A marketer’s life should never be quiet, but the list of challenges facing retailers seems to have multiplied while the pandemic became an all-consuming concern.
The past few months saw inflation rates rise while businesses groaned under the burden of high freight costs. Meanwhile, hiring has been another pain point, with 965,000 open jobs in retail alone. That’s before the unique challenges facing marketing teams, from responding to the still-inevitable demise of third-party cookies to maximizing the potential of e-commerce.
To survey the scene and offer perspectives on the path forward, Modern Retail rallied a squad of marketing leaders and entrepreneurs from top brands to come together for the Marketing Leaders Forum. The speakers brought their varied talents to the table to share their experiences and offer suggestions for marketers on how to ride out the storm to succeed in 2021 and beyond.
For the most part, the pandemic has been seen as a catalyst for existing trends in marketing, rather than throwing up entirely new developments. With restrictions easing enough to allow a revival of in-store shopping, the forecasts for e-commerce are a vindication of that assessment.
According to eMarketer, digital sales are expected to exceed $900 billion ($908.73 billion) in 2021, representing a 13.7% increase year-on-year. E-commerce transactions are expected to smash the $1 trillion barrier in 2022, and it’s hard to see why that upward trend would backslide.
As a result of this increase, marketers are poised to make big changes. Criteo’s Executive Managing Director for the Americas, Rory Mitchell, said analysis of back-to-school spending is flagging a strong rebound for in-person shopping and for the broader retail sector, but the slant towards online is clear. Mitchell said Criteo’s data shows 40% of consumers are buying online, compared to 28% visiting brick-and-mortar stores.
Around 20% of brands Modern Retail recently surveyed said they don’t expect offline marketing budgets will ever return to pre-pandemic levels. At the forum, we heard from a number of speakers about the ways their brands are consolidating the shift towards digital commerce.
Farmer’s Fridge CMO Meghan Hurley, for example, provided insights into the brand’s pivot from its vending machine model to DTC and delivery. The company began by deploying vending machines holding freshly-made salads in highly-trafficked urban areas — predominantly used by commuters. But, when the pandemic began, people stopped going to work and that foot traffic dried up. As a result, Farmer’s Fridge quickly pivoted to a home delivery direct-to-consumer business.
Vending machines are still a core part of the business, and a rich source of data insights, but Hurley said Farmer’s Fridge will be doubling down on DTC in the coming year, with website upgrades and a customer loyalty program two of the top priorities.
Chelsea Phillips, General Manager at Babe Wine, said the brand tries to fold a DTC component into every campaign, no matter what the purpose or KPI. The online wine company is now focused on getting customers to its own digital properties. Driving traffic to owned assets like a brand website bolsters a consumer’s experience of the brand.
“It just is a helpful place to pull out more of that brand lifestyle aspect, versus it just being about the wine,” Phillips said. “You get more of our personality when you go to the website because we can directly control what that experience is like.”
Meanwhile, some brands are expanding and trying to figure out how to speak to a new national audience. Brands that focus on being local, for example, are feeling out the optimal balance between their localized offerings and how they present to a nationwide, often online, audience.
Foxtrot CMO Carla Dunham talked about the upscale corner store’s imminent launch of Foxtrot Anywhere, which will give consumers across the country the opportunity to shop Foxtrot’s curated selection of food and drinks and have them delivered to their homes. Before, Foxtrot had a handful of locations that showcased many local products and worked on being a complementary part of any neighborhood. But now, with national delivery on the horizon, Foxtrot has to maintain its localized brand identity but figure out a more scaled strategy. Foxtrot is expanding its private label selection as it prepares to expand not just with nationwide DTC, but by debuting its brick-and-mortar locations in a succession of new markets.
The big hurdle is figuring out how to translate stores that curate local products for a national audience. “Our brand is having at its core this obsession with food and drink and wine,” Dunham said. “Then having different modalities around how that gets dialed up or dialed down depending upon the neighborhood, depending upon how we want to think about the assortment in that specific location and geography.”
Google has delayed the retirement of the third-party cookie, but that doesn’t mean you can kick your own post-cookie planning down the road.
Criteo’s Rory Mitchell said marketers should use this overtime period to think their strategy through, but don’t delay. Mitchell recommends investing in “cookie agnostic” areas like contextual, connected TV, and omnichannel advertising. “All of these will prove to be really beneficial to understanding how you want to lean into different types of investment when that 2023 deadline comes around,” he said. Make test-and-learn your marketing mantra and you’ll put your brand on the path to success.
In working out how to build a rapport with Gen Zs, marketers are grounding campaigns in values and often an overarching sense of mission. Babe’s Chelsea Phillips talked about the tie-dye cans and other merchandise that Babe Wine launched as part of a campaign that will support the ACLU.
The influencer budget remains an important part of most brands’ marketing strategy, and although there’s nothing particularly new about that, the influencer scene continues to evolve and expand. New platforms, partnership formats and niches are emerging all the time, and marketers should make sure they’re leveraging every potential avenue. Eric Girouard, the Founder and CEO of Brunt Workwear, talked about tapping into the “large underbelly” of blue-collar trade influencers on Instagram. Instead of relying on large influencers with mainstream audiences, Brunt has sought out smaller individuals that speak to a smaller work-focused community.
“It’s for all the specific trades,” Girouard said. “There’s not just one big fashion influencer or one big food influencer – you go into each of the different trades and there’s usually someone at the top of those.”
As the name suggests, these are manufacturing operations that occupy a small footprint in terms of real estate, labor and other resources compared to the traditional large scale factory. Microfactories are expected to play a growing role in various industries in the coming years. In retail, microfactories can be placed in strategic locations to cut down on distances for shipping between the factory and delivery destinations. By providing an alternative to offshoring manufacturing, microfactories enable brands to reduce waste and bolster their sustainability credentials. Model No. CEO Phillip Raub talked about how the on-demand furniture brand uses 3D printing to create pieces at its 6,500 square-foot microfactory in Oakland, CA. Raub said the plan is to establish a series of microfactories across the country, with a goal of having a microfactory that is “within 100, 150 miles of 80% to 85% of all consumers.”
“We had some fun on Tik Tok just marrying different types of red wines with pizza, the content took off and then we decided to just put together an aisle and make it fully shoppable in our app around that theme.” – Carla Dunham, CMO, Foxtrot
Creating communities and channels for receiving – and using – feedback from fans and customers is table stakes these days. But marketers are also finding creative ways of using social media and content to inform product development. Carla Dunham talked about how Foxtrot uses data insights, online polls and social discovery to identify nascent trends that can be a springboard for new private label products, but we loved how this pizza-and-wine initiative made the jump from TikTok to brick-and-mortar.
“It’s going to be about 61% year-over-year specifically to the back-to-school promotional period, and that flags a really strong point around retail recovery.” – Rory Mitchell, Executive Managing Director, Americas, Criteo
The past few months have allowed physical retail to return, and as data comes in there are signs that the sector is bouncing back and putting the misery of 2020 behind it. Rory Mitchell shared data showing retailers have been faring well during the critical back-to-school period, with e-commerce also contributing heavily to those year-on-year numbers.
“No matter what kind of tools you create, people just basically still wanted to talk to somebody and walk through and say ‘Hey, can you customize this or can you do that.’” – Phillip Raub, CEO, Model No.
Marketers should open up every channel they can to allow customers to communicate with them and get the help they need. However, for all the online tools that are out there to make the process convenient and fast, many consumers feel most comfortable talking things through with another human. Phillip Raub said this had been a somewhat surprising, but important insight for Model No. as the company grew.