Year-end/year-beginning in this industry is always tied up in the peculiar dynamics of the retail trade, where so much of the year’s profit is made after Black Friday, and in the unavoidable dynamics of the economy as a whole, where trepidation over the outlook for the coming year turns us all introspective if not cautious.
But cyclical dynamics are not going to change the equation driving at-retail now. As consumers move away from traditional marketing/media messages, in-store is indeed the last place they can be targeted, and so attention is now being refocused to the retail space. The search for the in-store RPG, and the need to engage shoppers at-retail, is now the focus of brands, producers, retailers, and agencies.
To prepare a sidebar for Matt Baker’s feature on shopper engagement in this month’s issue, I had an intriguing conversation with John Greening. John is well known for his work on the legendary Budweiser ad campaigns in the 90’s, and is now a Marketing professor at Northwestern University. Since meeting John a few years back at a conference, I have been fascinated by his broad knowledge of marketing. (I had Laura Davis-Taylor explore with him in the last issue the question of whether building the brand, and stimulating immediate sales, are still mutually exclusive undertakings.)
In my conversation with him on segmentation and shopper engagement, I was particularly taken by his summary assessment of a broad and nuanced subject. “We have now moved from the need to organize supply, to the need to organize demand”, he said. He was talking about the rise of the mega-retailer model, where supply inefficiencies were wrung out of the system and economy of scale was injected into the distribution side. That those models also created early on the dynamic where the store buyer who sourced product was the same person responsible for and in control of selling the product to the shopper–now means that changes in the demand side of the equation are going to shake things up a bit. The shopper now has more control of the shopping experience (that begins before they even enter the store), the brands now want more control in-store, and the new kids–the agencies– have arrived on the block and want in.
So as we all start hand-wringing over the economics, micro and macro, that are as much a part of this season as pre- and post-holiday sales and holiday parties, there is really only one economic trend that counts: I can’t say it better than John. We have now moved from the organization of supply, to the need to organize demand. Food for thought for 2008: Will shoppers now start organizing into communities, and set the new rules of engagement themselves. Will marketers be invited to the party? I’m betting those shoppers may be harder than people think for marketers to organize into communities while they’re at home and at work. And so at-retail will shine even brighter as the place to create those kinds of communities and establish a new shopper engagement model that has a place for everyone on the supply side–the retailer, the brand, the POP producer, and the agency.