FMCG is a pretty tough business to be in at the moment. And with Nielsen stats showing around 60 percent of all grocery purchases in New Zealand are bought on discount, the highest percentage of any developed nation, brands are trying everything they can to boost sales and margins. Geometry Global, the world’s largest shopper marketing and activation network, has recently opened its doors in New Zealand and it reckons it can help.
Internationally, the WPP-owned Geometry Global arose from the merger between G2, OgilvyAction and JWTAction (OgilvyAction officially launched in New Zealand in early 2012). And executive director Louise Cunningham, who has 12 years of marketing experience in the UK and in New Zealand working both agency and client side, says it's "the full monty" of shopper marketing.
"What's fundamentally different about this is that we've got shopper marketing expertise across the entire path to purchase ... We don't have an awful lot of expertise in New Zealand because it's relatively new."
In the modern marketing world, she says "shopper marketing is a specific skillset" and it's taken 18 months to pull together the right team (at present it numbers 12, but the website shows the team includes a couple of senior Ogilvy staffers, Greg Whitham and Adi Staite).
Locally, she says shopper marketing activity often centres around consumer promotions and point of sale and she says there are a number of agencies doing that well in this market. But, internationally, it is a much bigger area and its website says it changes shopper behaviour by "providing a full-service shopper marketing offering, using shopper insight generation, digital, creative and in-store activity".
Shopper marketing is experiencing huge growth globally, with Cunningham pointing to a study from 2010 showing over 55 percent of manufacturers in the food, beverage, health and beauty, and household products categories saying their investment in shopper marketing would grow by more than five percent annually over the next three years (this was ahead of digital media).
"Companies are shifting their advertising and promotions mix away from traditional media, while trying to hold the line on further increases in trade promotions spending," the report said. "They are planning to rapidly scale up spending on platforms that are closer to the point of purchase to create direct relationships with shoppers and drive more measurable results."
Most of that growth is driven by FMCG brands with global footprints (big consumer brands are also getting in on the shopper marketing act) and she says this trend is evident in New Zealand as well, although there is no specific local research to back that up (it is planning on doing a study in October).
Google has done some impressive work in terms of mapping the new path to purchase with its Zero Moment of Truth research. And while it's hard to imagine punters checking out the groceries they're going to buy before heading to the supermarket, she says its model is more about targeting consumers at "that very moment of greatest stimulus". It calls this 'Precision Activation' ("the right combination of spaces, places, moments and voices that enable us to sell more for our clients") and to do this it uses a proprietary planning process called Leonardo, which drills down into the purchase decision journey.
The tag team of digital media and big data allows for more targeted, relevant ads, something Google has traded on exceedingly well. And that is also changing shopper marketing. She points to the example of a chocolate biscuit. It can send out a message at, for example, 3pm when consumers might start dreaming about having a treat with a hot drink after the kids are in bed, and use targeted digital media to offer a specific call to action and try to change shopper behaviour.
She says shopper marketing is more action-led than brand-led, but it is important to have a balance between the two. And she thinks Kellogg's Nutri-grain is a good example of that, because while the advertising is targeted at teenage boys and, by extension, their mothers, it's the mothers that do most of the buying and need to be targeted.
Experiential activations also seem to be increasingly popular for FMCG brands. She says it has experiential expertise in the team and from what she can tell "there's a move out of just focusing instore" so it's now stretching that out across the whole path to purchase.
So what does the arrival of Geometry Global mean for Hypermedia, which talked up the importance of shopper marketing when it launched in 2010, is owned by Greg Partington and works closely with Countdown?
Cunningham says Hypermedia doesn't fit within her group and is part of the Ogilvy network, but she says it is an important partner due to its connection to Countdown's instore media (she says Geometry Global works with Ogilvy clients like BP, Pernod Ricard, Countdown and KFC but it also has its own FMCG clients like Sealord, Coca-Cola and Griffin's). And with a tightening of the clear aisle policy she believes Hypermedia will become increasingly important as it gets harder for brands to get in front of consumers.
There have been a number of staff changes at Hypermedia since it launched and Belinda Freeman, who has worked with Nielsen and Ipsos, took over as managing director in April after ten years in the UK (prior to that she spent 17 years in New Zealand). Freeman didn't want to be quoted, but Cunningham says it has a number of new initiatives in the pipeline.