Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
The rising discipline of mobile marketing brings with it a chance for retailers and CPG suppliers to usher in a new consumer-centric era of compelling, creative trade promotions that step up discounts as individuals engage more with specific brands and stores.
Buy more of a brand, or shop more at a store, or use a cell phone to pass along articles about, say, fabric care from a detergent manufacturer, and a consumer could receive extra savings rewards from manufacturers and retailers.
How cool is that? It could be mighty cool for brands that market directly to consumers' cell phones as they build their shopping lists or are actually in the stores.
"Tech-enabled shoppers of every generation, but especially younger shoppers, use cell phones and PDAs increasingly to buy smarter and save. The action is in the store. That's where to communicate because conventional media are fragmented to the point where those buys are less effective for brands," Wayne Spencer, senior vice president-business development, Synectics Group, told CPGmatters in an interview.
With mobile trade promotions, he said, the industry is starting from scratch with a clean slate to distance itself from the wasteful, sub-optimal merchandising patterns of the past.
"It's critical that retailers and CPG collaborate to reach a single sophisticated view of the truth that both sides can mutually act on. This shared view fosters a collaborative environment, which will inevitably result in incremental profits and volume on the in-store merchandising investment," Mr. Spencer said.
"If we do this right, mobile marketing will probably rejuvenate trade promotions. If we don't, CPG margins will continue to erode. We need to move far away from where trade promotions have devolved. Consumers are bored to death with promotions today. They're zombies who look for the lowest price. This doesn't help the retailer or the brand," he insisted.
Here is a good example of trade promotions in the future: Blended promotions between name brands and complementary private label products, such as pasta and sauce, or meats and breads, or milk and cookies. In Mr. Spencer's view, "brands need to realize that private label isn't going away, and stores need to maximize category penny profits with the correct blend of brands and private label. They need to co-exist, augment each other, and focus on serving consumers with the shared goal of enhancing their in-store experiences."
"The funds for mobile marketing and social networking [today] will most likely come from the advertising/consumer marketing budgets, rather than from trade promotion budgets, because CPG controls less of the latter than they'd like," he added.
Discussion Question: How do you think mobile technologies will affect trade promotions? Do you see retailers and manufacturers recognizing mobile as an opportunity for beginning a new era of collaboration "from a clean slate"?