What Direct Response Marketers Need to Know When Moving Into Retail
Jill Draper, president, Marketsmith Inc.
Direct response marketers looking to move into retail are faced with considerable challenges. They must navigate the needs of retailers to promote their products to the largest possible audience. This transition isn't a minor change in strategy; it's a fundamental shift from a product-centric focus to a consumer-centric one, where the company becomes an actual “brand”—not just a manufacturer of product.
Direct response marketers should consider the following five tips to become more brand-focused in their marketing plans:
1. Get consumer insight. What does the product accomplish for the consumer? Understand the benefits and any possible pain points of the category from the consumer's point of view. Look closely at what claims are on the packaging, the pricing strategy, and consider what the consumer expects, especially at your price point. The best way to do this is to conduct market research through focus groups, surveys, and other research techniques. It's critical to gain a deep understanding of the consumer's needs before you engage retailers and start promotions. Equally critical is the understanding of what your competition is doing at the shelf and in their marketing campaigns used to drive point of sale, including how they speak to and interact with the consumer. Ultimately, this information will help direct-to-consumer marketers to pivot from making a sale through direct channels to building brand recall and brand preference that will drive sales at retail.
2. Understand each retailer's hot buttons. The retailer is a key stakeholder in the successful shift from direct response marketing to brand marketing. It's critical that you demonstrate a commitment to providing ongoing marketing support for your brand if you want to keep your shelf-space or gain incremental merchandising. Obtaining retail support can be done by paying slotting allowances, but it can also be accomplished by partnering with the retailer, understanding its marketing needs, and creating exclusive co-marketing programs that will help it create a unique and differentiated consumer experience for its shoppers. To create the most relevant programs for a specific retailer, direct response marketers first need to find out what's important to the retailer. Perhaps it needs help with increasing store traffic or attracting a specific market audience—you can help by increasing your media spend, or by creating a product configuration that would attract that specific audience. Does the retailer promote a charitable organization? You can augment its efforts and create an in-store promotion that supports the charity. Do you understand its signage requirements? The key here is to create a co-marketing program that meets the retailer's needs while also building your brand at-shelf.
3. Leverage in-store mobile behavior. A growing number of consumers are using their mobile devices in-store to compare prices, get more information, or to purchase items online at a discount. While some marketers may view this behavior as a threat that could undermine their retail efforts, other more modern marketers see mobile “showrooming” as an opportunity and are meeting the consumer in the aisle through their mobile device. For example, Solstice, a specialty sunglasses retailer, offers an app that allows consumers to see a larger selection online and make a purchase while they're in the store. Other marketers are redesigning their websites and implementing responsive design to ensure that the online consumer experience is as rewarding and powerful as an in-aisle point-of-sale.
4. Leverage data analytics. Every direct response marketer should be closely monitoring sales data on a weekly—if not daily—basis when they're in the retail channel. But, where many marketers fall short is in looking at the right data to understand the key levers that should be tweaked on a real-time basis to maximize retail performance. For example, while you'll most likely be looking at the impact that your short-form campaign is having on retail at an aggregate level, you may need to look deeper and examine the impact of individual airings on retail sales by day and by daypart. Additionally, you'll need to look at the impact of other media—such as store circulars—on your brand's sales performance. The key is to be able to collect all of the relevant data—transactional, media performance, consumer demographic, and consumer engagement metrics—necessary to create a meaningful and insightful dashboard that will provide insight and enable you to optimize your marketing plan in real time. It's to the marketer's advantage to live in a world of accountable media and to demand that every single marketing dollar is not only as impactful as possible, but provides additional intelligence, as well. Consumers are changing, devices are creating new revenue streams, and your audience touchpoints are becoming more diversified. One must be constantly learning from the data, not only to see actionable insight but also to evolve to the next level.
5. Optimize the in-store consumer experience. Before you jump into retail, you need to consider how you plan on obtaining visibility into what's going on at the point-of-sale. Many marketers don't know when an item is out of stock, or if a competitor has an on-shelf promotion that's only available in-store and isn't yet out on the Internet. You also need to know when signage is poorly managed so you can hold the retailer as accountable as you would hold your media-buying agencies for their media placement effectiveness. If you don't have a robust sales force, you need to consider outsourcing to companies that offer secret shopper services and other data-gathering tactics to give you insight to what's happening at the individual SKU/store level. All of these initiatives require costs and effort, but they're critical for presenting the right brand image and converting as many sales as possible in the store aisle.
The company that's moving from direct response marketing to retail has to not only think about new strategies, but also look at how it market its products and work with partners in a whole new way. Transitioning to retail doesn't just mean a change in processes, but a new mind-set to tackle the challenges and considerable opportunities.
Jill Draper, president, Marketsmith Inc.