Live Issue... Agencies adapt to demand for retail expertise

Retail has this year become a major focus for the region’s marketing agencies. It is regularly cited by agency bosses as a priority, perhaps second only to digital.

The latest agency to announce it is beefing up its retail practice is Euro RSCG, which recently launched Shop@Euro. Even though the agency has offered shopper marketing for the last 15 years, it is only now that it has decided to forge a new identity for the unit. Agencies including Iris, Ogilvy & Mather, Momentum and Arc also claim in-store expertise.

Like ‘digital’, ‘retail marketing’ is a catch-all term that covers everything from store layout to shelf wobblers. So what exactly are clients looking for, and where do agencies need to raise their game?

According to Zain Raj, the global head of retail at Euro RSCG, the agency wants to bring insights to brands and consumers from its global practice. Shop@Euro will service Coca-Cola, NTUC Fairprice and other retail and FMCG clients. The agency will help clients to understand shoppers and their journeys, and to develop brand messages against this information.

Will Lee, general manager of Catapult Marketing, takes a similar view of the discipline. “It is really about rolling up your sleeves to understand the whole in-store environment and how the shopper behaves there. Once you understand that, you can create a marketing and communication programme that answers your brand’s needs at the retail level.”

Lee cites Subway, a Catapult client, as an example. The agency studied store designs, merchandising and shopper behaviour, and concluded the menu ‘viewership’ experience - where shoppers engage - was not being maximised. Neither were the areas where shoppers were considering or buying. Catapult’s suggestions included selling solutions at the start of a queue of customers and reinforcing the most viewed menu areas.

One reason for the interest in shopper marketing is that brands in many markets now have less control over the retail environment. “In the value chain, retailers are the first access point for consumers,” says Craig Maplestone, managing director of Iris. “With retailers taking control of who comes into their stores, it has become difficult for manufacturers to compete. That is why they need to build a relationship with the retailer.”

He notes that agencies need more than a new name to excel in this area. “To offer a real and effective retail marketing offering, an agency will need to change its mindset away from understanding the consumer to understanding the shopper and the retail channel.”

That has implications for planners and creatives, who need to think about the dynamics between retailer and brand; that may require people with very different skills. “It’s not about brand-building, but actually moving the product,” says Lee.

Rajdev Narula, point of buying leader for Cadbury Asia-Pacific, thinks that many agencies are still using a version of the brand’s TVC in-store. “What they need to understand is that if a shopper doesn't plan to buy confectionery, then our biggest barrier is how to get the shopper to our category aisle. Having the right communication to entice them to buy our brand is irrelevant if the shopper is not planning to buy in the first place.”

Lee thinks that aside from MNCs like Procter & Gamble, Unilever, Kraft and Coca-Cola, a lot of clients are still learning the basics. But according to Maplestone, the onus is on the agency to recommend retail communications if the client’s objective is moving large volumes. He is convinced that clients are ahead of most agencies in understanding “that resizing a print ad, which has been taken from a TVC end-frame, and sticking it in-store is not effective.”

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This article was originally published in 22 October 2009 issue of Media.