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The past year has seen an explosion of interest in shopper marketing. Reportedly 60 percent of brands and retailers are investing in shopper marketing efforts, up from six percent previously. Most, however, admit to being in the learning stages of the emerging practice.

Finding a common language is the first challenge. The term encompasses in-store media, brand marketing, trade relations and consumer promotions, as well as resetting shelves and rethinking categories, like the new initiatives recently announced by Walgreens. Basically, shopper marketing refers to marketing stimulus that is created based on a deep understanding of the shopper. The perceived benefits include increased sales, improved customer loyalty and overall return on investment, which certainly justifies the rush of interest.

A short but impressive list of case studies, from the few retailers who’ve made their efforts public, shows that although the in-store frontier may seem like the Wild West of trade activities right now, the physical space offers significant opportunity to support growth. What’s exciting is the increased industry talk around two things. Improved collaboration between retailers and manufacturers in order to share information and build on what’s working, and a growing awareness that customers alternate between being “consumers” and “shoppers.” The switch is flipped at the point where people are actually engaged in window-shopping the store or aisle, perusing the shelves, browsing the website or paging through the catalog. Knowing what’s happening at that moment is key. That’s why a significant factor in shopper marketing is high-quality behavioral data from which to draw the actionable shopper insights that help shape strategic plans.

“We use the term to encompass the strategies and tactics that engage and influence the customer inside the store,” says Tim Murphy, vice president, Interbrand Design Forum. “It’s a more holistic take on shopper marketing that starts at the top level—brand positioning, which informs the mid-level channel strategies, retailer requirements and category management—and goes all the way down to the promotional level. For the last seven years, we’ve been working on an approach we call Shoppernomics, created around our ability to understand what drives shopper decisions and then deliver that at retail. We’ve seen some very exciting results from Shoppernomics. It has the ability to address the whole store from brand to basket and it’s affordable, unlike a lot of the tools out there that are too narrowly focused.

”One store seeing a pronounced impact from the holistic approach to shopper marketing is arts and crafts specialty retailer, Michaels. By asking shoppers why they purchased, not just what, when and how much, it discovered their need went beyond craft materials to inspiration and fun. The store itself wanted more personality, so its brand positioning was brought to life through higher level category delivery, all the way to shelf and package level.

Michaels concentrated on five categories transformational to their business. Shopper marketing helped find the most productive opportunities, optimize those spaces and allow the retail brand to shine through. The refreshed jewelry section especially delights shoppers. Innovative design, merchandising and staffing gave it a boutique look and feel, while shopper insights led to a new shelf organization with the right breakups, flow and SKU placement. As a result, store productivity has gotten a boost and customers are giving Michaels credit for being fresh and inspirational. The new store experience has craft-related blogs buzzing.

Collaboration between manufacturers and their retail partners has always held the dual promise of reduced antagonism and gains in competitive advantage for both parties. Manufacturers often have more shopper data than their retail partners, who in the past simply merchandised categories based on POS data. But behavioral data from shopper marketing shows that consumers don’t think in categories.

“I hope we see more collaboration, and maybe the current sense of economic urgency will help overcome resistance to that,” says Amanda Yates, vice president of strategy and analytics. “The toughest part of the two groups working toward a new strategy seems to be getting both of them to decide to compromise for the greater good of the category. That means moving away from the proliferation of brand extensions, excessive SKUs. Things that often lead to a less rewarding shopping experience. Shopper marketing takes your thinking well beyond the planogram.”

A deeper level of intelligence allows the retailer and manufacturer to anticipate the needs of the shopper and arrange the store to influence them, not merely accommodate them. That was the thinking behind Cadbury Adams/Halls’ study to find out how shoppers behaved around the cold remedy purchase.

When the company conducted in-home and in-store communication research to find out what was involved in the decision-making process, it discovered issues around merchandising, packaging and experience. One surprising insight was that people shopped in a manner opposite to what the company previously believed. Additionally, it realized that light-reflecting metallic packaging was hard to read and soft bags were not conducive to storage at home.

Findings such as these give a CPG company the ability to improve packaging, strengthen aisle communication and modify assortments based on shopping styles, and include strategic brand-blocking to make a statement at shelf. Such plans for orchestration of the shelf set are seeing greater acceptance from retail partners.

“When you can flow with the shopper thought process, you have a better chance of connecting emotionally,” says Murphy. “It takes relatively little investment and has a huge upside. In the beauty aisle, for example, you may find that better educating her at shelf or including suggestions for new color combinations suits the prevailing shopping style. In a case like that, you’re not spending millions on media. You’re leveraging your assets to better connect with her needs.”

With the ability to interpret insights from shopper data and translate that into the physical space, retailers and manufacturers have a better chance of getting to that sweet spot—the shopping experience that keeps people in the store longer, strengthens a brand’s position, increases share, enhances ROI, saves marketing/trade money—all the while making life easier for the customer.

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