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In-store marketing heats up in
China
BEIJING - Intensified
competition is leading to in-store promotion wars
in China's retail sector, but marketers who want
to ensure top returns on investments should use a
holistic approach. That's the judgment of
ACNielsen, a global market research company, which
does shopper studies and retail measurements of
in-store activities.
"With increasing
competition in and out of the stores, promotions
are [now] seen as a critical marketing tool to
attract shoppers' attention to a specific brand
and generate sales," said Glen Murphy, managing
director of ACNielsen China, in an interview with
China Daily. "Evaluating and maximizing the
effectiveness of these promotions is essential to
the success of any consumer brand in China."
In-store promotions
critical
Recent ACNielsen studies conducted
in China have revealed an increased emphasis on
in-store promotions due to intensified competition
among products for shelf space. "Competition is
the major trigger of this increased use of
promotions," said Murphy. "Our previous studies
show the number of products available inside a
store has been increasing over the past several
years, which not surprisingly has driven to an
escalation of marketing expenses." Murphy observed
that "the focus on in-store promotions is being
driven in principle by an increased attention to
actual shoppers, rather than consumers who may not
necessarily make the shopping decisions".
ACNielsen's research shows that a lot of
shopping decisions are made inside stores, at the
point of purchase, rather than before shoppers
enter stores. Effectively influencing shoppers'
decisions "on-the-spot" is therefore a critical
element for marketers to consider. "In-store
promotions have been put in the limelight as
marketers have found traditional marketing tools
such as heavy advertising campaigns are not enough
to drive consumers' loyalty to a brand, nor a
greater share of [the] wallet [of] a shopper faced
with a huge number of choices in-store," Murphy
said. "Promotions are therefore at the top of many
marketers' agendas nowadays".
Shopper
insights essential
"A key factor marketers
have overlooked to date is the insights into
shoppers' preferences and their involvement in
relation to promotional activities," said Murphy.
ACNielsen's study of the issue has uncovered
differences in attitudes and participation among
different shopping groups.
Take housewives
and youngsters for example. According to the
ACNielsen survey, housewives cite "benefit for the
whole family" as a top priority when it comes to
promotions. They are knowledgeable and keen on all
kinds of promotions, and will always compare and
calculate for better cost-savings. In the
decision-making process, "flavor, brand and price"
are the most important stimuli for housewives,
while promotional information outside the store
has an immediate influence on their plans before
they shop. In-store promotions then serve the
purpose of confirming their choices and helping
them decide on their final purchases. Typically,
brand switching takes place in-store because they
may find further cost-saving promotions when
shopping.
Youngsters react to promotions
very differently. They care only about themselves,
and are more attracted by new launches or creative
promotions. For them, shopping is more of a
discovery tour. Youngsters look for inspiring
promotions in addition to cost savings. "We
suggest that marketers develop a more effective
communications message when formulating their
promotions strategy by targeting specific consumer
or shopper groups," Murphy said. "Furthermore, a
corresponding link between out-of-store
advertising and in-store promotions is also a key
to success, and all these activities should
reflect the brand image, irrespective of whether
it is a consumer goods brand or a retailer
banner."
Direct monetary
benefit
According to the ACNielsen survey,
direct monetary savings from promotions are most
preferred by grocery shoppers. The top three
attractive promotion types for shoppers are "buy
one get one free" (38%), "price discount" (29%)
and "bigger volume at same price" (12%). "Lucky
draw" and "points for gifts" were not as popular
because they don't offer immediate benefits and
usually involve a complicated procedure with
little chance of successfully reaping the
benefits.
As shoppers generally plan their
purchases before shopping, "leaflet mailed to
home" ranked as the shoppers' first choice in
terms of promotion communications. "TV
commercials" and "in-store posters" ranked second
on the list. However, younger people were more
likely to learn about promotions from TV
commercials than older people, who prefer direct
mail. ACNielsen's study also revealed that an
effective promotion communication should be
eye-catching and in a convenient location. "An
eye-catching location is essential to attract
shoppers' attention to promotions in store,"
commented Murphy.
Convenience needs
improving
For current in-store promotions,
housewives are basically satisfied if a promotion
fulfills their needs in terms of value for money.
However, youngsters expressed some
dissatisfaction. They complain that they don't
know how to choose when they are overwhelmed with
similar-looking promotion information. Both groups
shared a common expectation for an ideal
promotion, which should be "convenient" and
"exciting", although the word "exciting" seems to
be interpreted quite differently. For housewives,
"exciting" implies more promotions and cost
savings, while for youngsters it is more about
creativity or uniqueness.
Overall, "more
convenient" is seen as a key area of improvement
for in-store promotions, with 45% of the
respondents claiming "more convenient" as the most
important area for improvement, followed by "more
cost savings" (36%) and "enhanced shopping
experience" (19%). While older people indicate
greater cost savings as the most important factor,
younger people are more likely to want an
improvement in the shopping experience.
"What this says to marketers is really
[that they should consider] how to make [their]
promotions more readily available for shoppers, to
facilitate their shopping decision and lighten up
their shopping experience in general," said
Murphy. "Retail is detail," he added. "When
talking about promotions, detail is even more
critical. Whether it is about the discount level,
or the package size, a thorough understanding of
shoppers will help marketers ensure they've got
the details right, and thereby have a greater
chance of winning a greater share of shoppers'
attention and wallets."
(Asia
Pulse/XIC) |
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