X Marks Sweet Spot for Marketing Agency

Every day, busy moms stop by the baby section in their local Walmart to pick up items ranging from clothing and diapers to car seats and cribs. People shopping for baby gifts also head there in search of the perfect present.

While many people may take this store arrangement for granted, it wasn’t always the case.

For years, baby items were scattered throughout stores according to product category — diapers were with paper goods, for example, and cribs were in the furniture aisle.

But this changed in 1997 when Andy Murray, founder of a consulting firm that eventually became international shopper-marketing agency Saatchi & Saatchi X, started working with Dina Howell, who then was in Fayetteville as head of Procter & Gamble’s Wal-Mart Stores Inc. team.

Putting their heads together, Murray and Howell did some shopper research and learned that moms really wanted to be able to find all baby-related items in one location inside a store.

“And so we created it for her for the first time, in a Walmart store,” Howell said. “So now it’s obviously the way everyone shops for baby items today.”

Their collaboration on the “baby center project” for Wal-Mart is widely considered the birth of the marketing niche called shopper marketing. Fifteen years later, the company Murray started at his kitchen table has grown into an industry leader with offices in 10 countries.

Murray “had a dream to start the company that ultimately become Saatchi & Saatchi X,” said Howell, who two years ago retired from P&G and became CEO of Saatchi X, as the company is known. “And he believed that starting it here in Arkansas at the center of a great deal of commerce made really great sense.”

Murray, 49, retired in December as chairman of the firm, and has started a new venture mentoring entrepreneurs.

Claudia Mobley, director of the University of Arkansas’ Center for Retailing Excellence, said Murray is considered a pioneer of shopper marketing. The concept has now spread to most businesses and ad agencies, she added.

Definitions of shopper marketing vary — and sometimes conflict — depending on who’s offering them. Retailers, manufacturers and ad agencies bring their own perspectives to the topic.

Howell prefers the definition crafted by consulting firm Deloitte: “Shopper marketing is the employment of any marketing stimuli, developed based on a deep understanding of shopper behavior, designed to build brand equity, engage the shopper (i.e. an individual in ‘shopping mode’), and lead him/her to make a purchase.”

This means, essentially, that by understanding the consumer’s behavior, the retailing industry can implement strategies such as display, coupons and placement to move the consumer to buy, Mobley said.

 

Going Global

Murray describes shopper marketing as both science and art. And despite the claims of some, the object isn’t to sell a shopper things she doesn’t need, he said.

“It’s about helping her find what she wants more efficiently and effectively,” he said.

That entails looking “at that moment when [the consumer] is in a different mindset, where she’s being prompted to buy something, to fulfill a need or an impulse to purchase,” he said.

“That shopper impulse is where her mind shifts from just being aware of a brand to having an intent to purchase. So it’s dealing with all of the things that start to happen when that mindset shifts to where you’re in a shopping mode.”

Whether the shopping takes place in a physical store or online, Murray said, shopper marketing is still driven by insights into the shopper’s purchasing decisions.

“It’s really about understanding the emotion and the decision-making process of shopping,” he said.

Like Howell, Murray’s also an alumnus of P&G, which brought him to Fayetteville in the early ‘90s. He left the company in 1993 to work for Hallmark Cards subsidiary DaySpring Cards.

But coming from an entrepreneurial family, he’d always wanted to build a company “from scratch.” In 1997, he did just that, founding BrandWorks Consulting.

Demand for the company’s services was high, he said.

“We couldn’t really grow fast enough because it was such a hot area,” Murray said.

So in 1999, the company joined with Thompson Earnhart & Associates to form ThompsonMurray.

“And then we kept growing and kept growing,” Murray said, “and in 2004, I looked around and said we really need to become global if we’re going to be effective, and we needed a global partner.”

Of several suitors, he chose to sell ThompsonMurray to Saatchi & Saatchi, which is a division of Paris-based Publicis Group, one of the world’s largest communications companies.

“And then in 2010, when we had kind of achieved the core goals that we’d set out to achieve, I decided to bring in a CEO and move into more of a chairman role and mentor in a succession path,” Murray said.

He likened leaving the company last year to running a relay race.

“I ran the first leg, and now it’s time to pass the baton and let someone else run the next leg. My dream and hope is that Dina continues to grow it and make it even more successful,” he said.

“I felt very satisfied that I was able to see something transition. Most companies can’t transition past their founder, and this was a test for me to do that. It was never my dream to hold onto it. If it was, I wouldn’t have sold it.”

 

‘Like Coming Home’

Although Saatchi X has greatly expanded its client base over the years, Wal-Mart and P&G remain important parts of its business.

Jeff Schomburger, president of P&G’s global Wal-Mart team, said in an email that Saatchi X “has been a leader and instrumental in bringing shopper innovation to the industry to turn shoppers into buyers. They have been an important partner to P&G and our success over the past 15 years.”

Howell’s transition from P&G to Saatchi X was a natural one that she calls a win-win-win.

After working with P&G in Fayetteville from 1997 to 2004, she returned to the company’s headquarters in Cincinnati and continued to lead global shopper marketing and media.

Just before retiring in December 2010, Howell got the offer to join Saatchi X, “and it’s very much like coming home,” she said.

“It’s an amazing opportunity in chapter two to be the global leader of an advertising agency that is as prestigious as Saatchi and Saatchi X,” she said. “I still get to work in the industry that I love. It’s been a fantastic almost two years.

“And I got to move back to Fayetteville, Arkansas, which I love.”

The company continues to grow at a fast pace, Howell said.

Saatchi X opened its 13th office, in Cincinnati, about three months ago, and is already planning its next location, which she would only describe as “certainly a hub of commerce.”

Although Saatchi X’s parent company is publicly traded, Howell said it doesn’t release its revenue by division.

But Advertising Age estimated in 2009 that Saatchi X had U.S. revenues of $30 million and revenues outside the U.S. of $10 million.

Saatchi X is moving quickly to adapt as technology changes the way people shop, Howell said. For instance, it’s integrating technology like QR codes on store shelves. Shoppers with smart phones can scan the code to get more information about a brand — “much more information than we could ever print on the shelf,” Howell said.

Saatchi X’s large shopper insights department uses a number of proprietary methods to find out the “why behind the buy,” Howell said. These range from focus groups and online dialogs with shoppers to in-store “shop-alongs” and even home visits.

Mobley said shopper marketing is growing so quickly as a segment of marketing because technology and the availability of high-quality data provide more specific information about the customer.

“I think we are at the tip of the iceberg,” Mobley said. “At some point, the industry will know before I do what I want and send me a coupon.”