Retail channel priority: change or…
The recent AIMIA retail study has given a great insight to the rest of the marketing and media world, on just how polarised the retail sector is in Australia in terms of attitudes towards digital and online media. There are clearly two camps – the red and the blue. In the blue corner are those that know the power of the online space in the purchase cycle and have already committed to the channel, therefore trying to fiercely protect their strategies to get an edge on their competitors. In the red corner are those that have no idea where to start and are too embarrassed to even discuss it – let alone start actioning it.
It’s crunch time for many of our favourite retailers as we lead into the busy Christmas period and it’s no surprise that in recent times there are a select few retailers really embracing digital, having witnessed a significant uplifts in sales – not just as an ecommerce channel but more importantly communicating to their consumers where they are to drive them in-store. Let’s face it, with people spending more time online than on TV each week (Nielsen Technology Report 2010) digital channels such as computers, laptops, mobile phones, iPads, in-store kiosks and the like are all part of the new process consumers go through before purchasing in-store.
To think that with all of the evidence, case studies, reports, research and business logic that indicates that online needs to be a significant part of the marketing mix to increase pre-disposition to purchase, sales intention and driving people in-store to purchase… it defies logic why retailers aren’t moving budgets.
Unfortunately with the shift in consumer eyeballs and purchasing patterns it has left many of our retail marketing teams left in their wake and there’s no doubt it’s unsettled them. They’ve been used to knowing exactly what press ad, TV buy or radio mix would lead to what uplift in sales and all of a sudden their guess is as good as anyone’s as they look to try and work out what the optimum mix is when putting digital into their budgets.
Unfortunately with the recent GFC, the decline in sales growth and limited marketing budgets, our retail marketers have been spooked. Fear is driving their decisions (or lack of decisions) which is leaving them buying similar media mixes as they have been for years, and sometimes decades. With 83% of AIMIA retailer respondents saying they will increase their online marketing spend, let’s just hope for their sake that it’s realistic, because a 20% increase in budget coming from a base of 250k a year isn’t going to affect a media market where competitors are spending millions upon millions of dollars in the space. It still baffles me that with such a mature audience online, some retailers are still cap in hand in market asking for ‘freebies’ to help them get off the ground, I’d like to see Channel Nine’s response to asking for a free prime time spot as an international retailer looks to open in Australia, wanting to see if TV works here.
It’ll be interesting to watch the next 12 months unfold as we continue to talk, work with and educate retailers on just how powerful online can be as a part of a multi-channel marketing mix. I just wonder if we’ll be speaking to the same people in 12 months if they’re in the red corner.