By Alicia Fiorletta, Senior Editor
While consumers may be referring to digital touch points more frequently to make browsing and buying decisions, they still thrive an intimate, one-to-one connection. And frankly, sometimes the anonymity of the web creates anything but an intimate experience.
So although online behemoths like Amazon have rightfully been declared a retail force to be reckoned with, many industry players know not all hope is lost.
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Reaffirming this point is Jeff Fagel, who is CMO at G/O Digital. Prior to his current role, Fagel served as a marketing exec for Gatorade, Pepsi Co. and Sears. Needless to say, he has the marketing knowledge to share detailed feedback on current trends, best practices and what we can expect in 2015.
Despite omnichannel being the words on everyone’s lips, Fagel is honing in on localization. See his thoughts in the Q&A below:
Retail TouchPoints (RTP): Based on your experience working for numerous brands and retailers, what top trends do you believe have impacted the industry the most? Were there any key lessons learned from your time with top brands that you’d like to share?
Fagel: Marketing has seen a huge shift.Breaking though has become increasingly difficult. Everything is faster and this shift is reshaping marketing communications.
This multichannel convergence forces us as marketers to change our perspective. We need to think, plan, organize and communicate differently. For example, brands are no longer in control, the key is to tap into this and embrace versus fight it. From how we watch and interact with live TV to the proliferation of crowdsourced creative campaigns, brands now live in a world of real time feedback and connections. Here are two key lessons that will shape marketers’ success:
- Ditch the channel-heavy focus. Gap is one of the biggest offenders. Sales that are online only, different pricing in store vs. online, inventory systems that don’t allow ship from store. Instead, focus on streamlining the online-to-offline experience at every touch point and at multiple stages of the buying journey. The lines between online and offline shopping have not only blurred; they’ve begun to disappear altogether. And with this blurring of lines comes even greater urgency to compete with Amazon.
For today’s retailers, the purchase path is less of a linear path, and instead more of a pretzel whereby both digital and physical retail intertwine with one another. Forget about channels – online, offline, multichannel and omnichannel. Consumers are in greater control of their shopping experiences and they have more choice than ever before. So for retailers, the challenge is how do you cut through the clutter and reach these shoppers.
- Mobile Is More Than A Channel — It’s A Behavior: Of course mobile is what every marketer is trying to figure out. But to make mobile advertising worth your while, it needs to be relevant, contextual, and engaging. In other words, we need to consider how consumers already interact with their devices and take advantage of that behavior. For example, consumers who download and use the Home Depot app can not only look up product reviews, but they can also scan product UPCs while standing in-store. This is the right kind of mobile-first thinking that other brands should be deploying. But to make it happen, retailers will first need to readjust their channel-focused mindsets, after all, shoppers don’t have a channel strategy; they have a shopping strategy.
RTP: There are numerous reports pointing to Amazon as an unstoppable force. In what areas does Amazon beat other retailers?
Fagel: To understand why Amazon is such a threat to retailers, let’s look at the figures. In 2013, its sales topped $67.9 billion – that’s $49.6 billion more than Apple. But as with many fights, there’s a challenger and a favorite. And in this retail battle, there’s a tendency for marketers and industry pundits to proclaim Amazon as the clear winner.
Sure, Amazon can ship items anywhere, but can it fulfill the local and personal needs of shoppers? Can it solve their pain points immediately and answer questions such as “I need cold medicine now,” while at the same time evoke inspiration? The answer is no.
So as holiday shopping ensues, retailers will have to do what Amazon simply cannot do – be “channel-less” and activate local marketing across multiple touch points and stages of the buying journey.
RTP: Conversely, how do brands and retailers have a competitive advantage over Amazon?
Fagel: The idea of local marketing has been elusive, but local stores and physical retail is a differentiator for folks against pure play threats like Amazon. For retailers you need to consider how consumers already interact with researching online on their devices and take advantage of that behavior.
Real-time, localized, digital activation at national scale will be the golden opportunity for retailers this holiday season and beyond (year-round).
In order to give Amazon a run for its money, retailers and brands must establish a reason to believe with a reason to act locally. While Amazon can ship items anywhere, it still doesn’t deliver on the promise of immediacy and local physical store relevancy. The tactile experience of being inside a retail store – seeing and touching products – is not going away any time soon.
RTP: Are there any trends brewing and/or coming to the forefront that you believe will be more pronounced in 2015?
Fagel: Here are a few that stand out:
1. To Scale Local Marketing We Must Move beyond Location: It’s clear that consumers are increasingly digital and increasingly local. Consumers want messages that are relevant to them – for the products they want, at the stores in their neighborhood. While retailers have been focused on what’s next in local – iBeacons, Apple Pay, and other technologies – connecting with consumers locally needs to be relevant, contextual, and engaging. In other words, you need to consider how consumers already interact with researching online on their devices and take advantage of that behavior.
2. Win The Webrooming War: Webrooming or ‘reverse showrooming’ will have a much bigger payoff than showrooming. A couple of years ago, the practice of showrooming was on an alarming rise, with 50% of online purchases in 2012 occurring as a result of this behavior. However, in the last two years, the practice has decreased (falling down to just 30% of purchases in 2013) as businesses have found more effective ways to fight back.
As digitally dependent as shoppers may become, the interactive experience that physical retail stores provide is still in demand. While digital technology and tools may cut research time down and help pinpoint cost-saving deals, 90% of shopping still occurs within three to five miles of consumers’ homes.
So while showrooming is centered on price, “reverse showrooming” – the practice of researching online and buying in-store – is all about discovery. And therein lies the real opportunity. As our research found, 30% of holiday shoppers said that they always use their desktop/laptop computers to research on-sale items before heading in-store. If that stat isn’t convincing enough, another 25% said they go online to “compare products and prices between retail stores” before making their way in-store.
3. Channel-less Wins: Retailers must ditch the channel-heavy focus. Instead, focus on streamlining the online-to-offline experience at every touch point and at multiple stages of the buying journey. The lines between online and offline shopping have not only blurred; they’ve begun to disappear altogether. And with this blurring of lines comes even greater urgency to compete with Amazon.
For today’s retailers, the purchase path is less of a linear path, and instead more of a pretzel whereby both digital and physical retail intertwine with one another. Forget about channels – online, offline, multichannel and omnichannel. Consumers are in greater control of their shopping experiences and they have more choice than ever before. So for retailers, the challenge is how do you cut through the clutter and reach these shoppers.
RTP: Do you have any final tips or best practices for retailers as they establish their plans for 2015?
Fagel: We’ll see a major shift in 2015 that connects programmatic buying and programmatic creative. Moving beyond efficiency and targeting to content and creative that is more dynamic, relevant and local. Consumers want messages that are relevant to them – for the products they want, at the stores in their neighborhood. Real-time, localized, digital activation at national scale is the opportunity for retailers.
By creating programmatic content and ads that are native to users’ experiences, retailers should feel renewed with hope that they can stand toe-to-toe with Amazon – and even win back some of their customers in the process. My advice to retailers is simple – build content that’s personalized to shoppers’ existing behaviors and preferences, that integrates the online-to-offline experience at every touch point and that’s precisely targeted to meet their local and immediate needs.
