March 29, 2018

Don’t Tell the Media: Retail is Alive and Well

It’s rare to go a full day without reading a headline in your email inbox or on a news site highlighting the rapid demise of the retail industry. Many brands that have become household names are undergoing massive business restructuring or shuttering their doors altogether. Shopping malls that once served as go-to destinations for many communities are experiencing increasing vacancies. The perception largely driven by the media is that brick and mortar retail is a sinking ship, but what is the reality? Deloitte set out on a nearly year-long study to better understand the state of retail as it stands today and the driving forces behind recent changes. And what did they find? The silver lining.

 

Despite the onslaught of negative press, retail is still growing and in many places, thriving. Backed by a stable and growing economy, consumer confidence is at an all time high. Experts predict that in the next five years, online sales will grow 11.7 percent annually, and in store sales by 1.7 percent.1 That’s healthy growth across the board.

IBIS World Projected Retail Growth

Deloitte found that a big contributor to the success of brick and mortar stores actually comes down to income. Today, shoppers in lower income brackets prefer to to buy in physical stores. As the wealth gap continues to widen, more and more Americans are losing their discretionary incomes and landing in this low earning bracket. The purchases they make will likely be in person, so brick and mortar stores stand to benefit the most from this change in the distribution of wealth.

 

With this in mind, here are a few marketing priorities to consider:

 

1. Fine tune your customer acquisition strategy

Yes, you know a lot about your customers, but are you investing into the right channels that will lead them (and other audiences who look like them) to make a purchase? As mentioned previously, even details like household income (HHI) play a significant role in the way people shop. Consumers with a low HHI may compare prices online before ultimately going into a nearby store to make a purchase. Your marketing dollars should be aligned with these behaviors. For many brands, it may be time to reevaluate how consumers search, and ultimately buy. Find an agency that can help you understand the unique features of your most profitable audiences, and then identify the right mix of channels to activate them. Small optimizations on the front-end can have a big impact on long-term growth.

 

AMP Agency Customer Journey Mapping


2. Make it easy for consumers to compare prices and find inventory at nearby stores

Eighty-one percent of consumers do online research before making a purchase.2 Whether shoppers are becoming more cost conscious or simply cost aware, the fact is they are more informed than ever before. Retailers should leverage local ads to motivate store visits. Solutions like Google’s Local Inventory Ads and Brand Showcase Ads allow shoppers to quickly locate information on the products they’re looking for as well as their availability in nearby stores. Google also has a feature that allows advertisers to adjust bids for individuals with a certain income range (from the top 10% to the lower 50%), who live within a certain geography. If you’re a multichannel retailer who sells discounted items, you may want to increase bids for searches that originate in an area in the lower 50% household income level. To measure the impact these ads are having on driving purchases in stores, check out Google’s Store Visits tool. Store Visits uses anonymous, aggregated data to measure the number of people who click or view ads and later visit a store.

 

3. Build superior storefront shopping experiences

The digital and physical shopping experience shouldn’t be planned in silos, rather they should be developed as a consistent end-to-end experience. Forty-two percent of in-store shoppers search for more information while in a physical store3 and savvy retailers like Sephora are combining digital elements into their physical stores to make it easy for shoppers to explore, find and purchase the products that are right for them. Discount retailers like Marshalls are making the physical shopping experience more social by encouraging store visitors to share their unique finds with their social networks using the hashtag #marshallssurprise.

 

Marshalls Surprise


4. Leverage partnerships to grow awareness and sales

Brands and retailers often market to the same consumers, so by working together, their power is magnified. With ecommerce set to experience double-digit growth over the next five years, digital co-op investments are a great way for brands to increase their exposure online and drive sales across channels. The right agency can help you identify, manage, and measure the outcomes of these opportunities.

 

While the Retail industry is alive and well, we are seeing a massive shift in the way multichannel retailers operate to meet the changing needs of their consumers. And let’s not count out pure-play e-tailers. Amazon is working hard to turn low income shoppers into loyal customers. Individuals who receive government assistance can qualify for a reduced $5.99 a month Prime membership, and EBT cards can now be used to pay for qualifying groceries. We expect that as brands compete more on price and free shipping becomes more universal, consumers from all income brackets will begin to make more purchases online.

 

As Socrates once said, “the secret of change is to focus all of your energy, not on fighting the old, but on building the new.”

 

Here’s to building the new.

 

You can access a copy of the Deloitte study, The Great Retail Bifurcation, here.

 

1 IBIS World

2 GE Capital

3 Google, Ipsos

 

December 16, 2016

With Email to Millennials, You Just Don’t Know If They’re Going to Open It

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Younger millennial email users are more hit or miss than older US email users when it comes to opening marketing emails, with larger percentages either always or never opening those messages.

You’ve got mail.

December 15, 2016

It's All Part of the Packaging: How Marketing Can Solve the Problems Food and Drink Brands Face

Screen Shot 2016-12-15 at 11.20.53 AM.pngThe food and drink industry faces criticism from every angle. From government regulations on the advertisement of alcohol, society’s pressures to keep trim and slim and ‘Lean In Fifteen’, to the impact of waste and resource on the world’s rising temperature; food and drink brands have to cater for any possible criticism.

How sweet it can be.

December 14, 2016

The Undoing and Redoing of Food

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The nation’s largest food companies now face competitive pressure from two different directions. From one side, there is a movement toward simplicity — simpler recipes, fewer ingredients, less processing. A nice way to label this shift toward simpler foods is “the undoing of food.” At the same time, and from the opposite direction, there is the “re-doing of food” — a process whereby entrepreneurs take on existing categories and seek to reinvent them in a way that improves on the incumbent.

Unfeed me.

December 12, 2016

Consumers More Likely to Open Marketing Emails During Holidays

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Online shoppers are 68% more likely to open a retailer’s email during the holiday season than at any other time of year, according to a recent study from Adlucent. In addition, 32% of online shoppers suggested that they would be more likely to click on a retail ad.

Holiday mode on.

December 8, 2016

The Rhythm of Food

Screen Shot 2016-12-08 at 1.27.51 PM.pngHow do we search for food? Google search interest can reveal key food trends over the years. From the rise and fall of recipes over diets and drinks to cooking trends and regional cuisines. What can we learn about food culture by analyzing the yearly cycles in search interest for food, dishes, ingredients, and recipes?

The many facets of food.

December 7, 2016

Overmonetized Influencers and Pesky Millennials: What Brands Are Worried About Right Now

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Digiday asked brands to “map out” what is really on their minds when it comes to challenges in the brand marketing space. Each individual mind map was then used to create one giant composite chart to try and envision what really is occupying the headspace of top brands right now.

Get in their head.

December 6, 2016

5 Charts: Forecasting the 2017 Global Ad Market

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Recent reports indicate that China’s advertising growth will continue to outpace other large international markets and that digital ad spend will finally usurp TV ad spend next year. Researchers also predict that mobile will take up nearly all of the global advertising growth and that social video will be a major driver of mobile’s growth.

'Tis the season for planning.

December 5, 2016

TV Ad Market is Stabilizing, CBS Research Chief Says

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CBS expects broadcast TV's overall ad revenue to remain steady in 2017. Excluding the effects of the Summer Olympics, broadcast TV ad growth next year will be about 4%, roughly in line with 2016, David Poltrack, chief research officer at CBS, said. The TV ad market is showing more stability compared to the last several years, and an increase in GDP growth, an acceleration in consumer spending, wage growth and pickup in retail sales are positives for 2017.

Steady...steady...

December 2, 2016

5 Things You Need to Know About 2016's Must-Have Toy, Hatchimals

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Hatchimals may seem like they became this holiday season’s "it-toy" overnight, but the Furby-esque stuffed animal, which children coax out of an egg with 30-plus minutes of nuzzling, didn’t come out of nowhere. Launched globally on Oct. 7th, Hatchimals is the result of some pretty ingenious marketing, and comes from a company with a long track record of generating buzz. Here are 5 things marketers need to know about the craze.

Can adults get in on this?

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