Digital Disruptors for Retail Marketers in 2015
Simply put, disruptors change the formula for winning business models. For retailer marketers, digital disruption is becoming a constant. In the past few years, nearly 70 percent of the U.S. population has moved from phones to smartphones and downloaded over 100 billion apps. Billions are active on social media globally, publicly sharing who they are, what they do and what they like. Digital has moved from transforming the purchasing of media (e.g., music, movies and books) to influencing 50 percent of all shopping purchases.
Marketing is forever altered by these tectonic shifts. Retail marketers must now be highly flexible and adaptable, anticipating and reacting to the next round of digital disruptors. As we progress in 2015, here are five potential disruptors that all digital marketers will need to be actively engaging on to ensure they continue to have a winning formula for success:
1. Location, location, location: Physical store locations have long been a critical element for retail success. In today's digital world, real estate is taking on a new meaning as the consumer's mobile screen has become some of the most valuable "real estate" for a retailer to "occupy." With the always digitally connected and active consumer, marketers are now able to add current location, as well as past location-based behaviors, to their toolkit for understanding and interacting with consumers.
Marketers need to be familiar with location technologies like beacons, Wi-Fi and geo-fencing. These technologies open up new dimensions for real-time and personalized marketing. Innovative retail marketers are already exploring opportunities for competitive advantages with location-based technologies. Walgreens with beacons and Wal-Mart with store-specific apps are notable examples.
2. Social shopping 2.0: At the dawn of social media, there was a large push to simply port the storefront to social media. Superimposing the traditional e-commerce platform onto this new platform, focused on transactions, didn't work. As the social media phenomenon has matured somewhat (notice I didn't say "is mature"), it presents a number of potentially disruptive opportunities and challenges.
There are three main areas of opportunity today with social media: listening, targeting and interacting. Social media listening provides new levels of real-time granularity on retailers, consumers and products. On the main networks, including Facebook, Twitter and Pinterest, there are opportunities to create significantly more targeted marketing campaigns leveraging the dearth of consumer data that exists in these channels.
At the same time the velocity of new social channels has continued to increase with emerging players like Wanelo and Snapchat. These networks create a level of complexity and fragmentation that challenges retailers and brands to effectively keep pace and provide meaningful exchanges. While there appears no clear-cut formulas for success, it is clear that social media allows marketers to know a lot more about individual consumers and consumer segments, and provides many more opportunities for meaningful interactions.
3. Fast analytics: As the Internet of Things continues to blanket the world with sensors and create massive data streams, the challenge for marketers will be the ability to "market in the moment." Being able to generate insights quickly will be a key differentiator as it enables more real-time capabilities. We see this today in the paid search and display segments with real-time bidding. Fast analytics built on top of big data will make marketing decisions in subsecond timeframes a differentiator and potential disruptor. As retailers drive their analytics strategies, including tools and resources, speed needs to be among the core considerations.
4. It's about the journey, not the destination: Tracking and attribution technologies across differing channels continue to improve, allowing retailers to get closer to that Holy Grail of "one view of the customer." With this, retail marketers have the opportunity to drive increased levels of personalization reflecting not only an individual's current transactional value, but also their value over time. As these connections are made, lifetime value will (finally) be better balanced with transactional margin, driving marketing spend.
5. The death of the pure-play: As Amazon opens its first storefront, perhaps we've reached the inflection point, removing any remaining doubt that the future shopping landscape is no longer architected around the store or a website. Those are merely components in a retail world that's architected around the customer journey. While some notable challenges exist, marketers have never been in a better position to deliver personalized, omnichannel experiences that differentiate their brand — on their websites, in social media, in-store, and on mobile — when, where and how it makes sense. Winning formulas going forward integrate all of these elements.
The landscape for marketing continues to change rapidly. More than ever before, retail marketers need to be watching for, and innovating with, the next round of digital disruptors. Change is certain, survival is not.
Paul Schottmiller is senior vice president, strategy, retail and consumer goods, at Merkle, a customer relationship marketing agency specializing in data-based marketing solutions.
- Companies:
- Amazon.com
- Places:
- US