Sunday, January 20, 2013

Post-Digital Retail Marketing

Where are the opportunities now that digital is so 2012?

First, let's use David Cooperstein's description of what post-digital means. In a year-end post in Forbes, he described several key characteristics of the new marketing landscape.
  1. Budgets will be based on outcomes, not silos.   Since consumers don't think or care about channels, there will be an emphasis on more integration to achieve objectives.
  2. Campaigns (programs) will be designed the way consumers think and act.  Start with the questions: How do they want to engage?  and Why do some hate doing business with us?
  3. Push digital into the physical realm to facilitate choice and decision making by making interesting and relevant information ubiquitous along the journey.  
  4. Leading organizational structures will no longer be driven by media type; agencies are sure to follow.
These trends suggest there are new opportunities within retail that simply aren't re-purposing existing thinking on digital platforms.   Here are two likely candidates:

  • Broadly speaking, this is the use of a mobile device in store as part of the shopping experience.  The more specific definition continues to include later purchasing online making it evil in the eyes of some.   Some baseline metrics:
    • While it varies by country, showrooming behavior exceeds 40% among Millennials
    • Stores still matter (for now) since 80+% of transactions occur in store.   However, when viewed from online purchases nearly half were Showroomers.  That is, given an online purchase - about 50% of those consumers got some information in store first.
  • This behavior suggests that consumers are simply trying hard to minimize their risk.   They want to...
    • Avoid buyers remorse. Often done by checking reviews to see how other people feel about the product.
    • Be assured of a good enough deal. Price comparison (and matching) is a way to ensure we're not getting screwed.
    • Trade off the right benefits.   Convenience of the here and now, as well as click to store, are powerful factors in the purchase process.
  • Given given that value is the ratio of benefits to price there are numerous things that retailers can do on the benefit side of the equation. And that means looking for emotional, promotional, informational and communal content opportunities.
  • Retail remains on a course where marketing and merchandising will continue to intersect.   And this is no more evident than in the area of promotions.
    • The principles of CRM are being used to deliver targeted offers - whether in an email or in-store.  Tailoring offers based on purchase history works.
    • Digital and print circulars are complements, not substitutes, thus allowing for different consumer experiences based on the same offer library.  In the post-digital age consumers will want to access more information from whenever and wherever.
    • The incremental reach from flyers is probably less than 10% (given the dominance of print reach) suggesting that merely replicating the page experience is only the first step toward providing consumers value.
  • Price isn't the only attribute of a promotion.   Exclusivity - either in time or person - makes offers more attractive. 
    • Personalization drives sales; as do "Deal Chic" and intermittent reinforcement. But special needs to mean special, not just a word used weekly.
    • Since consumer needs vary across retail segments (expert opinion is important in pharmacy, not so much in apparel) the offer should include what consumers value most.
  • The competitive nature requires that offers get in the hands of as many consumers as possible; and this still means physical distribution.  
    • The digital equivalent to the door knob is the banner ad; and it doesn't take much to imagine linking POS data with the delivery of display ads in a kind of "Merchandise Re-targeting" scenario that leverages geo-targeting in both worlds.
I'm sure there is much more....but these seem like a good place to start thinking.


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