It is well known by now that large FMCG firms and some categories are facing a crisis of volume and consumption- shoppers are trading out and across as a result of the inflationary market place we find ourselves in. The historical solution has been to go back to understanding our shopper and category but recently we have moved away from that towards pricing (or as I have called it in the past- lazy or growth) or made attempts at bold new marketing campaigns #Jaguar or hiring a few new influencers on the latest social media channel.
Is it because Trade/Shopper marketing departments have been lost recently in the conversation of “Where do the belong- is it sales, marketing or indeed standalone” or have we moved our focus away because it isn’t “sexy”. Maybe we will never know but the reality is now more than ever FMCG firms need to revert to understanding their brands path to purchase and its importance in delivering what shoppers need, when and where.
In a simpler time, long before the internet, the path to purchase in the FMCG and supermarket space was relatively straightforward. Consumers moved through a linear process, typically beginning with brand awareness through traditional advertising channels such as television, print, and in-store promotions. The journey would then progress to consideration, often influenced by word-of-mouth, product sampling, and in-store displays, before culminating in a purchase decision made almost exclusively within the physical store. Data from Nielsen in the early 2000’s indicates that over 70% of purchase decisions were made in store.
Then something came along caused a bit of disruption, The Internet. Consumers began to interact with brands in various channels and at different points along the traditional path to purchase muddying the waters between awareness, consideration, purchase and post purchase. The rise of ROPO (Research Online, Purchase Offline), changed buying habits with early online shopper principles focussed on content, research and reviews and product images and reverse ROPO (Research offline and Purchase Online), changing the nature of some physical stores- especially in the appliances and household tech space. This challenged the traditional path to purchase somewhat, but the influence points were still clearly demarcated even if the channels and the number of steps had become more numerous. By 2019 according to PwC, 45% of global consumers reported using multiple channels when shopping for groceries and FMCG products, up from just 10% in 2010.
However, that has changed as well. The path to purchase is no longer demarcated by clear lines, the purchase, research and influence channels have become even more muddied and now it is hard to determine exactly where and when the purchase will take place. As I mentioned in a previous article “The Death of Discounts”, whilst promotional levels are dropping, this purchase spiderweb is now driving up trade spend as FMCG firms struggle to truly understand and influence the point of purchase.
A 2023 study by McKinsey found that the average consumer interacts with at least six touchpoints before making a purchase, with digital channels playing an increasingly significant role. The study also revealed that 73% of consumers expect a seamless and consistent experience across all channels, underscoring the importance of omni-channel strategies in the modern retail landscape.
Key drivers of change in the current path to purchase include:
If an organisation can organise, visualise and use its data to understand the new cobweb path to purchase, they stand a chance at being able to win in this new retail environment but there is one big “if” with all of this. Only “if” they ask the right questions of the data will they do so. To do this you need know what questions to ask and that comes with time, with experienced, well trained, well rounded shopper and trade marketing teams who understand their category, have the data at the fingertips and know how to use it to understand the story it is trying to tell them.
The saying goes that “Data is King” in this new digital age, but the reality is that our ability ask the right educated questions will make the shopper and marketing team emperors.
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