2. SPECIAL REPORT
Common Brand and Retailer Measures
Measurement buckets: Brand objectives, expressed as: Retailer objectives, expressed as:
Lift, units/occasion, category share, Lift, category sales, comp-store sales, cross-
Transaction data brand loyalty, national campaign ROI, category sales, basket size, profitability per
retail program ROI square foot
Trip frequency, trip types, number of aisles
Shopper List making, dwell time, consideration, shopped, shopper card penetration and
behavior shopper engagement, advocacy participation, digital shopper engagement,
shopper loyalty, household penetration
Retailer brand equity measures (ongoing
Brand equity measures: awareness,
measurements): shopper satisfaction, percep-
Attitudes and beliefs “brand for me,” “would recommend to
tion of shopping experience (“clean store,”
a friend”
“friendly staff,” “quality products,” etc.)
Sales: scan data
Sales: Scan data, shopper card data
Data accessible to re- Insights: media consumption, in-home
Insights: trips, in-store traffic, in-store video
spective stakeholders ethnography and consumption data,
or tracking data, website traffic, shopper
qualitative insights, cross-channel data,
profile-level, basket data
national panel data
Brand-based programs that meet the re-
Non-shopper, business- A “seat at the table,” increased feature
tailer’s specific business needs (such as trip
to-business relationship and display support, favored vendor
frequency, category sales); improved differ-
benefits status, category captain designation
entiation
But the report later notes, “One word miss- 1. Aligning Objectives programs solely to block a competitor from
ing from this definition is, ironically, the one The Brand Perspective gaining an advantage. For instance, some
that the Commission identified as most es- One of the brand-side challenges to even multi-brand programs allow only one brand
sential to effective shopper marketing: ‘col- rudimentary collaboration stems from the per category to participate. And such cat-
laboration.’” While there are exceptions, brand-retailer dynamic itself: the brand is no egory exclusivity requires brands to employ
most effective shopper marketing programs longer a “client.” Over many years, brands competitive, “bare-knuckle” tactics.
require brand-retailer collaboration. This is have grown accustomed to buying media or When these kinds of dynamics are in play,
a business necessity for achieving optimal research, which puts them in the driver’s seat. it is difficult – or even irrelevant – to mea-
results. But partnering with retailers is very differ- sure the return on investment. This is not a
This article examines ways in which brands ent, because brands don’t completely control test-and-learn enlightenment model, but a
and retailers can effectively measure the re- spending. Retailers have different objectives, warfare model, where defending turf and/or
sults of joint programs while also examining and can drive a hard – even intimidating – gaining ground are the key objectives.
a few of the obstacles they might encounter bargain. One anonymous brand marketer Next, brands have intra-company dynam-
along the way. suggested that it’s like trying to befriend a ics that can hinder aligning objectives with
There are essentially three steps that must bully: he keeps taking your lunch money, but retailers. Notably, sales and marketing teams
be taken to effectively measure the impact of you go on trying to please him. can appear to operate at cross-purposes, es-
joint shopper marketing programs: 1. Align- Brands sometimes feel compelled to par- pecially when they are in silo-ed departments
ing objectives; 2. Assigning success metrics; ticipate in trade programs in order to stay with different compensation incentives. For
3. Assessing and reporting results. on a retailer’s good side, or to maintain mer- many manufacturers, these legacy organi-
That may sound simple, but it isn’t always chandising support, or even to simply stay on zations are well-entrenched cultural forces
easy. the shelf. Occasionally, brands participate in within the company, and that makes getting
2
3. SPECIAL REPORT
everyone on the same page with the cus- data and back channels to understand their mentality is, ‘If you aren’t growing top-line,
tomer a challenge. real priorities. One down-to-earth retail ex- you are dead.’” Key performance indicators
In many classes of trade there are key mar- ecutive admitted, “Sometimes even the buyer (KPIs) will often include year-over-year cat-
keting weeks for different categories. Getting won’t give you a straight answer!” When in egory growth, comp-store sales growth, and
a brand promoted at retail during that week doubt, brands must keep marketing goals increases in basket sizes and trips. Brands can
is critical to achieving annual sales goals, so broad, which in turn leads to fuzzy objectives. use this as a starting place for aligning success
winning that week equates to success – and Ultimately, retailers interviewed for this ar- metrics with their partners.
financial compensation – for many salespeo- ticle contend that the ideal brand proposal Brands, too, are interested in top-line sales
ple. Thus, temporary price reductions (TPRs) sets meaningful differentiation for the re- for their business. So mutual success can be
remain entrenched. tailer as a core objective. The best programs calculated in part by sales lift – but can’t end
Shopper marketers in that same company, are those that include a total store solution, there. Broader mutual benefits must be as-
on the other hand, may see things differently. provide a critical point of difference vs. a com- sessed, such as increased units per purchase
Co-marketing dollars used to fund TPRs can petitor, or deliver a real shopper solution. The occasion, incremental cross-basket purchas-
miss strategic objectives. If trade money is corresponding success metrics would include, es, growth in category-purchase frequency,
being spent to help the retailer “throw in a respectively, comparable-store sales lift, at- new user penetration, and shopper delight,
gallon of milk” with a threshold-dollar pur- titudinal shifts among shoppers, and cross- among others.
chase, brand equity goals and shopper be- basket analytics. Of course, not all measures will reflect
havior goals may be lost completely. There- One retailer remarked, “We also keep our benefits for both partners. Retailers often
fore, some programs are designed primarily eyes on the size of the prize.” So, objectives don’t care about a brand’s share of category;
with sales goals, not brand
goals, in mind.
The Retailer Perspective
Most retailers think that few
brands are savvy about re-
Mutual goals and mutual
tailer values. According to
the retailers interviewed for
respect: “If we do nothing else
this series, fewer than 30% but that on a regular basis, it’s a
of brands address retailer
priorities in their shopper win-win.”
marketing proposals. When
program objectives are only
Catherine Lindner, vice president,
brand-centric, retailers may retail marketing, Walgreens
view the metrics as self-serv-
ing or irrelevant.
To illustrate this, consider
a typical brand proposal. Brands begin their also must show substantial retailer payoff, conversely, brand teams are usually retailer-
presentations with shopper insights – a good beyond brand lift. agnostic about sales (although their custom-
start, but one that rarely ladders up to the Additionally, brands aren’t alone in dealing er-team counterparts would feel quite differ-
retailer’s objectives, which are based on busi- with internal issues that can create stumbling ently). But identifying mutual goals can help
ness issues that often are quite different from blocks for collaboration. Retailers have legacy cement the commitment to the program and
the brand’s. For example, in the grocery class organizations with silos, too. For one, buying the partnership.
of trade, trip missions are blurring across centers sometimes aren’t incented to cooper- When it comes to identifying mutual goals,
channels; drugstore chains sell ice cream and ate with each other, so developing holistic mapping retailer shopper segments to brand
convenience stores sell cat food. This puts shopper solutions across departments (like buyers is a frequently cited technique. How-
intense pressure on the competition for trips. skin and hair, say) can be very difficult. Cross- ever, recognizing overlapping brand equities
So retailers would like brands to help them departmental solutions may be hard to estab- is at least as important. Common equity will
prompt a trip mission that could only be ful- lish because one of the buyers doesn’t “get help with program development, but will also
filled in their store. Providing insights and credit” for the sales. help determine metrics of success. Both retail-
designing programs to solve this need would er and product perceptions can be included in
lead to a brand win. 2. Assigning Success Metrics pre-post shopper surveys, for example.
On the flip side, retailers aren’t al- First and foremost, retailers want to drive Once objectives are aligned, identifying
ways transparent about their strategies, top-line growth for their stores. According the corresponding metrics is fairly straight-
so brands can be left relying on secondary to one executive, “For many retailers, the forward, because the measurement options
3
4. SPECIAL REPORT
How Walgreens and Hershey Spent
Their Summer Vacation
The following case study resulted from pilot programs “When you don’t do that, our idea of success is different
conducted by members of the Retail Commission on from our vendor partner’s idea of success.”
Shopper Marketing as a way to validate its model for Rather than employing the standard seasonal theme
effective collaboration. It was presented during the 2010 of preparing for the return to school, the partners devel-
Shopper Marketing Expo. (For more information, visit oped creative that leveraged Hershey insights into the
p2pi.org.) mindset of “Mom,” who views the final few weeks of
summer as the last chance to have fun with the family,
Hershey and Walgreens teamed up in summer 2010 to de- according to Phil Stanley, then Hershey’s vice president
velop a back-to-school campaign that would drive store of customer marketing.
trips and increase basket size while boosting candy sales. A “Don’t Stop Summer Fun” theme fit well into Wal-
Walgreens chose as its target “Efficient Eileen,” the greens’ overall brand position of “inspiring a well life,”
chain’s most important execution of which
customer segment in largely “resides in the
terms of pharmacy sales, healthcare space,” Lind-
but a shopper who typi- ner explained. “But [the
cally does not buy candy Wal g re e n s s h o p p e r]
during her trip. Hershey, doesn’t just think about
meanwhile, chose to tar- the health aspects. She
get “Em,” its core con- thinks about the fun and
sumer segment. the happiness. And she
The partners then set knows that when she’s
about finding the points happier, she’s healthier,
of intersection between and vice versa. [So] it was
“Eil e e n” a n d “Em .” a position that we knew
While a key component resonated with our con-
of collaborative shopper sumers.”
marketing is to “make The program ran in a
sure you create alignment” between the retailer and handful of markets (selected for their prospects for suc-
manufacturer’s key targets, “don’t get too caught up on cess) and employed displays, circular features, local radio
being perfect,” advised Catherine Lindner, Walgreens spots, coupons and online components. “All of these
vice president, retail marketing. “ I think we got the best were existing tools that we already had in our portfo-
result ... without a lot of crazy math” and additional lio,” said Stanley. “We just brought them together and
spending on the effort, she said. aligned on the objectives.” “Ultimately, we didn’t spend
They also devoted time to determining mutually ben- more as an organization,” added Lindner.
eficial objectives and the methods through which results Although specific results were not disclosed, both Stan-
would be measured. The metrics included sales/unit ve- ley and Lindner deemed the program a financial success.
locity, dollar share vs. other retailers and incremental lift But both executives were effusive about the effect the
on the sales side, and awareness, unplanned purchase process had on the nature of their business relationship.
impact, purchase barriers and likelihood to recommend “We know a lot about confection consumers. But Wal-
on the attitude/behavior side. greens knows more about its shoppers than we could ever
“We don’t sit down [with manufacturers] and align on hope to know,” said Stanley. “The goal was to see if we could
metrics early enough – or often enough,” Lindner said. really drive performance. And I think we’ve proven it here.”
5. SPECIAL REPORT
generally become readily apparent (see chart, count for the “fully loaded cost of measuring Finally, the process of collaboration offers
page 2). results.” its own reward. “It’s that mutual respect that
The challenge that arises here is logistical: This makes upfront commitment all the oftentimes gets left in the lobby. If you walk
The brand typically has some of the necessary more critical. But it also means that only pro- in with the idea of mutual goals and mutual
data, and the retailer has the rest. While both grams big enough and profitable enough to respect, it really goes a long way,” said Cath-
sides have access to scan data, retailers are make the analysis worthwhile will be read. erine Lindner, vice president-retail marketing
obviously more interested in their own shop- Realistically speaking, that won’t be more for Walgreens, while speaking in fall 2010 at
pers than in a national panel of category buy- than two or three programs per year. a Retail Commission workshop. “If we do
ers. Yet brands don’t normally have retailer- Brands should be prepared to shoulder nothing else but that on a regular basis, it’s a
specific shopper data. The retailer, therefore, most of the burden of analysis (and related win-win.”
owns the information that is most meaningful expense) as a “cost” of establishing a deeper
to him. And it is this data that will prove the partnership. However, there are potential
benefits of the brand’s program to the store, benefits for retailers who share the burden:
including shopper card data, store-level sales gaining insight into how their shoppers re-
data, on-shelf audit information, in-aisle vid-
eo monitoring analysis and ongoing shopper
spond to different stimuli, category by cat-
egory. Retailers also will be able to gauge
About the Author
attitudinal studies. which brands are driving more effective and
efficient programs, thereby increasing the
3. Assessing and Reporting sophistication of their alliances.
Results
The participating brand will be at the ready to The Return on Relationship
report results to prove program effectiveness While hard sales and shopper behavior data
because it is in their immediate best interest are critical to evaluating program success,
to do so. But will the retailer? As noted earlier, each partner gains softer benefits from the
the retailers own the data that will help the collaboration as well. This is the “return on
brand prove its case. the relationship.”
Many retailers seem reluctant to share On the brand side, the benefits can include
results, probably at least in part because it a general increase in feature and display sup-
Liz Crawford has more than 20 years
would require them to shoulder some of port and even a coveted “seat at the table,”
of brand management and consulting
the expense and effort involved in analyzing the latter of which means that the brand is
experience with a concentration in
them. In fact, one executive pointed out that consulted on category-level decisions. A solid
strategic innovation. Over the last
retailers themselves rarely anticipate or ac- brand partner can also enjoy official category few years, Crawford has focused
captain status. on developing integrated shopper
By the same token, the retailer’s business marketing strategies for Fortune 500
Series Schedule will improve by working with brands that truly clients. Currently, Crawford is an
understand their needs and can help drive analyst and contributing writer for the
Part 1: Rationalizing the their objectives effectively. As an example, Path to Purchase Institute. McGraw-
Investment Diet Pepsi’s “Skinny Can” launch at Target Hill released her book, “The Shopper
(discussed in article three of this series) en- Economy,” in March.
Part 2: Measurement of hanced the equity of both partners among
Shopper Behavior the retailer’s shoppers. Ultimately, such mu-
tual equity enhancement is what makes shop-
JWT/OgilvyAction Inc., conducting
Part 3: Measurement of Brand per marketing more worthwhile than tradi-
business under the OgilvyAction and
Impact tional collaborative activity.
JWT Action brands, is a fully integrated,
The potential for mutual benefits goes be-
end-to-end shopper marketing and ex-
Part 4: Effective Integration yond program impact to encompass busi-
periential marketing agency with main
Practices ness-to-business effects such as cost reduc-
offices in New York, Chicago and Akron,
tion, profit growth, and long-term customer
Ohio. It is part of the WPP Group.
Part 5: Retail Collaboration loyalty and satisfaction. These benefits are
measurable over time. Because shopper mar-
Part 6: Directions for the keting is a relatively new discipline, however,
Future there are few companies that can identify
them as yet.
5
