Advancing Trade Marketing in the Digital World

Advancing Trade Marketing in the Digital World
Advancing Trade
Marketing in the
Digital World
Connecting
Digital and
Trade Marketing
New technology has always been
a central agent for retail industry
change.
The spread of car ownership in the 1920s
allowed consumers to travel further and
carry more, resulting in the emergence of
large stores outside of cities. In the 1940s,
home refrigeration enabled the growth of
bulk food purchases. And in the 1990s,
the internet began to overcome the space
limitations of physical stores, generating
almost limitless variety in consumer choice.1
1.
Josh Leibowitz, How Did We Get Here? A Short History Of Retail, LinkedIn, 7 June 2013.
Trade marketing is the exchange
of value in manufacturer/retailer
trading agreements. Typically
manufacturers will ‘offer’ budget
to retailers to support sales. These
budgets are often used to fund
special price deals,
in-store displays and other forms
of promotions at point of sale.
When does online come up in your trade
marketing negotiations?
Retailer: “Ok, so we’ll take 200,000 units at $120 per unit.”
Manufacturer: “Hmm how about 250,000 units.”
Retailer: “I can stretch to 250,000 units at $100 per unit, but we’ll need a $200,000
contribution to ensure we can merchandise effectively to drive sales.”
Manufacturer: “Ok, so what am I getting for my $200,000?”
Retailer: “Don’t worry, we’ll feature your product in the front of store, on premium shelf
placements, in our magazine and marketing campaigns.”
While core retail has experienced countless
permutations, trade marketing has changed
very little since it first emerged in the 1970s.
First popularised by consumer packaged goods
manufacturers as a way of driving short-term sales
and market share in supermarkets, it now represents
a half-trillion 2 sub-industry within retail. But it hasn’t
kept pace with changes in consumer behaviour. While
trade marketing practices are typically aimed at getting
consumer attention at the point of sale, they haven’t
followed consumers in their shift to buying online.
2. The Boston Consulting Group,. Paying For Performance. 2012.
3. Golden, Brad and Kathy Weber. Confronting Trade Promotion Fragmentation. Kantar Retail, 2016.
4 The Goldman Sachs Group Inc, Trade Budgets At A Tipping Point, 2015.
Manufacturer: “And what about online...a significant portion of our sales are from online?”
Retailer: “ Let us get back to you on that.”
Just 13% of manufacturers have separate brick-and-mortar and
e-commerce budgets and 24% have no e-commerce budget at
all.3 Given the significance of digital touchpoints in both research
and purchase, recent reports suggest that falling returns on
traditional trade marketing are a function of budgets and
placements not diverting from physical to digital channels as
quickly as the consumer. 4
When employed as a marketing channel, digital remains
significantly underutilised. Although some retailers might traffic
static messaging to all consumers, digital media is capable of
much more, from precise audience targeting to robust campaign
measurement. Not playing to the strengths of digital is a missed
opportunity to create more relevant online experiences for users
and to drive sales.
The rise and
rise of digital
Shopping gone mobile
Research shows that 70% of customers make their initial product
discovery online versus 28% in-store, and 39% of customers
research online before purchase.
Trade marketing budgets continue to
focus on influencing the consumer
within the store and through
traditional media strategies. But
today’s consumer turns to the web
for research before online or offline
purchases.
That figure is even stronger for big-ticket technology purchases
(55%) and for health, fitness and beauty items (58%).5
Brand perceptions and purchase decisions are shaped in millions of
moments ahead of purchase, even more so for higher ticket offline
purchases and these are the moments that matter for both brands
and retailers alike.
Year over year the influence of digital
– and especially mobile – on offline
purchases is growing faster than ever.
Digital was responsible for
Mobile influence on in-store sales
jumped to nearly $1 trillion (up
from just $160 million in 2013),
representing
of offline sales in 2015, compared to
only $330 million in 2013.
of overall digital influence.6
$1.7 trillion
In this environment, it makes sense for brands and retailers to
increase the investment in digital trade marketing, where the
consumer is conducting research and completing purchases.
Digital is also both targetable and measurable, so applying
digital targeting to trade campaigns and leveraging the power of
programmatic buying and selling will deliver a positive step change
in profitability for both retailers and manufacturers.
5.
ROBO: How Today’s Shoppers Research Online and Buy Offline, Marketing Tech Blog.
6.
Navigating the New Digital Divide, Deloitte Digital.
28%
“We understand the value of digital as both
in-store and Macys.com sales are influenced by
digital during the customer shopping journey.
We have recently consolidated our buying
organisations from stores and Macys.com to be a
single omnichannel buying organisation to cater
to our cusomers’ shopping behaviours.
We continue to invest in digital technologies to
drive greater ecommerce personalisation for
users, greater value for our suppliers and both
in-store and online sales.”
– Terry Lundgren, Chairman and CEO, Macy’s
What to do?
Tool up
Using an ad server – to manage
and traffic supplier messages,
forecast and target audiences and
deliver transparent and accountable
campaigns – is quickly becoming a
prerequisite. Manufacturers demand,
and get this from, their other digital
media partners, so digital ‘retail media’
should be no different. Frequency
capping, targeting, remarketing,
return on investment and in-flight
optimisations are just basic currency
in digital marketing. In short, those
manufacturers and retailers that
are ready to make basic use of
digital’s structural advantages over
offline, analogue predecessors face
enormous opportunity.
“Retailers and manufacturers need to ensure
that the digital customer journey is optimised
and personalised, particularly at the lower
end of the funnel. We are embracing this by
programmatically buying retail banner display
advertising tailored to our end user segments.”
– Darren Needham-Walker, Marketing Director, HP Australia
At Google we’re starting to see the green shoots of this trade marketing (r)evolution
and are excited to share some recent highlights from the pioneers of the industry.
CASE STUDY
Hewlett Packard
Single view of the customer
boosts sales and ROI
Case Study
Hewlett Packard
Goals
• Drive incremental sales of HP hardware
• Develop closer partnerships with key retail partners
• Understand return on investment (ROI) across marketing efforts
Approach
• Embedded conversion tracking on retail partners’ sites
• Used DoubleClick Bid Manager and Google AdWords to enable
HP and retail partners to share data
• Created a single view of the customer
• Targeted and retargeted consumers using a unified cookie list
Results
• Fourfold increase in ROI based on online sales
• Twofold increase in conversions
Case Study
Hewlett Packard
As a producer of hardware, software and related services for
businesses and consumers, HP wanted to drive sales among
millennials. The company conducted a study to uncover the
segment’s attitude towards the brand and found that
millennials didn’t believe HP products were relevant to them.
Instead, they associated HP with older users. This led HP to
realise it needed to do a better job of communicating with and
`
targeting the millennial segment.
To achieve this aim, HP began by shifting marketing spend
from billboards, TV and print to targeted, accountable digital
media. This approach helped the brand reach millions of
engaged and in-market consumers, drive awareness of new
products and take consumers through the consideration
phase of the purchase funnel. The challenge then was to
guide these consumers through the lower funnel, from
evaluation to purchase.
Case Study
Hewlett Packard
HP worked in close cooperation with their retail partners and
resellers in Australia to create a campaign using Google AdWords,
YouTube, DoubleClick Bid Manager and the Google Display Network.
HP shared their first-party consumer data with
Measured through incremental ecommerce sales,
retailers and worked to embed conversion tracking
HP produced a fourfold improvement in return on
on the retail partner sites. In this way, HP and the
investment, while traffic from programmatic
retail partners were able to share cookie lists and
retargeting converted two times higher than the
create a single view of the customer. The unified
non-targeted consumer. Ultimately this data-led
cookie list could then be used to target and retarget
approach helped HP expose more of their millennial
consumers who had already shown an interest in
target audience to their campaigns and drive
the brand’s products.
incremental sales at a significantly lower investment
These methods meant that HP was able to gain a
much better understanding of the full customer
journey than was possible before.
than previous marketing efforts.
Case Study
Hewlett Packard
“Retailers and manufacturers need to
ensure that the digital customer journey is
optimised and personalised, particularly at
the lower end of the funnel. We are
embracing this by programmatically
buying retail banner display advertising
tailored to our end user segments.”
—Darren Needham-Walker, Marketing Director, HP Australia
`
Was this manual useful for you? yes no
Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Download PDF

advertisement