BrainTrust Query: Key Item Marketing - Innovation Needed ASAP!
Key items are the core of powerful assortments -- always have been and always will be. For years, retailers have depended on promotional marketing techniques like newspaper inserts and direct mail to stimulate sales. Unfortunately, economic realities and changes in consumer behavior are combining to create measurable erosion in the lift and ROI delivered by these methods. Moreover, the recession's impact on expenses has put even greater pressure on marketing budgets.
The costs of production and distribution for inserts, magazines and direct mail have climbed significantly over the past five years. Circulation and readership for newspapers and magazines has plummeted, and read-rates on direct mail are at an all time low. Cost per impression has risen sharply, and marketers find themselves with fewer dollars chasing less effective methods.
The ability of CPG brands to drive traffic is at a cyclically low point, a result of the recession having rendered aspirational marketing ineffective. Consumers want information about product features and benefits, and seek confidence that the merchandise will meet their real-world needs. The internet has created a means for shoppers to effectively render retail assortments into commodities, limiting marketing to price and availability.
Multi-channel merchants and marketers need an innovative response to these conditions that reinvigorates key items, creates differentiation, and enhances the retail brand. Retail chief marketing officers, whether for multi-channel retailers or pure play ecommerce sites, almost universally mention "video" as a desired site enhancement for the coming year. A study by Future Merchants, Inc., shows that 67 of the Top 100 have some form of video on their site. However, the adoption and incorporation of video remains, at best, an inconsistent and difficult to sustain effort for most of Internet Retailer's Top 100.
Video
is seen as a medium that can effectively communicate and demonstrate
specific product features linked to valid consumer needs. Further, video
has become economical, when applied to key items. Video production costs
have plummeted and key items have sufficient upside potential to warrant
the expense.
Delivery remains the critical factor, and the ecommerce website offers numerous advantages. With millions of monthly unique visitors, already engaged in the purchase cycle, retailers don't have to pay for attention -- they already have it. Effectively, the distribution costs are nil.
However, video content that does exist on retail sites doesn't tend to be key item focused, and often lacks a sustainable approach. Future Merchants found in their survey that many retailers used video to launch an exclusive brand, support a season such as BTS, or was repurposed from television commercials or 3rd parties -- with no regularly found updates or additions which would reward repeat consumer interest. The video content is typically poorly positioned on the site, seldom integrated into the shopper's normal behavior, and often opens in a completely new browser window. Product demos are limited and generally support the vendor's key items, not the retailer's.
Discussion Questions: How do you rate the potential for using video programming as a key item marketing method on e-commerce sites? What industry dynamics are keeping good dollars supporting failing methods to promote key items? What is keeping e-commerce sites from being used as marketing distribution platforms?