Path to Purchase Trends 2021: Positive Spins

Our 25th annual survey finds plenty of industry optimism – if you don’t mind change “How to handle the future without fear.”Those are the words one consumer product marketer used to express his greatest “business-related concern” for 2021 while responding to our annual Path to Purchase Trends Report survey. We think it’s probably safe to say that this represents the first time in the survey’s 25-year history that someone has discussed the future in such stark terms.Over the years, the Trends Report has regularly examined many pressing industry issues, the worries keeping executives up at night as they strive to better engage and convert shoppers. But they’ve always been more tangible concerns about effective marketing and merchandising strategies; about shifts in consumer demand and shopper behavior; about budgets, staffing and skill sets; about mutually beneficial retailer collaboration and activation. Never before have we heard a general fear about what the future might hold.That’s what happens when a once-in-a-lifetime event like the COVID-19 pandemic not only disrupts an already-evolving retail industry but also upends the personal lives of everyone working within it. With everything that happened last year – including some other society-shaking events that profoundly affected the industry – a little fear of the future is certainly justifiable.On the other hand, a little optimism wouldn’t be out of place either, because the industry’s response to the events of 2020 was largely impressive and, in many ways, has paved the way to future success for organizations and individuals that embraced the necessary changes and now are better prepared for anything else that might come along.It’s fitting, therefore, that our Trends Report’s silver anniversary coverage can focus on the “silver linings” produced by the pandemic, the positive outcomes that, although precipitated by negative circumstances, have ultimately created an industry better equipped to confront the future without fear.This year’s Trends Report examines the key issues facing our industry across the five general themes outlined below. THE INDUSTRY’S EVOLUTION COVID-19’s arrival in early spring sparked panic-induced pantry loading that strained supply chains and, in conjunction with the store traffic restrictions that followed, made brand promotions an afterthought at best but often an obstacle to efficient operations as well. In many cases, it temporarily brought the practice of shopper marketing to a screeching halt.Those were short-term situations, however. For the most part, the more lasting impact of the crisis involved an acceleration of trends already taking place at a more gradual pace: consumer adoption of e-commerce across all product categories and retail channels, the shift toward digital marketing among brands and retailers, and the subsequent need to reinvent the role of brick-and-mortar stores.So the pandemic didn’t put the brakes on shopper engagement but rather forced many organizations to put the pedal to the metal on a host of strategic initiatives that previously were part of the five-year plan. And while the expectation is that shoppers and brand spending will both swing back to physical stores to some degree, omnicommerce is clearly now the name of the game.More on the industry's evolution.RETAILER RESPONSE TO THE PANDEMIC Retailers such as Walmart, Target, Kroger, Albertsons and Ahold Delhaize that were building up their omnichannel infrastructures before the crisis hit sped up their timelines significantly. Companies that were further behind the curve (like Costco, Southeastern Grocers and 7-Eleven) started or expanded relationships with third-party vendors.While there were plenty of bumps along the way (severe shortages of key products, weeklong waits for online order deliveries), most leading retailers earned praise from their brand partners for rising to the challenges they faced – although many still have work to do to become fully ready for omnicommerce.More on retailer response to the pandemic. RETAILER COLLABORATION The relationship between retailer and product vendor has never been contentious enough to be classified as “love-hate,” but it’s rarely been mistaken for “wedded bliss” either. Yet the need for both parties to respond quickly and efficiently to the pandemic’s impact made it even clearer than ever before that collaboration is essential to success. And what’s driving effective retailer-manufacturer collaboration these days? Unique shopper data. With the pandemic’s circumstances leading many shoppers toward other retailers and brands, with the migration to digital commerce making personalized engagement increasingly critical, and with more and more retailers positioning themselves as bona fide media operators (see next section), accurate, actionable data has become vital. And when it comes to shopper data, Kroger has emerged as the industry’s role model, according to our respondents.More on retailer collaboration.RETAIL MEDIA NETWORKSIn a typical year, the awakening to retailers as legitimate media operators that occurred across the industry would have been, without question, the biggest story. But, of course, 2020 was no typical year.In January, Microsoft CEO Satya Nadella told an NRF Show audience that the trend has the power to “reshape retail business models.” By July, it had made shopper marketing “a bigger business than advertising,” according to marketing maven Scott Galloway. By December, CVS Pharmacy and Walgreens had joined the networking party alongside Walmart, Kroger, Albertsons and Ahold Delhaize (not forgetting Amazon, of course).“It’s really, really important to leverage this customer media … and connect it to national media, so that shopper marketing isn’t a discrete function off somewhere [but] a strategic imperative,” Henkel NA’s Ken Krasnow told attendees of our own Path to Purchase Expo last November. More on retail media networks.WALMART VS. AMAZON In the decade-long battle for supremacy between Walmart and Amazon, it appears as if the reigning champion of the CPG marketplace held its ground in 2020, defying the logical assumption that its pure-play e-commerce competitor would exploit the massive channel shift taking place. It certainly did in the eyes of our survey respondents.More on Walmart vs. Amazon.FOR A DEEPER DIVE into the survey and its results, see the "Summary of Findings."SURVEY METHODOLOGY: In late October 2020, marketing executives at U.S.-based consumer product manufacturers were emailed a questionnaire to be completed online. The names were drawn from Path to Purchase IQ magazine subscribers, Path to Purchase Institute members and others in the EnsembleIQ database, with an emphasis on people with manager, director or senior executive titles. From those emails, 156 executives submitted surveys. Each respondent was entered into a drawing for one of four $100 Amazon gift cards. The survey was administered and the data compiled by EnsembleIQ Research Solutions.

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