Shopper Marketing - June 2017 - 147
To succeed in the digital world, CPG marketers must completely rewire their go-to-market strategies.
Historically and in the brick-and-mortar environment, innovation and SKU proliferation
catalyzed growth - pushing products into market and then supporting them with marketing and merchandising. In this push model, CPGs invest millions of dollars to build out
inventory on retail shelves and then turn on marketing spend to drive consumer awareness
and engagement. Retailers have to maximize the in-store experience with secondary placements for more product exposure and to spur shopper experiences.
E-commerce is a pull environment. Virtual shelves are populated with virtual products.
There is no preliminary inventory build-out investment. Online, CPGs need to spend at
product launch to create awareness and consideration before the possibility of a purchase,
allowing demand to pull products through the system. Once demand is created, manufacturers need to be reactive in this model in order to fulfill demand quickly, thus efficiency in
the supply chain is more critical than ever.
The approach to e-commerce also needs to consider that the online marketplace is an equalizer. Niche brands can drive awareness and engagement by marketing along the digital path
to purchase. In this space, smaller players benefit from agility and know-how, leaving leaders
that are stuck in the traditional brick-and-mortar mindset scrambling to catch up.
Fully embracing opportunities online demands an in-depth understanding of how brickand-mortar and online retailers compete, co-exist and complement each other simultaneously. In the Path to Purchase Institute's Shopper Marketing Trends Report 2017, industry
experts captured the impact e-commerce is having on the in-store environment.
From the panel discussion:
What impact is e-commerce having on the in-store environment?
"It's starting to mold the brick-and-mortar store in its own likeness."
- Nick Jones, EVP Global Business Development & Innovation, Arc
"It's redefining the standard for frictionless. Walmart knows that digital interaction has rewired our brains, shortened our attention spans and shortened our
patience in-store. You see them accelerating shopping with the use of digital instore and breaking down the buying experience into fewer, easier steps working
to remove every millisecond of waste."
- Julie Quick, SVP, Head of Insights and Strategy, Shoptology
Tim O'Connor, CEO and founder of Retailer Performance Solutions, emphasizes the importance of navigating the digital landscape and collaborating to earn shoppers' business. At
the Path to Purchase Expo in the fall of 2016, he said marketers must be creative, proactive
and persistent over time because of the complexity in the e-commerce landscape. He added
that while retailers have a good grasp of shopper insights given high levels of customer engagement, brands and e-tailers can make inroads as long as CPG brand marketers consider
shopper insights and re-evaluate their path-to-purchase process in the digital space.
E-tailers have the understanding of how consumers move online. Visibility into the online
path to purchase illustrates where shoppers were before they landed on a retail site - their
journey tells a story.
For retailers, the key is significant investment to build out capabilities online and grow
e-commerce for grocery, in particular. Today e-commerce for grocery is largely in urban
areas and on the coasts. Even Walmart has yet to fully develop its click-and-collect model,
which is only in hundreds of stores.
The key to figuring this out is balance - create great in-store experiences and provide the
customer service today's consumers want in-store and online. Positive experiences in either
channel will provide benefit and competitive advantage.