manufacturing.
The importance of retailing

Retailers normally perform two major complementary functions.

• One is the satisfaction of consumer needs and wants
• The other is providing an outlet for production.

Retailing has become a significant force during the past century.

It’s the primary point at which most people have contact with the
world of business.

Retailer have grown into some of the world’s largest companies,

Functions of Retailers

1. Merchandising, a process which includes the purchase of an appropriate

assortment of products and to ensure the pro table sale of these products.
2. Operations, also known as store management, includes activities such as
store maintenance, receipt and distribution of merchandise, as well as offer
sales-support activities and customer service.
3. Promotions, include all activities that concern with communicating the
retailer’s message to the public through advertising, displays, publicity,
public relations, special events and promotional activities of the store.
4. Control, which deals with the financial aspects of the business, that is,
accounting procedures, employees’ payroll, sales tallies, customer and
supplier bills.
5. Personnel, which involves employee selection, training, advancement and
welfare.
Retail: creation of value

• Offering the right merchandise

• Creating a good shopping experience
• Decreasing the risk of shopping
• Making shopping convenient
• Reduce price by controlling cost
Retail: Adding value to products

• Ensuring the right products are bought to meet the needs of the
customers
• Displaying the products for customers to touch and feel before they
make a purchase decision
• Allowing the customers to buy in individual or multiple units
• Making available sales associates to demonstrate the products or
answer any product queries
• Selling the product at a competitive price
• Allowing customers to exchange or refund a product that is not
suitable
• Offering other personalized services such as delivery, gift wrapping,
repairs, etc.
 Coffee
…

or
Starbucks…
A store is…

A space of Consumer
experience
An imagination machine
EXPERIENCE DIMENSION

A meeting point
A Brand communication
space
A test lab

A Dynamic database

A market research source

A sales machine

BUSINESS DIMENSION
Classification of Retailing Formats
There are two kinds of retailers

Store retailers usually operate from a fixed location and serve walk-in
customers.

Non-store retailers reach out to customers at their homes or offices by:

• Electronic or online formats
• Catalogues or mail order
• Door-to-door selling
• Telemarketing
• Television or radio
• Vending machines
Ownership Based
• Independent Retailers − They own and run a single shop, and determine their policies
independently. Their family members can help in business and the ownership of the unit can
be passed from one generation to next. The biggest advantage is they can build personal
rapport with consumers very easily. For example, stand-alone grocery shops, florists,
stationery shops, book shops, etc.
• Chain Stores − When multiple outlets are under common ownership it is called a chain of
stores. Chain stores offer and keep similar merchandise. They are spread over cities and
regions. The advantage is, the stores can keep selected merchandise according to the
consumers’ preferences in a particular area. For example, Westside Stores, Shopper’s Stop,
etc.
• Franchises − These are stores that run business under an established brand name or a
particular format by an agreement between franchiser and a franchisee. They can be of two
types −
• Business format. For example, Pizza Hut.
• Product format. For example, automobile sector, Ford
• Consumers Co-Operative Stores − These are businesses owned and run by consumers with
the aim of providing essentials at reasonable cost as compared to market rates. They have to
be contemporary with the current business and political policies to keep the business
healthy. For example, Sahakar Bhandar from India, Puget Consumers Food Co-Operative from
north US, Dublin Food Co-Operative from Ireland.
 Merchandise based
Format Description Target Market Value Emphasis

Large stores which are divided into discrete departments selling a

One-stop store catering to varied
Department stores wide range of diverse products such as cosmetics, clothing, home Mass
customer needs
furnishings, toys, electronics, etc

Large self-service stores that sell a wide variety of goods such as One-stop store catering to varied
Supermarkets Mass
food, toiletries, household products, etc customer needs

Wider choice for that specific range

Small stores which concentrate on selling a specific range of
Specialty stores Narrow of merchandise and allow brand
merchandise and related products
comparisons where possible

Small self-service stores which sell a limited line of fast-moving food Convenient location and long
Convenience stores Mass
and non-food items, are usually well located and operate long hours opening hours

Discount stores Stores that offer a wide range of products at discounted prices Mass Low price

Low prices and satisfy all of

Very large self-service stores that offer an enormous range of
Hypermarkets Mass customers’ routine weekly shopping
products under one roof
needs

Convenience without having to move

E-tailers Stores that sell goods on the Internet Mass
around
Retailer Marketing Decisions
Retailer Marketing Decisions

Segmentation, Targeting, Differentiation, and Positioning Decisions

Retailers must first segment and define their target markets and then decide how they
will differentiate and position themselves in these markets

✓What consumer to target?

✓Do target shoppers want variety, depth of assortment, convenience, or low
price?
✓Store differentiation and competitive advantage

Until they define and profile their markets, retailers cannot make decisions about
product assortment, services, pricing, advertising, store décor, online and mobile site
design, or any of the other decisions that must support their positions
Retailer Marketing Decisions
• Product assortment and services decision
Retailers must decide on three major products variable: product assortment, services mix,
and store atmosphere/experience
• Price decision
A retailer’s price policy must fit its target market and positioning, product and service
assortment, the competition, and economic factors.
• Promotion decision
Retailers use various combinations of five promotion tools . Advertising, personal selling,
sales promotion, public relations, and direct and social media marketing – to reach
consumers.
• Place decision: location
Retailers often point to three critical factors in retailing success: location, location, and
location! It’s very important that retailers select locations that are accessible to the target
market in areas that are consistent with the retailer’s positioning.
✓Shopping center is a group of retail business built on a site that is planned,
developed, owned, and managed as a unit
Retailer lifecycle
The retail lifecycle
Current situation, trends and data
 A brief history of retail

• Mass production
• Local and global competitors
• Informed consumers
• Convenience…
Source: A study by PwC Belgium and Gondola Group
Retail: Past, Present & Future
Major retail format • More convenient
• Less time consuming
• Experience
Only convenience, low prices &
less time consuming???
TERRY LUNDGREN, FORMER CHAIRMAN | MACY'S, INC.

https://youtu.be/14tWt-k2T4M
Retail Evolution

The retail industry is a dynamic one, always adapting to better cater to customers.
For the past decade, we’ve seen a handful of updates and advancements that have
propelled the industry forward. No matter how much the industry changes, the
idea that “customer experience is king” will always stay the same.

To understand the past — as well as the future — of retail, it’s critical to understand
any institution, including the retail industry, “is linked to the progression of the
economic and social system” (Harvard University’s N.S.B. Gras. In 1939). In other
words, retail is at the effect of economic and social forces and must constantly
adapt as it seeks to win customers and create the ultimate customer experience.
Retail Evolution

Over the years, the approach to delivering an exemplary customer experience has
shifted. And as we move deeper into the digital age, retailers must focus their
efforts on three key areas while looking toward the future:

• Workforce
• Supply chain
• Bridging the gap between the physical and digital worlds
Retail Evolution

• The retail sector is in a period of renewal and reinvention. A major demographic

swing is underway, with Millennials replacing Baby Boomers as the dominant
generation. Millennials, and other digital native generations that will follow, bring
with them a high-degree of technological savvy — as well as a host of new
expectations for retailers.

• This new breed of shopper is more connected to devices and data, more
comfortable moving seamlessly across multiple media channels, and generally
more informed than ever before. For possibly the first time in history, shoppers
are in the driver’s seat, not retailers.
Retail Evolution

• Retailers must learn to respond to the demands and needs of these consumers to
survive and thrive in the coming years. These new connected shoppers will be
focused on experience — and expect shopping to be like other facets of their
lives: personalized and tailored to them. More and more, shoppers will demand
one-to-one connections and interactions with brands. Merchants need to learn to
operate in this new seamless world, and create engaging shopper-centric
experiences.

• Despite these shifts the new generation of connected shoppers will continue to
make most of their purchases in brick-and-mortar stores because online shopping
has failed to deliver fully with them in one critical area: experience. If retailers
can learn to engage these shoppers and create differentiated and exceptional in-
store experiences, connected shoppers will want to shop at their stores.
Retail Evolution

• To help retailers engage with the new breed of shoppers and meet their
expectations, new retail technologies, are already available. Companies are
creating opportunities for forward-thinking retailers to take advantage of new
data, analytics, and instore engagement technologies to help shape and create
exceptional in-store experiences, capture new shoppers and grow their brands
through this period of change. These companies are allowing retailers to bring
the future into their stores today. Change, while potentially daunting, brings
opportunities for any retailer brave enough to move ahead of the wave. Retailers
can implement solutions now to become more shopper-focused, and bring the
future of retail to their stores today.

• The retail industry has undergone a significant transformation over the past
decade, and it continues to evolve quickly.
Retail Evolution Overview

• Led by advancements in digital channels, 2018 has been kind to retail in the US,
with the market reporting growth every month so far after a record-setting 2017.
Even so, the face of the market is quickly evolving, and retailers must adapt to
new shifts in demographics, attitudes and consumer preferences.

• In 2019, the market will be defined by emerging technologies that change the
way consumers interact with their favorite brands, a shift in preferences, and the
emergence of new battle lines for e-commerce
Retail Evolution
Are bricks-and-mortar shops really doomed, as the
headlines seem to suggest?
Retail remains the single largest private sector employer in the UK, with one in 10
people working in retail, and annual sales totaling a staggering £358bn.
Despite the alarming headlines on the demise of the British high street, online sales
still only account for 17pc of total retail sales in the UK, according to the Office for
National Statistics.
Britain’s retail landscape is dominated by supermarkets such as Tesco, Sainsbury’s,
Asda and Morrisons, followed by department stores such as John Lewis.
Technology retailer Dixons Carphone also makes the top 10, along with Boots,
according to market research firm Global Data.
But Amazon muscled into the top five this year (behind the supermarkets), and
now accounts for £4 in every £100 spent in the UK.
 Kantar Retail’s 2017 Top 50 Global Retailers (EUR)

Source Kantar Retail © 2017

 Kantar Retail’s 2017 Top 50 Global Retailers (EUR)

Source Kantar Retail © 2017

 Top 10 retailers

Source: Global Powers of Retailing 2019 | Top 10 highlights

 Record growth of retail revenue in FY2017

Source: Global Powers of Retailing 2019 | Top 10 highlights

 World's Largest Retailers by Country
• Mexico: FEMSA Comercio, S.A. de C.V., Convenience/Forecourt Store; no. 100 in
global retail ranking
• United States: Wal-Mart, Hypermarket/Supercenter/Superstore; no. 1 in global retail
ranking • Netherlands: Ahold Delhaize (formerly Koninklijke Ahold N.V.), Supermarket; no.
14 in global retail ranking
• Australia: Wesfarmers Limited, Supermarket; no. 21 in global retail ranking
• Norway: NorgesGruppen ASA, Discount Store; no. 110 in global retail ranking
• Austria: Spar Holding AG, Supermarket; no. 93 in global retail ranking
• Portugal: Sonae, SGPS, SA, Supermarket; no. 167 in global retail ranking
• Belgium: Louis Delhaize S.A., Hypermarket/Supercenter/Superstore; no. 108 in global retail
ranking • Russia: PJSC "Magnit", Convenience/Forecourt Store, no. 57 in global retail
ranking
• Bermuda: Signet Jewelers Limited, Other Specialty; no. 153 in global retail rank
• South Africa: Steinhoff International Holdings N.V, Other Specialty: no. 68 in
• Brazil: Lojas Americanas S.A., Discount Department Store; no. 185 in global retail ranking global retail ranking

• Canada: Loblaw Companies Limited, Hypermarket/Supercenter/Superstore; no. 30 in global

• South Korea: Lotte Shopping Co., Ltd., Hypermarket/Supercenter/Superstore; no.
40 in global retail ranking
retail ranking
• Spain: Inditex, S.A., Apparel/Footwear Specialty; no. 38 in global retail ranking
• Chile: Cencosud S.A, Supermarket; no. 64 in global retail ranking
• Sweden: H & M Hennes & Mauritz AB, Apparel/Footwear Specialty; no. 42 in
• China: Gome Home Appliance Group, Electronics Specialty; no. 81 in global retail ranking global retail ranking
• Denmark: Dansk Supermarked A/S, Discount Store; no. 114 in global retail ranking • Switzerland: Migros-Genossenschafts Bund,
Hypermarket/Supercenter/Superstore; no. 39 in global retail ranking
• Finland: Kesko Corporation, Home Improvement; no. 126 in global retail ranking
• Taiwan: 54 President Chain Store Corp., Convenience/Forecourt Store; no. 154 in
• France: Carrefour S.A., Hypermarket/Supercenter/Superstore; no. 9 in global retail ranking global retail ranking
• Germany: Schwarz Group, Discount Store; no.4 in global retail ranking • Thailand: CP ALL Plc., Convenience/Forecourt Store; no. 75 in global retail ranking
• Hong Kong SAR: A.S. Watson Group, Drug Store/Pharmacy; no. 51 in global retail ranking • Turkey: BİM Birleşik Mağazalar A.Ş., Discount Store; no. 149 in global retail
ranking
• Italy: Coop Italia, Hypermarket/Supercenter/Superstore; no. 72 in global retail ranking
• UAE: Emke Group / Lulu Group Internationa,
• Japan: Isetan Mitsukoshi Holdings Ltd., Department Store; no. 83 in global retail ranking Hypermarket/Supercenter/Superstore; no. 141 in global retail ranking
• United Kingdom: Tesco PLC, Hypermarket/Supercenter/Superstore; no. 11 in
global retail ranking
Source: The balance small business
 U.S. most valuable Retail Brands - Statistics & Facts

Source: https://www.statista.com/
 Retail trade in Europe - Statistics and Facts

Source: https://www.statista.com/
 Fashion & Accessories

Source: https://www.statista.com/
 Total number of Nike retail stores worldwide from 2009 to 2018

Source: https://www.statista.com/
 Food & Beverage

Source: https://www.statista.com/
 Health & Hygiene

Source: https://www.statista.com/
Retail eCommerce sales worldwide (2014 – 2021)
eCommerce share of the global sales (2015 – 2021)
Retail eCommerce Sales Worldwide (2015 – 2020)
UK Retail eCommerce Sales (2014 – 2019)
UK Smartphone Retail Ecommerce Sales (2016 – 2021)
 Top 25 e-commerce retailers in Europe Turnover 2017 in
Million €
Company name Country of origin Main sector Online Turnover Europe in mio € total turnover % online sales
2017 2017 2017
Amazon USA All sectors except food 30400 30400 100%
Otto Germany Fashion 11534 13653 84%
Sainsbury's UK Food/ All sectors 6007 30037 20%
Apple Inc Luxembourg Consumer electronics 4770 47680 10%
Tesco UK Food/all sectors 4748 67840 7%
Zalando Germany Footwear, leather and fashion 4119 4119 100%
Next PLC UK Fashion 2942 4671 63%
E. Leclerc France Food/all sectors 2760 34500 8%
El Corte Ingles Spain all categories 2676 8111 33%
John Lewis Plc UK Fashion 2303 4430 52%
Carrefour France Food/all sectors 2278 56947 4%
Metro Group (Mediamarkt/Saturn) Germany All sectors 2205 32.800 7%
YOOX NET A PORTER group limited Italy Fashion 2200 2200 100%
Shop direct UK Fashion, homeware, electronics 2190 2190 100%
ASOS Plc UK Fashion 2181 2181 100%
Cdiscount (Casino group) France Consumer electronics 2137 20900 10%
ASDA (Wallmart) UK Food/all sectors 1940 24936 8%
Inditex Spain Fashion 1851 15430 12%
Ocado Ltd UK Food/ All sectors 1660 1660 100%
Mark & Spencer UK Fashion 1563 12024 13%
Dixons Carphone UK Consumer Electronics 1560 11997 13%
Migros Switzerland All sectors 1511 25190 6%
Darty France household electronics 1489 7448 20%

Source: https://www.retail-index.com/E-commerceretail.aspx
Jeff Bezos on Wallmart vs. Amazon

https://youtu.be/RkPDdPPjTPM
The future of retail and challenges
The future of Retail
 The future of Retail: experts opinions
• Retailers must adopt the “four pillars of Amazon success” to thrive, Bryan
Eisenberg, Founder and CMO, IdealSpot
• Delivering personalized experiences will be the key, Melissa Gonzalez,
Chief Pop-Up Architect, The Lionesque Group
• The days of one-size-fits-all customer service are over, Jim Roddy,
President, Innovative Retail Technologies
• Retailers must be prepared for Amazon’s no-click future, Steve Mader, Vice
President – Digital & Retail Insights, Kantar Retail
• Retailers will use technology to strengthen customer relationships while
making operations easier, Brent Spicer, CEO, Collect Apps
• Retailers will increase their efforts to set up fully integrated systems,
Jessica Pearse, Events + Product Marketing Specialist, Unleashed Software
 The future of Retail: experts opinions
• Many of the fundamentals will stay the same, Ryan Baker, CEO, Timely
• Retailers should expect an uptick in competition, Kevin Loomis, VP-Product
Development & Co-Founder, Ecomdash
• The future of retail will be transparent, dynamic, and seamless, Keith Anderson,
VP, Strategy & Insights, Profitero
• Retailers must make authentic connections, Bridget Johns, Head of Customer
Success, RetailNext
• The future of retail is mobile, Jon Worley, CEO of Proximity Marketing division,
Proxama
• Retailers must get back to the basics, Luigi Mallardo, VP of Global Sales and
Marketing, Whisbi
The biggest challenges faced by the retailers
Digitalization: impact of
technology in the points of
sale
Going omnichannel: combination of efforts and commercial synergies between on-
line and the physical store will be the key to attract and retain
the shoppers.
Creating an in-store customer
experience: The rise of experiential retail
 Informed Shopper

Satisfy a new shopper much more informed and,

therefore, more demanding, who not only looks for
a good price but also a fully satisfactory and
memorable shopping experience.
The rise of
subscription e-
commerce
Making e-commerce
shipping faster
The glass box and
brands-as-a-culture
Employee Expertise
Data
Customer centric & customization
Jeff Bezos on Amazon Business Strategy - How They Succeed and Thrive in Everything

https://youtu.be/tSzzjJd5BHk
Retail & Big Data
• To make Walmart Pharmacies more efficient
Walmart uses simulations at the pharmacy to find out how many prescriptions are
filled in a day and to determine the busiest times during a day or month. This data
helps the pharmacy with staff scheduling and to reduce the amount of time it takes a
prescription to be filled
• To improve store checkout
Walmart is testing how to use big data to improve the store checkout experience. By
using predictive analytics, stores can anticipate demand at certain hours and
determine how many associates are needed at the counters. By analyzing the data,
Walmart can determine the best forms pf checkout for each store: self-checkout and
facilitated checkout.
• To manage the steps of a supply chain
Walmart uses simulations to track the number of steps from the dock to the store. This
allows the company to optimize routes to the shipping dock and track the number of
times a product gets touched along the way to the customer. The company also uses to
analyze transportation lanes and routes for the company’s fleet of trucks. The data
helps Walmart keep transportation costs down and schedule driver times.
• To optimize product assortment
Through analysis of customer preferences and shopping patterns, Walmart can
accelerate decision-making on how to stock store shelves and display
merchandise. Big data provides insight on new items, discontinued products
and which private brands to carry
• To personalize the shopping experience
Big data allows Walmart to identify a shopper’s preferences to develop a
consistent and delightful shopping for baby products, Walmart can use data
analysis to personalize mobile rollback deals for parents and help them live
better by anticipating their needs
Becoming More Data Centric for a Better Customer
Experience

• We have been the first hotel company to use Digital Check in. If you are a Hilton Honors
member you can book through an app and select the room you want. Also, in hotels in
the US, a few in other countries, including this hotel, you are able to use your mobile as
the key to open doors.
• Our software includes apps to gather important info about customers (CRM - Customer
Really Matters) so that we know their preferences and anticipate to their needs.
• We have a satisfaction tracking system (SALT - Satisfaction and Loyalty Tracking System)
• We collect e-mail addresses at check in, and upon check out, automatically, the system
sends a survey which, if answered, is tallied by question to obtain a satisfaction
percentage level. Only 9’s and 10’s are considered good answers. So if we say we have 67
% satisfaction, it means that % of guests is fully satisfied.
• We also include a comments box, which we analyze to implement corrective actions.
Shopper Marketing

Introduction

Juan Morillo Bentué, PhD