Simon Hathaway (pictured below) discusses the future of in-store communications and says direct marketing will play an increasingly vital role.

These are exciting times for shopper marketers, with the approach becoming increasingly popular as brands realise that to win in a recession they need to win in-store.

Successful integration of all the disciplines that shopper marketing encompasses is, more than ever, essential to effectively turn shoppers into buyers and improve the shopping experience in the process.

Direct marketing has always been an extremely valuable tactic within the shopper marketing approach, but the future heralds an even more significant role.

Yesterday was about Return On Investment
Shopper marketing and DM should both view ROI as one of the reasons they have been so successful over the last few years, compared to other communication mediums – both are extremely measurable. But while ROI has been (and always will be) important, the unprecedented economic circumstances we have seen have had further consequences for the marketing industry. In fact we are facing a greater demand for effectiveness, but across the whole spectrum of marketing activity.

Today is about Return On Integration
As a result, all global brands are looking for the most efficient and effective use of the whole marketing spend. This is why marketing today is all about ‘Return On Integration’.

For marketing strategies to be fully integrated and therefore more effective for less money, brands should take a discipline agnostic approach. This means the personal context of shoppers (ie where they are, what they’re doing, how they’re feeling and whether they are in consumer or shopper mode), should drive your choice of media channels. While shopper marketing suffers from a lack of a concrete definition, an enlightened few have worked out that it is about more than just wobblers in-store. As an approach that puts the shopper at the heart of the communications mix, smarter marketers will also understand that it’s a highly effective way to plan your communications. This is why we’re now seeing shelf-back solutions that use a variety of marketing disciplines at the full range of touchpoints from till to TV.

Of all those disciplines, direct marketing is increasingly important for FMCG brands and retailers’ shopper communication strategies, for two reasons in particular:

Firstly, the shoppers of today are planning a lot more; 75 per cent claim they will only buy items that are on the shopping list they leave the house with. If your product is not on the list it won’t get put in the basket as shoppers seek the emotional benefit of feeling in control. This makes direct marketing very effective for influencing the planning phase of the shopping cycle and therefore impacting the consumers shopping list.

Secondly, more and more retailers are adopting clear store policies and charging for all in-store media opportunities – and it’s not cheap. This is another reason why clients are increasingly moving to context-based media planning, and in-store comms strategies are being designed to work together with direct marketing.

Inevitably, some brands are complaining that it is harder than ever to secure work in-store, but the upside for the consumer is improved shopability, with more insight-based, sophisticated in-store communication. Simply put, there was too much cardboard that cost too much for retailers to produce and maintain. It was also becoming less and less effective as the consumer has become increasingly resistant to disruptive communication methods.

As a result, marketing as a whole has moved from a disruption model of communication to an attraction model, and shopper marketing has focused more on targeting consumers before they get to the store itself. The single best example of this in the UK has been Tesco’s Clubcard. With the amount of data it has, it can effectively model and target every household in Britain.

Tomorrow will be about Return On Involvement
However, as I stated at the beginning of this article, I believe the future will see DM take an even more significant role within the overall approach of shopper marketing. The next era in marketing will not be concerned with generating a ‘return on integration’ but rather a ‘return on involvement’ as part of a wider shift to the model of a ‘participation economy’.

Just as the shoppers of yesterday needed to be informed, today’s now need to be engaged. But the shopper of the future will have to be inspired.

The economic climate has forever changed how consumers are operating. Not only are they are spending their money differently and becoming harder than ever to engage, the technology they are using to shop is changing rapidly. In future, to close the deal with your product in their basket you will have to inspire shoppers to actively participate in an improved shopping experience and generate a ‘return on involvement’. New retail communications technology will be absolutely key in achieving this.    

There has been a lot of talk about what RFID technology can do in the future, especially when it is combined with smart trolley solutions and the club card type data that is now available to many retailers. Everyone is agreed that until the RFID chip comes down in cost, it will stay a stock control, rather than a marketing tool.

Most believe that in-store screen technology represents the retail channel of the future. I agree, but ask why retailers should invest the capital in-store when the screen already exists in the shopper’s hand. Smartphone technology will be one of the most effective ways for brands and retailers to connect with shoppers. Firstly, it’s an interactive, involving solution that the vast majority of shoppers are highly familiar with – 85 per cent of people have a mobile phone on them when they shop. But this also provides brand marketers with a route around the barriers retailers are putting up.

One area that has seen particularly explosive growth is iPhone applications. In the US, for example, Kraft foods has launched its ‘iFood Assistant’. For 99 cents shoppers can download the app – which enables them to browse recipes, add items to a shopping list, view suggestions for dinner and store favourites into an online recipe box, it even includes a grocery store locator. These branded applications, which act as tools to help people shop, are essentially a highly involving form of direct marketing. 

Another great example is Virgin’s iPhone app, based around its ‘Flying without fear’ course. Consumers willing to part with the small sum of £2.99 receive relaxation exercises, fear therapies and a personal video introduction from Sir Richard Branson himself. While the application is not explicitly designed for in-store use (although airplanes are becoming more and more like retail destinations themselves day by day), it is still a direct marketing tactic that achieves one of shopper marketing’s main goals – removing barriers to purchase.

Of course, both shopper marketing and DM are data driven and these sorts of mobile shopping tools can upload shoppers’ behavioural data while inspiring them to act, whether that’s jumping on a plane or trying out a new recipe. This can feed into any related DM activity and enhance a brand’s understanding of its customer base. If customers are willing to pay for a tool they go on to use on a weekly or even daily basis, a huge amount of trust is generated between the consumer and the brand in question.

More than ever, we are being asked to inspire shoppers, generate involvement and encourage participation. Mere engagement will just not be enough. The future of retail marketing will see DM tactics increasingly aligned with shopper marketing strategies.

I can see the day, and not too far away, when products could be launched with a focus wholly on shelf-back communication, without any TV spend at all. Increasingly, we are seeing global FMCG investment switching in-store. I believe this will be supported more and more by data driven, highly targeted direct marketing activity in which shoppers can actually take part.

   Simon Hathaway is CEO UK/EMEA Saatchi & Saatchi X