Brand Alchemy: O Shopper, My Shopper

Posted August 5, 2024

Brand Alchemy: O Shopper, My Shopper

Architecting retail victory by integrating shopper decisions made across all touchpoints into your brand’s execution blueprint

August 2024 • SSG Perspective

By Vish Sharma, Tanya Thomas, and Jessica Cheng

Summary: As consumers become more discerning in these times of financial constraints, it is not only critical for brands to understand what influences shoppers along their purchase journey, but also how to seamlessly integrate marketing activities into that purchase process to guarantee conversion. This calls for a deeper understanding, especially in today’s omnichannel world, of the relative importance of different consumer and shopper touchpoints.

In this article, we showcase how SSG’s predictive Path-to-Purchase (P2P) approach provides deep insights on shopper behavior that marketers can use to efficiently conduct full-funnel brand activation. We also outline how to leverage P2P insights to optimize investments across those touchpoints that matter the most.

Tighter purse-strings necessitates a re-evaluation of the shopper’s role in brand decision-making

Time and time again, we have seen brands struggle to influence retailers: an oft-heard complaint^† from sales leadership and retailers is one of brand strategy being disconnected from what is happening at the point-of-purchase, with the shoppers. In other words, demand generation is not always in-sync with sales activation and, frequently, ATL and BTL spend are optimized separately. Brand leaders openly discuss this challenge of integration, and of pulling brand-building activities all the way through to the shelf and to conversion. Moreover, as shopper tighten their wallets in this economic environment, they are also becoming more discerning about their purchase choices.

All this necessitates a re-evaluation of the role of consumer demand in brand strategy (an approach which focuses on occasions in which a brand is consumed) and pivoting instead to the shopper who is driving the decision-making in these times of financial strain. It is incumbent on brand teams to better understand their shoppers – how they navigate the aisles, the decisions they make along the way, and the critical tradeoffs they make to stay within budget. In this article, we discuss how SSG’s proprietary shopper Path-to-Purchase work has influenced brands’ commercial execution and guided investment decisions in order to accelerate brand growth.

How and when do shoppers make their brand decisions?

Path-to-Purchase (P2P) refers to the journey of a shopper from the first time they become aware of a brand to the time they purchase the product (see Figure 1). The journey spans across manufacturer and retailer touchpoints or across channels that a customer engages with the brand.

Figure 1: Core elements of SSG’s Path-to-Purchase approach

Note that the purchase journey of a shopper is not linear

At its core, our P2P approach has helped marketing and commercial teams understand at what point in the decision-making process do shoppers make up their minds about the brand they are going to purchase: this includes understanding how brand awareness levels play into their decision, how ‘influenceable’ shoppers are to changing that decision, and the tactics most likely to intercept the shopper (swaying their decision) or to retain them (so they continue buying your brand).

At SSG, we conduct predictive P2P modelling using large-scale shopper data to identify what really matters to shoppers i.e., what are the most influential touchpoints for a shopper to drive the ultimate sale. This work has yielded fascinating insights on awareness-driving tactics that drive up salience and conversion, the role of research in the shopper’s decision, and specific purchase drivers that are most predictive to driving conversion at the point of sale. These insights have equipped marketing and commercial teams to build detailed execution playbooks aligned to the shopper’s optimal path-to-purchase. Understanding the full “universe” of optimized investments has also enabled them to operate outside of traditional spending silos (trade vs. promo vs. media) and collaborate better with their cross-functional and retail partners.

How can I use P2P to accelerate brand growth?

Our P2P approach is powerful in its ability to pull marketing activities all the way through to the shelf (physical or digital). While marketing strategy tells you what to say to your consumer, P2P tells you how to bring this to life on the shelf by understanding where to invest (i.e., optimized mix of touchpoints), which channels to prioritize, what the optimized price-pack architecture is, what the shelf strategy needs to be, and so much more. The depth and scale of our P2P studies also provides the ability to uncover shopper nuances across sub-categories, brand sublines or price-tiers, and across channels or retailers.

In this article, we highlight two examples of how we have used our deep understanding of the shopper’s path-to-purchase to help deliver on clients’ brand growth ambitions:

Optimize brand investment-mix to the most impactful touchpoints

Execute on brand (subline or price-tier) and category nuances to capture additional growth

Align brand investments to the right shopper decision-making touchpoints: At one of our clients, their investment profile was such that just ~20% of the budget was allocated to media activities, while the bulk of their spend (~80%) was focused on point-of-sale (PoS) execution – development of posters and banners, retail sales staff engagement and incentives, event management, etc. This heavy-tilt on PoS had happened because of a long-held belief that consumption in this category was impulse-driven, decisions were made at the shelf, and that the success of brands in this category was proportional to the strength of the relationship with the retail sales staff (whose recommendations held sway over which brands shoppers bought). However, our granular shopper research uncovered that nearly two-thirds (~70%) of shoppers made brand purchase decisions well before ever setting foot into a store. In other words, our client’s investment mix did not reflect true shopper purchasing patterns and their spend was focused on activities which had minimal impact on conversion at the ‘last 3 feet’ (i.e., at the point of purchase). That being said, we did find that in-store paraphernalia had a different role to play – that of driving awareness and keeping the brand top-of-mind. For the client, what this meant was that they didn’t need to completely scale back on all in-store activation, just that there was a need to right-size the extent of those investments.

They went on to adjust their investment mix and, by Year 2, the client had adjusted to a more balanced 50:50 split (see Figure 2) – with a heavier lean on pre-store activities including awareness-building activities and media activation. The resulting investment boost led to more brands in the client’s portfolio reaching media sufficiency and greater household penetration – all netting out to >20% improvement in ROI versus prior years.

Figure 2: P2P-guided shift in investment mix

Understand shopper nuances within brand sublines to more effectively intercept shoppers: The marketing organization of a client had recently restructured their brand teams and brought their mainstream and luxury segments under the remit of a single brand leader. The brand had aggressive plans for its luxury tier to make crucial contributions to growth and margin expansion. The challenge posed to us was to help the brand develop a holistic and consistent strategy that they could execute at scale, simultaneously addressing the needs of their mainstream segment (where most of their shopper base was) while accounting for the ever-increasing importance of the luxury shopper. We set out to understand if mainstream and luxury shoppers shop differently, what matters to luxury shoppers when deciding on a premium purchase, and if we could integrate these nuances in a scalable way into the brand’s execution plans.

What we uncovered through our large P2P study was that luxury shoppers were significantly more digitally-engaged: luxury shoppers were involved in more trial purchasing and tended to research the category much more compared to mainstream shoppers (who tended to purchase known and familiar products, requiring limited prior research). They also did so while being heavily-reliant on digital channels and more engaged in eCommerce (see Figure 3). This indicated that the brand team needed to prioritize the development of digital assets and improve their digital shelf to create more immersive online content, with the goal of driving digital engagement for their luxury shoppers

Figure 3: Key differences in shopper behavior across segments

We identified the role of in-store touchpoints as an important awareness builder across all shopper groups (regardless of price segment) – allowing the brand team to double down on their in-store efforts. Our granular insights also indicated that to influence undecided shoppers, it was important to use signage such as posters, shelf talkers, and shelf blades to stand out in the cluttered store shelves and educate consumers about the brand. When it came to conversion, there were nuances – discounts and promotions influenced mainstream shoppers more, while special displays (branded posters, outside-aisle product displays) and in-store product sampling more substantially influenced luxury shoppers. Understanding these commonalities and nuances allowed our client to adjust their BTL activities and spend in line with their portfolio ambitions, to drive execution at-scale.

Conclusion

In this article, we have discussed how our proprietary Path-to-Purchase approach has helped hone strategic execution and accelerate growth by focusing on pathways that matter i.e., those that maximize your brand’s chances to win that purchase. It is a comprehensive approach that can inform finance, marketing, and sales actions, and drive investment efficiencies.

In future next editions, we will discuss how we have used this in conjunction with our Consumer Perceptions work as part of our proprietary Demand HD^®︎ approach^† to clearly articulate consumer and shopper demand as well as develop innovation growth terrains to future-proof your business for the long-term.

Our experts

Vish Sharma
Managing Principal
[email protected]

Diana Hartford
Managing Principal
[email protected]

Vivek Narasimhan
Senior Principal
[email protected]

Tanya Thomas
Principal
[email protected]

Kirsten Myers
Principal
[email protected]

Scott Strang
Principal
[email protected]

Footnotes

†

SSG experience across variety of sectors

‡

Sharma Strategy Group’s Demand HD® suite of analyses allows you to see your consumer like never before. The granular detail provided will make it possible to predict consumer choice, reveal consumer perceptions, unearth patterns, and uncover underserved demand. Turning on this powerful tool can outline complete path-to-purchase and associated decisions and create direct links between choice drivers at consumption and at point of purchase

Asif Younas