BrainTrust Query: Key Item Marketing – Innovation Needed ASAP!
Don Delzell, Managing Director, Future Merchants, Inc.
items are the core of powerful assortments — always have been and always
will be. For years, retailers have depended on promotional marketing
techniques like newspaper inserts and direct mail to stimulate sales.
Unfortunately, economic realities and changes in consumer behavior are
combining to create measurable erosion in the lift and ROI delivered
by these methods. Moreover, the recession’s impact on expenses has put
even greater pressure on marketing budgets.
costs of production and distribution for inserts, magazines and direct
mail have climbed significantly over the past five years. Circulation
and readership for newspapers and magazines has plummeted, and read-rates
on direct mail are at an all time low. Cost per impression has risen
sharply, and marketers find themselves with fewer dollars chasing less
ability of CPG brands to drive traffic is at a cyclically low point,
a result of the recession having rendered aspirational marketing ineffective.
Consumers want information about product features and benefits, and seek
confidence that the merchandise will meet their real-world needs. The
internet has created a means for shoppers to effectively render retail
assortments into commodities, limiting marketing to price and availability.
merchants and marketers need an innovative response to these conditions
that reinvigorates key items, creates differentiation, and enhances the
retail brand. Retail chief marketing officers, whether for multi-channel
retailers or pure play ecommerce sites, almost universally mention “video” as
a desired site enhancement for the coming year. A study by Future Merchants,
Inc., shows that 67 of the Top 100 have some form of video on their site.
However, the adoption and incorporation of video remains, at best, an
inconsistent and difficult to sustain effort for most of Internet
is seen as a medium that can effectively communicate and demonstrate
specific product features linked to valid consumer needs. Further, video
has become economical, when applied to key items. Video production costs
have plummeted and key items have sufficient upside potential to warrant
remains the critical factor, and the ecommerce website offers numerous
advantages. With millions of monthly unique visitors, already engaged
in the purchase cycle, retailers don’t have to pay for attention — they
already have it. Effectively, the distribution costs are nil.
video content that does exist on retail sites doesn’t tend to be key
item focused, and often lacks a sustainable approach. Future Merchants
found in their survey that many retailers used video to launch an exclusive
brand, support a season such as BTS, or was repurposed from television
commercials or 3rd parties — with no regularly found updates or additions
which would reward repeat consumer interest. The
video content is typically poorly positioned on the site, seldom integrated
into the shopper’s normal behavior, and often opens in a completely new
browser window. Product
demos are limited and generally support the vendor’s key items, not the
Questions: How do you rate the potential for using video programming
as a key item marketing method on e-commerce sites? What industry dynamics
are keeping good dollars supporting failing methods to promote key items?
What is keeping e-commerce sites from being used as marketing distribution