The battle for the hearts (and wallets) of global consumers is now fought online, with brands pouring money into ever expanding digital marketing budgets in a bid to capture the attention of scroll happy internet users.
However, this focus on direct-to-consumer marketing neglects a crucial element in a buyer’s decision process – the retailer.
With the most important choices of the online shopper’s consumer journey taking place on the retail site, many brands are coming to realise that they have been neglecting this key element.
But brands and retailers are now coming together to foster more fruitful partnerships via a renewed focus on trade marketing. Trade spend is a well established tool in any brand’s marketing strategy, but, just as with direct-to-consumer marketing, the future is digital.
The online consumer journey
In a constantly connected world, the consumer is empowered to take immediate action on any buying impulse that strikes them, being never more than a few taps or swipes away from a purchase.
The potential for distraction is high; anything that does not offer at least the promise of immediate gratification can quickly be scrolled past onto the next shiny object.
At the same time, the online shopper, always seeking more, can chance upon some novel information that inspires a purchasing decision that they might not have otherwise considered.
The online shop isn’t a simple list of products—it’s a network of that information that can influence consumer decisions.
When dealing with the shortened attention span of the digital consumer, it is crucial for any brand to get their campaign on the right screens at the right time, and that means injecting the message into the retailer’s web presence, as close to the ‘add to cart’ button as possible.
Digital transformation of trade marketing
Traditional trade marketing in the form of in-store banners, displays, product demonstrations, and special promotions, has a proven track record of effectiveness and commands considerable investment in the form of trade spend.
Traditional trade marketing accounted for billions of global spending, rivalling the global advertising market in size.
We are still in the early days of digital marketing, as companies go through the growing pains of upgrading their digital competencies to take advantage of the e-commerce landscape in a way that stays ahead of the competition.
A survey found that CMOs devoted a greater portion of their budgets to developing marketing technologies (software development, analytics, implementation, etc.) than labour costs, with tech spending rising to around 29% of the average budget.
The report projected that spend on digital marketing would increase from 44% to 55% of marketing budgets by 2024.
Globally, consumer product brands spend on average just over 10% of their budget on digital display ads.
These digital marketing campaigns are great at raising brand awareness, but there is typically a gap between where a campaign is seen, and where most people actually buy their products – at the online retailer. Digital trade marketing aims to close that gap.
Evidently, brands are well aware of the value of both trade marketing and digital marketing. But a combined approach is only just being adopted by forward thinking market leaders, many of whom still describe their investment in digital trade marketing as small scale.
Digital transformation in this case is more than simply transferring the benefits of traditional trade marketing over to the e-commerce space. It means leveraging the best opportunities that modern technology can offer, such as multimedia campaigns, viral social trends, and AI.
Retailers hold the reins
Surveyed brands view digital trade marketing as an experimental, ground-breaking area where a lot of work still needs to be done. One main reason for slow development in this area is that they can’t do it on their own.
It’s the retailers who control the valuable points of sale and hold considerable power in relationships with brands. A retailer’s market share, existing relationship with a brand, and its own digital expertise can all affect its desirability to brands looking for a digital trade partner.
With the right partnerships, online retailers can benefit from brand integrations to increase conversions and attract greater revenue from trade spend.
More importantly, trade marketing programs with brands can help protect their marketing share from big fish such as Amazon, which already offers digital trade marketing packages to brands.
Retailers must become the “Marketing Partners of Choice” for brands to ensure long-term profitability in changing and competitive markets.
Barriers to development
One of the main challenges of digital trade marketing is data sharing. Marketers are eager to see metrics from retailers, who, if they can prove performance linked to purchases, can gain incremental trade spend budgets from brands.
Technologically, this has never been easier, but the fact is that traditional organisation structure still throws up barriers.
Even within one company, information silos between departments such as sales and marketing lead to anxiety and confusion over what data is important and why.
That’s why businesses are investing in the training of personnel in digital skills, as well as structural reorganisation for closer cooperation to determine common campaign goals and important metrics.
Current best practices for retailers
The main obstacle to making the most out of digital trade marketing right now among both brands and retailers right now isn’t tech, it’s mindset.
Choosing the right brand partner is key – one that offers a quality product and is savvy enough to try something new. When starting a new partnership, here’s what to keep in mind:
● Adapt and innovate Digital trade marketing can be fantastically effective but suffers from the fact that there are few ready made packages on offer.
This can actually be a good thing: as an emerging field in a fast-moving digital space, digital trade marketing should be flexible and adaptable to market shifts in real time. Evaluate campaign performance as it goes along and optimise during, not only after, a campaign.
● Communicate common goals and metrics To attract trade spend from brands, retailers should be able to demonstrate performance in a way that makes sense to their partners, as well as work with them to develop shared goals and KPIs.
Effective knowledge sharing is more than just exchanging information but includes communication about the interpretation and use of that information.
● Leverage your tech Use multimedia and interactive elements to engage consumers in a way that isn’t possible offline, use customer data for effective targeting, and automation to provide a seamless experience between advertising and conversion.
unea makes it easier for retailers and brands to plan and run marketing campaigns, whether collaboratively or standalone.
The unea cloud-based vertical SaaS platform bundles all your needs:
● task management needs
● end to end workflows
● customisable automation
● internal and external communication channels
It allows retail companies to execute well thought-out trade marketing campaigns while saving time and making the best of use of available resources.
The added bonus:
● Brands can better manage trade spend budgets and see the outcome of their spending.
● Retailers get to increase trade spend revenues next to traditional sales channels.
Learn more about unea.
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