Keep Learning How to Play: The Evolving Retail environment

Most marketing executives in the alcohol industry believe that they require two fields of expertise: one in marketing and the other in their liquor category; for me that is wine. Too often however, liquor-marketing executives forget the broader segment alcohol falls into; retail and the number of disciplines required to compete in a largely saturated retail environment. The retail landscape is evolving rapidly, more change has occurred in this segment in this decade, than has happened in the last half century. So what? The world is evolving rapidly, every industry is moving faster now than ever before, so what is the benefit of understanding the changing retail environment? Plato says that ‘Human behaviour flows from three main sources, desire, emotion, and knowledge.’ In order to change our behaviour as marketers, we must first have the knowledge to know what to change.

Norelle Goldring from GFK refers to the retail environment as a ‘game,’ in her article on ‘Major Retail and Shopper Trends and their Application for Liquor Retailing,’ and while I am sure she is not referring to it in the literal sense, I think she might be on to something. Liquor retailing is like a game of Monopoly: you as the player are the producer, your product the pawn, the top hat for the purpose of this analogy. The board game and all of its properties are the various retail outlets you may wish to do business with (purchase). The purchasing of properties, houses and hotels are your distribution points in those retail outlets, and as you move your top hat around the board, you are gaining knowledge of your retail environment. You learn which outlets you do not want to ‘land on’, which outlets give your consumers the best value (do not charge you exuberant fees) and overall, learn the game.  Unfortunately, for the retail segment, the ACCC can send you to jail and we do not collect $200 every time we pass GO.

There are over 1000 editions of the traditional Monopoly board game, themes, colours and technology changes with each but they are all made up of the same essential elements. Similarly, the retail industry is continuously evolving, but it’s not the game that is changing, it is the way we play it. In order to stay competitive and succeed in this environment, we must keep learning how to play.

What monopoly cannot symbolise, are your shoppers. Notice, I use shopper and not consumer, this is one of those rapid changes I referred to earlier, ‘shopper’ is the new ‘social’ when it comes to marketing buzzwords. We no longer refer to our customers as consumers but as shoppers because we have realised that it is just as important to appeal to the shopper, as it is to appeal to the end consumer. All trade marketing managers, like myself, thank you for this realisation.

These shoppers make up the remaining two elements of Plato’s quote; desire and emotion. Shoppers are on a mission, and this mission is not only to purchase, but also to have an ‘experience’ with your brand. Creating this experience can be achieved by understanding a number of retail insights, we have all of the usual suspects, digital and mobile strategies, these are no longer optional, gamification, crowd sourcing, big data and low intentional planning to name a few. One trend that plays very well with our experienced junkie shopper is personalisation. This trend, like digital, is no longer optional. Your shoppers expect you to know what they need and what they like, but more importantly, what they do not like. A recent IBM study showed nearly 50% of shoppers are willing to give you detailed information about themselves if it means you will personalise the offer, make it relevant, and stop spamming. One size does not fit all, not in hats and no longer in retail.

Shoppers are savvy, they understand the difference between your online and bricks and mortar stores, and they know how to combine the two, this is known as Omni-channel retailing. Google Shopper Marketing Council found that 8 in 10 smartphone shoppers shop with the assistance of mobile in store, with frequent in-store mobile users spending 25% more than occasional users. Technology that plays on this insight is iBeacon software, allowing brands to interact and engage with iOs users in the nearby area. Combining mobile technology with the in-store experience allows your shopper to interact with your brand at both an online and face-to-face level and speeds up the in-store process. It also gives the shopper confidence that they are getting the best deal, reducing post-purchase dissonance and so reducing return rates.

Unsurprisingly, shoppers are looking to reduce in-store time. Stores such as Sneakerboy, a luxury sneaker store, allows shoppers to interact with their brand in-store as well as offering time saving technology via touch-screen iPad ordering. No lines, no checkouts, no waiting means more engaged shopper. This idea is known as ‘showrooming’. ‘Teradata Applications’ found that one in five consumers are now visiting stores to trial products with the intention of later purchasing online with 96% of people polled admitting to have intention to start doing so. With the increased cost of physical store fronts, along with all other rising costs associated with running a retail outlet, ‘showrooming’ is sure to be the next ‘shopper’ marketing buzzword.

In summary, remembering that you are not just a marketer, or just a liquor-marketer, and that you are operating in a far broader retail environment, we can use retail insights such as personalisation, Omni-channel retailing and showrooming, to ensure that we keep learning how to play the game.

Jessica Ratcliff
Current student in the Master of Marketing program at the University of Sydney Business School