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What is the difference between Trade and Shopper Marketing?

If a mass consumption company or a network of stores does not understand the difference between Trade and Shopper Marketing in commercial management, it is surely limiting its competitive position regardless of whether its operation is only digital or if it does so omnichannel, that is, through a combination of physical and digital.


One of the main discussions in consumer companies and retailers is the need to align digital channels with physical operation to guarantee that the Shopper's purchasing experience is the best possible.


We know that having a physical and digital sales operation has significantly complicated the commercial operation, from strategic planning and monthly sales estimates to the design of the perfect omnichannel store. Initially, some processes and functions were simply duplicated as a result.


Some companies have decided to assign the responsibility of developing e-commerce to a Sales Manager with experience in e-commerce. It is not wrong, but experience shows that it is necessary to add some other important characteristics to the profile of this professional to ensure that the objectives are sustainable in the long term, without conflicting with the other sales channels.


Companies that did not have a Trade Marketing unit responsible for the INTEGRAL development of all sales channels, saw in the short term an increase in internal friction in their commercial operation, as well as the dissatisfaction of their customers as a result of frequent inventory failures, communication, promotions, and outdated prices, among others.

When the commercial operation is not integrated, manufacturing companies and retailers see their internal operating costs increase at rates that are usually greater than the increase in their digital sales.


Although for some executives, Trade Marketing is still the little-understood “other Marketing”, more tactical than strategic that tends to get lost between the Sales and Marketing departments of organizations, and on certain occasions the great recipient of the “rest of responsibilities” that no one wants. , the reality is that for many companies, it has been a function that has played a fundamental role in aligning the needs of Shoppers, Manufacturers and Retailers.


Trade Marketing is responsible for accelerating the rotation of strategic brands in all channels (including digital) above the competition, that is, increasing market share per store.

When the Sales and Distribution departments are responsible for increasing the sales volume to the store (Selling - IN), Trade Marketing is responsible for making that product "leave the store" (Selling - OUT), that is, that the Shoppers buy it more than the competition.


The first Trade Marketing departments were born in the late 80s and early 90s to manage certain commercial actions, in many cases in isolation, aimed at retail trade, especially large accounts. The first promotions, merchandising materials and “tailored” displays began to be developed; brand strategies were adapted from a general market vision to a vision by commercial channel and/or region. New customer classification models and territory coverage and management strategies were developed that had to show alignment between modern and traditional channels.


Starting in the mid/late 90s, the Trade Marketing function was strengthened with the consolidation of the different Category Management models (today we are going through 3.0), ECR, among others, which come to support the integration of actions and programs joints and optimize the interfaces between Retailers and brands. Perhaps the biggest criticism of traditional models was that they had focused on processes to optimize the supply chain and little on the client (consumer/shopper) and their needs and behaviors.


Diferencia entre Trade y Shopper Marketing

With the development of the Internet at a global level, stores began to open new digital channels in parallel to their physical operation and the Shoppers began to present more accelerated changes in their purchasing behavior, since every day they were more informed, with greater capacity to comparison of offers and benefits, as well as becoming a generator of opinions and content. As a result, the old and increasingly expensive practices of merchandising, display, and promotion were losing effectiveness and efficiency.


Diferencia entre Trade y Shopper Marketing

Traditional merchandising based on posters has lost its effectiveness. To obtain a different result, you have to play with the new rules of omnichannel multisensory stimulation.

To face this problem, some companies decided to create a unit exclusively dedicated to understanding the needs of the Shopper or Client, their mission, and purchasing habits by channel to guarantee that their offers were always more visible and relevant than those of the competition in any type. of store.


Some (perhaps the majority) incorporated this "function" into Trade or Customer Marketing, others into Brand Marketing, and some others are creating new departments focused 100% on the topic and reporting directly to the Commercial Department.


Today, analyzing the most successful companies, we can see that they have applied Shopper Marketing not as a specific functional unit but as a "Commercial Skill", that is present transversally throughout the commercial structure, especially in the functions of channel managers, category, key account and in advertising agencies.


Shopper Marketing came to enhance the Trade Marketing function since its focus is to know in depth the individual, their needs, motivations, and emotions every time they buy the category in any channel, whether physical or digital, to be able to modify their PURCHASING BEHAVIOR.


With the advance of Neuroscience and studies of Shopper behavior, the most successful companies can design promotional activities that break with the supply routine, awakening interest in trying something new.


That understanding is fundamentally in what, how, and when you buy our and other categories and brands. To do this, we must analyze our information and that of the Retailer, in addition to observing the shopper during the purchasing process.


The combination of ALL will give us a greater possibility of detecting actionable opportunities (Insights). From there, strategies will be derived to effectively stimulate the buyer's EMOTIONS to persuade them to buy more, more expensively, or more frequently from our brand throughout the process.


Knowing the Shopper and their purchasing behavior in depth is now as important as it was in the 80s to know the consumer for the creation of the advertising campaigns that moved the industry.


Increasing a company's persuasive power so that the target shopper buys more, more expensively or more frequently its strategic brands through any physical and/or digital sales channel is now a critical skill for any manufacturer or retailer.

In conclusion


The main difference between Trade and Shopper Marketing is that the latter is not an organizational function that carries out a variety of tasks and has a large number of responsibilities, tasks, and budgets. It is clearly, as we mentioned previously, a skill that encompasses functions such as Marketing, Trade Marketing, and Key Accounts, among others.


The executive who has this commercial skill will be able to take better advantage of the available inputs: market studies, sales data, field observation, etc. to generate actionable insights that improve the effectiveness of their promotional actions and commercial results.


Specifically, companies that manage to develop Shopper Marketing skills in their commercial teams will be able to see a positive impact on their results in a few weeks, making the most of all the information contained in their systems:


  • Creation of new and more effective customer segmentation models, using Machine Learning to analyze the millions of transactional data by Shoppers that are collected in administrative systems through all channels and that was previously impossible with traditional Excel sheets.

  • Improve the quality of execution in all physical and digital stores.

  • Increase satisfaction and retention rates of shoppers and retailers.

  • Greater internal coordination in planning the promotional calendar by brand, channel, or key account.

  • Greater profitability of the commercial operation with shorter response time to launches and news.


The great challenge for manufacturers and retailers is to update their commercial processes, structures, and job profiles as soon as possible to incorporate the key skills of OMNICHANNEL Shopper Marketing, creating multifunctional mechanisms for the development, coordination, and control of all sales channels, and enabling the entire team with the skills required to carry it out.


 


Juan Manuel Domínguez, Diferencia entre Trade y Shopper Marketing

Written by Juan Manuel Domínguez R. CEO of TMC Commercial Consultants. If you are interested in learning about TMC's consulting or training products in this area, write to us at contacto@tmcconsultores.com and we will immediately contact you.

If we are not yet connected on LinkedIn, it will be a pleasure to have you in my network of contacts https://es.linkedin.com/in/juanmanueldominguezr

If you want to discuss some ideas on how to implement it in your company, contact us at contacto@tmcconsultores.com and we will respond immediately.







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