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Route to purchase strategy design

Strategy is about prioritization, deciding how to best use scarce resources and deciding what not to do. Depending on the shopper journey, the challenge is to prioritize the right touchpoints and define the right level of investment to best manage the shopper toward the conversion.

The starting point in developing any route to purchase strategy is to understand the consumption need states and the associated purchase process. The development of the route

Power score of in-store shopper conversion dr ivers Example of in-store purchase drivers and their conversion power

Figure 3.31 Power score of in-store shopper conversion dr ivers Example of in-store purchase drivers and their conversion power.

Source: Millward Brown, 2008

The route to purchase 69 to purchase strategy depends on where the company will compete, i.e. which is the target consumption need state(s). This determines the competitive environment, as well as the shopper behavior. For example, in the airline industry, if the targeted consumption need state is business travel or economy family travel, the implications will be different in terms of shopper behavior, and how to design the route to purchase strategy.

When the consumption need states and where the company will compete has been defined, the competitive position within the consumption need state, and specifically the category, in terms of shopper penetration of the category and the market share of the manufacturer’s products and services, has to be evaluated to understand the overall strategic challenges.

Understanding the consumption need states and the competitive position also gives important feedback for the development of products and services, as well as the positioning of brands. This is not a task that normally falls within the confines of shopper marketing. Still, shopper marketing has an important role to provide insights to ensure that there is an adequate offering in line with the strategic positioning and the shopper marketing challenge at hand.

After understanding the competitive challenge, the attitudes of the shoppers need to be mapped. Crossing the involvement with the level of planning gives insights into the activation priorities. In situations with high involvement, the pinchase process needs to be supported with adequate information along the shopping journey. When the involvement is low, the challenge is more to draw attention at the moment of conversion. The level of planning influences where the focus of the activation should be, before the purchase or during the shopping trip, closer to the moment of conversion.

Shopper penetration and market share matrix

Figure 3.32 Shopper penetration and market share matrix

The vertical dimension shows the shopper penetration, i.e. the percentage of shoppers buying the category. The horizontal dimension shows the market share of the manufacturer's products and services within the category In the upper left cell many shoppers buy the category, and the challenge of the manufacturer is to gain market share within the category In the lower left cell, few shoppers buy the category, and the manufacturer needs to evaluate the possibility and potential attractiveness of the position. In the right lower cell, the challenge is to increase the interest and conversion of the category. In the upper right cell, the challenge is to continue to ensure dominance. Obviously, positions of low penetration and market share can be attr active, if the value and the margins are profitable.

Source: Author

Involvement and planning matrix

Figure 3.33 Involvement and planning matrix

The vertical dimension shows the involvement level and the horizontal dimension the level of planning. The upper left cell shows high involvement and planning, and demands interaction, information and education along the various touchpoints of the shopper journey. The upper right cell shows high involvement, and low specific planning, which demands interaction, information and education close to the moment of purchase. The lower left cell describes low involvement and high planning. In this situation, the different touchpoints need to be managed with interruptive messages to draw attention and build preference. The lower right cell describes a situation with impulse buying and low involvement, which demands interruption and attention building through activation close to the moment of purchase.

Source: Author

Mapping the touchpoints along the shopper journey, and understanding their importance and role is the basis for prioritizing them in terms of management and investment.

Touchpoints can be divided into touchpoints that lead to a purchase and those that drive the conversion at the moment of the purchase. In an omnichannel environment, there is not just one point of purchase, but several across different channels. Orders and purchases can be done on a mobile device, through the internet, or in a brick-and-mortar store. Not only do the number of touchpoints increase, but they can have a double role of supplying information and building preference to drive the actual purchase, as well as being a point of purchase. Not all touchpoints can be addressed with the same focus, but investments in them need to be prioritized to optimize conversion and relationship building. The role and importance of the different touchpoints need to be understood to develop the optimal shopper marketing progr am and route to purchase strategy. The prioritized touchpoints need to be understood in terms of their role to the shopper and activated accordingly. That is why it is necessary to understand with which touchpoints and with which investments the effect is optimal.

Matrix of reach and importance of touchpoints

Figure 3.34 Matrix of reach and importance of touchpoints

The vertical dimension depicts the reach of the touchpoints by percentage of shoppers. The horizontal dimension shows the importance in terms of percentage of shoppers that associated an important influence of the touchpoint on their final purchase decision.

Source: Author

The key is to understand the missions of the prioritized touchpoints to activate them in line with their role. In addition, the type of activation has to be evaluated to ensure the optimum investment by touchpoint. The return on investment (ROI) of the shopper activation program and the route to purchase strategy needs to be calculated and optimized in terms of the conversion effect and the sales and margins generated. Caution is required when calculating the ROI of marketing program investments as often longer-term impacts on customer loyalty and brand image are difficult to quantify. This is a challenge often discussed in relation to promotions and price discounts; they can be conducive of short-term sales, but have a small or even contrary effect in the longer term.

Defining the target consumption need states, understanding the strategic challenges, mapping the shopper attitudes and the touchpoints along the shopper journey, and prioritizing the touchpoints in line with their roles and ROI all form basis for developing the route to purchase strategy. The route to pinchase strategy can be built upon existing shopper journeys, but can also imply developing new touchpoints and changing the shopper journey in line with the strategic shopper activation interests of the company. Examples are online solutions, such as Dell or Amazon, or streaming in the music and movie industry, that have fundamentally changed traditional shopper journeys.

A clear and coherent message across the route to purchase is key to building trust with consumers and shoppers. The challenge is not only the route to purchase, but also the linkage

ROI calculation of marketing programs

Figure 3.35 ROI calculation of marketing programs

Example of a ROI calculation of a marketing program. The conversion value is calculated based on the shopper target, the relevant opportunity, expected conversion rate, and sales per conversion. The investment is calculated as the marketing cost to activate the priority touchpoints minus the costs shared with other programs or partners, and the variable specific cost per lead opportunity. The profit of the program is the additional margin generated minus the marketing program cost. The ROI is the profit of the program as a percentage of the program investment.

Source: Lenskold Group, 2017

From shopper journey to route to purchase strategy

Figure 3.36 From shopper journey to route to purchase strategy

Representation of the development of a route to purchase strategy. From consumption need states, shopper journey and role of touchpoints mapping and prioritization, in terms of awareness building, information, and offer evaluation touchpoints, to the purchase, and the influence of the experience on the initial consumption need state.

Source: Author

with the route to market. Products and sendees need to be available at the right points of purchase for the targeted consumption need states, and in line with the touchpoints activated. An example of building coherent route to purchase and route to market strategies is the TOP model (target - occasion - place). Specific consumers are the target for a specific occasion of usage, and the products and sendees are available in points of purchase aligned with the target consumers and consumption occasions.

Another example is Coca-Cola and its Motor program to ensure a 360-degree coherent activation approach. The program connects the different touchpoints of the shopper journey according to the media channel and shopper conversion funnel, from ATL, out of home, in the store, until the product package, and the role of each touchpoint in the shopper activation journey. Hereby, the route to purchase strategy becomes linked with the route to market, at least when it comes to the place of purchase. For example, for then- program in Thailand Coca-Cola won the silver Ogilvy Award shopper marketing award. In Thailand, Coca-Cola was facing stagnant growth and loss of leadership in the soft drink category in the main sales channel, the traditional trade. With a coherent shopper marketing program Coca-Cola was able to turn around the situation. The program included the management of different media from outside to inside the point of purchase, until the packaging of the product itself.113

The design of the route to purchase strategy is key to managing scarce resources to optimize the shopper conversion along the shopper journey in line with the positioning within the consumption need states and the strategic objectives.

The route to purchase strategy can actively change the initial shopper journey to achieve strategic advantages. For example, the banking sector and Fintech has radically changed the shopper journey and opened the market to new digital only competitors, e.g. N26 from Germany. Dell is another example of a company that changed the competitive dynamics in the PC market through a digital marketing and sales process. These examples of change in the banking and computer industries describe radical changes to the commercial value chain, not only in the route to purchase, but also in the route to market.

TOP activation scheme for beer in South America

Figtire 3.37 TOP activation scheme for beer in South America

Example of TOP (target - occasion - place) model for activation strategy for the beer category in South America.

Source: Author

Coca-Cola Motoring to win program in Thailand

Figure 3.38 Coca-Cola Motoring to win program in Thailand

Silver shopper marketing award winner of David Ogilvy Awards. Motor of Coca-Cola is a shopper marketing design and implementation initiative.

Source: Coca-Cola, 2008

Notes

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