"The biggest challenge is getting away from traditional trade"

Written by Pritha Mitra Dasgupta | Updated: Jun 28 2011, 12:49pm hrs
Saatchi & Saatchi X, one of the leading global shopper marketing agencies, entered India last year. The agency is part of the Publicis Groupe network, which is the world's third-largest advertising agency holding company. Saatchi & Saatchi X has already picked up two key clients liquor brand Diageo and fast moving consumer durables (FMCG) major Proctor & Gamble. In an interview with FE's Pritha Mitra Dasgupta, Simon Hathway, regional CEO Europe, Middle East, India & Africa, Saatchi & Saatchi X, talks about the opportunities in India, challenges posed by traditional trade to shopper marketing and how digital media is changing the way people shop. Edited excerpts.

Why is there such excitement around this concept called 'shopper marketing' What does it entail

I look at shopper marketing as overcoming the barriers to purchase. So that means we are no longer looking at reasons to buy but really looking at reasons why people are buying your product.

You can employ a shopper marketing agency to help you understand how people shop for your product. And understand how to get a higher conversion rate so that you can turn more shoppers into buyers. Many people try and find shopper marketing by media touchpoints such as in-store media, display, etc. Till now it's been fine in a market like India. But now with more modern retail, people have more choice and therefore there can be more barriers to purchase. And therefore the challenge will be to overcome them. And that is what we are trying to address.

What are the trends in the shopper marketing space globally

I think the biggest change that is going to happen is with digital. We are seeing shoppers using digital appliances or tools to help them shop. So the biggest trend that we are working on is what we are calling 'search to shelf'. And that means, from the moment someone goes 'I need to buy something', how do they behave, what tools they use digitally or not digitally, and where does the store fit in that story. And then it is also important to manage the relationship. This is interesting because the industry tends to talk about online and offline but the shopper doesn't see a line.

In India the internet penetration level is still low, but 3G technology is coming. So the next big phase will be how people use their hand-held devices to shop.

How has Saatchi & Saatchi X fared in its first few months of operations in India

We are working with a number of clients. We share one client with Saatchi & Saatchi (the parent company), that is, Proctor and Gamble (P&G). However, our business here is separate. We are not necessarily handling P&G brands directly. And then we have picked up Diageo, who's a separate global client.

Are companies in India willing to spend on shopper marketing

I think clients are willing to spend and they are taking retail investments seriously. The problem is, for most FMCG companies such as P&G, perhaps only 5-10% of the distribution goes through modern trade. And therefore their return on investment (ROI) is quite low.

In India the biggest challenge is getting away from the traditional trade. So sometimes clients end up spending more than what they expect because of the scale, complexity of retail. But they know that it's a long-term market. And the opportunity in the long term is very big.

The diversity that India provides is also very exciting. On one hand there are clients like P&G who do understand this and there is a system in place. And then there is a whole new set of clients who are learning very quickly but also because their global organisation is learning very quickly. There is a huge opportunity in India to lead the way with some of those global companies.

What are the challenges in India

A lot of people are still thinking 'I have above-the-line and below-the-line and so why do I need to change'. So there is that point of educating people about the advantage that we create. The other thing that we do see is that clients are not organised or structured for shopper marketing. That's another barrier for them to do things correctly. But those are challenges that we face everywhere in the world.

How much sales can shopper marketing ensure within a store

It really depends on the category and what the challenge is. We recently did a campaign in the UK where in a single store we saw sales going up 1500%. The client was Diageo and Coca Cola. The shopping challenge in most stores is that the alcohol and the mix that you put are not in the same place. So by putting the two together, sales increased manifolds. It's not a big thing but it overcomes a big barrier.