TECHNOLOGY

Report: Online sales alter trade and brand marketing

BY Deena M. Amato-McCoy

As retail sales shift from offline to e-commerce, marketers must learn to adjust trade strategies and budgets to be successful in a digital world.

According to “Trade Marketing in Transition,” a report from Criteo and Kantar Millward Brown, the growth of e-commerce — across both emerging devices and channels — is demanding that retailers learn to merge brand budgets with trade budgets. This combination typically includes retail display allowances for product positioning, temporary price reductions, end caps, and shopper marketing.

"Trade marketing is undergoing a profound shift," said Jonathan Opdyke, president, brand solutions, Criteo.

"To profitably target and acquire shoppers, both online and offline, marketers must adapt their trade practices and budgets,” he added. “Retail marketers need solutions that allow for real-time measurement of ROI, and an end to the debate between offline vs. online, in favor of an omnichannel approach.”

These transitions will address many pain points that still exist in trade marketing. For example, many brands are still learning how to manage online sales. In fact, 50% of respondents rated online sales as "disruptive to hugely disruptive" to their industry. Other issues causing concerns in a digitally-driven marketplace include Amazon setting prices (29%), conflicts between brand and retail sites (28%), and the complexity of process (27%).

Meanwhile, retailers need to revamp internal processes if they want online marketing to succeed. For example, 58% of retailers said measurement/attribution and trackability (58%) needs improvement. Meanwhile, 56% of initiatives that reach younger consumers (56%) and process complexity (55%) also need attention.

Over the next five years, retailers must up their game when it comes to trade marketing — and this includes shifting away from traditional means. For example, on both stand-alone e-commerce and retail sites, paid search was considered an area with the greatest expected increase in effectiveness (62%). Conversely, print-related tactics were expected to have the greatest decrease in effectiveness (52%).

When planning how to improve future trade spend, marketers are staying proactive. Among the top three items on marketers’ wish lists for the future of trade spend are simpler methods to measure effectiveness (58%), a holistic view of the shopper (56%), and connecting trade and brand budgets (53%), according to the report.

Here are additional takeaways on how to succeed in this transitioning landscape:

• Utilize product listing ads and display advertising techniques to increase sales and generate incremental revenue to compete with Amazon.

• Given that paid search on e-commerce and retail sites is considered an important part of the future of trade spend, brands should continue to develop the ability to manage this form of trade marketing.

• Just as they do offline, brands and retailers need to come together to develop best practices for the mutual benefit of driving sales and developing efficient practices and measurement tactics to assess the impact of online trade activities.

• Late-comers to e-commerce marketing may face a daunting challenge when they choose to support online sales, due to factors like “Top Rank Persistence,” and Amazon's growing dominance in the market.

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TECHNOLOGY

Ikea expands breadth through third-party sales

BY CSA STAFF

Ikea is getting in on the online marketplace game.

The home furnishings giant is embarking on a test that will focus on selling its products on websites other than its own. This move will get merchandise in front of more online customers, according to Reuters.

The chain was encouraged to make the move based on the disruption that marketplaces, such as those operated by Amazon, which is making its own push in the furniture category; Alibaba and Etsy, are causing in the retail industry. Ikea will begin testing the program in 2018.

In an interview with Reuters, inter Ikea group chief executive Torbjorn Loof said, “On digital platforms, we only sell our products through our own website, and there we also see that the competitive landscape is changing. I leave unsaid on which (platforms), but we will test and pilot to see 'what does this mean, what does digital shopping look like in future and what do digital shopping centers mean?.’”

This test marks the first time Ikea has sold its goods through another company. The new program also coincides with Ikea’s other new concepts designed to connect with more shoppers, including new smaller store format tests and merging digital operations into stores to better support its omnichannel shoppers, the report added.

To read more, click here.

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TECHNOLOGY

Regional supermarket chain steps up promotional game

BY Deena M. Amato-McCoy

Weis Markets knows the key to driving loyalty is to deliver value.

In a move that will improve its marketing and promotions operations, the regional grocer has partnered with dunnhumby and Aptaris. By integrating an enterprise promotional planning, price optimization, modeling and forecasting system, Weis is one step closer to increasing sales, improving customer loyalty and building a more profitable and competitive market position.

The end-to-end platform manages product deal submission from suppliers through the Aptaris Vendor portal, which manages enterprise marketing and promotions management. Meanwhile, dunnhumby’s computer science algorithms model and forecast the effects of Weis’ promotions on sales and profit, as well as the influence on customer shopping behaviors down to the individual shopper.

Weis Markets can now optimize both base and promotional retails through real-time modeling and forecasting, while gaining insights into the impact of pricing activities on the top and bottom line financials. Activating these insights within the system, the grocer can now create promotional events, including their weekly circular ads, with a 360 degree view of the impact on individual category plans across every store, their customers and their baskets – in real-time.

“We strive to deliver an exceptional shopping experience by offering a strong combination of value, service and variety,” said Richard Gunn, senior VP of merchandising and marketing at Weis Markets.

“The dunnhumby-Aptaris promotional solution will help us to better align and deliver meaningful promotional plans and activity for our customers, across all of our markets,” he added. “We see this as a critical component to help bring our customer’s voice into the entire promotional process, from our initial interaction with our suppliers, to the finished weekly circular.”

The solution will be used across the chain’s 204 stores, which operate in Pennsylvania, Maryland, New York, New Jersey, West Virginia, Virginia, and Delaware.

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