Digital marketing gathers pace

By Norrelle Goldring

How is the shopper and retail marketing industry behaving with regards to its activities? At the end of 2017, POPAI and GfK conducted the first industry benchmarking survey for three years, and pleasingly, a number of things have moved on.

Previous POPAI studies in 2014, 2011, and 2010 were used as a basis for this research, providing us the ability to look back at how the industry has changed and evolved.

Shopper and retail marketing is now widely regarded as being both strategic and tactical, rather than merely tactical as in prior surveys.

Two thirds of respondents consider shopper and retail marketing to cover couch to cash register, rather than instore only or the ‘last the feet’, and this mentality has influenced the kinds of activities that are increasingly going into market.

Two thirds of what is activated is temporary (in market for less than eight weeks), and this is expected to continue with the increasing use of digital content, which is interchangeable in nature.

Around half of campaigns making it to market are brand led, a quarter are retailer led, and around one third are shopper, category, or occasion led. The proportion of retailer and shopper led campaigns are perceived to be increasing.

The number of brand led campaigns is perceived to have decreased to around three to five campaigns a year for many brands, with only around half of brand campaigns pitched to retailers actually making it into market. This is partially due to retailers’ need for proven ROI despite requests for innovation.

Another reason for the apparent decrease in brand led campaigns is the increase in use of retailers’ media assets, which participants say has resulted in an increased cost of getting into market and a subsequent mentality of ‘fewer, bigger, better’.

A side-effect of the rise of retailers’ media assets has been a shift in fulfilment and production revenue from agencies to the retailers.

Looking at the types of activities activated, most digital tools increased versus 2014, with websites, social media and EDMs employed the most frequently in campaigns.

Within Instore tools, off-location displays and POS materials remain the most commonly used, although deployment of store staff incentives has increased since 2014.

More than 25 percent of participants expect to use more instore tools more often, so instore is definitely not dead. (This is also tied back to the use of retailer assets, a number of which are instore).

While catalogues and advocacy programs are currently the most frequently used out of store non-digital tools, we have seen a large increase in the use of experiential programs and tools, underscored by the Experiential category’s size and growth in the POPAI Marketing at Retail Awards, (our fastest growing category). Experiential is expected to increase the most, in part because it ties into emotions, where instore environments are still largely transactional and clinical.

Four in 10 participants indicated they are now measuring the results of more than 75 per cent of their campaigns, an increase from 2014, however, one in three are measuring fewer than 25 percent of their campaigns.

While three quarters are measuring volume and value uplifts from campaigns, half of participants say they are employing impact and influence measures such as engagement, participant and reach. This is a substantial increase versus the 2014 survey.

Despite this, fewer than one third have any kind of permanent measures or dashboards in place. This remains an area of opportunity for industry development.

Mobile, social & digital

Progress in the use of digital, mobile and social tools for retail marketing programs since 2014 was also outlined in the results POPAI &GfK Shopper and Retail Marketing Industry survey.

Nearly 100 percent of brands and retailers have trialed or adopted website use for shopper and retail marketing activities in the past 12 months.

Two thirds of the total sample (brands, retailers, agencies, POP suppliers) had trialled or used EDMs in campaigns, and the same percentage for social media.

Because four in 10 of the sample’s primary channel is FMCG related, this shows an increasing use of digital, even within FMCG environments.

Agencies are more likely than brands to use microsites, AR/VR or mobile apps due to an innovation culture, with a higher number of programs developed for a broader cross section of clients. AR/VR was trialled or adopted by 23 percent of our total sample.

In our survey, brands were more likely than retailers to use promotional microsites (although these were only used by 31 percent of brands), and understandably retailers were significantly more likely than brands to use web-based feedback and review forums.

Mobile use is still in its infancy across the retail marketing sector, with fewer than one third of the total sample employing mobile techniques for retail marketing campaigns in the past 12 months.

These were slit across four main purposes – 30 percent used mobile offers pre-store; mobile search was used by 26 percent, mobile apps were created in 18 percent of cases, and mobile-based location was utilised by 20 percent of campaigns.

Digital role, scale and scope

Nearly half of agencies and brands are using digital in 75 to 100 percent of shopper programs, with a quarter of brands reporting that they use digital 100 per cent of the time. Many brands are tying into retailers‘ digital activities such as loyalty program EDMs.

A third of our total sample have run exclusively digital retail marketing campaigns (ie, campaigns with no instore/POS components).

Despite this, half of the total sample don‘t have a dedicated digital mobile function (driven by agencies). Nearly two thirds of brands had a dedicated digital function, as did nearly all retailers. Around nine in 10 digital functions create content, and one third coordinate media buying.

When asked about the primary or dominant role of digital, mobile and social in retail marketing campaigns, 42 percent believe it to be awareness driving. A quarter think the primary role of digital is sales conversion, and a further 16 percent say it is to drive store or category traffic. Only a small percentage believe the primary role of digital is brand equity, or encouraging trial (eight percent each).

This indicates that the biggest opportunities around digital are in reach and targeting, along with leveraging measurement capabilities. Participants cited the biggest opportunities in utilising digital, mobile and social in retail marketing campaigns as being ‘measuring ROI’, ‘better targeting’, ‘direct connection with customers and ability to drive sales process with them’, ‘scale’, ‘efficiency and effectiveness’, and ‘fully integrated campaigns’.

Barriers to digital adoption in retail marketing programs are considered to be around ownership, ‘keeping up’, complexity, and privacy.

Comments around digital challenges from participants included: ‘lots of choices, limited resources means don’t know where to spend the time and money, ‘Changes fast – difficult to keep up and stay across what works and what doesn’t’, ‘ownership over who is responsible.…and finding dedicated experts’, ‘cost of leveraging retailer databases and subsequent inability to create longer term loyalty and reengagement program with those audiences’, ‘privacy concerns and data restrictions, and ‘integration with other commerce, communication and relationship vehicles’.

Many of these challenges are ‘hows’ rather than ‘whats’, which we would expect to be ironed out in time.

The good news is that the industry, while not yet executing digital and mobile on scale in retail, is generally perceived to have a ‘test and learn’ mentality, epitomised by this comment from a participant: “Digital is currently toe in the water…in its trial stages for shopper. People don’t have a great handle on it yet, but this will change quickly.”

In sum, there have been increases in the use of digital and experiential tools and programs, and some improvements in measurement, but the instore environment will remain underdeveloped with the retailers’ increasing control of it.

ABOUT THE POPAI GfK SHOPPER & RETAIL MARKETING STUDY

The POPAI GFfK Shopper & Retail Marketing Study is conducted by POPAI utilising research house GfK (Norrelle Goldring) every three years as a check in on the state of the shopper and retail marketing industry. In 2017, the study interviewed 29 industry particpants face to face and received 91 responses to an online survey. Participants are a cross section of brand manufacturers, retailers, POP materials suppliers and agencies, creative agencies, and various other agencies such as insights and strategy, to provide a broad industry overv