This post explains how the digital world is influencing the trade marketing manager's role and how online trade marketing can be utilised to:
- better target consumers with a more tailored and personal experience.
- help protect your retailers against loss in market share to online giants such as Amazon.
- develop better relationships with retailers and improve ROI.
From In-store To Online
Don't you just hate uncertainty?
As the digital world expands, we all know that a trade marketer's role is progressively moving more online.
But exactly what does this entail? Should you start preparing right now for a massive shake up to your role?
Before we answer these questions, let's first distinguish between traditional trade marketing and online trade marketing.
Traditionally, a trade marketer would be tasked with two key objectives: to get their products ranged in-store and then to influence in-store sales.
Amongst other things, tasks would include the management of FSDUs (Free Standing Display Units) for product positioning and other in-store promotional activity.
But times are changing.
As the rise of online retail continues, trade marketers are increasingly facing tasks that wouldn't traditionally be under their remit.
People are shopping more and more online.
Research shows millennials do 54 percent of their shopping online and are 1.6x more likely to do their grocery shopping online than their previous generation.
And research from Deloitte shows that every 56 cents of every dollar spent in a bricks-and-mortar retail stores is influenced by a digital interaction.
The point of sale is shifting to online stores.
As a result, the line between consumer marketing and trade marketing is becoming progressively blurred.
It's now a trade marketer's duty to collaborate online with their retailers to generate higher conversions and more sales.
And when you really think about it...
...why wouldn't you want to?
It's a win-win-win situation.
Both you and the retailer make more product sales and the consumer has a better shopping experience.
However, a trade marketer's foray into the digital world doesn't come without its challenges.
This requires more work and better digital training, which may daunt old-school trade marketing stalwarts.
Let's take a look at both the benefits and challenges trade marketers face online.
Benefits of Online Trade Marketing
Marketing Without The Physical Constraints
This is without a doubt the greatest advantage of marketing your products online.
Think for a moment about your bricks and mortar POS material. Whether it's shelf strips, wobblers, totems or hanging banners, there is only so much information they can contain.
If your customer needs more information, they're not going to be able to find it in store.
However, online you're not faced with the same constraints.
Numerous product images, lifestyle images, videos, detailed product descriptions, consumer reviews, product comparisons, technical specification sheets and even augmented reality (AR) product visualisations, can all be used to give a rounded view of your product
The main drawback you face with online retail is not physically being able to get your product into the hands of the customer.
To counteract this, you need to show off your product as best as you can.
Let's go back for a second to the physical POS material you would produce, following the customer journey from arriving at the store to eventually ending up at your product on-shelf.
In an ideal world you would be creating multiple touch-points, but this can start to become prohibitively expensive.
Now translate those POS thoughts to the digital environment, many online retailers will gladly take as much content as they can get, after all, it all helps to generate the sale.
You may have to pay to have your product featured on the store's homepage, but this is likely to be a fraction of the cost of producing an FSDU and paying to have it placed prominently in the high footfall entrance to a physical store.
Smaller Brands Can Make More Noise
As a smaller brand trying to make an impact, getting your product ranged in retail stores can be a difficult and expensive process.
However, it's much cheaper to range your products online, it can be a real leveller.
Larger brands can find it hard to react to the fast-changing digital environment, due to rigid systems and processes.
This gives smaller brands a tremendous opportunity. They can take advantage of being nimble and quick to react to ensure that they are delivering captivating content, giving their products an edge.
Easier To Track ROI
Advanced online reporting makes it easy to track data and metrics, offering simpler ways to demonstrate ROI and lobby for more budget.
This means a higher trade marketing spend overall.
A report by Google shows manufacturers are protecting their traditional trade marketing budgets whilst allocating more for their digital media budgets.
With digital marketing, you can speak to the consumer on a one-to-one basis.
Take Amazon for example. It recommends products based on what the consumer has previously bought and their interests.
It's like having your own personal shopper and makes you feel like your needs are being listened to.
It's a direct relationship between the retailer and the consumer known as 'one-to-one marketing'.
Trade marketers who get their products ranged in an online store can rest easy, knowing that the consumer is getting a more tailored experience.
Better Targeting Equals More Conversions
With user experience and advertising tailored towards the consumer, purchase rates and click-through rates are naturally higher.
Again, this is a win-win for everybody.
With retail stores closing across the country, online advertising offers trade marketers higher conversion and click-through rates to increase product sales. Retailers have a better return on investment and consumers have a more streamlined shopping experience that's tailored towards their interests.
Retargeting — Eyes That Follow You Around The Web
Many online retailers may also offer programmatic advertising which utilises retargeting.
Put simply, if a consumer looks at your product online, ads of your product will be displayed on other sites they visit.
This keeps your product fresh in their mind and increases sales.
And even if the retailer doesn't offer programmatic advertising, there maybe an opportunity to do it yourself by placing tracking codes on your product pages.
I'll go deeper into programmatic advertising later in this blog — it's potentially a very profitable method of driving product sales.
In order to maximise sales, manufacturers and retailers must work together.
Try to think of your retailer as a 'brand partner'.
Sharing first-party consumer data with the retailer — such as information collected from website analytics, CRM and business analysis tools — will enable you to create a more comprehensive single view of your consumer.
However, this can be a tricky conversation, as everyone wants to own 'their customer', it's all a matter of trust.
Agreeing challenging but realistic KPIs such as increasing sales, more visits to your product pages and an increase in market share will ensure a focus on results that benefits all parties.
"Trade marketers must shift their mindsets from exclusively traditional media and in-store promotion to include the digital world — requiring a strategic retailer partnership with a single customer view in order for brands to prosper."
~ Phil Wright, Director, WrightObara
Challenges Of Online Trade Marketing
Lack of internal cohesion
For many of the companies we've worked with, traditional trade marketing is handled in the sales department.
Any digital marketing is handled by the marketing department.
This makes it difficult to coordinate campaigns and share data.
In a report by Criteo, budget allocation is potentially one of the biggest cultural shifts in trade marketing.
The report describes how brand budgets and trade marketing budgets have traditionally been separate entities.
Brand budgets are fixed in advance, whereas trade marketing budgets vary according to actual product sales.
One is based on metrics and the other on sales figures.
But for trade marketing to progress in the digital world, we may start to see this approach evolve.
Aligning marketing budgets to measurable trade tactics can help drive the growth of eCommerce.
Lack of Training
Trade marketers often lack the online skills that digital marketers possess.
Collaboration and knowledge-sharing is essential to bridge this gap.
Companies need to increase investment in digital training.
Mistakes such as providing a low-quality product image, or not providing useful product information in your online description are common. These can have a detrimental effect on the consumer's willingness to buy.
Bear with me and I'll go into the best-practices for providing product information to retailers — and I promised you more on programmatic advertising too.
But let's not jump ahead.
First, we need to get your product ranged on an online retailer's website.
Let's take a look at some approaches that will help your product to stand out.
Selling To An Online Retailer
Firstly, it's important to find the right online retailer for your product.
For example, if you're selling an artisan product, don't try and pitch to a retailer that offers only mainstream brands.
Be selective. Find online stores who are willing to work with your for your mutual benefit.
Before you try to set up the meeting with your online retailer, ensure you have identified a reliable distribution partner who can guarantee your products will be delivered on time.
You can make initial contact with online retailers from a number of different activities:
- Trade shows (take a look at our blog on effective exhibition stand design)
- Online research and old fashioned phone call
Try to identify the buyer for your category. Be tenacious, but once you've spoken to them, respect their time sensitivities and let them guide next steps. Ideally you will want a meeting to pitch your product.
If you don't get the offer of a meeting immediately offer to send them samples of your product.
There are a number of ways you may be asked to sell into a retailer.
If you manage to secure a meeting using your super sales skills, you may be asked to a 'Meet The Buyer' event at the retailer's offices. There you will learn about the retailers' online merchandising, logistics and the requirements they place on their suppliers.
You'll then likely have a one-to-one session with the relevant category buyer to discuss your potential listing.
Alternatively, you may be required to conduct a sell-in presentation.
In either situation, it's important to be prepared.
Having a solid product offering and sell-in presentation is key.
Include any case studies to prove ROS (rate of sales). If you don't have ROS then be ready to be clear on your vision and goals. Do you have a solid business plan?
Include the information the retailer will want to hear:
- What profit margins can they expect to make?
- What are your sales projections?
- Minimum order requirements?
- Are you going to offer large order discount incentives to the retailer?
- What's your USP?
- Who are your competitors and what are their weaknesses?
- Do you hold patents for your product?
- How do you ship?
- What's your promotional and marketing budget?
You could set up a dummy digital marketing campaign providing them with an example of how you're going to promote your product online to increase your chances of sell-in.
Now take a breath and...
We're nearly there. You've successfully sold into an online retailer.
Now, in the final part of this post, we'll discuss how you can work with the online retailer to drive product sales.
Online Trade Marketing Techniques To Drive Sales
Maximising The Opportunity When Providing Product Information
If you're featuring your product in an online retailer's website, to maximise any opportunities you must provide information that will lead to more sales.
You simply would not believe how many products I've seen online with terrible manufacturer descriptions, poor images and lacking basic information needed to make a purchase.
If you're providing product information to the retailer, if possible and applicable, include the following:
- High-quality lifestyle images (product being used in its setting)
- Various specific product images (front / back / sides / close-ups / three-quarter views / in use / features / details)
- Video explaining features & benefits and showing product in use
- Product description including features & benefits
- Product specs
- Technical specs
- How-to-use guide
- Warranty / Guarantees
- Product comparison tables
- User reviews
- Social media links
Let's look at a good example, and then a (ahem) not so good example.
Here's Scotts' 'Patch Magic' product as featured on Amazon. Scotts has provided high-quality images and a concise description detailing the features & benefits.
Scotts also provided a range of images showing the product at various angles and in-use.
It further details the features & benefits....
... and goes into how to use the product in a simple three-step process.
It also has a list of frequently asked questions.
And on top of all that, as you would expect, the entry also includes reviews and product comparisons.
From this, the consumer can make a well-informed decision on whether to buy the product.
In contrast, let's look at Scotts' competitor, Westland, and its Bulb Planting Compost.
Firstly, there is only one image and no description above the fold of the page.
The only other information provided is some short technical specification and a short list of features & benefits much further down the page.
It may all sound obvious but when these simple things are lacking, it can significantly harm sales.
So, get the basics right and it will make a big difference.
Online retailers all work differently so what you can / cannot provide will vary considerably.
It's always good to have a conversation with them.
There may be opportunities to write an extended product entry, add additional images / videos, feature promoted products and utilise remarketing.
Remember earlier I promised I'd delve into programmatic advertising in this post?
Well the time has come.
So what is programmatic advertising exactly?
Traditionally, an advertiser would place their ads on sites where their target consumer would regularly frequent.
So if you're a car manufacturer, you'd advertise on a car website.
However, this 'hit and hope' approach is targeted towards a self-selecting group not an individual.
Through 'retargeting', programmatic advertising enables you to display ads that target consumers individually on a range of sites, based on what they've recently viewed.
If a consumer has interacted with your product on the retailer's website but didn't complete the purchase, an ad for that specific product could appear on a completely different website they visit later, or on one of their social media channels.
These ads are less intrusive for the consumer as they're more tailored and have been proven to have significantly higher click-through-rates and conversions.
What's more, it removes the need for humans to negotiate ad rates and to manually send over ad insertion orders, meaning it's faster and cheaper.
Ideally, you want to both be working off the same platform.
As a manufacturer, it's essential you work with your retail partners to embed conversion tracking on their websites to give you a single, shared view of the consumer.
Retailers and brands can combine retail data and brand data to improve audience targeting.
This will enable you to get a much better understanding of the customer journey, working together with your retailer for mutual benefit.
In the digital age, cross-channel marketing is now an effective way to engage with consumers across multiple channels.
It gives the consumer a single, integrated experience and increases brand engagement.
As a trade marketer, coupons are an effective method for targeting consumers and driving traffic online.
Place coupon codes in direct mail, brochures and catalogues, for the consumer to then go and redeem online.
When they enter the coupon code offer them a chance to opt in to your mailing list to receive further offers.
This will enable you to encourage repeat online visits and build a relationship with your brand.
SMS messaging coupons is also an effective method for driving traffic to your website and driving online sales.
They offer far higher open rates and conversions than email marketing and offer a short, streamlined path to purchase.
Trade marketing is rapidly changing in 2018 and you don't want to fall behind.
While online trade marketing is evolving, it's just one aspect of the trade marketer's varied and challenging role. There are significant cultural and technological developments occurring across the board.
From advancements in trade shows, to major changes in merchandising, why not download The Ultimate Guide To Trade Marketing 2018?
It features exclusive advice from our trade marketing experts on every aspect of the modern trade marketing role, including:
- Generating a buzz around your product at trade shows
- Creating unforgettable point of sale displays
- Elite marketing strategies for increasing your product's in-store sales