This article will cover:
- How to develop your digital trade marketing strategy, step by step
- Basic considerations for leveraging technology
- Developing a digital asset library to streamline your digital trade marketing activities
The 'Retail Apocalypse' and the rise of digital
As the clock struck 12.00am and we entered 2019, it marked the closure of a difficult year for the retail sector, one plagued by the demise of numerous British high street stores.
Toys ‘R' Us, Maplins, Carpetright, Marks & Spencer, Debenhams and Poundworld were just some of the once-formidable retailers who rode the pale horse into “the retail apocalypse” and failed to come out the other side unscathed, if at all.
Even the Christmas rush wasn’t enough to curb the downward trend in bricks-and-mortar store visits during the festive season, with footfall dropping three percent on last year – the third consecutive annual fall.
As hell on the high street continues, we’d be forgiven for thinking it doesn’t bode well for trade marketers who desperately cling on with BTL campaigns in a bid to drive product sales in stores.
But it’s not all doom and gloom.
A report from the Office of National Statistics shows the amount of money spent in the retail industry increased by 4.7 percent to approximately £366 billion in 2017, when compared with the previous year.
The rise was largely driven by a record proportion of online spending, increasing to 18.2 percent in August. And department stores continued to reach a record proportion of online retailing in August 2018, at 18.4 percent.
It’s clear to see that the point of sale is shifting rapidly.
And to the savvy trade marketer, here lies an opportunity to capitalise on consumers’ increasing online spend.
Capitalising on digital trade marketing
As UK retailers begin shifting more focus towards digital, more and more now offer digital ad services to the brands whose products feature on their online stores. It’s similar to the way brands pay for eye-level product placement on supermarket shelves.
Through display ads, featured products and sponsored links, digital enables brands to capture consumers as they browse for products on their retailer’s site. Retargeting ads also provide brands the opportunity to stay fresh in the minds of consumers, appearing on other sites once the consumer leaves the retailer’s online store.
"Retailers understand the need to evolve," says Zakie Beg, Google’s Strategic Partner Lead. "More and more are turning towards advertising as an ancillary revenue stream to support their core businesses. Alibaba, Amazon and Walmart are great examples."
Trade marketing's shift towards digital isn’t just a UK phenomenon. In fact, a multitude of retailers began offering ad services to brands long before digital ads started to permeate UK retail.
Way back in 2014, eight out of ten US retailers used digital services for brands to advertise products on their sites. And why wouldn’t they? It’s a win-win for all parties — brands get more exposure and sales, retailers get extra revenue and consumers get a more personalised service with recommended products tailored to their needs.
"The pressure retailers are feeling from low or falling margins on their core products represents a real opportunity for collaboration with suppliers to capture revenue in a more profitable and efficient space online. The influence of digital advertising as a revenue stream cannot be understated. To truly maximise on this potential, retailers must ensure any activity remains true to their brand, their supply partners and their customer's journey."
~ Zakie Beg, Google's Strategic Partner Lead
5 steps to kickstart your digital trade marketing strategy
Step 1: Understand the right partnerships
Do your due diligence. Look at your current and potential retailers who are digitally savvy and want to develop online. They need to be able to move at the right pace with a focus on digital innovation.
Step 2: Talk to your retailers’ digital teams
Trade marketing is about building relationships. Use your current contacts to introduce you to the people responsible for digital media innovation within your retailers. Alternatively, use LinkedIn to find the right people.
It all starts with communication. Your retailers may already offer digital services, but even if they don’t currently have the capacity they may be interested in developing digital services as it’s a symbiotic relationship.
Working together, brands and retailers can look at what they can leverage from technology partners. It could be agencies, third-party tech providers, or even an in-house solution.
Strike up the conversation and remember not all retailers are in the same space and understand how big the opportunity is.
Step 3: Define your goals, set KPIs and agree on targets
Look at your goals from both the brand and retailer perspective. Improving sales is the main goal, however it could be achieving more brand exposure or telling your brand story.
Set agreed KPIs, work from a single customer view and be open to challenging each other and growing together. This will pay dividends when it comes to analysing results as the retailer will be able to offer more tailored reporting.
Step 4: Understand the technology and strike a deal
Once you start getting down to the nitty gritty, it’s time to take a deeper look at what technology you and your retailers already have in place. Are there any organic overlaps you can leverage to drive efficiency?
Consider what sort of ads you would like to run in relation to your goals. Discuss what they can offer. The retailer may work with a third-party tech provider using a digital ad server, such as Google Ad Manager, to offer a wide range of ads, from display ads using video to sponsored searches. Some retailers may have the capacity to host product videos on product pages and increase conversions.
How does your retailer offer placements on their search or product listing to give your brand more exposure? If a consumer conducts a search on the retailer’s website, how can the retailer customise the search when the consumer interacts with them again on their website?
As a trade marketing professional, you’ll have good insight into your consumers’ purchase behaviour. How your consumers purchase your products will affect the type of ads you run.
For example, the product may not require serious consideration so a short display ad may do the trick. Alternatively, if it’s a product that requires careful consideration, they may need to see ads over a longer period on different channels.
When it comes to pricing, some retailers sell on impression, some clicks, some conversions. It all comes down to what commercial models they have in place. If you have good relationships with your retailers, there will be more elbow room to negotiate.
Step 5: Build your digital assets
Once you’ve agreed on ads and pricing, you’ll need to supply the retailer with digital assets. This may be a short, informative product video or professionally-designed display ads. Ensure the retailer provides you with specific sizes and descriptions.
Building a digital asset library is a good way to stay ahead of the game and grow your digital presence quickly. This will enable you to fire off various product assets whenever the retailer requires them. This could include:
- 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)
- Various size banner ads
- Video explaining features and benefits and showing product in use (short, medium, long)
- Product description including features and benefits
- Product specs
- Technical specs
- How-to-use guide
- Warranty / Guarantees
- Product comparison tables
- User reviews
- Social media links
The time is now
There’s no denying trade marketing is shifting towards digital. Wherever you look there are constant reminders, from doom-mongering news articles to colossal numbers of high street discounts.
The challenge is for brands to work with their retailers to ensure they react quickly, before they join the sombre ranks of Toys ‘R’ Us, Carpetright and Maplins.
"Trade marketing is valued globally as roughly a $500 billion per year business, of which $3.4 billion is the UK," adds Beg. "With monumental shifts taking place in consumer retail behaviour, digital trade marketing represents an opportunity to evolve with the consumer whilst boosting sales and margin growth. A better, more personalised and engaging shopping experience online, will enable retailers to deliver more value for their suppliers, whilst building stronger and deeper relationships."