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Retailers and shoppers appear to vary on what they consider to be the biggest influence on sales, according to "Limits to Limitless," a 2014 marketing spending industry study by Wilton, Conn.-based Cadent Consulting Group.
Here are some key points of the study:
- The retail customer remains king, with 57 percent of spending (trade promotion and shopper marketing) channeled through retailers. There's the potential for this to go even higher with retailer digital initiatives.
- More personal, customized and targeted spending has doubled since 2012.
- All types of traditional spending have declined: advertising, consumer, promotion and trade.
- Nearly 50 percent of trade promotion is channeled into price for either temporary price reductions or ongoing price management.
- Traditional advertising has been validated for generating awareness, but overall spending trends are negative, and effectiveness is perceived as weak by retailers and shoppers.
- Consumer promotion had the greatest spending declines, with funds often redirected to digital alternatives: Online coupons and personalized custom offers could become the new norms.
- The digital budget is now more than half the size of traditional advertising. There's clearly a degree of hype surrounding digital, with spending reflecting a strong “test and learn” approach.
- Digital spending has a bias toward analytical models, which are typically based on click-through, awareness or unique visitors, not sales or ROI.
Customized and personalized retailer offers can help all parties, as suggested by these comments from retailers responding to the survey:
- "The more relevant these vehicles are to the shopper, the more effective they will be."
- "Delivery of the right value proposition to the consumer determines the effectiveness."
- "Retailer-specific coupons can help drive loyalty to a particular retailer, and if that retailer captures information about the shopper who uses that coupon and then customizes future offers for that shopper… that can be very effective for both the retailer and the manufacturer."
- "We want manufacturer suppliers spending their money with us."
- "Our focus is on our frequent shopper card."
- "Sampling tends to be a one-day event and can miss a lot of shoppers."
Shopper marketing is all about winning in store; manufacturers often just pay lip service to brand equity building initiatives, as suggested by these comments from manufacturers in the survey:
- "We need to get better at winning in-store. That's what our shopper marketing is all about."
- "We're shifting from brand awareness to retail shelf presence in the competitive environment."
- "We want to have more focus on in-store merchandising to capture buyers in department, versus out-of-store advertising."
- "We've had to shift to more retailer-specific programs targeting the consumer who shops in that specific retailer."
- "We're looking to test some in-store TV to gain additional displays."