With shoppers becoming more sophisticated and information-savvy thanks to digital influence, BR decided to take a look at the local shopper marketing industry and how it approaches consumers and clients.
Nine out of ten Romanians love to shop however, even in their daily shopping activities, they tend to stick to the budget. Ideally, they would prefer to shop from only one place, but the reality shows that price is a main driver (72%), making stops at several shops inevitable. Romanians have big expectations when it comes to shops’ offers and want to optimize their shopping process. The results were gathered by the research agency GfK, from a 3,000 house panel of respondents.
The buying decision is more informed; the decision process is complex and subject to a whole array of influences, generating valuable marketing insights. According to Corina Chiorean, CEO g7, the shopper has access to tons of data to compare and interpret. Furthermore, modern shopping leaves behind a data trail for marketers to analyze. Technology and data are the omnipresent means to find out what best suits one’s shopping needs – apps and innovative user interfaces are within anyone’s reach.
“Although the decision-making process is faster and more fluid, the intriguing questions remain the same as in previous years – how do shoppers choose a brand? When and where do they decide to choose it? How do they decide to switch from one brand to another? What earns and keeps their loyalty? We, g7, think that the most significant part of the answers to these questions depends on creating personal relevance of the brand for each shopper. This is the next currency – connecting the shopper to your brand by being personally relevant, by understanding their moments of truth, their lifestyle and their needs. Technology is constantly in a changing process, but human needs are always going to be the same. However, what technology enables us to do today is to understand and address shopper needs at an individual basis, as opposed to segmenting them into broad categories. For the first time in the history of marketing, we are able to operate on a segment of one individual customer,” explained the g7’s CEO.
On their turn, Fieldstar’s representative considers that the best word describing shopper marketing in Romania would be “strive” – a continuous strive for consumers’ attention, for fresh ideas in a world with hard-set boundaries: location restrictions, budget, low-pace adoption of marketing trends by companies or consumers etc. “As the consumer behavior changes from year to year, agencies are also updating their profile. At this moment, there are few agencies on the Romanian market recognized for their competence in implementing shopper marketing campaigns. In contrast with other segments (creative, online, production agencies), where there are lots of new-up comers every year, the shopper marketing industry seems to be an area suitable for agencies that have a strong background and great national coverage,” said Andreia Dinu, executive director Fieldstar.
“Creativity with a clear focus on results is the name of the game when it comes to shopper marketing, however, behind creativity lie a wealth of data, information, trends, results & learning from category, retailer and brand. The good part about shopper marketing impact is that it can be measured almost in real time. The client doesn’t need to wait 3 months for the next BHI to see how the new TVC performed, but, the mandatory is to measure it and be open to take the feedback the shopper gives through buying or rejecting their product at shelf, engaging with the brand activation or not.,” considers Ondina Olariu, business director Geometry Global Bucharest.
Adrian Paculea, executive director at Mercury360 Communications believes that shopper marketing is still a trend in Romania when it comes to agencies. “I would say that there are 3-4 agencies that are truly doing shopper marketing in the Romanian market. And when I say that, I am referring to the complete cycle, from shopper strategy to execution. The market is divided into categories: strategy and concept and execution. Shopper marketing in Romania represents a lot of in-store, at point of sales. Very few clients target through shopper marketing campaigns online and I consider that this is a place for growth in the future. I still believe that not a lot of clients are thinking their shopper marketing campaigns from a retailer standpoint, although they should considering that each one of them has a different type of business, different business targets; the politics of the producers should be aligned to the ones of the retailer. We still have national campaigns, somewhat customized to the shopper,” points out Paculea.
Coming closer to Andreia Dinu’s perspective on the agencies that are activating on this market, Mercury360’s executive director declares that he sees a higher interest from multinational agencies in tapping this field of activity. But clients are looking for specialized agencies that are thinking shopper-centric and not consumer-centric, a competitive advantage for the agency he is representing which has always been very oriented towards shopper marketing. “In terms of budgets, more and more large multinationals are starting to move budgets from the brand and media area towards the shopper one. And here it’s really important to point out that shopper marketing is more than just what we do at shelf, it’s also about how we influence the shopper behaviors and consumption, getting in their mind and finding out what their mind processes are when making a decision, as well as trying to influence them throughout the entire process. Most of the time, in Romania, when people think about shopper marketing, they are only thinking about what happens at the selling point. And here, it’s up to the clients and the agencies to convince them how important all the steps are,” explained Paculea.
Moreover, this new landscape leads to a very competitive race for the shopper’s attention, among the brands. “In Romania, although the brands have understood that the shopping decision-making sophistication level has grown, judging by the types of consumer engagement tactics they use, I would rather say that they chose to play it safe, at least for a time. Many marketing people I interacted with, in Romania and beyond, expect a change in the way brands communicate with consumers and think that the industry is ready for a disruption,” said the g7’s CEO.
Looking at the creative side of things and how it’s changing and evolving on the market, Corina Chiorean says she is very impressed by the resourcefulness, inspiration, innovation and daring ideas she sees in Romanian communication agencies. “Tons of courageous ideas get proposed daily to the brands we all work with – this gives me so much confidence about the forthcoming period, when brand communication will be all about customer connection through various tools, channels and touchpoints,” added Chiorean.
A different angle that completes the picture is shown by Dana Nae Popa, managing director at pastel. According to her, the trade marketing departments have a bigger and bigger word to say in the brands’ communication and marketing strategy, something that is seen very clear also in the briefs received by the agencies. “The budgets have also grown and the brands are trying to experiment as much as possible, especially because the consumers’ appetite brings the growth of this segment. “If we make a parallel between the way in which the shopper marketing industry is seen by the creative and the brand we would see some pushes of creativity enhanced also by the brand’s desire to be as visible as possible. Moreover, it can be observed the moderating of the ideas and the adapting to the market, probably due to the budgets or the fears about this new territory,” said Dana Nae Popa.
Changes over the years
Regarding what and how things have changed during the last years in the industry, according to Cristian Paraschiv, customer experience manager at Fieldstar, the brands and their agencies are more focused on delivering a complete and enhanced experience, telling the brand stories in a more qualitative manner – from concept to implementation. Every single detail is important now, when consumers are bombed with infinite information on their daily journey home-job-after job-home. “Furthermore, with so many alternatives, people are more selective, paying attention to every aspect. Price is still important when making the purchase decision, but now more than ever before, it’s not about purchasing only a product, rather a brand: the product, the story, the emotional connection etc. And Millennials – this overused word – are those who are setting-up the new paradigm. Another important change over the last years is the uprising mix of both digital and traditional solutions, in a perfect mix that has given brands the opportunity to know the shopper better,” said Paraschiv.
His opinion about the power of the stories is supported also by Dana Nae Popa, that affirms that the very big pressure on pricing and the big amount of promotional campaigns have determined the brands to develop more and more visible and creative shopper marketing campaigns. “Shopper marketing campaigns that tell stories, talk more and more personalized with the consumers and the use of the technology is becoming more and more natural. From one year to another it has been observed the consumers’ desire to experiment new things and the brands have responded to those needs,” considers the pastel representative. How has the agency adapted to this situation? Pastel has an integrated and intra-departmental approach of the shopper marketing campaigns that proves to be essential in realizing some efficient and memorable campaigns. This is also the reason for which in the agency there isn’t a shopper marketing department per se, instead specialist in each department – creation, client service, strategy, PR, Social Media – are focusing on creating experiences, based on their expertise, in order to be able to speak about consumer journey, not only in-store experience, therefore a complete, 360° experience.
Dana Nae Popa
Moreover, it has been proven that agencies’ strengths also lie in their human capital. Fieldstar’s focus is to keep employees with great experience with a wide understanding of marketing and consumer behavior. This year was dedicated to developing the agency’s capacity to work with different tools, gaining and interpreting data correctly in order to deliver more efficient campaigns. “We have a mix of people on the team, with backgrounds in marketing, statistics or creative areas. Additionally, our new technology resources (especially AR &VR) are helping us to have an extensive perspective and answers for various briefs and domains. In our organization, relationship building is sometimes so much more than a marketing tool. It is the one strategy that overcomes indifference for us,” added Andreia Dinu.
On his turn, the Mercury360 executive director considers that interest started to shift more towards the shopper marketing industry in Romania after the crisis started, as a way of influencing the shopper in-store more. And then it started to evolve beyond the one-time activations that were generating good sales for a short period of time. Moreover, clients and agencies started to build platforms in order to better understand the shopper and the shopper matured by not just hunting promotions, making targeting more difficult. Therefore, things have to be seen more in-depth and complex, shifting the focus from short-term to long-term. “The mechanics are changing, you have to find that special factor that will attract the shopper and keep him closer to your brand, something more than just a simple in-store activation. Shopper strategy represents a lot more than just promotions. Online has changed the mechanics and the tactics a lot, creating a CRM platform can help you follow the shopper’s moves and create a clearer view of their behavior and preferences. It can also help you make it viral, something that will help the visibility of the brand,” said Paculea.
Moreover, looking on the clients’ and agencies’ sides, the Mercury360 representatives show that more and more multinational clients are developing shopper marketing departments in their companies and putting a larger emphasis on research.
Taking a closer look to the companies, Ondina Olariu considers that most of the multinational companies are going through restructuring their operating models. Switching from CMOs to CGOs, mixing brand & category management, remodelling trade or channel management into shopper marketing, they show signs of change. “Investment in in-store activity is back on the list of most marketing departments, however, the financial crisis set back some of the progress that was made until then in terms of creativity. Digital shopper is the new name of the game and the best is yet to come. Some of the retailers grew stronger through understanding and formulating clear category objectives and partnering with brands to deliver on them. Part of the retailers also started using data and creating new sources of revenue through their use. E-commerce, though still a faraway spectrum for Romania is closely following the growth path we see in most developed countries. The investment in technology and its usage in store is yet a story to be built in the region, most of the countries in Eastern Europe playing at a similar level,” explains the Geometry Gobal Bucharest business director.
“Still, a big problem in the industry is that we don’t have enough data. A lot of studies are about the consumer, but only a few about the shopper and their shopping behavior, that differ a lot from one category to another. Also, the retailer plays a large role. I also believe that retailers are starting to collaborate better with the clients, something that is essential in this market.”
Challenges – the agency side
With the changes happening both on the shopper and clients’ sides, agencies have to keep evolving and adapt in order to make sure they keep and grow their position. The recently rebranded omni-channel agency, g7, is a consumer engagement agency, specialized in connecting brands with consumers, by all means and channels, online and offline. g7 is now going through a business model changing process – from a cost-based, fragmented service provider model to a value based integrated consumer engagement strategist. Another one is the clients’ buying process – although they acknowledge the 100% integrated consumer engagement approach, due to large organizational entrenched practices they continue to buy fragmented services, with laborious separated tender processes.
“From a similar client – agency relationship perspective, there is still another challenge in the way high value added, strategic and innovative solutions are sold – the Romanian market has set the expectation for extremely low margins; it is redundant to say that, under normal business conditions, value is always costly. This leads to another discussion that brings to light different difficulties in our business model – the poor stability in the fiscal policy, together with low predictability in the national business environment bring striking effects in a, still, cost-based model. Since our activity is labor intensive, the labor taxation measures affect our business immediately. Although we are fully aligned with our clients in tariff policies, this governmental instability brings unnecessary bureaucracy burdens to our daily business life,” explained Corina Chiorean.
In its 11 years of activity, pastel had campaigns exported in more than 20 other countries and besides many beautiful briefs, the agency’s representative admits that most of the times they even they are for daring campaigns with beautiful objectives, most of the time, when arriving at the implementation stage, what one sees in a store has nothing to do with the initial brief or the agency’s proposal. Therefore, “one of the challenges is to maintain the enthusiasm and creativity at the same standards, even, most of the times, the beautiful ideas remain only in the ppts or a client brief,” said Nae Popa.
On their turn, Geometry Global Bucharest is positioned as a shopper marketing agency. This means strong shopper strategic capabilities, data analysts, digital expertise and creativity that leads to conversion. And, as said by Olariu, the real difference between Geometry and the rest of the competition is that the agency brings to the table the convergence of retailer, brand and shopper needs, the level of understanding for current market capabilities, their internal work methodologies (where they take a beautiful problem and find a key moment of truth in the life of the shopper to answer it) and the ability to track & analyse shopper response.
“We are a mix of ex-business people with passionate creative and sharp strategists. It’s not always an easy combination to handle as a client, as they may be facing tough questions about their businesses, however, it’s a winning one. One of the challenges we have encountered is the long journey between just activating in store and having a clear plan and shopper strategy behind the activation. The level of education regarding shopper marketing is another challenge – the difference between shopper and consumer for instance. This is not the case though with the global and regional accounts, most of them multinational companies, who have built shopper science in time,” concludes Ondina Olariu.
When it comes to Mercury360, Adrian Paculea says that they don’t have a shopper marketing department and at the same time uses the term sparingly, as the term is used differently from one agency to another in the Romanian market. At the same time, as working on this field requires a really good knowledge of the brand, they prefer to work with a multi-disciplinary approach, also with the people from brand communication and the ones from activations. They have a creative department concentrated on in-store and BTL and as well as a very good production department that can deliver solutions. They also do implementation in house, but they put a big accent on the strategy side as well. Everything is integrated.
“The challenge is the adaptation to the retailer, because most of the time they don’t share data with the clients. Not having enough data, the agencies tend to look at the shopper’s profile, but the problem is that, with only one exception, at a hypermarket level, it begins to get uniform and starts to become more proximity than anything else. On the implementation side, we have a big problem concerning the employment side, being more and more difficult to find the right persons,” concluded Paculea.
Looking into the future
We asked the agencies’ representatives what they foresee happening and how they will approach the future. In this context, Corina Chiorean thinks the relationship between brands and consumer is very quickly getting closer and closer. The brands that will know how to become personally relevant to shoppers and will have an authentic interest in keeping them loyal and engaged at any time and place, will win their attention and wallet. “Commercial campaigns communicated top-down from brands to consumers are most likely to fade away. Shoppers have, on one hand, abundant information through various channels and, on the other hand, the technological tools to select what is worth their attention. As a consequence, the power balance now inclines exclusively towards customization capability, effective engagement methods and customer motivation techniques. The agency’s role is shifting towards a more strategic place, a marketing and sales consultant, who is able to accompany the brand’s identity and product creation, since the agency is a customer recruiter, an engagement catalyst and a brand loyalty builder,” concluded the g7’s CEO.
For Mercury360, the biggest accomplishments on the clients’ side are the winning of several Heineken accounts at the beginning of this year. And what makes it even more important is the fact that Heineken has an internal shopper marketing department and was looking particularly for a shopper marketing agency, having separated this side from the brand one. “I wish that all the clients will take this road when it comes to shopper marketing, on the inside of their business. Moreover, looking at the industry, I believe that in the future there will be a better collaboration between the retailers and the clients and there will be a bigger emphasis on long-term projects, rather than short-term ones,” declared the Mercury360’s executive director.
A positive look into the future has also the Geometry Global Bucharest business director that there is a lot of investment abroad in the newest technologies to study and interpret shopper behaviour – from augmented reality to neuroscience methodologies. She has visited one of her clients’ shopper science labs and she considers the future is really here. “The shopper marketing studies have come to accurately calculate instantly sales impact of moving one SKU at a different shelf level. Shopper communication tests show that the word “NEW” so much valued by a brand manager when launching something, is the least visible word in an in-store piece of communication. As to the agencies, I think that the real competitiveness stays where data sits. It is not impossible, but it is difficult for agencies organized around the creative process and not rooting their work in strategy and data, to reshape to answer the briefs clients come from the store with. In parallel, big data companies are trying to expand their businesses into creative territories, as it is easier for them to add this to the technological background and the ability to deal with data and measurement,” declared Ondina Olariu.
Still, there is a lot more place for growth. And as Dana Nae Popa points out, not only a numerical growth, but a transformation and adaptation to consumers’ desires and habits. Yet, in this context, the biggest win for the consumers is the fact that the brands have understood that they need to be more human, to offer an one to one experience, as personalized as possible. “And they also know that if they continue to position themselves on a pedestal from which they try to sell their product the effect will be a reverse one and they will be rejected by the consumers,” concluded pastel’s managing director.