03 Apr The pressures of boosting profitability
Today’s consumer demands more from retailers. They are more connected, informed and feel empowered. For shoppers, this translates to higher expectations of brands and their products, and they need to clearly be told the benefits that they bring in order to part with their hard-earned cash. In the face of Brexit and the impact on the economy, those expectations are only set to rise.
Retailers that succeed in this uncertain climate will be those that work to better understand what shoppers want, how they shop and how this changes across the path to purchase. With information overload and shoppers engaging with multiple platforms and devices, getting the right messages at the right time from retailers is key to getting cut through and aiding conversion.
Inspirational content, for example, is best delivered where shoppers have longer dwell time and are open to learning more about an offering. But as the shopper moves closer to the point of purchase, the communications need to be more personalised to their need state. That’s why, across Threefold, it’s important that we continue to work to personalise not just the communications shoppers are exposed to but the promotional offers as well.
Equally important for retailers is understanding purchase decision cycles by category and product type. With purse strings tightening, retailers need to remember that conversion will be even more of a long game for products like TVs and laptops. Conversations with these shoppers need to be considered and continuous, with retargeting being absolutely critical for high ticket categories like electrical goods.
ROI remains the most important measure of marketing, with brands and retailers needing to prove the return to secure funding from the business. It is crucial that effectiveness measures are put in place based on the role that each communication is playing.
Evaluating in-store marketing and whether it works is possible with the right methodology. This has been perceived as hard for bricks and mortar retailers, but there are massive improvements being made in this area. The Co-op are taking great strides to make their analysis of in-store marketing for
brands much more reliable, using test versus control analyses in closely matched stores to determine the effect on their sales.
With the pressure to grow profitability increasing exponentially, retailers need to understand their assets and consider how they use them in new ways. Retailers have the potential to develop in-house media centres, using the channels they have to deliver paid-for advertising campaigns with brands.
Retailers know their customers, they offer significant reach and they build brands that consumers trust. By working together with suppliers and third parties to create meaningful campaigns, they not only improve the likelihood of a shopper making a purchase, they also bring in advertising revenue to the business. This can have a significant impact at both the top and bottom line.