In my post on the top retail trends of 2014-15, I introduced the concept of a “Marketing retrofit,” one of the more prevailing trends sweeping through the retail industry, and one that looks to firmly entrench itself well into the future.
On it’s own, retail is a hyper-competitive industry – it always has been, always will be. On top of the inherent nature of the business, retailers continue to compete for wallet share in a challenging global economy, and traffic, as a metric, is generally declining year-over-year for most brick-and-mortar stores.
Now more than ever, it’s paramount for retailers to first drive shoppers to the store, and to do that, stores are reinventing the Marketing function and, in turn, reinventing themselves.
Starting at the top
Retail has learned Marketing can no longer operate as an isolated silo, and company performance requires the function to collaborate across the entire organization, as well as at every level. Peak performance mandates the silos of yesteryear must fall to create a truly seamless integration across all shopper-facing channels.
At savvy retailers, shoppers are driving the change initiatives, and retailers are responding by adjusting their traditional organizational structures. At the CEO-level, we’ve begun to see the ascension of a new type of leader, one well experienced with Marketing, and in particular, with a digital marketing background. Some of the largest retailers in the world are now lead by executives with an extensive marketing background, in combination with the technological, merchandising, operations and international know-how to lead a global organization across multiple channels.
Additionally, many retail organizations are facilitating a transition to a more collaborative, shopper-centric effort by combining leadership roles with multiple functions, and one of the most impactful positions is the empowerment of a single senior-level executive to oversee both Marketing and Information Technology.
Seek first to understand
In his book “The 7 Habits of Highly Effective People,” Stephen R. Covey shared habit number 5: Seek first to understand, then to be understood. Nowhere is this principle more important than in Marketing, a functional expertise built entirely on the art and science of communication.
Understanding customer behavior is foundational information, and retail marketers are now focusing on the “why’s” behind behavior. This allows retailers a sneak peak into shoppers’ needs, upon which they can develop and execute programs to meet and exceed those needs.
The two primary areas of focus in the operational Marketing retrofit are 1) gaining additional insights into the most desired shopping experiences, i.e., “store theatrics,” and 2) catering to localized markets while retaining a nimble and agile framework for instant response to current retail opportunities, like responding to social media feedback from customers on service issues, new product categories or promotional strategies. For example, @Nikesupport is a prime example of building loyalty through social media by allowing customers to quickly get helpful support. Nike is a large international company catering to local markets, but at the same time has the agility to set up a Twitter handle and respond with over 160K tweets that help customers in need. Another example is the brilliant, nimble response by Oreo to the famed blackout in the 2013 Super Bowl: “You can still dunk in the dark.”
There’s plenty of room to create a differentiated competitive advantage, too. In a recent Marketing 20/20 study, just 52% of respondents in the “over performer” category stated their organization leveraged all data and analytics to improve marketing effectiveness.
Today’s empowered shopper expects a personalized marketing approach, delivered in her most preferred manner. No longer does “one size fits all,” and retailers must now tailor offerings to individual customers, and the criteria on which they do so can be based on a multitude of factors.
Personalized marketing approaches are rooted in technology, and therefore provide the impetus for the growing number of combined functions of IT and Marketing mentioned above. Technologies are deployed in-store not just to gather data from and about shoppers, but also to deliver actionable data to stores and their associates, empowering the delivery of truly “wow” experiences. And, of course, technology is the bridge between retailer and shopper, a conduit for quick, easy communications and the platform so many new shopping experiences are built upon.
The technology infrastructure so many personalized marketing initiatives are built around today include opt-in WiFi; beacons, iBeacon protocols and Bluetooth connectivity; mobile payments; mobile POS and video analytics, all of which can add breadth and depth to the established collected data of purchasing information, loyalty programs, and various CRM tools and processes.
Just one piece of the larger puzzle
Marketing, on its own, isn’t enough to turn also-ran retailers into industry leaders. However, it’s one of the starting places, as not only can marketing insights draw shoppers to stores, they can also assist Retail Operations with the creation and delivery of a unique, customer-centric shopping experience.
As today’s retail revolution moves on, driven by the newly empowered consumer, it will be important for retailers to continue their Marketing retrofits, and along the way ensure the function is deeply rooted in the strategies and tactics of all organizational functions.
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