A hyper-competitive environment, and changing expectations on the part of younger consumers are causing retailers to make drastic changes to their traditional marketing and PR strategies. Retailers from grocery, to fashion apparel and footwear are making big changes, using innovative tactics and shaking up their marketing departments as they come to grips with what younger customers want and expect – and realize that they haven’t been delivering.
The so-called “retail apocalypse” is just the result of some retailers refusing to adapt. Rather than placing the blame on the Internet, blaming Amazon, or blaming the economy, retailers facing massive closings and bankruptcies need to look at their own policies if they want to know the real reason they’re failing.
In the notoriously thin margin grocery business, The Washington Post recently ran an article, “The new era of grocery just claimed its first victims.” The article noted the bankruptcy of Tops Markets and Southeastern Grocers, implying that Amazon’s acquisition of Whole Foods is to blame for what is likely to be a new retail apocalypse in the grocery industry. It’s common to point to a successful competitor and place blame for a company’s own failure – but in this case, Amazon is not to blame. Rather, it is the inability of some grocers to adapt to the times, understand what their customers want, and invest in the technology to make it happen. Kroger is doing just that with innovations like their “Scan Bag & Go” pilot.
Programs like “Scan Bag & Go,” which allow customers to scan items as they take them off the shelf using a smartphone app, then simply wave the smartphone at the self-service register to pay, are sometimes positioned negatively with claims of the programs being either “job killers” or “too impersonal” by those who don’t know better. Although these innovations do use technology to automate what used to be done manually, the big benefit to grocers isn’t in trimming a few man-hours – the benefit is that it gives customers what they want – and keeps them coming back.
From a marketing perspective, these sorts of tech innovations can be a big win, especially if upper management is on board with seeing them as not just simply cost-cutting innovations, but rather, bringing a new set of tools to better serve customers.
The surprising bankruptcy and shuttering of Toys R Us is also blamed on Amazon in the press – but again there are more reasons why the toy retailer closed than just online competition. There are more inward-looking reasons for the closing, chief of which is that the retailer failed to recognize cultural changes in their client base, and failed to adapt.
What does work? Retailers who recognize five specific trends, and make the necessary changes to accept them, have a greater chance at success. These are:
1. Changes in store format. Smaller stores are in. Shopping malls are out.
2. The online channel is equally important to brick-and-mortar.
3. Marketing is more personal, with an increase in social media’s importance.
4. Brand journalism and media placement as a tool for generating brand awareness.
5. Video-based marketing is increasing – use a video channel to tell your story.
The first two points underscore the rapid changes going on in retail – smaller store formats, and greater online channels – both of which are necessary to respond to the shifting demands and expectations of modern shoppers. Too, the personalization of marketing has been made more possible today with tools for hyper-localization and AI-driven personalization, which allows marketers and PR specialists to create campaigns based on very specific targeting, sometimes down to the individual shopper level. And brand journalism has replaced old-line SEO and content marketing as a means of getting high-quality content with brand mentions and thought leadership quotes in publications which are most relevant to your mission.
Finally, video-based marketing has become essential for telling your story. While cheap and basic animated “explainer” videos have become popular, these fail in a few fundamental ways – production value is low, storytelling is usually basic, and visibility is often low. Better video-based marketing engages with video bloggers with a built-in, large audience, with videos based around a known personality. A great example of this is Stadium Goods, a Manhattan-based retailer of high-end footwear, which can be seen as the venue in “Sneaker Shopping” – a very popular and engaging vlog featuring popular hip-hop artists and other celebrities going shoe shopping. Most recently, Stadium Goods can be seen as the venue for an episode with Ski Mask The Slump God, shopping with host Joe La Puma and reflecting about his first pair of Air Jordans.
The video campaign is highly effective, because it’s not attempting to offer a hard sell, rather, it’s telling an entertaining story and engaging real people in doing so. Effective story-telling has been elevated in the current environment, as commercials, videos and advertisements have shifted from listing values and features, to story-telling as a means of reinforcing brand. Other noteworthy and popular examples include Dox Equis beer, the “undisputed king of storytelling” according to Brand Quarterly, and Doritos, which has similarly mastered the art of storytelling with commercials like their “No Dogs Allowed” commercial, which shows dogs dressing as humans to sneak into a supermarket to buy the snacks.
The “retail apocalypse” is what you make of it – and with adaptive marketing tactics which respond to consumers’ shifting demands, retail apocalypse doesn’t even exist.