I just read five pages of Google search definitions for the term, but the only common thread in all of these I found is - all strategies, processes, efforts, and technologies that help to sell products to consumers. The reason there are so many different attempts to define retail marketing is that it is like a proverbial elephant and the blind men. That is why the most accurate definition of the term is "it depends on your perspective or a role you play in it." Of course, one can certainly bring up a multiplicity of retail marketing pillars and other props, but they are all also relative and specific to the method of retailing we use or the technology we sell. The only common denominator is the customer experience of consumers who buy the products we sell.
While "retail" has existed since humans started to settle down in larger groups and specialize in specific activities, the "marketing" part is relatively new and became relevant as people's relevant prosperity started to grow over the last two centuries. Retail marketing strategy is not important when one operates a small general store, the only store in a remote village in Russia. Inventory availability and logistics are by far more critical. Fortunately, we live in a more affluent society and are blessed with an abundance of choices. Therefore, a successful retail marketing strategy has to be developed and properly executed to ensure the consumers choose your products to buy and/or your stores to shop in.
Affluent consumers have choices of what they buy and where they shop, and these choices call for different retail marketing strategies and methods of their execution. These strategies may involve different channel types (physical, digital, direct-to-consumer, social media, and ... the list continues to grow), and each channel has its own ecosystem of players and participants. These players and participants are the "blind men" who try to define retail marketing as they see it from their perspective. Regardless of how any participant in the ecosystem defines retail marketing, the only constructive approach is to optimize your strategy on the customer experience of your target audience.
While a specific consumer may use multiple channels for shopping, it does not mean that consumers require CPG brands to be available and present on every possible channel to meet their customer experience expectations. Trying to be everything to everybody and everywhere is not a retail marketing strategy. In actuality, it is the exact opposite of having one and a sure failure. For example, a luxury fashion brand may focus on creating an exclusive in-store experience to cater to their affluent target audience, while also utilizing social media channels to showcase their products and engage with customers. They may not see the need to have a direct-to-consumer channel or participate in online marketplaces as it does not align with their brand image and customer experience expectations. By understanding their target audience and tailoring their retail marketing strategy accordingly, they can effectively reach and retain their desired target audience. A retailer that tries to sell a variety of products to all demographics without understanding their specific needs and preferences is likely to struggle and fail. For instance, a discount grocery outlet may try to attract high-end shoppers with high-margin specialty food products but ultimately fail because it does not align with their existing brand image or customer experience expectations.
Depending on your choice of target audience and channels, the most suitable for that audience, you will find yourself in a very different team of participants. While the journey usually starts with a CPG brand and ends with a consumer, your channel choice will often require teammates with different competencies and capabilities. They often understand their roles and measure their performance using KPIs that may not be aligned with yours. For example, if you are a CPG brand and sell in physical stores, you are likely to need to use a broker. Brokers perform a very important function in the physical retail ecosystem as they have established relations and trust of retail buyers and category managers that smaller CPG brands do not have. Your broker will persuade a retailer to give your products a shelf space much faster than you could do, and for that, he would be compensated with commissions when your products sell. The retailer will also be compensated with a profit margin on your products when consumers buy them. Your interests seem to be closely aligned, and yet all three of you measure and attain success differently.
The path to the development and execution of a successful retail marketing strategy lies in a clear understanding of your target customer's expectations AND alignment of your interests with the interests of your channel participants. You do not need to give everything they want, but if you understand really well what they need to succeed, you can negotiate your relations in a way that all of you win.
Our performance is heavily influenced by how it is measured. The success and career advancement of a District Attorney is based on a ratio of convictions vs. cases brought to court. The number of convictions, later overturned, usually does not impact a reputation of a former DA who is now a career politician. Our criminal justice system would be much more just if it did.
Professional hockey became a much higher quality sport after the forward's performance started to include not only goals scored but also goals scored against his team while he was on the ice.
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Measurement could be seen just as statistics and many people like to use statistics "as a drunken man uses lampposts - for support of their biases rather than for illumination." (Andrew Lang)
For example, our specialty is in-store marketing solutions used by retailers to bring more shoppers, by brokers and distributors to increase the velocity of their SKU sales, and by CPG Brands to promote their products and stimulate consumer demand. That allows us to access and analyze a lot of data which helps us to build the impact models for each of these constituencies. These models are not only useful for forecasting the efficacy of future in store demo events but, more importantly, for clearly understanding the leverages that impact their performance and learning how to become better.
Below are two examples of such models for a food broker or a wholesale distributor and for a CPG brand. Please note that even though both models measure the impact of the same event, their focus is substantially different.
Please let me know what you think about this approach in the comments below, or contact us for a free review and consultation for your in-store marketing processes.
