Work management

Why retail marketers must get their basic brand hygiene in order

  • by Sophie Stefanetti
  • 9 months ago

Some of Australia’s biggest retailers are among the publicly listed companies and big brands reporting their half-yearly results this month and some key themes are emerging.

Among these are the preparations each retailer is making to cope with the expected onslaught of online retailer Amazon later this year, the importance of tailoring the customer experience to suit each chain’s typical shopper, and an increased focus on efficiency gains as retailers look to get their house and their basic brand hygiene in order.

While Amazon’s official launch in Australia late last year has been widely described as “underwhelming”, retailers aren’t kidding themselves: as more fulfilment centres come online around the country, its offering and pricing will get better. And that means increased competition for existing retailers.

Efficiencies on the agenda with margins under pressure

Take electronics retailer JB Hi-Fi: the chain delivered better-than-expected results in its half-year earnings, which were up 21%. But its share price still fell just after results were announced as management confirmed it has sacrificed gross sales margin (the difference between what JB Hi-Fi pays and what it charges its customers) to lower prices so it can compete more effectively with Amazon.

JB Hi-Fi, with its large range of highly portable goods, will arguably be on the frontline when Amazon’s Australian operations gear up. It must continue to grow sales and contain costs, particularly if gross sales margin is under pressure.

All of which speaks to the pressing need for improved efficiencies — and greater effectiveness — of its retail marketing.

Customer experience a continuing battleground

Wesfarmers has had issues of its own this reporting period, writing down its UK and Ireland Bunnings division by $1 billion, as well as recording a non-cash impairment of $306 million against the value of discount department store Target, where sales have been lower than expected.

Meanwhile, Kmart and Target have been combined into one division under veteran retail marketer Guy Russo as Target attempts to contain costs, reconnect with its core customer and provide a reason to get them back into stores or shopping online.

Kmart has been doing well in the EDLP (every day low price) category but managing director Ian Bailey says the chain is not resting on its laurels, telling a public forum in Sydney recently that the discount department store was failing to meet shoppers’ expectations.

Omnichannel offering key to success

As Bailey says, shoppers now not only “have the power”, but also have “close to perfect information about product and price through their phones”.

The customer experience a retailer creates across all of those channels — and, soon, voice as well — needs to be a very competitive, consistently branded, finely tuned offering that reinforces a single message about the brand and leads the customer along the path to making a purchase in store or online.

In Australia, department store Myer is struggling as its $600 million “New Myer” initiative fails to strike a chord with its core customer base.

However US department store giant Macy’s is one example of a retailer that has rediscovered its customer experience mojo, recording positive comparable sales in November and December.

Chief executive Jeff Gennette puts the turnaround down to strong digital and mobile sales, the stabilisation of healthy brick-and-mortar stores after poor performers were closed and a better customer experience.

“Consumers were ready to spend this season, and we delivered with solid execution, fresher inventory, a curated gift assortment and a focus on customer experience,” Gennette said.

All retailers must understand and craft the essential customer experience that appeals to their heartland shopper if they are to survive in a time of intense competition, and reinforce that through their omnichannel retail and brand experience.

With gross sales margins under pressure, across-the-board improvements in productivity — including in marketing — are also squarely on the agenda.

Improving retail marketing efficiency and creating a better CX

So what are you doing to improve efficiencies and increase the effectiveness of your retail marketing in the coming six months?

Retail marketers must be platform-agnostic and be able confidently and consistently to deliver core brand and retail messages as easily and efficiently in a one-to-one mobile environment as on television.

Investing in your marketing resource management with a content and marketing operations platform that provides a unified view of the brand experience across all channels while helping to increase efficiencies by between 15%-50% should be high on the agenda.

Internal workflow efficiencies, more effective agency communications and big improvements in managing the sort of high-turnaround creative workflows that characterise retail marketing are there for the taking and can be used to direct more of your budget into your most effective marketing channels.

Not only will this simplify the complexity of your marketing activities, it will help to deliver your core customer a better brand experience.

Simple’s marketing operations platform helps enterprise marketing teams to plan, orchestrate, review and optimise their marketing activity across all channels. Book a Demo to see how it works.


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