09 Aug Digital Evolution and the Impact on Retail Marketing
What is the evolution of digital in retail marketing? Where are we heading?
Almost 10 years ago, I was walking on the streets of New York with a friend of mine after attending a Marketing Profs networking event discussing a different digital evolution. We spotted a flashy and grabbing sign to enter a store, which at the time wasn’t in Canada. The window display of Uniqlo invited us to come in and take a photo with their photo booth for free. We entered for the photo booth and exited with some proud purchases and without a photo.
Interestingly, experiential and experience marketing have been with us for some time in one shape or another. Yet, for various reasons, many retail operators were still caught into the “old ways” for almost a decade too long. Today, there is an emergency push to innovate and adapt processes and technology that otherwise would have taken years. ( Check out our interview on Social and Digital Trends with industry experts)
Technology is merely an extension of experiential marketing.
What we used to call traditional is now merged with the new media-digital. Digital evolution is a continuous process. This tells you how behind some retail sectors maybe if they are not fully adopting the “new old.” The unforeseen pandemic catastrophe brought stress and pressure to many organizations and businesses worldwide and their employees. It enforced some positive innovations for the long-term progress of the retail industry. The pandemic and political decisions changed the rules of engagement and business. But the unprecedented could easily sway business in extremities as they are challenged to catch up too fast. The pressure on internal resources to deliver miracles, the expectations, and the anticipation has also shortened and intensified.
The key to long-lasting success is a balanced approach.
Your plan should include customer acquisition costs across multiple platforms, the lifetime value of a consumer (meaning you need them engaged over time, not a quick click and single purchase and then gone), and overall company story and employee satisfaction. Employees will always be the most powerful micro-influencers of each business.
A recent publication by Deloitte, “2021 retail industry outlook”, speaks of the digital acceleration and the “new rules for retail” where subsectors such as grocers, home improvement, and mass merchants benefitted greatly from their status of “essential services.” Despite the small sample size of Deloitte’s survey, it is abundantly clear that digital acceleration and supply chain resilience are top priorities, along with the health and safety and realigning cost structure, all between the 70 and 88 percentiles.
Digital acceleration is a hot topic, undoubtedly- from adopting e-commerce to perfecting it and ensuring last-mile fulfilment.
“While having a digital touchpoint might help retailers meet minimum consumer expectations, retailers should differentiate themselves as customer acquisition costs continue to rise. Digitally native retailers, subscription models, and consumer products companies now pose meaningful competition.” ( Deloite, 2021)
The density of the competitive digital landscape is high, and brands from make-up to fitness to shoes and personal growth classes are all competing for the same disposable income at the same time and same channels. The limited attention span of consumers is holy-grail precious and now down to just 2 seconds in some cases.
- There are 1.85 billion websites online as of 2021. Forbes reports that some experts estimate that most Americans are exposed to around 4,000 to 10,000 ads each day!
- Prat & Valleti ( May 2021) state that in 2021 the global spending on online advertising is predicted to rise above the $400 billion mark, and Google and Facebook will account for 60% of this in the US and remarkably 80% in the UK. As you can see, Google’s profit is skyrocketing.
- According to Media Post, more than half of mobile users leave a website that takes more than three seconds to load.
We, as consumers, had one or two ‘aha’ moments during the last 16-18 months!
We deepened our beliefs or reimagined consumption and what matters most in our daily lives.
The purchasing decisions got more palpable and less impulsive in some cases. This affects brand equity.
Accenture surveyed consumers to understand how they reimagined their connection to brands, and “ 72 % of the Reimagined expect companies they’re doing business with to understand and address how their needs and objectives change during times of disruption ” . And “ 50% of the Reimagined say that many companies disappointed them by not providing enough support and understanding of their needs during challenging times “. Accenture identified the following new motivators, which we will take further and challenge you continuously to reinvent while listening to your customers.
For the Reimagined consumer, which represents the vast majority of the sample, the following appear to be the new motivators:
- Ease and convenience- 11%
- Service and personal care- 14%
- Trust and reputation- 12%
- Product origin -10%
- Health and safety- 12%
- Quality- 21%
- Price- 19%
The pandemic shifted how we, as the consumer, want to engage with brands. Similar to what instant gratification, fast deliveries, and on-demand services did to our consumer expectations. These new forces dictate which brands will champion our favorites’ list.
The spillover effect of the pandemic, in this case, will influence how to do strategic marketing planning.
Therefore, a purely digital strategy to saturate and conquer every touchpoint of the online realm is insufficient. Your overall corporate story needs to resonate with the purchaser. Not only that, but no super engaging banner or game will eradicate the sensory experience of in-person interaction unless we start living as depicted in the movie Wall-E.
We recently hosted some extended reality events. For the first time in 15 years, our team was relieved to see people interacting purely for the experiential part of the marketing activation. This singular observation showed a deprivation of physical experiences and a high appreciation for well-interwoven marketing action. The virtual gamification, combined with a real-life application, brought enjoyment, which may have been overlooked before the pandemic.
The bottom line is that digital is a must. But it shouldn’t be the only focal point and budget item of your retail marketing strategy. It should congruently flow with your overall product and corporate strategy. Your personal digital evolution can not be narrow-minded, or it is not an evolution. The corporate media mix should continuously reinvent experiential and extended reality options to engage your customer base.