Speaking at the eCommerce Show North 2018 in Manchester on Tuesday, Google’s Strategic Partner Lead, Zakie Beg, had a strong message for retailers:
“The future of trade advertising is digital as it provides the consumer a more personalised experience and offers suppliers greater accuracy on the impact their trade campaigns have on sales.”
The push towards digital trade marketing is justified. A report by Nielsen back in 2015 showed 6 out of 10 grocery promotions lose money for UK FMCG suppliers. And the bleak outlook for trade promotional investment in bricks-and-mortar stores continues up to this day, with an estimated 10,000+ stores to close this year, according to the Centre for Retail Research (CRR).
“The global trade marketing business forecast is in the region of $500billion,” says Beg. “There’s a real opportunity for retailers to capture that traditional marketing spend and use it more efficiently with more profitability in an online space.”
However, for Beg, the current uptake in digital advertising by brands doesn’t reflect the current consumer shift towards online.
“65 percent of organisations continue to use the mass market as their focus. So the small shift in trade marketing budgets to online doesn’t reflect the change in consumer behaviour yet, and it’s a real opportunity that retailers are missing out on.”
In order for suppliers to invest more of their trade budgets into digital, Beg calls for retailers to up their game by providing online consumers a more tailored experience to increase conversions and provide ROI for their suppliers.
“Netflix and Amazon are great examples of personalisation done correctly,” says Beg. “They are both powered by a family of algorithms that work together to produce recommendations based on purchases, searches and even browsing across the site.”
And research suggests personalisation isn’t a luxury in online retail, it’s a necessity. 77 percent of consumers expect an offering of products and offers that appeal to their personal taste.
“Retailers are some of the biggest media owners in the UK. Not enough is being done to understand where the customers really are online and delivering the right messages across the web and particularly the retailer’s site, at the right time,” says Beg. “Whether consumers are simply searching for products, or browsing the retailer’s site, retailers can use trade marketing budgets more efficiently. That requires having a robust ad server to enable retailers to manage and track all their supplier campaigns, forecast and target audiences and provide data and accountability to suppliers on the success of the campaigns.”
Improving retailer-supplier relationships
With bricks-and-mortar store sales stagnating at one percent this year and eCommerce sales rapidly increasing, Beg believes retailers have both an opportunity and a duty to provide value for their suppliers.
“As some retailers are the world’s biggest media owners, it’s really important to ask themselves some essential questions, such as ‘How are we driving more value, efficiency and sales for our suppliers?”
By sharing better data, Beg believes retailers will be able to strengthen relationships with their suppliers, working from a single customer view for mutual benefit.
“It’s a win for all parties,” adds Beg. “Digital trade marketing can increase sales, fund traffic acquisition and deepen manufacturer-supplier relationships.”