Connecting the route-to-purchase with the route-to-market
For companies to deliver a shopper experience in line with the brand intent, they need to coherently connect the management of the shopper journey toward a specific product or service, the route-to-purchase, with the management of this product or service toward the shopper, the route-to-market.
Due to the ongoing fragmentation and digitalization, shopper journeys are becoming increasingly complex, an issue well depicted in Scholz & Friends advertising video on the subject from 2008 (see video below). Communication and influence is not anymore a one-way street, but multi-directional and not under the full control of companies.
Also, sales channels are facing fragmentation, as well as new challenges from digitalization. Over time there has been a certain consensus that channels would develop toward a mainly modern trade, big box environment, but in many parts of the world, like South America, Africa and many countries in Asia, traditional retailing is preeminent. Also, many chains are developing different formats to better meet shopper needs or, in fact, compete with the traditional channel and the service it provides to shoppers.
Furthermore, direct consumption, on-trade channels, are increasing in importance, often driven by increased incomes, with a wide variety of sub-channels for different consumption needs, such as for an example restaurants, bars, and pubs. Digitalization has been disruptive to retailing, both as a marketing and a direct sales channel. Some of the more known examples include Amazon for books, Netflix for movies and series and Radio Shack for consumer electronics.
A 2015 study by ECR (Efficient Consumer Response) revealed that 85% of FMCG (fast moving consumer goods) companies have resources dedicated to shopper marketing, which shows that shopper marketing as a concept has reached the mainstream of company reality, especially in the case of consumer goods companies. With the introduction of the concept of the shopper journey, shopper marketing has taken the step out of the store to encompass more accurately the reality of today’s shopper and what leads them to buy. The shopper journey, or as it sometimes is referred to, the path to purchase, is, as Shankar puts it in his book Shopper Marketing from 2011, where the shopper is in contact directly or indirectly with the product or service and thus can be influenced by marketing activities to drive preference and ultimately conversion.
The concept of the shopper journey is important as it shows that the interaction between the different touchpoints with the brand, which constitute the journey, have a bigger impact on the shopper behavior than the individual touchpoints by themselves. It is thus important to optimize the journey experience over the experience of each touchpoint, as shown in a McKinsey report from 2016. Even if a marketing campaign is perfectly designed and developed, building awareness and preference through TV, radio, outdoor and digital media, if the touchpoint at the point of purchase is disappointing, the journey, as a whole, is sub-optimal.
As shown by Stilley, Inman and Wakefield in an article from 2010, shoppers enter the journey with an ideal proposal in mind, not only limited to spending, but what they are looking for to satisfy a future consumption or usage situation. In that sense, not only the journey needs to be well managed, but the offering needs to be in line with the solution the shopper seeks. Taking wine as an example, even the best service and the best food will not cover the fact of the missing of the appropriate wine to accompany the occasion. Especially wine is a category that has been used to better understand the connection between the intended usage situation and the shopping behavior, as for instance in a study of Hall, Lockskin and O’Mahony from 2001. A glass of wine at an informal family dinner compared to a formal dinner party would in most cases trigger different types of solutions in terms of wine type and price, as well as shopping journey, when it comes to information touchpoints and ultimately the channel of purchase or consumption.
A satisfactory shopper experience can only be achieved, if, as in the example above, a suitable wine is available to accompany the intended consumption occasion. The availability and presentation of the adequate product or service at the moment of purchase, to turn the shopper into a buyer, also needs to be ensured. Shopper marketing, as pointed out by Flint, Hoyt and Swift in their article from 2014, is strongly associated with the supply chain. Only by ensuring that the shopper will end up with the product or service that he has intended to buy to meet the consumption need, and that he has been activated along the journey toward the moment of purchase, and more importantly that he has been activated at the moment of purchase in the point of purchase, will the shopper experience be coherent with the brand intent.
Managing sales channels is complex, as it involves aspects of logistics, as well as of activating the point of purchase, based on its specific role to the shopper and its importance to the company. The question is how to optimize effectiveness in terms of activation and cost to serve across the different channels. Management challenges vary between modern trade channels with centralized negotiations and logistics and small independent outlets that need to be managed individually, either directly or through third parties, and digital channels.
The fragmentation and digitalization of shopper journeys and sales channels has led to a more fluid shopper behavior, where shoppers use different types of channels in their search and buying process in an omnichannel approach, as described and discussed by for instance Verhoef, Kannan and Inman in 2015. As opposed to multichanneling, where channels are managed in parallel, the starting point is the shopper, his needs, and the role of the different touchpoints and sales channels, and their interaction. Still, such a strategy needs to be well evaluated, as it in fact can be more costly, and less effective than expected, as shown in an evaluation by CNBC.
Connecting the management of the shopper journey, the route-to-purchase, with the management of the product or service, the route-to-market, is a complex endeavor, as in many cases sales channels are not under the direct control of companies, but it is where B2B (business to business) and B2C (business to consumer, or shopper) meet. The knowledge set needed to manage the route-to-market is quite different from the one needed to manage the route-to-purchase, which makes the internal coordination challenging.
Still, as the shopper reality grows more and more complex, different touchpoints and channels cannot be managed apart, as this no longer corresponds to how the shopper operates. To deliver a shopper experience in line with expectations, companies need to connect their route-to-purchase with their route-to-market. A challenging task, as the intersection of the route-to-purchase and the route-to-market is where different business realities meet, due to the different objectives, shopper vs. channels, and types, B2C (or shopper) vs. B2B, of management.
Proposed further reading:
ECR. (2015). ECR category management/ shopper marketing benchmark study in 14 European countries.
Flint, D. J., Hoyt, C., and Swift, N. (2014). Shopper marketing: profiting from the place where suppliers, brand manufacturers, and retailers connect. Upper Saddle River, N.J.: Pearson Education.
Hall, J., Lockskin, L., and O'Mahony, G. B. (2001). Exploring the links between wine choice and dining occasions: factors of influence. International Journal of Wine Marketing, 13(1), pp. 36-53.
Maechler, N., Neher, K., and Park, R. (March 2016). From touchpoints to journeys: Seeing the world as customers do.
Shankar, V. (2011). Shopper Marketing. Cambridge, Massachusetts: Marketing Science Institute.
Stilley, K., Inman, J. J., and Wakefield, K. L. (2010). Spending on the fly: mental budgets, promotions and spending behavior. Journal of Marketing, 70(3), pp. 34-47.
Verhoef, P. C., Kannan, P., and Inman, J. J. (June 2015). From Multi-Channel Retailing to Omni-Channel Retailing: Introduction to the Special Issue on Multi-Channel Retailing. Journal of Retailing, 91(2), pp. 174-181.
About the author:
Georg Krentzel is partner at Globalpraxis.
Published in:
American Marketing Association, Marketing News (14 February 2018)
https://www.ama.org/2018/02/14/connecting-the-route-to-purchase-with-the-route-to-market/
