Global trends in marketing-at-retail: Richard Blatt, POPAI

At the POPAI (Point-of-Purchase Advertising International) India Chapter, held in Mumbai on March 6, Richard Blatt, president & CEO, POPAI presented his thoughts on the new marketing model and the latest trends in marketing-at-retail.

POPAI, a global non-profit association, is the trade association of the marketing-at-retail industry. It is dedicated to serving its members by promoting, protecting and advancing the broader interests of the industry through research, education, trade forums and legislative efforts. POPAI is now present in 20 countries across the globe, including India.

Blatt went on to quote Elliott Ettenberg, chairman and CEO of Customer Strategies Worldwide, New York and former chairman and CEO of Bozell Retail Worldwide, who said that the days of the four P’s -- product, price, place and promotion -- are a thing of the past; this has given way to the four R’s -- relevance, relationship, responsiveness and repetition.

Current trends in marketing-at-retail

“Consolidation will be the biggest and most impactful of trends,” said Blatt. Many brands are starting to consolidate the marketing-at-retail function and responsibility under one department, instead of these functions being decentralized among the brands.

Other trends include agencies attempting to understand marketing-at-retail for their client’s benefit and sustainability, which took a downturn with the economic recession. Also, manufacturing in China will decrease, with cost being a continuing trend. Brazil, Blatt pointed out, also has some great manufacturing capabilities.

There will also be a growing demand for the medium, as brands move away from network TV advertising. Also, multinational retailers would continue to cross borders. Digital signage, too, is receiving a great deal of attention as a new medium that could be applied at a store.

Blatt also shared the case study of British-based Tesco that competes with Walmart in America. While Walmart’s USP is the discounts it offers across all products, Tesco’s research showed that consumers are price-sensitive to only some products and product categories. Using this information, the chain began to offer discounts only on those categories that consumers are price-sensitive to and effectively maintained price margins on others.

He went on to share excerpts from the TNS Retail Forward report that forecasts 15 trends for 2015, which will redefine the retail business environment.

Top 15 Trends for 2015

The trend state that almost everything, except mega-store chains and formats, will be downsized during the decade -- products/packaging, retail chains, store footprints and living spaces. More people will look for smaller, more personalized spaces -- both to live and to shop.

Another trend will be the ‘glocalization’ of retailing. For many big retailers, the next growth phase will come from segmentation and localization. Big retailers will focus on operating multiple formats and multiple concepts, targeted at specific customer segments, in specific local markets, for specific end-use needs and occasions, while operating in specific shopping modes.

A third trend will be breaking the 80/20 rule. The future of retailing is selling less of more. The traditional rule of thumb that 20 per cent of SKUs equals 80 per cent of sales will no longer hold. In 2015, the other 80 per cent of units will represent an increasing share of the sales and a disproportionate share of the profits. With expanded access, consumers will buy less of what’s “popular” and more of what “suits me”. Retailers, who can figure out how to deliver what niche markets are looking for, will reap the profits.

Another important trend will be the ‘unstoring’ of retailing. It will get harder to answer the question of what a store is. Distribution and marketing models will proliferate. Harbingers include pop-up stores, virtual stores, and retailers partnering with service/experience purveyors, such as spas, cruises and hotels.

Another trend would be the emergence of the consumer as a co-creator, where the line between maker and consumer will blur. Consumers will have almost limitless opportunity to get what they want by participating in the value chain as creator, co-creator, adapter, editor, re-mixer and re-packager.

Another big trend will be ‘power to the people’. Tools and technology will change the balance of power in retailing. Consumers will have almost perfect information access about products and pricing. If they can’t find what they want, they will expect the opportunity to conceive or create it.

Suppliers defending their turf will also be an important trend. Supplier-retailer relationships will be increasingly collaborative, but also increasingly competitive. With the Internet, consumers will have visibility into the full supplier offer -- not just what is on the retail shelf -- emerging as the ultimate consumer-pull strategy.

Other important trends include the ‘unchaining’ of retailing, where size will not equal success. Specialty retailing will be reincarnated by going back to its roots and getting closer to the customer. Next, global consolidation of big box retailers will happen, where one can expect even greater concentration of market share on a global scale.

‘Share of life’ retailing will emerge, where retailers will define themselves by the customers they serve, rather than by the products they sell. The decade will also see the rise of the ‘anchor place’. Like the store of the future, the shopping centre of the future will be closer to the customer. New generation lifestyle centres will offer the ultimate in simplification and convenience to busy consumers.

Exclusivity will escalate, with the proliferation of private brands and manufacturer exclusives across virtually all categories. Retailers will focus on differentiation, versatility, newness and return on inventory investment. A new technological environment will also emerge as a trend, where technology will pervade the living and shopping experiences of 2015. Consumers can expect to shop location-free, via wireless broadband, wireless devices and instant translation.

The value chain of 2015 will also support niche merchandising, down to the location, time and customized individual unit. The final, but important, trend will be the ‘triple bottom line scorecard’, where retailers and suppliers will need to become better global citizens, taking into account environmental and social performance, in addition to financial performance. They should expect to be measured against an expanded set of criteria -- planet and people as well as profit.

The event was organised by POPAI India in association with VJ Media Works.