What you’ll learn to do: Evaluate the key elements of the integrated marketing communications mix
As we begin the next section, it’s important to keep in mind that the limits of marketing and advertising budgets combined with the complexity of managing campaigns and content will constrain channel selection. Further, we’ll also want to be mindful that while consumers may be present in all communication channels, specific ones will be better fits, given firm strategy and consumer behavior along the Customer Journey. That said, we should be energized to know that there is a multiplier effect by leveraging several channels, which amplifies marketing messages. Integrated Marketing Communication optimizes messaging by harnessing the benefits of each channel to build a clearer and broader impact than individual or singular campaigns.
- Describe how advertising is used by retailers
- Outline the types of sales promotions used by retailers
- List some direct marketing tactics used by retailers
- Discuss the various online media elements used by retailers
- Explain why social media is a crucial part of any current retailer’s IMC mix
- Evaluate use cases for other miscellaneous media elements
Advertising in Retail
Marketing and promotion help facilitate exchange by providing information and context to consumers so that they are better able to understand how a specific good or service can meet their needs. Regardless of how well conceived, designed, positioned or priced a product or service may be, it cannot “speaks for itself.” It will not “sell itself,” if consumers are not aware of it or do not understand how it resolves a problem or issue for them.
Earlier, you learned about differentiation within retail, i.e. how each retailer has a target segment they’re trying to service through their assortment, pricing and other tactics. Thus, advertising is necessary to communicate these differences. Differentiation doesn’t “speak for itself.” Instead, retailers use out-bound advertising to consumers to communicate how they’re different. For example, Wal-Mart uses its advertising to showcase the breadth of its assortment and pricing to highlight the message, “Save Money. Live Better.” Target, its part, uses advertising for visual impact, showcasing style and design to highlight the message, “Expect More. Pay Less.”
Further, in-store promotion, in the form of merchandising, reinforces the differentiation, showing consumers how the assortment, signage, pricing and other features of the retailer solve the issues that are important to them. Returning to Wal-Mart, think about their Rollbacks, guarantees to match prices and use of shoppable displays, pallets and PDQs (pre-made display quantities). Now, compare this to target, which employs less signage and displays to present a “cleaner” shopping experience. Further, think about the lead-in to your Target store. Likely, you pass the One Spot, which features $1 items, before moving into apparel. Promotional tools like merchandising reinforce each retailer’s respective positioning and complement their out-bound advertising.
Advertising and promotion are also fundamentally important for helping consumers make product or service selections. And, in retail where the fight for attention is most intense, manufacturers and their brands are desperate to grab a consumer’s attention to encourage action/ transaction. The result can be “noise” or advertising clutter, making it more and more difficult to “break-through” with relevant messages. But, marketers have a wide assortment of tools to use at the Point of Purchase (POP)—from the product to the shelf to off-shelf displays.
To begin, product packaging is a canvas upon which marketers communicate brand messages, product features and benefits. It can be updated to offer:
- Seasonal or special graphics
- Specialty sizes
- Bonus packs, i.e. sellable units with extra pieces
- Trial packs, i.e. sellable units with a free sample of a related item
- Special packs, i.e. packages banded together to offer additional value or variety
Further, shelving and shelf location can be used to communicate with consumers. For example, both Campbell’s and Pillsbury have developed custom fixtures to accommodate their products and reinforce their brands in the soup and refrigerated dough categories, respectively. Channel strips, which run along the face of the shelf and are often the place where price tags are placed, can be customized for brand and product messages. Shelf Talkers, e.g. stickers, die-cuts and wobblers, are placed on the shelf, but extend into the aisle to attract shopper attention.
Outside of the shelf, there are also a number of ways for brands to break-through to consumers. For example:
- Floor graphics, i.e. durable vinyl graphics that can be customized for brand images and messages, which are placed on the floor
- End Caps, i.e. a display for a product placed at the end of an aisle
- Side Caps i.e. a display for a product placed at the side of the aisle end—usually Powerwing or Sidekick displays
- Shoppable Pallets, i.e. 40” x 48” shipping pallets, which have been configured with consumer shopping units, not shipping units. (Note: products usually ship in case packs, not individual units. Shoppable pallets, however, do not have cardboard outer cases.)
- Displays, e.g. PDQs like Pop-ups, Slantbacks, Powerwings Sidekicks and Counter Displays. These units have pre-made display quantities and are shipped directly from the manufacturer to retail. They are known by a number of names, dependent upon their shape and how they’re used. But, the important piece to remember is that they’re branded display vehicles intended to merchandise products away from their home shelf location and to generate attention for impulse purchases.
Each of these tools helps shoppers gather information and/ or evaluate options. Thus, marketing & promotion facilitates transactions. It is relevant for retailers trying to draw-in consumers and for brands trying to drive sales in-store.
Sales Promotions in Retail
The variety of sales promotions in retail is limited by only the creativity of the marketer. That’s to say, if you can imagine a way to convey value to the consumer, you can create a compelling promotion. That said, it is best to focus on value and simplicity. Simplicity ensures that consumers easily understand the offer and qualification. When promotions are made complex, either by requirements or by timing, they reduce the likelihood of participation.
Direct Marketing in Retail
In the section on Traditional and New Media, a distinction was made between types of media. New Media referred to channels that allow for nuance or hyper-targeting. It can be interactive and comparatively decentralized, allowing consumers to engage in two-way communication with firms and their brands. It can be optimized to have higher resonance with consumers, making messages, offers and promotions more targeted, relevant and engaging. New Media includes:
- Internet Search
- Social Media
- Direct Mail
- Direct-response, a message transmitted through traditional media communications that requires the reader, viewer, listener or customer to respond directly to the organization E.g. The Home Shopping Network
- In-product Communication, i.e. delivery of marketing content directly to a user’s internet-connected device or software application
With this in-mind, it becomes easy (easier) to see the potential advantages of including new media channels in the Integrated Marketing Communication (IMC) mix. That is, brands can communicate directly to consumers and potential customers. Over time, dependent upon activity, engagement and customer behavior, they can test, customize and optimize offers to ensure the highest levels of impact
Implicit with this is the understanding that firms are able to track customer activity on digital platforms, using cookies and pixels. This helps them re-target and engage them with customized offers. Further Customer Relationship Management and database tools help firms segment customers and potential customers by their behavior. This could be reflected in their engagement with the brand, e.g. webpages they view, e-mail solicitations they open or products they add to their on-line shopping cart but later abandon. Firms can then adjust messaging or offers to improve response rates, whether the intended outcome is engagement or transaction or other.
In practice, think about looking at shopper card data to describe a customer profile that has potentially lapsed in their purchase frequency or volume. This doesn’t mean we’re looking at the data of a single individual. Instead, think about this as reviewing similar data across a population of shoppers who fit a specific type. For example, perhaps they purchased $25 in cereal monthly at the retailer for a period of at least 6 months, but are now purchasing <$10 per month. The importance of this population is clear, i.e. $15/ month in lost Cereal Category revenue. If this population is 100 or 1,000 or 10,000 the change is important.
While it would be ideal to understand what has led to the change in behavior, that will require different (and potentially more rigorous) work. For now, our goal should be to quickly try to recapture the lost sales. Thus, we want to reactivate this population. And, because we have their shopper card data, we might know a lot about them—name, address, e-mail address, phone, etc. This would allow us to customize an offer to them.
Perhaps we’d begin with an e-mail offering $2.00 off on a purchase of 3 qualifying cereals. With technology, we could track the open rate on the e-mails, i.e. what percentage of the total distribution opened the e-mail. Further, we might track downloads of the coupon or in-store redemptions. This would reflect whether the offer had resonance. If unsuccessful, we might consider another offer or inducement. For example, we might text a unique coupon offer to them, offering a discount of purchases of 4 boxes of cereal or more and limiting redemption to only our retail store(s).
As this example illustrates, direct marketing, empowered by new media, gives retailers and manufacturers several tools for engaging consumers directly. As such, these offers can be optimized, making messages, offers and promotions more targeted, relevant and engaging. As such, direct marketing can be an important consideration for IMC.
Online Media and Retail
It’s likely very easy to conflate on-line activity with e-commerce, thinking only of the web as a place to transact, not necessarily as a channel through which marketers advertise and promote. Yet, it’s important to step back from e-commerce efforts and evaluate on-line search as a tool that helps consumers interact with firms and their brands. Equally important, when these are owned assets, i.e. the web properties of the firms and brands themselves, they become even more important messaging vehicles. That is, marketers are responsible for creating, curating and managing content, so that it has the most value and resonance for shoppers.
For example, digital marketing, including both Search Engine Optimization (SEO) and Search Engine Marketing (SEM) is used to connect sellers with potential buyers. As you read in Module 3: Multi-Channel Retailing, SEO requires web development, optimization and maintenance to ensure the on-line visibility of a firm’s website in natural or organic search. SEM, for its part, is a form of paid advertising that increases the visibility of a firm’s website in search engine results, i.e. through Google or Bing. Firms bid on key words to ensure that when searches using those keywords are made, their website appears among the search results. But, regardless, the goal of each is to deliver curious and/ or interested shoppers to owned websites, where marketers have placed relevant content in multiple media—copy, photography, animation or video.
Social Media and Retail
Social Media can be a powerful element of the IMC Mix for three (3) important reasons:
- Consumers opt-in to engage with the firm, its brand or products
- The firm, its brand or products can optimize their message for the channel
- Social Media allows for two-way communication and a multiplier effect
The importance of the first factor cannot be over-stated. Consumers who opt-in to engage with a brand communicate a level of interest that marketers cannot determine through traditional media. That is, when a consumer “comes to you” and expresses interest, marketers should be confident that they have an interested prospect who can be developed into a customer.
Second, social media can provide platforms for the firm, its brand or products to communicate in a natural way with consumers and its customers. That is, firm owns the medium, whether Twitter, Instagram or Facebook. Thus, they can curate their content for more nuanced or expansive messages. Unlike television or radio or even print, which have physical limitations, e.g. time or space, social networks allow firm and brands to message in the way that best suits them, e.g. long form storytelling, video, imagery. Further, brands can express their personality, confident that the majority of their social media followers are loyal customers and supporters. Think about the positive reaction Wendy’s has gotten from their Twitter activity.