BrainTrust Query: Key Item Marketing – Innovation Needed ASAP!

Discussion
Jan 05, 2010
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Commentary by
Don Delzell, Managing Director, Future Merchants, Inc.

Key
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.

The
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
effective methods.

The
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.

Multi-channel
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
Retailer’s

Top 100.

Video
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
the expense.

Delivery
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.

However,
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
retailer’s.

Discussion
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
platforms?

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9 Comments on "BrainTrust Query: Key Item Marketing – Innovation Needed ASAP!"


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Doron Levy
Guest
Doron Levy
11 years 4 months ago

Video is a great medium but it really depends on what you are selling. Online shopping sites suffer from a plethora of ‘distractions’ that impede the buying decision. Video and having embedded video players can be a huge distraction to the customer. Make sure you marketing message is short and sweet. Producing your own videos is very cheap now and the latest Flash players make it easy to install video onto any website. Good way to get your message across as long as the customer doesn’t lose interest.

Max Goldberg
Guest
11 years 4 months ago

There’s a lot hyperbole in this article. One has to question why the author is so intent on pushing video on retail websites. Yes video can enhance the consumer web browsing/research experience, but video is not the end all and be all for these sites.

A good website needs to be easy to navigate. It needs to be thorough. The ability to interact with the retailer or brand is essential, as is dialogue with other consumers.

Used well, the Internet is a great component of a marketing mix. Yes, newspaper and magazine readership is down, but that does not negate them as good advertising vehicles. The same is true for direct mail, television viewership and radio listening. Strong creative in any of these media can attract consumer attention and motivate investigation and purchase. A strong CMO or CRO knows this and incorporates many media channels into his/her marketing mix.

Joan Treistman
Guest
11 years 4 months ago
Website content is rarely evaluated on the basis of its ability to attract attention and generate involvement. Hence, videos are often a throw away and overlooked by visitors. It would seem that marketers concentrate their investments on search engine optimization, i.e. “build it and they will come.” Our website studies show great hesitancy on the part of visitors to click onto videos. There are some obvious reasons. There is often no indication of how long the video is and visitors don’t want to commit excessive time. And typically there is little to suggest what content is about to unfold. In turn, the visitors’ eyes move elsewhere. If the category is very important to the consumer, such as the baby seat shown in the query or the application of a knee brace, the shopper will take the time to look and see. However, for many video subjects, there is a bigger challenge for engagement which goes unheeded. Like many aspects of website design videos are a hotbed of personal indulgence, while parameters of effectiveness for such… Read more »
Bill Bittner
Guest
Bill Bittner
11 years 4 months ago
I think there is a very important place for video in a retailer’s online presence, but I don’t think it is a mere “cut and paste” of manufacturer videos. We all bemoan the loss of the true “service representative” in the retail store. Video may be a way for retailers to differentiate themselves from both their online and brick & mortar competitors. The challenge of course, is the old Borders/Amazon issue where consumers loved the Borders book reviews but bought at the Amazon lower prices. To make this all work, I think the online videos must be combined with an easy to use online store and in-store pickup or home delivery. Only by integrating all the shopping steps to the point of payment received can a retailer recoup the expense of video. This has to include a return process that encourages the consumer to try an online purchase even though there is some uncertainty about size or precise color. The threat of a difficult return policy is probably still one of the biggest deterrents to… Read more »
Nikki Baird
Guest
Nikki Baird
11 years 4 months ago
I know I’m not necessarily the target consumer here, but here’s my problem with video. Nine times out of ten, I’m browsing the web in front of my TV. It’s rare that I use any feature that employs sound in those situations. If I’m in an office at work, I’d have to put headphones on to use video–a sure-fire giveaway in a lot of places that you’re not doing work stuff. Even when there are times that I have an opportunity to use video, I’m impatient–I like to skim stuff, and with video it’s a tour through what you want to tell me, exactly how you want to tell it to me. If it’s longer than 3 minutes, unless I know the video is wildly engaging, you’re not going to catch me. So, like I said, I’m not necessarily the target consumer, but these are some things to think about–what do you do when the consumer can’t use the volume? Or just wants the down and dirty version, not the one with high production values?… Read more »
Bill Emerson
Guest
Bill Emerson
11 years 4 months ago

The focus of the article on a single element (video) provides a partial answer to the discussion question of why good dollars continue to be spent on failing approaches. One consistent aspect of retailing is the relentless pursuit of the “Magic Lever” that, once pulled, will cause profits to rain from the sky. After 35 years in the business, I can state unequivocally that it simply does not exist.

My point is that video surely has a place in effective brand communication. However, the entire process of communicating with consumers has been turned completely upside down by the Social Media phenomenon. Effective marketing now entails engaging the customer in a two-way conversation. It would seem, to me at least, that this piece of fundamental re-engineering is what will improve ROI.

Don Delzell
Guest
Don Delzell
11 years 4 months ago
The focus for the BTQ was on the use of video programming, and a distinct type of video programming, as an answer to the decline of traditional media to stimulate key item sales across all channels. Retailers dependent upon promotional marketing to drive sales of key items really do have a problem. They are having to spend more to get the same results, or endure eroding impact with the same dollars. Neither of these are sustainable propositions. The comments concerning a limited point of view are apt: the focus was on a single potential alternative, not on a sweeping overview of all available marketing new media options. Guilty! Social marketing is indeed a new frontier, and as those exploring it will attest, it is one with a difficult to articulate value proposition, costs all its own, and no current formula or model which delivers sustainable impact on sales for retailers. One WILL be developed…it’s just not there yet. However, there IS a workable model for video programming, supported by existing data, and enhanced by a… Read more »
Mark Johnson
Guest
Mark Johnson
11 years 4 months ago

Great article about this in today’s Wall Street Journal. Bandwidth, bandwidth, bandwidth, or should I say lack thereof? It needs to be integrated with other mobile communication strategies and bandwidth is very important.

Frank Beurskens
Guest
11 years 4 months ago

We’re always humbled (when evaluating what could be done technologically with flash, streaming video, social media, or whatever might emerge next…) by the power of simplicity and relevance. Google is a blank box with a square around it. Lots of white space. No flash. It performs exactly the way you want. It delivers. You leave.

The author suggests video can effectively communicate and demonstrate specific product features; video has become economical; video distribution costs are nil; it’s basically about production, rather than consumption, and therein lies the fundamental challenge legacy marketing concepts face morphing with interactive media as a channel.

It feels like the innovation needed in the industry today is less about technology and more about attitude.

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