THE FINAL SHOPPING FRONTIER

Brands slug it out on the supermarket floor where more crucial buying decisions are made than people may realise
By: Woranuj Maneerungsee
Published: 16/02/2009 at 12:00 AM
Newspaper section: BusinessHas this ever happened to you? You plan to buy instant coffee brand N but end up with brand M or, in the end, get nothing.

If so, you are in the majority. According to a recent study by the marketing service agency OgilvyAction in Bangkok office, 61% of shoppers make their final decisions in the store.



Conducted last month, the Shoppers' Decisions Made in Store (SDMIS) survey found that people will spend more carefully during a downturn. Stores have been the final battleground where brands fight to win shoppers' minds, says Ogilvy managing director Mitch Webber.

Every aspect of marketing is important in a slowdown and investing in brands should not be overlooked, he said. Companies that build their brands will end up in a stronger position.

"But I must say, in a critical time like this, shopper marketing (strategies to convince consumers in the store) is also important or even more important since half of shoppers make their decisions in stores. ... That is an open opportunity for all brands."

In addition, shopper marketing is more measurable and a lot cheaper than other marketing strategies.

Mr Webber and his team have investigated topics such as how people respond to product displays on shelves. They set up product layouts that go beyond standard point-of-sale materials and promotions.

Shopping behaviour has been studied for many years, which is why supermarkets look very similar. For instance, the magazine and book corner in a modern store is positioned as a "chill zone" to cool down consumers who will spend more time around it.

Supermarkets bake pre-prepared items and frozen dough to create a smell of freshly baked bread, which makes people hungry and encourages them to buy both bread and other foods.

But shopper marketing aims at a deeper relationship with consumers. The brand engagement is much more involved. It is about connecting with and influencing consumers. It doesn't matter what consumers plan to buy, the right engagement can nudge them to another brand. "We can nudge you but cannot trick you," explains Mr Webber. "You won't forgive the brand if we try to play a trick. The less you care about the product, the more we can change your interest."



Mr Webber says he can't reveal everything his team has done for clients because of business confidentiality. But one success story he can share is how OgilvyAction three years ago worked with Coca-Cola on product displays at Tesco Lotus.

Instead of displaying products in a traditional way, on the soft drink shelf, Coca-Cola was put in between products that go well it, such as chips, ready-to-eat meals and - as Thais love Coke as a mixer - whisky.

The result? Coke sales rose and so did the sales of the categories displayed next to it. The success of this approach led Pepsi to apply it too, said Mr Webber.

"But the real winner was Tesco Lotus, since it could sell space at a better price," he said with a grin.

Another strategy he recommends is for retailers to provide a wider range of products in one zone - in particular for mothers, who are the biggest customer group. For example, supermarkets could put all ingredients for cake baking in one place, which would be convenient and time-saving.

In the latest SDMIS survey, 600 shoppers were interviewed: half at hypermarkets such as Carrefour, Big C and Tesco Lotus, 200 at Tops Supermarket and 100 at 7-Eleven convenience stores. Of the total, 32% made decisions on quantity in the store (see chart) and 19% bought more than they had planned.

In a recession people think about value and price, says Mr Webber. But some categories are exceptional. The brand does matter for products with which people have high involvement, such as skin care, shampoo, soft drinks, beer, coffee and cooking oil. "But people don't care much about the brand when it comes to talcum, for example."

The survey found that 21% of shoppers made decisions about brands in the store. Of these, more than half switched brands and the rest only decided which brand to buy in the store.

Mr Webber says the survey has given him and his team new insights into how supermarkets can most influence category, brand and quantity decisions.

Consumers, he believes, make choices at supermarkets because the whole shopping environment is more engaging and inviting.

People also spend more time in supermarkets than in hypermarkets, which is an opportunity for the former to increase sales. Some researchers report that when shopping times increase by 1%, sales rise by 1.3%.

"I would like to speak to Big C, Tesco and Carrefour, who forget that people love shopping with fun. Don't make it like a warehouse. It's time for the big stores to bring back fun to shopping," says Mr Webber.