The growth of shopper marketing is expected to outpace other segments in the marketing mix over the next several years.
This is according to Integer Group chairman Jeremy Pagden, who was in the country to drive the expansion of its SA operations.
The Integer Group, a division of TBWA Worldwide, is one of the largest promoters of retail and shopper marketing networks and has a presence in 18 countries. Shopper marketing is a process that aims to identify shoppers who would buy certain products, targeting them through various marketing methods.
The Integer Group is growing aggressively in SA.
“It is our intent to grow by a factor of three over the next two years,” Pagden says. “SA has a sophisticated retail model, we feel it’s a market where the potential of shopper marketing can be fulfilled. There are some very smart retailers and all the great brands live here,” he says.
Shopper marketing is still in its infancy and was not even a known term 10 years ago, but it is growing.
In a study by global consulting firm Booz & Company, 83% of leading consumer packaged goods executives said they would be increasing shopper marketing spending by more than 5% annually between 2011 and 2014. This was surpassed only by online marketing.
Booz & Company estimates annual shopper marketing spending is US50bn in the US and Procter & Gamble alone spends over 500m to target consumers at the point of purchase.
In SA the segment has not been isolated in the published advertising spend figures but Pagden says developments in the media and retail sectors will drive the growth of the sector.
“The macro-factors that led to the definition of ‘shopper marketing agency’ were twofold,” he says. “These were the fragmentation of media and the consolidation of retail, which is happening in SA. A third influence came later in the form of the smart phone. Shoppers . wouldn’t buy a high-consideration product without doing some kind of research online,” he says.
Pagden says it’s easy to make a sale, “you just discount the product by 50%. But you’re not doing your brand any favours. There are smarter ways of making sales than discounts. This involves a three-lens model that includes the brand, the shopper and the retailer in a single strategy,” he says.