Report: Online sales alter trade and brand marketing

As retail sales shift from offline to e-commerce, marketers must learn to adjust trade strategies and budgets to be successful in a digital world.



According to “Trade Marketing in Transition,” a report from Criteo and Kantar Millward Brown, the growth of e-commerce — across both emerging devices and channels — is demanding that retailers learn to merge brand budgets with trade budgets. This combination typically includes retail display allowances for product positioning, temporary price reductions, end caps, and shopper marketing.



"Trade marketing is undergoing a profound shift," said Jonathan Opdyke, president, brand solutions, Criteo.



"To profitably target and acquire shoppers, both online and offline, marketers must adapt their trade practices and budgets,” he added. “Retail marketers need solutions that allow for real-time measurement of ROI, and an end to the debate between offline vs. online, in favor of an omnichannel approach.”



These transitions will address many pain points that still exist in trade marketing. For example, many brands are still learning how to manage online sales. In fact, 50% of respondents rated online sales as "disruptive to hugely disruptive" to their industry. Other issues causing concerns in a digitally-driven marketplace include Amazon setting prices (29%), conflicts between brand and retail sites (28%), and the complexity of process (27%).



Meanwhile, retailers need to revamp internal processes if they want online marketing to succeed. For example, 58% of retailers said measurement/attribution and trackability (58%) needs improvement. Meanwhile, 56% of initiatives that reach younger consumers (56%) and process complexity (55%) also need attention.



Over the next five years, retailers must up their game when it comes to trade marketing — and this includes shifting away from traditional means. For example, on both stand-alone e-commerce and retail sites, paid search was considered an area with the greatest expected increase in effectiveness (62%). Conversely, print-related tactics were expected to have the greatest decrease in effectiveness (52%).



When planning how to improve future trade spend, marketers are staying proactive. Among the top three items on marketers’ wish lists for the future of trade spend are simpler methods to measure effectiveness (58%), a holistic view of the shopper (56%), and connecting trade and brand budgets (53%), according to the report.



Here are additional takeaways on how to succeed in this transitioning landscape:



• Utilize product listing ads and display advertising techniques to increase sales and generate incremental revenue to compete with Amazon.



• Given that paid search on e-commerce and retail sites is considered an important part of the future of trade spend, brands should continue to develop the ability to manage this form of trade marketing.



• Just as they do offline, brands and retailers need to come together to develop best practices for the mutual benefit of driving sales and developing efficient practices and measurement tactics to assess the impact of online trade activities.



• Late-comers to e-commerce marketing may face a daunting challenge when they choose to support online sales, due to factors like “Top Rank Persistence,” and Amazon's growing dominance in the market.