Retail Marketers Rolling Back Pure Digital Strategies

Retailers are using increasingly disruptive marketing tactics, moving away from a singular reliance on traditional advertising and signage. At the same time, however, we're also seeing retailers recognizing that a purely digital strategy may not work either. Embracing a mixed marketing strategy is proving to be the choice for many brands.

Consumers expecting a different experience from retailers have triggered a massive shift in brands’ go-to-market strategies, with major retailers that have refused to adapt now facing store closures and bankruptcies. Those who pin the blame on Amazon.com aren't quite getting it right. It's not because Amazon is a competitive threat, it's because Amazon has changed what consumers expect in terms of store format, convenience and automation, seamless retail channels, and, of course, in how goods and services are marketed.

Younger consumers — i.e., millennials who now dominate the market — are digital natives, and they don't respond to the same sort of traditional advertisements as did their elders. They want to source their own information, they expect to be able to tap into a digital community rather than a corporate website, and they prefer commercial-free television experiences from sources like Netflix and Amazon Prime rather than network TV. Product placement is the new goal. The Mad Men era sought blockbuster commercials that captured the zeitgeist of the generation, and once in a while, they succeeded. However, the overwhelming success of ads like the legendary 1971 Coca-Cola "hilltop ad" isn't going to be replicated any time soon for the millennial generation.

Netflix is on the leading edge in rolling out its own version of the hilltop ad experience, but it's in the form of subtler product placement. Rather than hippies singing on a hilltop in Italy, it's show's characters interacting with brands and products as part of the storyline. In the popular show "Stranger Things," new brand partnerships are changing the nature of brand promotion, with plotlines that include the characters enjoying KFC at the dinner table.

Inside brick-and-mortar stores, advertising is changing just as rapidly, and it's firmly rooted in technology. According to an Intel report on digital retail, until recently, most retailers have focused their IT spending on the back office, with digital innovations in inventory and supply chain. But newer customer-facing technologies are becoming more evident — and are changing the face of retail by creating a more interactive experience. Kroger's smart shelf program goes far beyond traditional advertising, television commercials and newspaper inserts, instead interacting directly with customers’ smartphones to highlight relevant products as they walk through the aisles.

With external advertising and television commercials taking a back seat, indoor signage has taken on a greater role. Indoors, we're still seeing a healthy mix of traditional banners and digital ones. On the digital front, ultra-thin LED displays can now be configured in custom sizes and offer high-resolution displays.

All-digital marketing strategies did gain strength among even the earliest born-in-the-cloud dot-coms, but millennials are a challenging group to market to. While they're not watching network television and are busy getting their information online, they have also built up a resistance to online ads as well. Millennials who avoid traditional advertising are also avoiding digital advertising, with over half of them using ad blockers, causing retailers to roll back their digital-only strategies and build in a mix of traditional and digital tactics into their marketing plans.

More often, the appropriate solution is a mix of digital and traditional. Traditional indoor banners remain an important strategy. "With so many types of advertising people can forget that sometimes the biggest bang for the buck can still be found in physical signs," said Jered Nussbaum, president of marketing solutions company HalfPriceBanners.com, who notes that indoor signage plays an essential role in supplementing the messaging on the product packaging itself. You can't, after all, adjust your settings to block a vinyl banner hanging by an end cap in the grocery store.

Dan Blacharski is editor-in-chief at Ugly Dog Media, a PR and marketing firm.