Digital should only be a part of retail marketing

September 10, 2018

The influence of traditional media is stronger than you might think.

 

Of the top 10 activities Australians undertook in the past three months, shopping in a store was number one, showing bricks and mortar retail is alive and kicking.

 

According to the latest Roy Morgan research, more than 18.6m Australians went to a supermarket, 13.2m visited a hardware store, 12.2m shopped at a department store and more than 11.7m went to a clothing store or boutique. This is compared to the 11.2m who bought something online.

 

But in a world where profit margins are under pressure, the role of traditional advertising is often dismissed in favour of digital in a bid to decrease expenditure, explains Glenda Wynyard, managing director of The Media Precinct.

 

But there is such a thing as too much digital marketing, with some retailers losing sight of the need for tangible, real-world experiences.

Wynyard explains: “All media utilised should typically have a measurable impact on the lift in sales from the baseline, however especially in retail marketing, television-led campaigns are more likely to drive a sales impact, and tend to be less reliant on social measures.”

 

As an example, Wynyard points out the average printed catalogue with a metro distribution of 7km around each store (and 20km in regional areas) will lift year-on-year sales by an average of 13%. But when combined with television, sales are lifted by an average of 27% (which can be as high as 36% depending on the category).

 

Where digital can go wrong
 

Many retailers are trying to replace the physical catalogue with cheaper forms of communication - the internet. Particularly search and social.

 

But, what is hindering online retailers from gaining conversions is the lack of exposure. In a crowded digital landscape, online retailers have to fight for breathing room, and it is easy to get lost in an ocean of e-commerce.

 

“Online sales are extremely important in a retail marketing strategy, however we see a trend where more and more financial support is being put into what is really ‘one store’ at the expense of others: the physical stores,” Wynyard explains.

 

But it is equally easy to be overlooked in a massive physical retail ecosystem, while untargeted traditional advertising can become wallpaper and do little to uplift sales.

 

The best retailers have built an omni-channel strategy – a combination of digital, traditional and in-store experiences.

 

Online shopping set to heat up?

 

Amazon launched in December, and reported $16 million in total sales for its first month. In comparison, Myer reported an average sales revenue of almost $340 million every month in Q4 last year.

 

Whilst it is early days for the global retail behemoth in Australia, the apocalypse many were predicting has so far failed to materialise, with consumers still enjoying the physical in-store experience.

 

We can draw an interesting parallel between shoppers wanting to touch and feel, and the underlying concept of “Made in Australia”, where the money spent goes to local suppliers so the local economy grows. It’s all part of the same desire for a genuine retail experience.

 

That is not to say online shopping won’t heat up. Amazon’s head office has poured $31.6 million into the Australian business, its newest overseas venture, signalling a willingness to invest to build market share.

 

Interestingly though, when Amazon launched its first Aussie campaign earlier in 2018, traditional media featured heavily on its media plan, especially TV.

 

The future of retail marketing

 

“Using digital media to help shape customer relevancy is going to become increasingly important through the use of perceptual mapping based on web search queries, social and online consumer forum comments,” says Wynyard.

 

A recent study explored the associations of brands and products based on two types of data: 1) co-searched keywords in web search engine, and 2) comments posted on online consumer forums.

 

It showed the extent to which a pair of items is searched for together or compared in internet forums implies how closely they are correlated in the mind of consumers and plays a huge role in sales conversions.

 

For marketers this should reinforce the role of brand building through more traditional channels, rather than rely on sales promotions to boost income.

 

The power of association to grow and reinforce the consumer’s perception of brands over time is key.


 

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