Supercharging shopper solution results: Improving returns through shopper marketing and trade promotion alignment

A new Strategy& survey reveals that there is a select group of shopper marketing leaders that are capturing more influence with retailers and better returns. They achieve this by identifying and pursuing the right solution platform priorities, aligning their sales and marketing organizations to better focus on their platform priorities, and developing new funding and planning processes to support better decision making, greater lead time, and superior execution.

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Supercharging shopper solution results Improving returns through shopper marketing and trade promotion alignment


About the authors

Amsterdam Coen De Vuijst Partner +31-20-504-1941 coen.devuijst Chicago Penny Boswell Principal +1-312-578-4883 penny.boswell

Cleveland Steven Treppo Partner +1-216-696-1570 steven.treppo London Richard Rawlinson Partner +44-20-7393-3415 richard.rawlinson Jon Van Duyne Senior Executive Advisor +44-20-7393-3346 jon.vanduyne

New York Matthew Egol Partner +1-212-551-6716 matthew.egol San Francisco Nick Hodson Partner +1-415-653-3500 nicholas.hodson

Matthew Egol is a partner with Strategy& based in New York. He focuses on strategy and capability development work with clients in the consumer packaged goods, retail, marketing services, and media industries, and he leads the firm’s work in shopper marketing. Jon Van Duyne is a senior executive advisor with Strategy& based in London. He is a member of the leadership team for the firm’s trade promotion excellence practice and focuses on increasing trade promotion, sales, and marketing effectiveness through process, technology, and organizational improvement. Penny Boswell is a principal with Strategy& based in Chicago. She focuses on go-to-market strategy and sales and marketing capability development in the consumer packaged goods and retail sectors.

This report was originally published by Booz & Company in 2012.



Executive summary

Alignment between trade promotion and shopper marketing is essential to optimizing investments in shopper solutions. A new Strategy& survey reveals that there is a select group of shopper marketing leaders that are capturing more influence with retailers and better returns. They achieve this by identifying and pursuing the right solution platform priorities, aligning their sales and marketing organizations to better focus on their platform priorities, and developing new funding and planning processes to support better decision making, greater lead time, and superior execution.



Better alignment, better results

Consumer packaged goods (CPG) manufacturers can capture greater returns and competitive advantage by more closely aligning shopper marketing initiatives with trade promotion activities. When this alignment is achieved, shopper marketing programs will produce significant gains in return on investment (ROI) and brand equity, while also strengthening relationships with retailers. Recognizing that the consumer is not always the shopper, and that there are important touch points at home, on the go, and in the store that can be used to reinforce brand equity and convert sales, CPG companies increasingly design brand marketing programs to include a shopper marketing component. In most cases, shopper marketing complements trade and consumer promotion activities, overlaying a shopper solution on a price promotion in collaboration with a specific retailer. Shopper solutions offer added value beyond price discounts, and simultaneously create motivation and drive action. As detailed in our annual report on shopper marketing prepared for the Grocery Manufacturers Association (GMA), shopper solutions typically feature two or more products that can be purchased together.1 For example, a solution might bring together multiple categories and brands from across a store, such as a display that combines snacks, condiments, serving products, and charcoal to entice shoppers to transform an everyday meal into a cookout for family and friends (motivation) and provides the ancillary products needed to create it (action). The better the alignment between trade promotion and shopper marketing, the better the returns on shopper solutions. Coordination between the two disciplines is essential because, no matter where shopper solutions are executed on the path to purchase, their objectives virtually always include driving shoppers to the store and increasing the size of their baskets. Indeed, most shopper solutions involve customized displays and communications that are built around a trade promotion event staged with a particular retail partner. As such, their success requires the full support and involvement of account teams and retail partners.
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If alignment of shopper marketing and trade promotions is neglected, it is difficult to attain the full potential of shopper solutions. In fact, a recent Strategy& survey of 49 sales and marketing executives at major CPG companies reveals that many of the pain points associated with shopper marketing are directly related to the lack of cooperation and collaboration at the intersection of trade promotion and shopper marketing (see Exhibit 1).

Exhibit 1 Shopper marketing pain points
Retailers gravitate to price discounting in their shopper communications even for shopper solutions that are meant to provide additional value beyond pricing It is challenging to sell in programs that combine brands from multiple categories to retailers We spread our investment and resources against too many events rather than fewer, bigger programs Shopper marketing programs make it challenging to measure the ROI for trade promotion events We have too little lead time to execute solutions effectively with retailers and with other manufacturers It is hard to build the business case for investment within the organization

Retailer alignment




Retailer alignment

53% 39%

14% 8% 47%


Program strategy

Program measurement

39% 41%

4% 43% 2% 43%

Program execution

Organizational alignment


10% 39%

“To what extent do you agree that the following pain points are related to your shopper marketing programs?” (Percentage of respondents who agree or strongly agree)

Agree Strongly agree

Source: Strategy& Trade Promotion–Shopper Marketing intersection survey, Nov.–Dec. 2011



The results divide

The survey also revealed a clear divide among the shopper marketing initiatives of CPG companies. In fact, there is a select group of companies that is moving away from the pack in terms of shopper marketing practice and results. Our analysis of the survey data finds that some companies are reporting improved gains in “soft” results — that is, influence with retailers — in comparison to the average company’s performance. These leading companies are doing a better job of gaining a seat at the table with their retail accounts, and their shopper solutions are providing them with a valuable bartering chip as they seek to build account volume. There is an even greater performance gap when it comes to “hard” results. Here the leaders are capturing significantly faster sales growth from their shopper marketing programs than the average company. Though there is a wide range of results across individual programs within all companies, leaders also report higher overall ROI from their shopper marketing programs than from their other advertising and promotion programs (see Exhibit 2, next page). These findings are consistent with those of surveys that Strategy& has undertaken with the GMA and Path to Purchase Institute.2 Moreover, all of our surveys link the development of a leading shopper marketing capability with a coherent strategy that prioritizes the right shopper solution programs and aligns retailers and service agencies in their design and execution to enhanced influence and results.



Exhibit 2 The leaders are breaking away
Strongly disagree Strongly agree




1 … our collaborative efforts with retail partners give us greater influence over the programs they execute Influence … our category leadership position with some of our most important retail partners is enhanced … the brands in our portfolio are growing their sales faster than competitors in their categories … our shopper marketing ROI is higher than that for our other advertising and promotion investments “Due to our shopper marketing programs overall …” (Mean score of survey responses)



4 4.3 3.8 4.4 3.9 4.1 3.1 4.1 3.2



Leaders Average company

Source: Strategy& Trade Promotion–Shopper Marketing intersection survey, Nov.–Dec. 2011



What leaders do

What accounts for the enhanced performance of shopper marketing leaders? As might be expected, experience and size are correlated with shopper marketing success: The longer a company has practiced shopper marketing and the bigger the company is, the more successful its shopper marketing initiatives tend to be. But there are also a number of practices that are correlated with shopper marketing success that are unrelated to either a company’s size or its experience with the stillemerging discipline. Leaders in shopper marketing better manage the critical intersection of shopper marketing and trade promotion. This improves their ability to sell programs into retail accounts and enables them to better collaborate with retailers, creating shopper solutions that are more effective at growing the category than promotions focused on price discounting alone — thus realizing two of the major promises of shopper marketing. They accomplish this through three actions: 1. Identifying and pursuing the right solution platform priorities (those that offer attractive headroom for growth) and engaging the right set of retail partners around these priorities 2. Aligning their sales and marketing organizations to better focus on solution platform priorities 3. Developing new funding and planning processes to support better decision making, greater lead time, and superior execution 1. Identify and pursue the right solution platform priorities. Determining the right platform priorities enables manufacturers to fund and deliver shopper solutions that are most relevant for their retail partners and shoppers. Clearly recognized priorities give direction to investment and insight development programs, and serve as the basis for sustained commitment.



Prioritizing solutions starts with shopper insights, the currency for driving internal and external alignment around investments. The most effective shopper marketing programs take a problem-solution approach to driving desired shopper behaviors by addressing a focused set of shopper pain points. At the strategic level, this involves prioritizing areas where closing the gap between motivation and action can produce the greatest headroom for growth. This headroom may be found in a shopper segment (new moms, Hispanics, boomers), a department within the store that underindexes compared with other retailers, or an occasion or trip mission. For example, as described in our report for GMA, Clorox discovered headroom in the gap between shoppers’ motivation to prevent sickness during cold and flu season and their likelihood to take action given pain points in the shopping experience. In response, the company developed a scalable set of wellness programs and customized them for specific retailers, such as its “Prevent, Protect & Soothe” solution with Roundy’s Supermarkets (see Exhibit 3). In prioritizing this solution, Clorox captured an opportunity to accelerate growth and provided a key platform for retailer collaboration that enhanced promotional effectiveness.

Exhibit 3 Clorox finds headroom for growth

Dial® Soap On me SCOTTIES® Facial Tissue Burt’s Bees® Lip Balm Brita® Water Filtration In me Kellogg’s Special K Products
® ®


Partner with Roundy’s to drive traffic to pharmacy and increase total store sales Shoppers look for health and wellness solutions in or near the pharmacy, but the products are typically found in the center of the store in multiple locations Headroom for growth of several hundred million dollars in closing the gap between interest and action around prevention Connect center store with pharmacy to become health and wellness “one-stop shop” during cold and flu season Bundle and co-locate products to create “Prevent, Protect & Soothe” theme and leverage combined marketing voice Delivered education on health and wellness solutions for family, as well as coupon savings on multiple purchases Clorox Home Care up 2.3% in 2010, and up 16% during program; Clorox Disinfecting Wipes up 54%


Campbells’ Soup

Around me

Clorox® Disinfection Products


Help me

In-store Flu Shots In-store Pneumonia Shots

Execution & results

Source: GMA Shopper Marketing 5.0 study; Clorox and AMG; Strategy& analysis



At the event level, shopper solutions must be grounded in one or more insights that enable them to deliver value beyond the product itself. For this reason, the most effective shopper solutions are often focused on the experience of buying and using the product, rather than just the features and benefits of the product itself. Best-in-class shopper solutions share several key characteristics, all of which require developing insights to focus on “words that work” and the right motivational cues and calls to action to enhance their effectiveness: • Superior shopper marketing programs make the solution obvious, capture shoppers’ attention, and help them to visualize the value beyond price alone. • They focus on simple, concise messaging and content, avoiding overly complex or heavily loaded displays. • They offer compelling “news” and a clear call to action that explains why the shopper should put the product in her basket today. • Finally, they bring products together for a complete solution when required. A multi-manufacturer solution is not always necessary, but in some cases, it can be worth the additional execution complexity to create more value for the shopper. 2. Align the sales and marketing organizations to better focus on solution platform priorities. Because shopper solutions can simultaneously build brands and volume, shopper marketing can be a bridge between a CPG company’s business units, marketing, and sales, enabling better-integrated programs and optimized returns. Too often, the siloed nature of CPG companies blocks this benefit. The shopper marketing organization will propose solution programs and their appropriate platforms, but then must struggle to sell the programs to its own company’s field sales organization and business units. This is particularly common with scale programs that cut across more than one brand in the company and require greater coordination of efforts. The result is wasted time and resources for the CPG manufacturer and in some cases for its agency partners and other service providers, such as those involved in developing custom merchandising and displays. Creating greater transparency around the highest-value solution priorities and communicating effectively are key steps in driving greater organizational alignment. To achieve greater traction, companies need



to get beyond “heroic” efforts to sell programs internally to the organization and across marketing service providers and retail partners. Metrics are also essential to creating organizational alignment. Most companies are measuring the effectiveness of their shopper marketing to some degree, but few are measuring it as completely as needed to drive alignment (see Exhibit 4). Driving greater alignment also requires addressing roles, processes, and decision rights for shopper marketing investments. Instead of working separately, trade planning, category management, insight development, and shopper marketing must be able to collaborate with business units to optimize shopper solutions, especially for those programs that need to be customizable at scale. The economics of shopper solutions require

Exhibit 4 Measurement is inconsistent
Never Sometimes About half the time Most of the time For all programs

1 Incremental costs of shopper marketing programs Brand sales lift from shopper marketing programs Program compliance ROI of shopper marketing programs Category growth for retailer from shopper programs Developing a complete view of the costs of shopper marketing programs, including the costs of trade promotions, consumer promotions, and associated retailer-targeted media spend Retailer share gain from shopper marketing programs Brand health impact from shopper marketing programs (change to brand attributes tracked)



4 3.5 3.4 3.1 3.1 2.9 2.9


2.5 1.9

“How consistently do you measure the effectiveness of your shopper marketing programs?” (Mean score of survey responses)

Source: Strategy& Trade Promotion–Shopper Marketing intersection survey, Nov.–Dec. 2011



that they be scalable across retailers, while successful sell-in requires that they offer retailers the ability to differentiate themselves from their competitors and achieve often unique objectives. Given the need to roll out shopper solutions that include trade promotion elements across a broad set of customers in a way that is proportionately fair and equally available, it is also important to have the ability to develop “lite” versions of solution platforms that can be scaled more easily within channel or area teams as opposed to customer-specific teams. Greater collaboration is an imperative for solutions featuring products from across categories. For shopper marketing to leverage the full product portfolio, attain the scale needed to make solutions economical, and address the priorities of retailers, CPG manufacturers need to align resources by customers and channels as opposed to brands. Often this will require bringing customer marketing, shopper insights, category management, and trade promotion planning expertise more closely together, whether in a united organization or through more integrated planning processes and decision-making forums. The key to success is focusing not solely on the “lines and boxes” on the organizational chart, but on how decisions are made and how the execution of program activities is managed. Further, most of the organization’s shopper marketing resources should be directed to the customer, channel, or area teams in the field that customize platforms and execute shopper programs. Talent in the field should be supported by a lean shopper marketing center of excellence that is focused on synthesizing the insights and business cases, galvanizing the organization around the right set of shopper solutions, and supporting program management capabilities in both customer and brand marketing teams. 3. Develop new funding and planning processes to support better decision making, greater lead time, and superior execution. Efficient and timely funding and planning processes are essential to fielding effective shopper solutions. Many CPG marketing and sales executives — nearly half of the respondents in our survey — are experiencing planning-related pressures. They are concerned that they are spreading their efforts too thin by trying to field too many shopper marketing events. They also say they lack the proper lead time for successful execution. These problems are often exacerbated by the way funding is managed. Though shopper marketing is growing rapidly, it often receives funding in stages rather than through a preset budget. Today, annual shopper
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marketing investments are approximately 10 percent of trade spending, US$30 billion by CPG companies (excluding other categories such as consumer electronics, home improvement, and entertainment). In addition to this dedicated funding, a significant share of spending for shopper marketing programs is released during the year from brand and trade budgets. When these additional funds are taken into account, total spending on shopper marketing can be as much as twice the amount budgeted up front for the year. In all, shopper marketing spending is greater than the current spend on digital media. When funding is not secured up front during the planning cycle, shopper marketers often find themselves “tin-cupping” for dollars. In some cases, this problem is exacerbated because all funds must come from tincupping — more than a third of the companies we surveyed have no dedicated shopper marketing budget at all (see Exhibit 5, next page). One consequence of these conditions is an inability to focus on fewer, bigger, and better programs. Another is compressed lead times, which affect the ability to execute solutions effectively. Improved budgeting and planning processes provide shopper marketing with more time to conceive and deliver solutions that are better aligned to both brand and customer strategies. Shopper marketing leaders are more likely to have preset budgets that incorporate funding policies and terms with overall trade investment requirements and eliminate tin-cupping. They also have planning processes and tools that enable them to align their programs with trade planning in terms of timing and execution.



Exhibit 5 Too much tin-cupping
Disagree/strongly disagree We have an annual budget for shopper marketing that has been established by reallocating brand marketing funds 10% 23% 73% Agree/strongly agree 90%

We have a dedicated annual budget for shopper marketing that has been established by reallocating trade promotion funds or slowing the growth of trade funding “Tin-cupping” to obtain funding from brands/business units during the year rather than from a dedicated budget represents a significant source of funding for our shopper marketing programs A significant share of the funding for shopper marketing programs comes from customer trade promotion funds that are diverted during the year rather than from a dedicated annual budget for shopper marketing 70%

20% 50% 32%


40% 48% 34%


30% 23%


“To what extent do you agree with each of the following statements?”

Leaders Average company

Source: Strategy& Trade Promotion–Shopper Marketing intersection survey, Nov.–Dec. 2011



The alignment advantage

Leading CPG manufacturers are embracing shopper solutions to drive volume and build their brands with consumers, and to reduce their reliance on price-focused trade promotions and retailer events that can have lower ROIs in many cases and provide less opportunity for building brand equity. Toward these ends, they are leveraging insights to develop solutions that better tap into shoppers’ core motivations and activate equity along the path to purchase. But in the rush to develop shopper marketing as an organizational capability and a competitive advantage, CPG manufacturers should keep in mind that shopper marketing is inherently cross-functional and its success depends on alignment across marketing and sales functions, especially with trade promotions. Achieving greater alignment between shopper marketing and trade promotions is not solely a matter of creating a center of excellence or reshuffling organizational lines and boxes. Rather, it requires aligning marketing and sales to better engage retail partners in the development and execution of shopper solutions that deliver added value beyond price reductions to shoppers. This is a challenging task; it will often require developing new ways of working, and truly changing behaviors across the marketing and sales organizations. But CPG manufacturers that are successful at creating alignment not only will capture greater returns from the shopper solution programs and build strong brands, they will earn the right to win in their categories.



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For more information on shopper solutions, see “Shopper Marketing 5.0: Creating Value with Shopper Solutions.” Strategyand-Shopper-Marketing-5.0.pdf

See also “Ensuring Success in Shopper Marketing: The Essential Role of the Sales Team,” by Matthew Egol and Jon Van Duyne. media/file/Strategyand-Ensuring-Success-Shopper-Marketing.pdf

This report was originally published by Booz & Company in 2012.
© 2012 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. Disclaimer: This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.