Elliott Poulter - 15/03/2021
Although there had been a significant shift in consumer buying behavior before the COVID-19 global pandemic, coronavirus has undoubtedly sped up the process of change for retailers. It is likely that customers will always want to visit a brick-and-mortar location to make purchases. Still, they want to interact with businesses in different ways today, including how they receive marketing. Whether the retailer operates online, offline, or both, retail marketing is essential to ensure they reach their target customers in the best way and that customers will find the products and the business appealing.
What is retail marketing?
Put simply; retail marketing is how retailers appeal to customers and encourage potential customers to make their purchases. That simple definition, though, doesn’t tell the whole story – since there is a huge range of ways to reach customers and to help them along the journey to purchase. These strategies and tactics are essential for businesses to know, understand, and utilize to compete with the significant amount of competition in both the offline retail sector and the eCommerce sector.
Why is retail marketing important for retailers?
Retail marketing is essential because it is the key to a business’s success that sells, wherever the retailer is selling. Considering that it is easier than ever for customers to find alternative companies to make their purchases, retailers need to use retail marketing to show them what the business has to offer and how easily they can get their hands on those products. There are three main aims of using retail marketing:
Connecting with customers
Customers can contact businesses in many different ways today – gone are the days where writing to a business, phoning them, or visiting the store are the only ways to get in touch. In addition to those methods are emails, social media, chat plugins, text messages – and it isn’t just customers contacting businesses.
Speaking to customers through different mediums allows retailers to share more about their business and build deeper and longer-lasting relationships with their customers. This greater potential for interactions with their customers and followers allows for greater influence on purchase decisions, adds value for customers, and increases brand awareness.
Showing customers the products they want
When customers start searching for a product, they may not know precisely what they are looking for. Where there is a problem that they need to fix, a search begins – and those searches are where retail marketing should come into play. By categorizing products and placing similar products together, there is a greater chance that customers will find the right solution for their problem, which will lead to a purchase.
Enhancing the customer’s life
Retail marketing allows businesses to show the products they have to customers and highlight the value they have to offer to make purchase decisions based on what is right for them. Customers can find products that resolve a problem at a price that they are willing to pay, and the customer can improve their standard of living. With this, the customer is likely to share their experience of the product, and good word of mouth is expected to draw additional customers to the business.
Focusing the marketing strategy
Retailers use two main approaches when starting to market products to customers – the traditional ‘four Ps’ strategy and the more recent four Cs’ strategy.
Product centered marketing strategy (the 4 Ps)
This strategy is an approach that puts the product and the business at the center of marketing activity. The 4 Ps approach has been popular since the 1950s, and so it is a tried and tested way to plan product promotion. There are plenty more in-depth analyses of how to implement this strategy, so we’ll keep this section to a quick overview.
For retailers, the product offering is pretty much the most important thing to consider. If there isn’t any demand from customers for the products you have, you’re unlikely to make sales, even if the price, place, and promotion are right. Understanding the unique selling point and the life cycle of the products available is essential to gauge each point’s marketing activity in the cycle.
How much customers are willing to pay for a product is also a huge consideration for marketing a business. Not only should the price for each product be realistic, and consider the costs from suppliers, seasonal discounts, and the prices charged by competitors, there should be an over-arching approach that defines the retailer’s pricing strategy.
Retailers may make use of pricing psychology when identifying their pricing strategy. Whether using the rule of 9s, using discount strategies, or locating products strategically to encourage purchase, there is a vast amount of knowledge to help retailers sell more.
Where products are sold used to be solely determined by stores’ location and whereabouts in the store the product should be placed. However, as more sales channels have emerged, there are other sales locations to consider – positioning on websites, online marketplaces, social media channels, and so on. Retailers should decide where products are more suited to online or offline sales and use that as part of their strategy – creating ‘exclusives’ where appropriate.
Closely tied to place is promotion. The goal of a promotion is to ensure that customers understand why they need the product and why they should be prepared to pay the price that has been set for it. Promotional activities include advertising, public relations, and listing products on a variety of sales channels and showing the products on social media, curating collections on the eCommerce website, and so on.
Customer-centered marketing strategy (the 4 Cs)
As retail businesses diversify to include eCommerce sales and customers become more discerning about how they spend their money, many companies move towards an alternative marketing mix. Customer-centered marketing strategy is becoming more popular as retailers move towards omnichannel selling – because as a strategy, they complement each other. For many businesses, it makes more sense than using the 4 Ps.
Retailers are putting the customer first, then understanding their target customers in detail is an essential first step. The business needs to clearly understand what needs they are meeting for their target customers to ensure consistent sales. Consumers making purchase decisions are the most valuable resource for businesses, so consumer data and insights are so essential for retailers to use.
Cost isn’t the same as price – although many make that assumption. While the price is essential for retailers to get right (if the price of a product is too high, customers simply look elsewhere), other costs come into play, particularly with online retail. Costs that customers will factor into a purchase decision include the time it takes to get to the store or be delivered to their home, the benefit it will have to their everyday life, and the potential environmental or social cost of the product, amongst many others.
Again, it is easy to assume that convenience is equal to place in the 4 Ps approach – but convenience is much more than where retailers sell their inventory. Knowing where their customers interact with the business means that retailers can make the product available in the most convenient way. This might mean considering opening hours for bricks and mortar locations, the ease of purchasing on the website, a range of delivery options, or click and collect arrangements in-store, amongst others.
Promoting products is just one way that retailers have communicated with their customers, but the internet has increased customers’ and retailers’ ability to communicate with one another. There is email, of course, but the majority of businesses are now communicating with their customers through social media networks and messaging apps. Social media allows businesses to interact with their customers both in superficial and much more profound ways using social media. From these interactions, valuable insights can be drawn that can have massive implications for its future success.
How to develop a retail marketing plan
Because every business is unique, each retail business has different needs from their retail marketing activities. Whether the business is entirely offline, purely eCommerce, or a mix of the two, having a retail marketing plan is the first step in getting customers to the door of the store or onto the website to make a purchase.
Know your brand
Most businesses and marketing teams will already know their brand intimately – with branding guidelines, detailed analysis of the type of language to be used, and so on known by every individual that works for the company. Before beginning the retail marketing plan, ensuring the story behind the brand, the USP for the business, and so on should help to create the strategy.
Understanding the objectives of the business and the campaigns that should be run are the next steps. Once these have been established, it is easier to ensure that the correct assets required are available or obtained ahead of the campaigns launching.
Clarify the position of the business in the market
Carrying out a competitor analysis is commonplace in many different types of business, and retail should be no different. While the amount of competition online could make that feel impossible, choosing just a small number of competitors will help clarify the type of customer that the business can target and set prices. Competitor analysis doesn’t need to take long, and there are plenty of templates readily available that can make the process even quicker.
Define the target market
We’ve mentioned the importance of the customer in our section about the 4 Cs – but we can’t stress enough how important it is to know your customers intimately. Identifying key information about customers helps retailers to know whether their products will sell. Retailers should details such as these about their target customers:
- How far into their career they are
- The level of education they are likely to have attained
- If they are likely to be homeowners
- If they are likely to be a parent (or to be a carer for a family member)
- The customer’s likely income bracket
These are all incredibly valuable to think about when creating a marketing plan for a retail business. They will help identify competitors, which can inform marketing activity, but they also help identify these customers’ needs. This helps determine how best to reach them for marketing purposes and identify potential new products or opportunities to diversify the business.
Understand product benefits & USPs
Clearly understanding how products benefit the customer is essential since the message of the marketing activity will be focused on this. Whether the business takes the overview of the USP of the business or focuses on the benefits of a specific product depends on the aim of the marketing activity, but this should be clear before any activity takes place.
Outline the tactics you are going to use
Starting work without a plan doesn’t tend to make for a well-executed, successful campaign. Knowing the specific products that are to be promoted and on which channels activity will take place is the very least that retailers need to know before starting work.
This is not a comprehensive list of potential tactics; businesses have many different approaches and methods that they can make use of for retail marketing – but some of the tactics that can be utilized and implemented include:
- In-store promotions
- Websites and landing pages
- Direct marketing
- Point of sale promotions
- Public relations
- Experiential marketing
- Limited-time discounts
- Word of mouth
- TV/radio ads
- Social media ads
- Pay Per Click (PPC) ads
- Content marketing
- Pop-upPop-up shop locations
Most retailers will use a blend of different types of retail marketing tactics. Bricks and mortar retailers are likely to use a digital strategy that includes an eCommerce website, organic social media feeds, supplemented by paid social media ads, or PPC ads regularly, with other strategies employed where it is appropriate.
Suppose marketing campaigns are running concurrently (such as where different products are being targeted on different social media channels). In that case, it should be clear if they should complement one another or whether the campaign’s requirements are sufficiently different that the only similarity is the company logo.
Set the timeline for the campaign to run
There are precious few businesses that continue to run the same campaigns indefinitely. We often see campaigns being refreshed and reworked, and occasionally nostalgic campaigns get brought out of retirement – but rarely are these campaigns run without considerable thought. They are used in the context of a wider strategy.
Setting a careful plan for campaigns, how long they will run for, and how channels are essential in developing a retail marketing plan. Being sure that the campaign doesn’t run for too long and planning for subsequent marketing activity will help avoid customers becoming fatigued and ceasing to pay attention.
Set KPIs for assessing results
Meticulously putting out marketing content, week in, week out, isn’t necessarily going to lead to success. Before starting any activity, retailers should understand what the aim of their work is and how they plan to measure the success of the work. Experimenting with different strategies is expected (and is to be encouraged), but if the results don’t show the required return, there is little point in continuing. Where there is significantly lower engagement, businesses may refocus efforts and decide how to increase those channels’ value or decide to discontinue investment in those channels.
Retail marketing strategies
With so many things to think about before even planning a marketing activity, overwhelm is common. We’ve listed some great strategies for retailers to consider – but these aren’t the only ones! These might be adapted or inspire new strategies.
Reach customers where they want to be
Omnichannel isn’t just an approach to selling. Marketing to customers wherever they choose to interact with a business means there is more likely to be a return on investment – but just because it is there doesn’t mean customers will come. Campaigns should be carefully placed where target customers are. For many retailers in the 2020s, that means online advertising – through social media, their website, and their online listings.
But while driving traffic to bricks and mortar stores can be done using some of the same strategies as eCommerce businesses use, offline retail has additional marketing opportunities, too, in the way of store displays, windows, and point of sale promotions.
Don’t forget mobile
For online marketing activity, your assets should be easily viewed on all kinds of devices. Mobile commerce (shopping on a mobile device, usually a smartphone) now accounts for around 45% of the US eCommerce market. While most website building technology automatically creates mobile websites as standard, retailers should ensure that their web site’s performance and test the journey to purchase.
Optimize the assets you already have
Most retailers have many assets in place already that they can utilize – but they often don’t make the sort of use of them that they could. With this in mind, we’ve run through some of the most commonly under-used assets.
Directly outside the store
Often referred to as kerb-side, the area outside a store shouldn’t just be clean and tidy – it is an extension of the space available to work with. Suppose local by-laws permit and the sidewalk isn’t restricted. In that case, retailers can consider adding banners, flags, or sandwich boards to catch the attention of potential customers and to encourage them to wander inside.
Windows should be treated as a preview of what is inside the store to pull customers in. While the size and style of each store’s windows will impact the way it can be dressed, choosing a theme, and integrating that theme with broader marketing campaigns will ensure the windows help build brand awareness.
Inventory and displays
When customers enter a store, they need to be wowed. That means regularly rotating stock and creating beautiful layouts so that when customers return, they see new stock that they can be inspired by. The first display that customers see when they pass the doors should contain the newest items, products that are popular and have high margins. “Eye level is buy level” has been a mantra for retailers and visual merchandisers for years, to the point of cliché, but it is used so often because it is true. This means that placing the most desired items at eye level and others that complement them nearby. Where stores carry everyday items, they should be towards the back of the store.
Employees are the human face of your business and should be advocating for your business when they are both on and off the premises. Keeping your staff happy will help ensure that they are the best asset you have for marketing your business, and great staff will bring customers back to your store. Those who return will become regular customers, who eventually will advocate for your business too.
Advertising on social media isn’t a new idea – and considering the number of businesses that use their social media to promote their business, some retailers have voiced concern that social media advertising is pointless. But when social media companies tell us statistics like 90% of people on Instagram follow a business, it becomes clear why it is essential for businesses to make use of their social media accounts.
Most of the social media companies are creating commerce opportunities, too – Facebook has been building Shop functionality for a while, and TikTok is expanding their partnership with Shopify. There are claims that 2021 will be the year of social commerce. So (mainly where target customers are likely to be social media users), ignoring social media or not making it a crucial part of marketing strategy is likely to be a huge mistake. Creating shoppable posts means that new customers can find products they want, buy the item, share content, and amplify brand awareness on social media – all without leaving their feeds.
When marketing products to a different demographic, creating story posts may not be as successful as they could be. To reach specific communities on different social media platforms, working with influencers that are in the right demographic – or that are local to the store, and have a good following locally – is just one strategy that can create the desired results.
Social media channels aren’t just there to promote products either, though. Many customers use social media to contact businesses rather than sending an email – and in a lot of cases, they use social media to hold the business accountable if they’ve encountered an issue. Where customers have been impressed with a product or the service they have received, they may create their content talking about their experience with the company – and user-generated content can be invaluable for businesses, particularly if the customer has a large following.
There are thousands of posts that detail ideas for social media posts and build a successful social media strategy. We won’t replicate those here – but suffice it to say that an active social media presence is a fundamental part of any retail business.
Where businesses collect personal information about their customers, there is much more scope for marketing to customers – assuming permission has been sought first, of course. Customers use their phones for hours each day, and SMS (text messages), email, WhatsApp can all be used for effective marketing.
While these contacts are incredibly valuable, it is essential not to overwhelm customers with too many marketing messages. Segmenting customer data means that messages can be targeted and are therefore more likely to be positively received.
If the retailer has created an app – either as part of a loyalty scheme or simply for easier shopping – then in-app notifications can increase customer engagement. These should be used carefully, and it is recommended that they are only used when the app is open to avoid customers deleting the app. But where customers have high engagement levels, in-app notifications can encourage purchases and help increase positivity towards the brand.
Local businesses working together can increase value for customers and can also extend brand awareness. Working together creates more opportunities for marketing the stores in the local area, but there are also opportunities to encourage reciprocal business. Consider offering coupons for other stores, using space as pop-up locations, and so on – not forgetting to share details of these partnerships and initiatives on social media, website, etc.
Alternatively, partnering with local or national charities (depending on the business’s size) can be another way to reach customers. Shopping ethically isn’t just a trend that people who are vegan are hopping on – and where customers can feel good about their purchase, without needing to spend extra (or significant amounts extra), they are often willing to do so over other companies. While monetary donations are almost always appreciated by charitable organizations, partnering doesn’t necessarily mean handing over half of your profits to make a difference. Partnerships can be as simple as raising awareness to customers or volunteering with the charity for several hours each month.
Create a loyalty scheme
For many businesses, the aim of the game appears to be finding new customers rather than hanging on to the ones they already have. But encouraging repeat business is essential – because not only is acquiring new customers more expensive than retaining current ones, but because increasing customer retention by as little as 5% can increase profits by a minimum of 25%, and often by much more. Customers switching to different companies costs US businesses around $137 billion each year – which means that with a little effort, a loyalty program can be a great way to increase profits.
Customer loyalty should be built into every part of the customer journey, but a great customer loyalty scheme means that personalization can be much more effective. Customer loyalty schemes can help businesses to know their target customers better, to encourage customers to provide feedback and engage on social media – they are a powerful tool for retailers.
Psychologically, there are several factors at play with loyalty schemes. Positive reinforcement, motivation (collecting points can be incredibly motivating!), getting a head start on their purchases, loss avoidance, increased social status all impact us as customers – and once we’re a member of a scheme, there’s an increased feeling of commitment too. These are all incredibly valuable when it comes to encouraging customers to return – and that adds up to increased profits.
There are many different types of loyalty programs, all of which help increase repeat custom but have many additional benefits for businesses.
Paid programs that are successful tend to be rare – customers have to see a huge benefit for them to sign up unless it is a small, nominal fee that contributes to setup. The most prominent example of a paid loyalty scheme we can think of is Amazon Prime. However, it doesn’t give customers rewards on each purchase. The additional features that Prime members get included makes paying the fee worth it for many customers. They are rumored to make a loss on each membership, but considering Prime members spend more than double on Amazon each year than non-Prime customers do, it is clearly worth it for Amazon too.
Free programs are often the most successful for retailers. However, since many customers are now carrying many cards in their wallets, having an app available to scan and collect points or cashback is often preferred – which means implementation may not be achievable. However, on a basic level, for small businesses, small cards that can be stamped when a purchase is made may be all that is required – especially if those stamps add up to a free gift, even if that is as small as a coffee.
Charitable programs are a way to appeal to the philanthropic side of customers – especially if their continued custom adds up to a charitable donation on their behalf, with no additional action required. The Body Shop’s Love Your Body club allows customers to collect points, which can be used towards rewards or can be donated to charity.
Gamification programs encourage customers to play a game to unlock achievements. One of the most successful examples we can think of is Nike – when customers sign up to become a Nike Member, they get rewarded for being active on top.
Subscriptions are becoming ever more popular with customers. Wine and magazine subscriptions by post have been popular for years, but today subscription boxes are available for all kinds of products. Cosmetics and skincare products (for example, Glossybox), t-shirts (such as Monthly Tee Club), and even underwear (such as MeUndies) can be bought on subscription and delivered straight to the customer’s home. There are even mixed boxes available, such as FabFitFun – and whether a subscription box is sent monthly, quarterly, or on a completely different timeline, customers love them.
Use a referral campaign
Good word of mouth is incredibly powerful; almost every business owner knows and understands that. However, there are relatively few small business retailers that use referral campaigns consistently and successfully. While running referral campaigns can take a little effort, the potential gains made make it more than worth investing the time and money in getting it right.
While referral campaigns can be easier to run when they collect customer data as part of a loyalty scheme, it doesn’t have to be as complicated as that. Printing a stack of leaflets with two parts that offer an incentive if the customer brings a friend to the store (and a better incentive if they both purchase on the same day) is a low-tech way to encourage customers to return after they have made a purchase.
Wherever retail businesses are operating, they cannot be successful without the assistance of retail marketing. Deciding whether to use a product-centered or customer-centered approach to marketing the business and the products is the first step to formulating a retail marketing plan. The plan should detail the strategies utilized and the appropriate time-frame for those strategies to run. Ongoing assessment of the success of those strategies means that retailers can continue to make the most of their retail marketing so that their profits can continue to grow.
Elliott is the Marketing Executive at Olvin.
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