Leading Retailer Connects Brand Partners to Unparalleled Audience of Beauty Enthusiasts
BOLINGBROOK, Ill.–(BUSINESS WIRE)–Ulta Beauty, the nation’s largest beauty retailer, today announced the launch of its retail media network, UB Media, to offer brands addressable advertising leveraging its Ultamate Rewards members, the biggest community of beauty enthusiasts in the industry. This new capability will deliver a winning digital strategy for brand partners to personalize consumer engagement, drive growth, and fuel measurable returns.
“UB Media harnesses the power of our unmatched, first-party data from our 37 million loyal members to transform the way our brand partners can connect with beauty lovers,” said Brent Rosso, vice president, UB Media. “No one knows the beauty industry and its audience like Ulta Beauty. Our new offering reinforces our ability to engage guests where, when, and how they want to connect, with hyper-focused advertising efforts in a dynamic ecosystem and further elevates our position as brand partner of choice.”
Ulta Beauty recognizes that retail media networks are increasingly critical within the modern marketing mix and for retailers, a valuable opportunity to strengthen brand partnerships. As the country’s leading beauty retail destination, Ulta Beauty actively and proudly ideates and executes opportunities for growth for and with its brand partners. UB Media builds upon the company’s existing Digital Marketing Partner Program to provide even greater, more impactful opportunities to leverage its unparalleled Ultamate Rewards program to create more iterative opportunities within the ever-evolving omnichannel environment.
To bring UB Media to life, Ulta Beauty enriched its portfolio of ad products and channels – and will continue to do so in real time. At launch, the network offers advertising access via offsite display, videos, social and influencer as well as onsite sponsored products. Onsite display inventory on Ulta Beauty-owned properties is one of several new, core offerings activated this year. This full suite of ad inventory, experiences, and value-added services will be supplemented with additional formats in the future.
Ulta Beauty has created means to make the creative process easier for brand partners with the intent to reduce turnover time and deliver more agility and quicker speed to market. Additionally, brand partners using UB Media will have access to closed-loop campaign level reporting including audience and creative insights.
At Ulta Beauty (NASDAQ: ULTA), the possibilities are beautiful. Ulta Beauty is the largest U.S. beauty retailer and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and salon services. In 1990, the Company reinvented the beauty retail experience by offering a new way to shop for beauty – bringing together all things beauty, all in one place. Today, Ulta Beauty operates more than 1,300 retail stores across 50 states and also distributes its products through its website, which includes a collection of tips, tutorials, and social content. For more information, visit www.ulta.com.
Ulta Beauty was recently added to the Bloomberg Gender Equality Index, which tracks the financial performance of public companies committed to supporting gender equality through policy development, representation, and transparency. More information about Ulta Beauty’s corporate responsibility efforts can be found at https://ulta.com/investor/esg.
Ulta Beauty Media Contact: Eileen Ziesemer, Vice President, Public Relations
Names Linh Peters as SVP and Chief Marketing Officer, Luke Rauch as SVP and Chief Merchandising Officer, and Bala Visalatha as SVP and Chief Product Officer
DEERFIELD, Ill.–(BUSINESS WIRE)–Walgreens today announced three key executive leadership positions: Linh Peters, senior vice president and chief marketing officer; Luke Rauch, senior vice president and chief merchandising officer; Bala Visalatha, senior vice president and chief product officer. These leaders will begin their new roles in May.
“I am thrilled to have Linh, Luke and Bala join the Walgreens retail products and customer leadership team, and I’m confident that their collective decades of retail expertise and deep involvement with launching new customer experiences will accelerate growth in our company,” said Tracey Brown, president of retail products and chief customer officer, Walgreens. “As strong innovators in their own right, each have an excellent track record when it comes to successfully identifying white spaces across different customer touchpoints and tracking evolving consumer trends, which will be instrumental as we transform our business.”
As the chief marketing officer, Peters will oversee the vision, strategic direction and performance of Walgreens marketing activities, including marketing collaboration, brand design, brand positioning and marketing plan execution.
Linh is a modern marketing leader whose foundation in loyalty provides her both a strong data orientation and an ability to build brands based on a deep understanding of consumer needs.
Most recently, Peters was global chief marketing officer at Calvin Klein. She brings over 20 years of experience with some of the world’s biggest consumer brands such as Starbucks, Target and Ulta Beauty, with deep experience in building effective consumer engagement and loyalty on a global scale.
“Walgreens has an incredible opportunity to help millions of customers and patients transform their lives,” said Peters. “Throughout my career, I’ve worked collaboratively and cross-functionally to bring a laser focus on the customer experience to everything we do and I look forward to building upon the great momentum we’ve created over the past several years.”
Luke Rauch will assume the chief merchandising officer role to be responsible for the vision, leadership, strategic direction and performance of all Walgreens merchandising activities.
Throughout his career, Rauch has gained a reputation as a highly strategic leader who consistently delivers results with the customer in mind.
Rauch most recently served as chief of staff to Roz Brewer, CEO, vice president of Walgreens Boots Alliance. Prior to that, he was group vice president, owned brands and customer experience for Walgreens. In this role, Rauch led the owned brands strategy in the US and was instrumental in defining Walgreens retail customer experience. Rauch’s previous Walgreens leadership roles include vice president, commercial strategy and senior director, insights. Prior to joining Walgreens, Rauch worked for Deloitte Consulting in its strategy practice.
“I am honored to rejoin the Walgreens merchandising organization and look forward to working with the team as we continue to fulfill our purpose of more joyful lives through better health,” said Rauch. “Walgreens plays such a critical role in communities, and our consumer offer will continue to be pivotal to the company’s overall transformation. I am committed to building on the team’s tremendous momentum, while looking for new ways to best serve our customers and patients.”
Bala Visalatha is joining Walgreens in a newly created role of chief product officer, where he will lead the execution of Walgreens customer product strategy and development, along with user experience. In this role, Bala will look across product lines and functions to ensure all product solutions are aligned to the customer strategy. Bala’s organization will work cross-functionally, rooted in research, analysis and an in-depth knowledge of the entire customer product lifecycle within the portfolio.
With extensive expertise in retail, product management, loyalty programs, digital and omnichannel strategies, Bala is a proven leader with a deep understanding of customers.
Most recently, Bala was vice president of eCommerce at Walmart U.S., where he was instrumental in launching the new Walmart app and website, creating a unified omnichannel experience for customers. Bala brings more than 15 years of experience in leading and building products to drive transformation with some of the world’s largest consumer brands like Walmart, Sam’s Club, and American Express.
“Walgreens plays such a pivotal role in communities nationwide and it’s exciting to join at a time in which the business is rapidly evolving and transforming,” Visalatha said. “I look forward to leveraging data and technology to evolve and redefine the customer experience at Walgreens alongside the highly talented team across the country.”
Stay up to date on all of the latest news from Walgreens, please visit news.walgreens.com.
Walgreens (www.walgreens.com) is included in the United States segment of Walgreens Boots Alliance, Inc. (Nasdaq: WBA), an integrated healthcare, pharmacy and retail leader serving millions of customers and patients every day, with a 170-year heritage of caring for communities. As America’s most loved pharmacy, health and beauty company, Walgreens purpose is to champion the health and well-being of every community in America. Operating nearly 9,000 retail locations across America, Puerto Rico and the U.S. Virgin Islands, Walgreens is proud to be a neighborhood health destination serving approximately 9 million customers each day. Walgreens pharmacists play a critical role in the U.S. healthcare system by providing a wide range of pharmacy and healthcare services. To best meet the needs of customers and patients, Walgreens offers a true omnichannel experience, with fully integrated physical and digital platforms, supported by the latest technology to deliver high-quality products and services in local communities nationwide.
Companies collaborate on best practices eBook: “Setting Yourself Up For Success When Building a Marketplace”, available now as a free download
DENVER–(BUSINESS WIRE)–#commerce–Web Force 5, Adobe and Marketplacer, three leading companies with enterprise-grade expertise and proven success working together to help build digital commerce sites and marketplaces, have collaborated on an eBook featuring best practices and commonly asked questions as a guide for retailers and companies looking to launch and run their own marketplace.
It’s reported that $3.23 trillion is spent globally on the top 100 marketplaces with the top 49 U.S marketplaces reporting $919 billion in sales (Digital Commerce 360). Interest in operating a self-owned marketplace is on the rise from established retailers looking to drive revenue and create sustaining commerce strategies.
Retailers are actively looking for ways to drive revenue and are facing decisions about how best to build and optimize their tech stack. We’ve had so many conversations with merchants who’ve wanted to develop a marketplace in-house, but custom building always comes at a much higher cost to build and maintain over time, and in hiring and training staff,” says Lou Fabian of Web Force 5. “This is one reason we collaborated on this informative guide for retailers evaluating a marketplace strategy and what to look for in a partner. We know how to help them answer the questions they have.”
Creating a marketplace strategy enables retailers to expand catalog offers and branch out to new brands and markets with less investment risk, while mitigating supply-chain concerns. Scale becomes easier to achieve when evolving past a drop-ship-based business and building a seller-driven strategy. Marketplaces also increase customer engagement and grow customer lifetime value and loyalty by connecting like-minded buyers and sellers in your community.
“With a good marketplace platform, you’ll get a host of features that help you easily add and manage sellers and transactions from end to end,” says Jim Stirewalt, President, Marketplacer US. “On a marketplace, sellers will manage their own inventory, shipping, and returns behind the scenes, creating a much more seamless shopping experience.”
The eBook, available as a free download, features:
Overview of how a marketplace with third-party sellers supports business goals
Identifying which marketplace strategy to employ
The dropship dilemma: When it’s time to move on
What to look for in a technology partner
What to look for in commerce and marketplace tools
Guidance on business-critical considerations such as fraud protection and tax liability
“Online marketplaces account for a significant share of the world’s overall ecommerce market. Since they can be a great asset for an ecommerce business and retailers, brand manufacturers and distributors need to decide whether they will sell on someone else’s marketplace or if they will operate their own,” says Ed Kennedy, Product Marketing Manager at Adobe. “In this eBook, we share insights from working with thousands of brands’ on their digital marketplace strategies, including listing their products on 3rd party marketplaces from within Adobe Commerce, powered by Magento, or launching their own marketplace storefront.”
Marketplacer is a global technology Software as a Service (SaaS) platform equipped with all the tools and functionality needed to build a successful and scalable online marketplace at speed. To date, Marketplacer has helped over 95 businesses build and deploy their very own successful marketplace strategies and connected over 25,000 businesses worldwide. The Marketplacer platform exists to make growth simple, from implementing marketplace strategies such as shipment from drop-ship sellers, adding new categories or third-party range extension, through to consolidating markets and rolling out modern revenue models such as recurring memberships that allow businesses to grow faster and beyond the constraints of capital inventory.
Born and bred from the award-winning BikeExchange, the biggest online marketplace for anything and everything bike, founders Jason Wyatt and Sam Salter saw the opportunity to license the online software platform and apply it to new marketplaces. Marketplacer is responsible for powering business transformations of companies around the world. Visit www.marketplacer.com for more information.
About Web Force 5
The combined force of digital experts from 5 continents. That’s Web Force 5. It means our teams across the globe can be working for you while you sleep. Your website doesn’t rest, neither do we. Our industry revels in ambiguity, enabling bad tech, poor service, and price gouging. We know. We’ve done a lot of relationship rescues. And when someone’s been badly burnt, you have to be twice as good to win their trust. We had enough of being in bad relationships ourselves. It’s why we left our companies to start Web Force 5. We deserved better, and so did clients. Life’s too short. We treat our staff, our suppliers, and our clients all with the same respect. Right from the start, we took ambiguity out of the equation. We spend time doing crazy detail up-front. It can be painful, but it pays off. It gets our clients online, on time, on budget, and still on speaking terms. Now that’s something to revel in. Reach out to Lou and Web Force 5 for a complimentary consultative session at Webforce5.com.
The top retailers consolidated their power in 2021 while a pack of grocers including Amazon Fresh, Walmart Neighborhood, and Brookshire’s moved fast up the omnichannel marketing ranks. Retailers in the first quartile achieved long-term sales growth that is nine times higher than their counterparts in the fourth quartile.
Dunnhumby, a leader in customer data science, released the fifth annual dunnhumby Retailer Preference Index (RPI), a comprehensive, nationwide study that examines the approximately $1 trillion U.S. grocery market. In a second-year dominated by Covid-19, Amazon cemented its leadership position, with H-E-B following in second place and Market Basket leapfrogging three retailers to take the third spot away from Trader Joe’s. Wegmans held onto the fourth spot for the second year in a row.
In its first year in the RPI, Amazon Fresh vaulted past 55 other retailers to land in the fifth spot. The 10 additional retailers with the highest overall customer preference index scores are: 6) Aldi, 7) Trader Joe’s, 8) Sam’s Club, 9) Costco, 10) Walmart Neighborhood Market, 11) Target, 12) Publix, 13) Walmart, 14) BJs Wholesale and 15) Fareway.
Retailers who delivered on their customers’ evolving needs in-store and online performed best.
“The pandemic has massively accelerated changes in how customers buy their groceries, and their behaviors are continuing to evolve,” said Grant Steadman, President of North America for dunnhumby. “2021 was the year that grocery retail became truly omnichannel. Retailers who delivered on their customers’ evolving needs in-store and online performed best. This was mostly the larger players, who used their advantages to consolidate their positions. The challenges for most other retailers are significant, but a number of mid-size grocers gained momentum by understanding their customers better and differentiating their offering accordingly. The report aims to provide some direction on why and how retailers can best position themselves to win with customers, in this era of the Great Reinvention.”
The overall RPI rankings are the result of a statistical model that predicts how retailer execution on various customer needs – preference drivers – impact both lasting emotional bonds formed with customers, as well as near-term and long-term financial performance. Each preference driver score and emotional connection score is measured with data gathered from a customized, online survey of 10,000 U.S. households per year. The seven drivers of customer preference are: price, quality, digital, operations, convenience, discounts, rewards & information and speed.
Key findings from the study:
Price and quality are no longer head and shoulders above all other customer preference drivers in securing superior, long-term sales growth and emotional connection with shoppers. Price now sits alone at the top in importance with Digital and Quality tied for second. For the fifth consecutive year, Aldi’s laser focus on price secured the discount retailer with the highest ranking on price.
Retailers in the first quartile have long-term sales growth that is nine times higher than retailers in the fourth quartile, two times higher than retailers in the third quartile, and one and a half times higher than retailers in the second quartile. They also have superior short-term momentum to those in the other three quartiles, managing solid gains in 2021 surpassing even the height of the 2020 Covid boom, while some other retailers struggled to tread water.
Second-Quartile grocers have opportunities to also rise rapidly in the rankings by reinventing their relationships with their customers. Brookshires, Hy-Vee, Food Lion, the Giant Company and former second-quartile retailer BJs Wholesale made the biggest move up the rankings in 2021.BJs Wholesale, the Giant Company and Food Lion focus on personalization of the customer experience, through promotions, rewards and the right assortment helped them rise rapidly in the rankings. All three also delivered well-run operations that minimize out-of-stocks and maximize price consistency and logic. And most importantly, these three retailers delivered all of the above attributes without letting base price perception get to far behind Walmart, Costco and Aldi.Additionally, Brookshires and Hy-Vee also made big moves in the rankings due to their leadership in the omnichannel marketing experience that saves customers’ time. They are among market leaders in both ease and customer service in eCommerce and speediness of the in-store shopping experience.
Digital is king in driving momentum as Amazon has demonstrated over the last two years by being ranked as the top U.S. grocery retailer. Amazon is the top digital grocer followed by 2) Amazon Fresh, 3) Target, 4) Walmart and 5) Sam’s Club. These retailers clearly set themselves apart from the 2nd – 4th Quartiles in their omnichannel marketing transformation journey. Amazon, Target, and Walmart achieve clear gaps between each other and everyone else in digital capabilities. The gap in Digital pillar score between Walmart (ranked 4th) and Kroger (ranked 13th) is as big as the gap between Kroger and the 59th ranked retailer.
Omnichannel marketing examples
Grocery retail is now truly omnichannel, as Digital’s share of total grocery sales more than doubled during the pandemic, from 5% to 10% of sales, yet half of the U.S. grocery shopping population does not buy online and has no plans to. Nearly all online shoppers still buy in brick and mortar, where roughly 90% of all customer dollars are currently spent.
Retailers who use their own eCommerce platform, versus using Instacart or other third party platforms, have better customer perception of both the eCommerce shopping and delivery phases and performed better financially.
Sales Leads LatAm is a summary for Corporate Marketers, Media Sales Executives and Advertising Agencies to see what clients are moving into the market and/or targeting Latin American consumers right now.
Hilton announced the signing of a franchise agreement for a new Motto by Hilton hotel in Lima, Peru, representing the brand’s debut in the Caribbean and Latin America. Launched in October 2018 as Hilton’s newest lifestyle hotel brand, Motto by Hilton introduces a fresh approach to modern travel, bringing together efficient, micro-guest rooms, activated social spaces, locally inspired design, and a communal vibe in centrally located urban destinations to cater to travelers looking for value and one-of-a-kind experiences.In partnership with Compañia Hotelera CINSA S.A, Motto by Hilton Lima Miraflores is scheduled to break ground in May 2020 and expected to open in 2022. Similar to other Motto by Hilton properties around the world, Motto by Hilton Lima Miraflores will show off its flexibility through thoughtfully designed spaces, seamless technology and an elevated sleep experience that will make recharging easier than ever.Additional deals under Motto by Hilton are in various stages of development in prime urban locations around the world such as New York City, Indianapolis, Washington D.C. and Copenhagen, to name a few.Hilton currently has a portfolio of more than 150 hotels and resorts open and welcoming travelers in 23 countries across the Caribbean and Latin America with seven hotels in Peru.
Colombian Cueros Vélez/Studio F
The Colombian fashion group Studio F and leather goods specialist Cueros Vélez, two of the largest retailers in its local market, have begun negotiations to land in the Spanish market, which would mean landing in Europe for both companies.Colombian company Studio F, one of the largest fashion retailers in the country and with over 430 points of sale in Latin America in eight Latin American countries, plans to enter the Old Continent with an investment of 8 million euros.Studio F will combine four channels in its development in the market: directly operated stores, concessions in El Corte Inglés, multi brand and ecommerce. The first directly operated stores will arrive at the end of 2020. The company plans to have a store network of forty corners in El Corte Inglés and 18 directly operated stores in Spain. Studio F will bet on positioning itself in Spain in a higher segment and focusing on denim as a differential element. Based in Medellín, Colombia, STF Group generates more than 5,000 direct jobs and currently has operations in Colombia, Chile, Ecuador, Peru, Costa Rica, Guatemala, Panama and Mexico.Cueros Vélez started in 1986 with Raúl Vélez and Ana María Echevarría as a company specialized in leather goods. The company has expanded through retail and currently has about 300 stores in Colombia, Guatemala, Panama, Mexico, Peru, Costa Rica and El Salvador. The company also operates with two other brands, Nappa and Tannino, specialized in leather goods and distributed both online and in some Cueros Vélez stores.
Dine Brands Global Inc.’s DIN International House of Pancakes (IHOP) brand continues to expand through franchisee agreements. Recently, the company announced the opening of its first IHOP restaurant in Lima, Peru, through an agreement with Percapitals S.A.C. Markedly, this new property in Peru marks the company’s 62nd restaurant in the Latin America region.Steve Joyce, CEO and president, International, Dine Brands, stated that “South America is an important growth market for Dine Brands and we’ve seen great success there so far this year.”Earlier this year, IHOP debuted in South America with the opening of three restaurants in Ecuador. Of late, the IHOP brand announced that it plans to open a fresh fast casual concept — Flip’d by IHOP — in the United States during the spring of 2020. Currently, there are more than 1,700 IHOP restaurants in the United States and another 100+ IHOP restaurants worldwide. Moving ahead, Dine Brands International continues to focus on growth in markets including Central America, Colombia and Chile. By 2028, it anticipates to open 25 IHOP restaurants in Peru.
FreeNow, the ride-hailing venture owned by Daimler and BMW, expects to double revenue this year and next in a fresh challenge to Uber in Europe and Latin America.FreeNow’s so-called gross merchandise volume, which mirrors revenue, is forecast to reach about 2.4 billion euros (US$2.7 billion) in 2019, CEO Marc Berg said in an interview.Half of the 130 cities in Europe and Latin America where the company that was previously named MyTaxi currently operates in are already profitable, he said.Ride-hailing is expected to remain FreeNow’s main growth driver as it can be scaled up quickly once regulations are met.Apart from the main FreeNow brand, the company operates the Beat and Kapten ride-hailing services as well as Hive electric scooters. It’s active in 130 cities across 18 countries in Europe and Latin America.
E-Commerce trends in Mexico and Peru. Here’s your summary of the most relevant consumer insight research in Latin American markets. If you’re trying to keep up with the latest happenings, this is your one-stop shop. Check out the previous Latam Consumer Insights Roundup here.
in-Store Media has revealed that Mexicans prefer to buy wine at warehouse stores, according to 37% of survey participants. The most important factor to select the product is the brand, followed by the grape variety and price of the bottle. Over half (55%) of surveyed consumers already know which wine they’re getting before visiting the store. even so, 34% said they have changed their mind about the brand, and 86% said they’re willing to choose a new product if they find appealing information at the store.
Since November 2018, Amazon has launched five Alexa devices in Mexico, among which the Echo Dot is the most popular. Amazon has revealed the list of topics Mexicans ask the most about: animals; movies, TV shows and celebrities; trivia; songs; superheroes; Mexican History; sports; jokes; and alarms. Among the most frequently heard phrases Mexicans tell to their devices are: “Good morning, Alexa”, “Alexa, I love you”, “What’s up, Alexa?”, and “Alexa, I’m home”.
According to Linio, millennials are driving e-commerce more than any other generation in Peru. Peruvian millennials spend four minutes, 27 seconds in average looking for and purchasing products. Most of them research prices on mobile devices and make the transaction on a PC or laptop. Generation Z spends more time researching products, but are not yet spending as much as millennials.
A survey by Tiendeo.mx found that nine out of ten Mexicans said they planned to make purchases during the Buen Fin, on 15-18 November, and spend an average MX $4,518. More than two-thirds of respondents (70%) said they’d make their transactions in physical stores, as opposed to the 30% that claimed they’d use their phone, PC or tablet.
What: CommerceNext has published the results of a survey of 100 e-commerce decision-makers, meant to explore similarities and differences in the priorities of traditional and digital-first DTC brands. Why it matters: The report is meant to be a benchmark that helps marketers evaluate their priorities in terms of how to distribute budget among different technologies and objectives.
E-commerce is unpredictable; it forces marketers to be on the lookout for what’s coming next and reacting if only a little bit late can turn out to be fatal. In order to be more ready, decision-makers have to decide what matters more in every step of their strategy, which means having to prioritize investments and objectives. With these challenges in mind, CommerceNext conducted a survey of 100 top marketing executives in traditional and digital-first direct-to-consumer brands.
The objective was to provide a useful benchmark for online retailers to measure their priorities and decide how to distribute budget in the most convenient way. According to the results, even though both traditional and digital-first online retailers point to an increase in marketing budget, digital-first brands are spending way more while also diversifying their strategies. Below are the key insights from the study, titled How Leading Retailers and DTC Brands Are Investing in Digital.
Which Investments Did Work in 2018?
In order to compete, marketers need to be quick to decide which investments can help them reach their objectives. According to the study, 65% of respondents said their 2019 e-commerce marketing budget increased over the previous year, while only 10% of marketers are reducing their budget. In 2018, the top marketing investment priorities were acquisition marketing (81%), retention and loyalty marketing (43%) and promotions (32%).
When asked about the results of those investments, acquisition marketing had the highest level of satisfaction rating: 53% of respondents said acquisition marketing met expectations in 2018, and 24% said it exceeded expectations. On the contrary, 52% of respondents said unified customer data (e.g. a single view of the customer) performed below their expectations. Almost the same number had similar levels of dissatisfaction in personalization investments (51%).
What Are the Priorities of Digital-First and Traditional Retailers?
According to the report, consumers have more than doubled the amount of time they spend on DTC brands’ websites over the last two years. Even though all the companies in the study have increased their e-commerce marketing budgets, digital-first DTC brands are spending more: 78% indicated that their 2019 budget is higher than the one they had in 2018, while 60% of traditional retailers said the same.
Because DTC brands are based on data-driven decisions and customer-centric operations, they are growing and evolving at an accelerated pace. As stated in the report: “fueled by venture capital investment, these brands have focused on growth vs profitability.” Therefore, the most significant challenge for this group of brands is “achieving profitability at scale”, with “Managing tech integrations” coming in second, with 33% of DTC brands identifying it as a barrier. This is a side-by-side comparison of what each group considers to be the most significant barriers, extracted from the study:
How to Make the Best of the 2019 Holiday Season
According to the NRF, the 2018 holiday retail season exceeded expectations. Over 165 million Americans reportedly shopped either in stores or online from Thanksgiving Day through Cyber Monday 2018, and online purchasing, in particular, experienced a 19% increase compared to the previous year. The NRF has forecasted that 2019 retail sales will increase by 3.8% compared to 2018, and the online sales growth rate will increase between 10% to 12%.
DTC brands are increasing their budgets at a higher rate than traditional retailers and spreading that budget more evenly. For example, digital-first DTC brands are increasing their budgets equally (70%) between acquisition marketing and retention/loyalty marketing. On the other hand, traditional retailers are emphasizing acquisition marketing, with 77% of respondents increasing their acquisition budget compared to 64% of traditional retailers increasing their retention budget.
What: Retailers scramble behind Amazon and MercadoLibre to capture their share of expanding e-commerce in Latin America. This happens despite difficult payment and delivery challenges. Why it matters: Experts predict e-commerce trends will grow by 19% in the next five years. They see it rising well above the global average of 11%. The lack of brick-and-mortar retail outlets in Latin America actually plays into the hand of e-commerce retailers. That’s because it allows them to offer products to consumers outside of major cities who don’t have many shopping options.
E-Commerce Trends Heating Up
E-commerce trends in Latin America provide no place for the timid. The challenges are well-known. Experts say they include lack of infrastructure, consumers without credit cards or bank accounts, high rates of online payment fraud, and obstacles to delivering product—to name just a few.
One expert remarks the challenges are “daunting.” But competitors like Linio are finding ways to outperform. They chase what Linio’s General Director Olivier Sieuzac says is a “massive opportunity” in expected e-commerce growth in the region.
Linio has learned it had to expand its online business model. That means beyond just selling product. The strategy now includes things like creating its own delivery fleet. Linio also sells its hard-earned expertise to brands like Aeromexico who create their own online retailing presence.
To succeed in Mexico, Linio built partnerships with VISA to prevent credit card fraud. Consequently, it also joined arms with third-party payment channels. They include the convenience store chain Oxxo. Linio aims to provide the unbanked with cash-payment options.
Mexico, according to Sieuzac, offers the “worst of both worlds.” Mexico suffers high levels of online payment fraud and a low level of cooperation from banks.
As a result, Linio developed a proprietary algorithm with VISA as a response to reduce credit card fraud. Consequently, Linio also now offers its own credit card with a loyalty program. The loyalty program awards cash back on purchases.
Linio also created its own fleet in Mexico to handle the delivery of over-sized items like refrigerators and other home appliances.
Infrastructure, payment obstacles
Lack of infrastructure in Latin America makes delivering product a particularly difficult part of the e-commerce business.
Logistics and related issues amount to 15 percent of the cost of what’s sold online—well above other regions, according to Miriam Dowd, Marketing Manager at FOCUSECONOMICS.
Merchants experience the impact of “limited” access to credit card-based payment methods. Banks often don’t allow debit cards to be used for online payments.
“E-commerce in Latin America faces many challenges, the most daunting of which are logistics, traffic, and infrastructure. Regulations and rules vary among countries. Merchants have and limited access to secure, credit-card based payment methods,” Dowd explains.
Online sales are expected to grow by 19% in the next five years. As a result, that is well above the global average of 11%. They are foreseen to double in value to $118 billion in 2021.
But on the positive side of the ledger, experts say market penetration is low compared to other regions. As a result, that represents lots of opportunity. Consequently, the market also offers higher growth rates.
“Online sales are expected to grow 19% in the next five years – well above the global average of 11%. As a result, they will double in value to $118 billion in 2021. Consequently, two of the three fastest-growing eCommerce markets in the world are in Latin America. They are Colombia and Argentina,” Dowd said in an email to Portada.
E-commerce trends forecaster eMarketer found even with this expected high growth rate, nearly 75 percent of the market of 650 million consumers expected to shop online is untapped.
E-commerce trends working for e-retailers
MercadoLibre boasts status as the undisputed leader in Latin America. Its huge geographic footprint and logistics expertise “have helped it to hold the lead,” Dowd said.
Amazon leverages its international recognition to become a leading player in Latin America.
And for Linio, expanding its business model and offering consumers a trusted, predictable and “formal” online shopping experience proves critical to its success, according to General Director Sieuzac.
Linio seeks to set itself apart from other online retailers by rigorously vetting its product providers to make sure what they offer Linio’s customers meets certain standards.
Linio offers free returns in its strategy of building customers’ confidence.
“We’re not leaving customers alone in a face-to-face situation with the seller,” Sieuzac said.
Linio’s strategy provides its online expertise to brands. They then create their own online shopping sites, a key component of Linio’s competitiveness.
As a result, Linio entered into a partnership to build and operate Aeromexico’s Club Premier online shopping experience.
Mexico offers the worst of both worlds: high levels of online payment fraud and a low level of cooperation from banks.
Linio also partnered with the micro-financing company ConCredito. ConCredito provides a huge presence in rural zones not necessarily within Linio’s geographic footprint.
Linio publishes its catalog of products on ConCredito’s website “Creditienda.” Linio spokesperson Paulina Maza said the company supports the ConCredito e-commerce site with specific promotion campaigns. They include digital marketing, logistics, fast delivery of products, and returns.
What lies ahead
The lack of brick and mortar retail outlets in Latin America actually plays into the hand of e-commerce retailers. That’s because they can offer products to consumers outside of major cities where consumers don’t have many shopping options. Sieuzac told Portada, “It’s a massive opportunity. You have people that simply don’t have access to products, even from a normal shop.”
A “key component” of e-commerce growth in Latin America proves to be shopping online with a mobile phone. As a result, a report by yStats.coMobile commerce reveals experts expect it to increase at a faster rate than e-commerce.
Brazil offers the largest consumer e-commerce market in Latin America. The report found experts predict Colombia to show a 20 percent growth rate through 2021.
A summary of the report reveals experts predict: “Rising internet and smartphone penetration rates, greater online payment security and development of MCommerce to contribute to the growth of online retail sales.”
What: First Insight has released the results of a study that examined the shopping behavior of U.S. and U.K. consumers, and found that millennials are still the biggest contributors to the success of certain retail models. Why it matters: Millennials’ growing shopping power forces brands to identify the right ways to connect with this generation.
First Insight has published the results of a consumer study conducted in the U.S. and the U.K. to examine shopping habits, purchase behavior, and influences driving purchase decisions. The survey was answered by a sample of more than 1,000 U.S. consumers and 565 U.K. respondents. The study revealed that millennials contribute more than any other generation to the success and longevity of certain retail models, as they tend to spend more, shop more often, and are more open to adopting new retail models such as subscription boxes.
“Where millennials shop, how they shop and when they wear the brands they love are direct reflections of how they define themselves,” declares First Insight’s report. “To tap into this lucrative group of shoppers, retailers must be able to connect with this generation through the right shopping experiences and unique products at the right price.”
The Biggest and Most Impulsive Spenders
According to First Insight’s study, millennials in both the U.S. (74%) as well as the U.K. (58%) are most likely to spend more than $50/£50 per visit in-store as well as online. This compares to 71% of Generation X and 65% of Baby Boomers in the U.S., and 42% of Generation X and 38% of Baby Boomers in the U.K.
In both the U.S. and the U.K., millennials have the highest added-to-cart percentage rates both in-store and online. In the U.S., 87% of millennials said they “sometimes or always add items to their carts they weren’t planning to buy when shopping in-store.” This compares to 86% and 78% of Generation X and Baby Boomer respondents, respectively. U.K. respondents mirrored these responses closely: 83% of millennials said the same, followed by 76% of Generation X and 69% of Baby Boomers.
Subscription Boxes: A Hit Thanks to Millennials
First Insight’s data shows that usage of subscription box services is driven primarily by millennials, as 31% of respondents from this generation are currently receiving subscription boxes in the U.S. versus 21% and 8% of Generation X and Baby Boomers, respectively. In the U.K., 32% of millennials versus 22% of Generation X and 10% of Baby Boomers are currently subscribers.
However, data shows a significant difference between U.K. and U.S. shoppers when considering the longevity of this model. While in the U.S., 32% of study participants intend to subscribe in the next six months, only 13% of U.K. respondents said the same. Also, significantly more U.K. respondents said they “never subscribed” to subscription boxes than those in the U.S. While 49% U.K. Millennials, 63% of Generation X and 84% of Baby Boomers reported they never subscribed to a subscription box service, in the U.S., 33% of Millennials, 48% of Generation X and 64% of Baby Boomers said the same.
Millennials Like to Show Their Love
As the report explains, “Flexing is to wear or display brands to show a personal association with the brand. This can be done to display wealth or status, or to make a statement.” One of the study’s findings was that sports brands are the most popular for flexing in both the U.S. and U.K., with millennials the most likely to flex all brands across every category. In the U.S. and the U.K., respectively, an average of 23% and 24% of respondents said they are flexing sports brands, while only 17% of U.S. respondents and 21% of U.K. respondents flex luxury brands.
When it comes to items being flexed, people in both the U.S. and the U.K. are flexing clothing the most (57% vs. 51% of U.K and U.S. respondents, respectively), followed by shoes (35% of U.K. respondents and 42% of U.S. respondents), and accessories like watches, jewelry and bags (20% of U.K. respondents and 28% of those in the U.S.)
What: We looked at the results of the e-commerce marketing strategy of the top 15 online retail sites visited by shoppers in the U.S. in February of 2019 and how the sites scored in numbers of visitors. Why it matters: Amazon’s relentless e-commerce marketing strategy and its increase of visits to its retail website continued in the second month of this year, topping 23-percent of all visits to the top 15 retail sites in the U.S.—nearly double that of its closest e-commerce rival Walmart at 12.2-percent of visits.
Number of visitors to the Top 15 e-commerce sites in the U.S., February 2019
Total Audience, Home and Work, PC/Laptop
Total Unique Visitors*
Apple.com Worldwide Sites
The Home Depot, Inc.
Best Buy Sites
Source: Comscore *Numbers reported as shown
Amazon Expansion Continues
Amazon continued to expand its online e-commerce dominance in the U.S. in February, gaining more than 2-percentage points compared to January, to reach 23.4-percent of all visits to the top 15 retail sites in the U.S. as measured by Comscore. The behemoth internet retailer expanded its online market share at the same time that brick-and-mortar retailers have closed 4,800 stores this year alone, according to the Financial Times. Analyst Deborah Weinswig told the newspaper she expects approximately 12,000 retail stores to be shuttered in the U.S. this year.
Brick-and-mortar retailer Best Buy saw its share of visits to the top 15 retail site in the U.S. slip from 4-percent in January to 3.4-percent in February. Macy’s, too, lost ground going from 4.3-percent in January to just 3-percent in February. Walmart continues to be the most successful brick-and-mortar retailer online, holding at second place in February with 12.2-percent of all visits to the top 15 ranked retail sites in the U.S.—but still well behind Amazon in online visits.
Best Buy, Home Depot slip
Best Buy slipped from 11th to 13th place from January to February in Comscore ranking.
The Home Depot, too, lost ground, going from 9th place in January to 10th place in February.
Apple held steady in 4th place with 7 percent of all site visits in February.
eBay, too, held its ground in third place with 11.1-percent of all visits, matching its share in January.
Macy’s saw a decline in its site visits from 4.3-percent of all visits in January to 3-percent in February.
The top eight most-visited sites in the Comscore ranking held their positions from January to February, with Target ranking 5th.
Retailer Kohl’s continued to see a downward trend in its share of visits to the top 15 sites, from 5.5-percent in December to 3.8-percent in January to 5-percent in February.
What: WPP and Waze have announced a collaboration that will make it easier for retail brands to run campaigns on Waze. Why it matters: This partnership will allow WPP’s clients to directly reach and target drivers via the in-car platform, driving store footfall and product sales.
WPP and Waze just announced they are partnering to make it simpler for retail brands to run campaigns on Waze, the social navigation app owned by Google, which has over 100 million monthly active drivers globally.
This collaboration will direct drivers to retail locations via in-route messaging and will launch in Canada, France, Italy, the United Kingdom, and the United States this year.
“We are excited about the opportunity to collaborate closely with WPP and its global client base, sharing best practice and creating optimal solutions to drive in-store foot traffic for WPP’s many consumer product clients,” said Samuel Keret, Global Director of Waze Ads.
“WPP already brings the most creative, technology-led ideas to our clients to generate growth. Through our innovative partnership with Google, we’re now able to give clients exclusive access to Waze software that puts them in the driving seat to influence the shopping habits of the future,” added Stephan Pretorius, Chief Technology Officer at WPP.
What: We looked at the top 15 online retail sites visited by shoppers in the US in September of this year and how they scored in numbers of visitors.
Why it matters: Anticipation over Apple’s release of two new iPhones and major product updates this fall may explain an increase in visitors to its retail site in the US. Visits increased by nearly 1%, continuing an upward trend since July. Visits to the department store retailer Kohl’s site jumped two rankings to outpace visits to Best Buy, Lowe’s and Macy’s.
Number of visitors to the Top 15 e-commerce sites in the US, September 2018
Total Audience, Home and Work, PC/Laptop
Total Unique Visitors
Apple.com Worldwide Sites
The Home Depot, Inc.
Best Buy Sites
Visits to Apple’s online retail site jumped from 7.3% of all visits to the top 15 sites to 8.1% in September, according to the latest rankings from comScore. Amazon, Walmart, eBay and Apple continued to dominate the top four positions in the rankings in that order. The department store retailer Kohl’s managed to move up a position compared to the previous month, from 12th to 10th place. Macy’s took last place in the rankings, the same position it occupied the month before.
Macy’s saw a slight uptick in visitors compared to August, but remained in last place at 29,880 visitors in September.
Apple has seen an upward trend in visitors to its retail site since July of this year, topping out at 73,558 visitors in September.
Ticketmaster dropped two places in the rankings to 12th place in September from 10th place in August, for a total of 35,005 visitors.
The Home Depot continues to outpace Lowe’s in numbers of online visitors to its website, seeing 43,144 visitors in September compared to 32,131 for Lowe’s. Lowe’s has announced it will close 47 stores in the US and Canada.
Best Buy held on to its 10th place position in September, with a total of 36,248 visits compared to 39,329 in August.
Target continues to outpace Kohl’s, Macy’sBestBuy, Lowe’s and The Home Depot in number of online visitors, coming in at 57,236 in September.
The majority of all online site visits by shoppers still belongs to Amazon, Walmart and eBay, at 21.1%, 12.2% and 11.4% respectively.
What: Digital marketing technologies and how brick-and-mortar retailers are flocking to mobile phone, SMS, geofencing, Bluetooth and GPS technology. As a result, they’re discovering new and powerful ways to communicate with consumers. Both inside and outside of their stores. Interviewee: Gatorade’s Tiago Pinto. Why it matters: Portada follows the money to understand this gold rush into mobile phone messaging. The bottom line for retailers adds up to a lot more sales.
The ubiquitous mobile phone may prove to be a lifeline to struggling brick-and-mortar retailers. They’ve found new and powerful ways to engage in one-on-one conversations with consumers. That’s fueling an investment and marketing boom in geofencing, SMS, push notification, beacon, Bluetooth and other technologies.
In fact, if numbers reported by retailer American Eagle are any indication, failure to adopt may be unaffordable. The fashion retailer reported a three-fold increase in sales after using geofencing to drive foot traffic into stores, according to a recent report by AdWeek.
E-commerce sales may be exploding, but it’s too early to discount the local shopping mall or retail as we’ve traditionally known it. The price of shares in Target are surging as the US rides a wave of rosy economic numbers.
But there’s more going on under the hood for brick-and-mortar retail and Target knows it. According to Chain Store Age, Target is expanding the use of its own mobile phone app. Now customers can place orders on their phones and then pick up their goods at the store’s curb. They don’t even have to leave their cars.
There’s more going on under the hood for brick-and-mortar retail than you may realize.
Not your father’s digital marketing technology
Target’s use of its mobile phone app is the tip of the iceberg of a bevvy of exploding technologies that has altered the landscape of brick-and-mortar retail marketing well into the foreseeable future.
Your mobile needs global positioning system (GPS) technology to find the nearest cell tower. But it also allows retailers and apps like Facebook to pinpoint your location to within less than 100 meters.
Enter SMS, Bluetooth beacons, geofencing, push notifications and stores’ own apps and retailers now have a whole new way to lure customers into their aisles—including targeting you even when you’re shopping at a competitor’s location.
JCPenney, Whole Foods, and Best Buy are using mobile apps to send special offers and coupons to customers, according to Mobile Business Insights. PepsiCo’s Gatorade discovered three years ago that it could use Facebook and GPS to post offers on Facebook for soccer players within a certain distance of known team practice locations in Brazil.
“Sales went through the roof,” Gatorade’s Global Marketing Director Tiago Pinto tells Portada. The program was expanded to other cities in Brazil and PepsiCo now uses GPS and Facebook to send messages to consumers in Mexico City, Bogota, Buenos Aires, Lima, and Santiago. Feedback has been positive from consumers. According to Pinto: “I think as long as you are providing a service and not interrupting, the consumer sees it as welcome. They want to receive content that is relevant to them.”
Geographic location is just one of the barometers you have to look into. The consumer’s profile is more important.
“Gatorade would like to expand the program to include WhatsApp. But Facebook which owns WhatsApp has yet to make that possible”, Pinto says.
Brave new world for retailers
GPS technology and cell phones have opened up a brave new world of digital marketing technologies for retail marketers. But at the end of the day, Pinto tells Portada that knowing the customers’ likes and preferences is still the key to the kingdom.
“I think geographic location is just one of the barometers you have to look into. The consumer’s profile is more important,” says Pinto.
Nevertheless, the seemingly endless growth in cell phone usage worldwide and digital marketing technologies makes the possibilities appear limitless.
According to a study by Criteo, retailers in North America with both a mobile website and a mobile phone application make 67% of their sales on their mobile apps.
Tech Crunch reports that consumers now spend fives hours per day looking at their cell phones. According to Mobile Business Insights, SMS messages are read by 98% of consumers who receive them.
Having their own mobile app allows retailers like Target to send push notifications to their app users.
Geofencing investment to hit $1.7 billion
But the cherry on the ice cream may be the combination of GPS with geofencing.
With geofencing, retailers can selectively message mobile phone users when they are within say a mile radius of the store. It also allows retailers to set up geofencing perimeters around competitors’ locations. They can then target offers to consumers considering the competition’s options.
With geofencing, retailers can selectively message mobile phone users when they are within say a mile radius of the store.
Investment in geofencing is expected to race past $1.7 billion in 2024, with the fastest growth seen in the Asia-Pacific region, according to a study by Global Market Insights.
“As more and more brick-and-mortar retail businesses are implementing proximity-based marketing campaigns, the applications of geofencing-based marketing solutions are poised to increase rapidly over the forecast period,” the study of digital marketing technologies found.
Key players in the geofencing market are Apple, Google, Thumbvista, Esri, Urban Airship, Bluedot innovation, Gimbal, Embitel, Placecast, Simplifi.fi, Swirl Networks, Radar Labs, UpSnap, GeoMoby, PlotProjects, Localytics, Pulsate, Mapcite, and DreamOrbit, the study said.
We are introducing a bi-weekly summary of the most exciting recent news in marketing technology and trends. If you’re trying to keep up, consider this your one-stop shop.
LATAM retailer SACI Falabella will purchase the online retailer Linio for US $138 million. Linio operates in Chile, Peru, Colombia, Argentina, Mexico, Venezuela, Ecuador, and Panama. E-commerce in Latin America is expected to grow by 19% in the next five years – well above the global average of 11%.
Investors will pour US $4.5 million into the influence marketer FLUVIP to help it grow in Spain, Latin America, and the US. FLUVIP uses machine learning and predictive artificial intelligence to measure the impact and cost of influence marketer campaigns on social media platforms.
Your customers could be turned off if you only talk to them using artificial intelligence, a Capgemini worldwide survey of internet users has found. The survey saw wide acceptance among shoppers for AI interactions, but it also discovered that shoppers are happier when chatbots and virtual assistants come with live-human interaction options.
Compliance with the European Union’s General Data Protection Regulation (GDPR) is costing Fortune 500 companies US $7.8 billion, according to Fortune. A survey by PwC pegged the cost for 200 US companies of 500 or more employees at between $1 and $10 million.
A majority of US marketers view the European Union’s General Data Protection Regulation (GDPR) as a threat to their ability to target audiences. Digiday talked to 46 US marketers who said they were more concerned about restrictions on reaching key market segments than the cost of fines for noncompliance.
Conversions of inbound marketing leads into sales is a lot lower than you may think at just 13 percent according to a study by Implicit, as reported by PMG360. Look for a 20 percent improvement when you nurture inbound leads with personalization, targeted reach, lead scoring and timely response.
What: We looked at the top 15 online retail sites visited by shoppers in the US and how they scored in number of visitors in May 2018. Why it matters: Wal-Mart’s hard-fought effort to build an online presence has put it ahead of eBay in the number of online visitors. The Bentonville, Arkansas brick-and-mortar retailer surged ahead of eBay by nearly 5,000 visitors in May, 2018. But the e-commerce behemoth Amazon still leads by nearly double the number of monthly online visitors compared to traditional retailer Wal-Mart.
Number of visitors to the Top 15 e-commerce sites in the US, May 2018
Total Audience, Home and Work, PC/Laptop
Total Unique Visitors
Apple.com Worldwide sites
The Home Depot
Best Buy sites
Amazon led the field with 21.5% of all online visitors in May
Wal-Mart (12.5% of all online visitors) and eBay (11%) are competing neck-in-neck to be Amazon’s closest online competitor
eBay dropped behind Wal-Mart by just under 5,000 visitors for a second-place finish
Apple took fourth place with 7% of all online visitors for the month
After Apple, Target took 5th place with 6.4% of all visits in May
Big-box Target has nearly double the visitors of Macy’s
Home Depot has powered ahead of Lowe’s by more than 10,000 monthly visitors in May, proving to be online shoppers’ favorite in the home improvement category
.What: We talked about Retail Marketing to JC Penney’s Ana Lucía Soto, MillerCoors’ Turiya Luzadder, Wilson’s Ángel Carmona, and Oath’s Maya Abinakad & Denise Brien. Why it matters: The term ‘Retail Marketing’ has been around for some time. However, the attention is still focused on consumers, not on retail shoppers. This seems like a missed growth opportunity.
Retail marketing tries to inspire shoppers to make last-minute sales when they are already prepared to buy something. Especially when compared to other media, the main characteristic of in-situ marketing is immediate impact. This concept isn’t new. Procter & Gamble was considered one of the pioneers in retail marketing in the U.S. around 2001. Several definitions of the concept have floated around since. A widely accepted version, provided by POPAI’s Retail Marketing Industry Council in 2011, defines retail marketing as “the application of shopper insights along the path to purchase, to affect purchase behavior in order to increase sales for both retailers and manufacturers.”
For marketing consultant Mike Anthony, the problem with this definition is that the word “insight” is elusive. He sees retail marketing as a process of understanding rather than an application of insights. For Anthony, the key to this kind of marketing is “using that understanding to develop a marketing mix which influences shopper behavior” in a way that improves consumption of a certain brand.
There are many ways to do this. Nevertheless, there are common techniquesto persuade shoppers depending on who designs the campaign. Manufacturers consider price, packaging, and arrangement of products, while retailers emphasize the location, the store layout, and lighting, for example. We talked to marketing experts about the key facts of retail marketing in the future. A future which is actually already here.
1. Customer Experience is Key, Both Online and Offline
It’s all about experience, not online or offline but both. In the words of Turiya Luzadder, Director, Shopper & Local Insights at MillerCoors, “Retailers and brands looking to win with consumers must provide a positive in-store/online experience that quickly instills confidence that the product will meet the needs (functional and emotional) of the consumption occasion.”
As she explains, everything is changing at a quick pace, but there’s a big opportunity to learn about online and offline solutions, as each one offers something different. “People will shop both online and offline as each exploits its own strengths. Online will lead with its promise of convenience. Offline will seek to provide an experience as it retains the advantage of a tactile environment with social interaction.”
Either online or offline, what really matters for retail marketing is making sure the experience is so great consumers come looking for your brand. According to a study conducted by Maya Abinakad, Global Marketing Director, and Denise Brien, Senior Director of Consumer Insights at Oath, 9% of consumers’ brand love comes from outstanding experiences. “Brands [who] transform ordinary into extraordinary deliver experiences that are consistent, engaging and memorable,” they explain.
Even though there is now a shift towards a completely digital landscape, brands need not lose sight of what really matters: ensuring shoppers have a good experience. “The key is to offer the best experience possible to our consumers,” asserts Ángel Carmona, Business Manager, Latin America at Wilson. “We need to engage our brand with our consumers by a shopping process which needs to be friendly, clear, and fulfilling. Our client’s satisfaction is crucial for references and future purchases.”
2. It’s the Era of Technology: Better Know How to Use It
Every day new marketing technologies become more relevant. As Oath’s Abinakad and Brien state, “Marketing is one of the main strategies that evolve in every technology trend. The relationship between customers and technology is a trigger that changes everything around it. If a brand hopes to stay relevant, it must capitalize this relationship. “Today’s industry is much more data-driven, with increased access tools that can provide real-time information on shopper behavior,” comments Ana L. Soto, National Media Manager at JCPenney. “Data insights will allow companies to better understand a consumer’s behavior and path to purchase, which will allow them to target their retail marketing efforts more effectively.”
Programatic Marketing as a Strategy
“We could say that programmatic marketing will have a significative growth this year,” point out Abinakad and Brien. “This strategy allows marketers to channel their ads to the correct audience and tailor the message to each product or services’ target. In this sense, location-based marketing plays a key role in insights of where consumers are and how to offer them the best option according to their location in real time.” This and other trends, like the accelerated change from desktop to mobile, will have an important impact on the way marketers address shoppers; technology is a real opportunity to reach targets effectively.
3. You Need to Look Inside as Well as Outside Your Doors
As Wilson’s Ángel Carmona explains, implementing a campaign is not enough. It is also necessary to integrate and evangelize your staff. “[Your staff] is the most important ambassador at the point of purchase and should be the best way to engage with the consumers.” In other words, everyone in your organization needs to be on the same channel. There’s no use in having a great product if only you know it. There’s a great chance shoppers will engage more if the whole team has a deep knowledge of why they should engage.
Making mistakes is easy, but it’s also easy to avoid them if you get your priorities right.
Therefore, Ana L. Soto recommends “to have alignment, consistency, and collaboration within your organization —from internal teams all the way to agency partners— in order to use the correct channels to target the consumer effectively and ultimately drive actionable results that engage them in a meaningful way to them.”
4. Here’s What You Should Do, and What You Shouldn’t Do
When Portada asked our interviewees about the most common mistakes related to retail marketing, they took us back to the basics: communication, human needs, and positive change. For Turiya Luzadder, “Making mistakes is easy, but it’s also easy to avoid them if you get your priorities right”. In her words, there are three key priorities to bear in mind in order to avoid mistakes:
1) To bring the organizational focus back to the human and retailer needs. “We spend so much time focused on our own goals that we risk losing sight of our dependence on consumer and retailer engagement”. 2) To constantly tear down the silos. “Strong communication amongst teams (brand, consumer, channel, shopper, chain, analytics…) is critical. It’s easy to go too far down a path before seeking feedback. 3) Being willing to take risks to create change. “There are times when you have to take a chance on an idea that is different and makes people uncomfortable. Finding the right retail partner and marketing advocates becomes critical.”
No matter how good your product is, if a consumer is not satisfied with the experience they won’t come back.
The easiest mistake to make in retail marketing
For Ana L. Soto, the easiest mistake to make in retail marketing is not having a true understanding of the customer. “Marketers need to have a clear understanding of their target audience coupled with data-driven insights into their behavior,” she comments. “This is crucial in determining and executing a successful strategy that will lead to high levels of engagement.” It is easy to get lost in technology and new trends and forget what truly matters. Ultimately, says Ángel Carmona, the main objective should be providing the best shopping experience possible. “No matter how good your product is, if a consumer is not satisfied with the experience they won’t come back. We live in a global market and we compete with more brands than ever, so we are only as good as our service.”
And sometimes that implies going a step further. In the midst of the fiercest competition, the brands that go the extra mile get the best results. According to Abinakad and Brien, 30% of brand love is determined by its ability to exceed consumer needs. “Brands that give consumers what they want —often before consumers even ask— offer something that competitors can’t. The secret is overdelivering on quality, durability, design, and performance in your product, your marketing and everywhere you meet your consumer.”
Major brand marketers and innovators will gather at the tenth annual edition of Portada Miami in the Hotel EAST on April 18 and 19 to discuss topics like Voice-Based Technology, Gamers and Gambling, Attribution Models for Digital Media Agencies, App Marketing and much more. Register now here!
To ready the discussion for Portada Miami, Portada’s Chair of the Travel Marketing Board Trip Barret wrote the article below on 4 Ways Airlines Can Learn From Major Retail Brands.
What: With Amazon’s launch of Amazon Go a “first” in the Retail Industry, we look back at another game-changing ‘first’ in the airline industry: the introduction of the first 747 by Pan Am. Why it matters: Both the Airline and Retail Industries are having to reinvent themselves continuously to be both profitable as well as the preferred choice of consumers. Looking at how Amazon vs the Airlines build their Consumer / Brand relationships, we can see which efforts bring more “value” into that relationship and, ultimately bottom line.
The news came out on January 22nd that Amazon had officially launchedAmazon Go, widely believed to be the next transformative, and arguably disruptive step in the retail industry. This reminded me of a similar, widely heralded launch on January 22nd, in 1970, by Pan Am: the Boeing 747. The introduction of that flight greatly expanded air travel throughout the world, allowing lower fares and more non-stop flights over longer distances.
While the Airline and Retail Industries may have more perceived differences than similarities, the visions of Pan Am’s Juan Trippe and Amazon’s Jeff Bezos to make their globally-recognized companies bigger, bolder, and more ready to reach everywhere, are certainly in lockstep. But, unlike Pan Am, long recognized as a trailblazer faded into the history books of Iconic Brands, Amazon continues to generate increased demand and loyalty from its core customers, while creating new opportunities to bring new customers into the fold. In this article, I outline the main ways airlines can learn from the successful efforts Amazon has introduced.
1. The Classic 4 P’s: Product, Price, Promotion, and Place
The Airline Industry today is certainly much different from the glory days of Pan Am —passengers are a commodity, customer loyalty has dwindled as loyalty programs are devalued, aircrafts are likened to real estate (pitch vs profit), and while progress has been made in employee / management relations, the overall customer service “guest experience” still has a long way to go.
Looking at the Airline Industry through the lens of Jerome McCarthy’s Marketing Mix of the 4Ps –Product, Price, Promotion, and Place, it is easy to conclude that most US Airlines have executed well against this model (and should continue to do so). In fact, you could even say that two additional P’s have been added successfully to the mix: Performance (load-factors, scheduling, fuel efficiency) and Profit (especially in ancillary fees).
Airlines have managed to add two additional P’s to the mix: Performance and Profit.
Airlines are increasingly investing in newer aircraft models (Product) and consumers have even more fare options, thanks to the introduction of “Basic Economy” (Price). In today’s Digital World, messaging, targeting and multiple offer options are available (Promotion), and given the consolidation of the Legacy Carriers as well as the growth of Low-Cost and Ultra Low-Cost Carriers, more and moredestinations are being served by giving consumers more options (Place).
2. More P’s to Take Into Account
However, in the process of getting the 4 P’s right, the Consumer / Brand relationship has been increasingly overlooked, and it contributes a great deal to the long-term success of a company. In this context, two more P’s should be considered: ‘Persona’ (how the consumer feels about his or her ‘relationship’ with the brand, about its stance on social issues and employee relations, and how well he or she is treated), and ‘Preference’ (the consumer’s commitment / loyalty to the brand and vice versa).
If you take care of [your employees], they’ll take care of your costumers.
Videos and social media postings of on-board interactions between flight crew and passengers are as disturbing as seeing uniformed crew members picketing for new contracts; and these can impact a customer’s perception and choices. As Bill Marriott learned from his father, and still incorporates at Marriott, “If you take care of them (employees), they’ll take care of your customers and the customers will keep coming back again and again.” American Airlines recently celebrated Bette Nash’s 60th anniversary as a Flight Attendant; when interviewed, Bette revealed the ‘secret’ of how a Brand can successfully engage the ‘Persona’ point: “I love my people. I know my customers. I know what they want. The airline thinks names are important, but I think people’s needs are very important. Everybody wants a little love.”
The airline thinks names are important, but I think people’s needs are very important. Everybody wants a little love.
The second P, Preference, has really seen major changes in the last few years as the Airline Industry has massively changed their loyalty programs (devaluing miles, increasing award level pricing, adding minimum spend requirements, and fare-based vs distance-based mileage earnings) while trying to convince their loyal flyers that it is in their best interest. However, there is an inherent flaw in this approach: with almost all airlines, travelers must re-qualify their status each year to continue to be ‘appreciated and valued’ by the Airline. If the traveler’s business with the Airline reduces in a given year, the ‘love’ or status returned will also diminish—which then begins a downward spiral of the overall relationship between consumer and brand.
3. All Relationships Need a True Purpose
This yearly ‘dance’ reminds me of a poem by an unknown author which outlines the 3 types of friendships: 1) Friends for a Reason (to meet a need, but ends once that is accomplished), 2) Friends for a Season (to grow and seek new experiences which bring great joy, but are also of limited duration), and 3) Friends for Life (indefinite relationships built upon emotions and commonly shared experiences.) By applying these concepts to Consumer / Brand relationships, my assumption would be that a majority of the relationships consumers have with brands would fall into the “Reason” or “Season” categories, with few falling into the “Life” category.
[A buyer’s] decision may fall into the ‘Brand for a Reason’ category, more so by accident than by design.
Given the transparency of the digital world, the airline and hospitality industries, in general, fit squarely into this analogy. For the infrequent, or price-sensitive traveler who will most likely seek out options via the web on Expedia, Priceline or Kayak vs checking with an individual airline, his or her decision falls into the “Brand for a Reason” category —which may be a one-time occurrence or may happen again—, more so by accident than by design or conscious choice.
Road warriors will maximize their efforts to concentrate their business with one carrier in order to achieve the ever-elusive elite status. These travelers fall into the “Brand for a Season” category—and while they make the best of it during the high-travel years, they ultimately know (or come to realize) that the relationship won’t last forever and ultimately they will part ways with the Brand (unless they are in the small group of Ultra Road Warriors who manage to earn one of the “Status for Life” Elite levels.)
Then there are those consumers who do establish a relationship with a brand, perhaps first through the original 4P’s of marketing. As they mature, they find the brand also satisfies and delivers on their Persona and Preference expectations—they’ve entered the “Brand for Life” category.
4. Taking a page from Amazon’s book
Having consumers enter the “Brand for Life” category is a huge accomplishment for an Airline, or for any industry, and it is exactly what Jeff Bezos and Amazon have accomplished. From its inception, Amazon’s mission and vision have been “To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online, ” and it has delivered on that since day one. The Four P’s of Marketing-Check. Performance-Check. Profit-check out the stock price!. So how about Persona and Preference?
Customers are all treated equally well—whether a Prime Member or the occasional shopper. As it expands, Amazon continues to emphasize increasing its knowledge of its customers, while simplifying their lives as well as their purchasing decisions. It has grown from selling books, music, and videos, to bringing unlimited options to their customers across multiple touch-points—from consumer goods to groceries, to technology, to streaming content. Preference-Check. As Amazon narrows its search for its second headquarters (which will add new employment opportunities) and progresses with its newly announced efforts with Berkshire-Hathaway and JP Morgan to address employee health care costs/needs, it continues to show its leadership and vision for planning for the future, further endearing itself to its consumers, who have come to expect remarkable things from the company. Persona-Check.
And so, January 22nd stands out as a significant date for two Iconic Brands albeit nearly 50 years apart: the launch of the first scheduled 747 flight, recalling Pan Am, the Airline that transformed the way the world travels, and the launch of Amazon Go, Amazon’s next step in meeting and exceeding its customers’ needs and expectations, and impacting the retail industry into the foreseeable future. The Airlines are much better positioned for success than Pan Am, but the true measure will be whether they can develop the strong Consumer / Brand Relationship with its customers the way Amazon does on an ongoing basis.
Trip Barrett is head of Travel Marketing Content and chairs the Portada’s Travel Marketing Board, including top-notch executives from the Travel Industry like Jennifer Adams [MD-Integrated Marketing, American Airlines], Ricardo Casco [Global Sales & Integrated Marketing, Avis Budget Group], Pablo Chiozza [SVP USA, Canada & Caribbean, Latam Airlines], Alan Duggan [Regional VP Business Development, The Americas, Meliá Hotels], Roberto Muñoz [VP, Strategic Partnerships & Loyalty, Aeromexico], José Luis Pérez [Head, Marketing Performance, Volaris] , Luis Perillo [VP, Sales & Marketing, Caribbean & Latin America, Hilton], Ángel de la Tijera [Top Accounts Commercial Head Mexico & Latin America, American Express], and Alvaro Valeriani [Regional Vice President Sales & Marketing Latin America & Caribbean, Hyatt Hotels]. This board, as well as the other Portada councils, will meet at PORTADA MIAMI, on 18-19 April. Click here to save your spot!
What: Grocery retailers are identifying opportunities in the Hispanic market, and many of them are merging with or acquiring other store chains in order to better benefit from that opportunity. Why it matters: Not only are Hispanic and ethnic supermarkets a growth sector, but multicultural consumers also substantially influencing grocery and cuisine trends of the overall U.S. population.
For quite a few years now, multicultural consumers have influenced grocery and cuisine trends in America. Things like pizza, sushi, and tacos are such a big part of food culture that no one hardly ever questions their place within American culture, but as populations continue to evolve, manufacturers and marketers need to study the details of multicultural Americans’ buying behavior that are inspiring new trends.
Hispanic Aisles, Who Cares for Them More?
According to a survey conducted by Nielsen in 2016, 32% Americans would pay more for a brand that understands multicultural needs, while nearly half would shop more at a retailer with more multicultural products. However, it is evident that there are differences according to demographic and age segments. For example, it is important to know that 61% of U.S. Hispanic Millennials shopped at a Hispanic supermarket in 2015, and 51% of Hispanic Millennials are drawn to Hispanic grocers because they have a panadería or tortilla shop. 40% of American Millennials are multicultural, and more than half of this group are Latinos.
Gender should also be considered, as Latinas have increasingly become the breadwinners and purchase decision-makers in their households. As Nielsen found in 2017, 68% of Latinas prefer to buy brands they trust, and 79% say they cook meals frequently to retain a connection to their native culture. However, marketers need to focus not only on Hispanic consumers, but they also have to look at how they influence the general market in order to really understand growth opportunities for their products. When Nielsen measured Intercultural Affinity (ICA) for Hispanic-oriented products, it found that ambiculturals in general spend more on beans, tortillas, and refried beans than monoculturals. Then, retailers are not only addressing Hispanics, but also consumers from other cultures capable of boosting the growth of culturally Hispanic products.
What’s in Store for 2018
According to a report issued by “The Why? Behind the Buy US Hispanic Shopper Studies” in December, 2017, the purchasing power of the estimated 57 million Hispanics in the US has soared to never-before-seen levels. They have become one of the most lucrative ethnic groups in the retail grocery market, and that is directly related to the growth of the Hispanic community.
According to “The Why?”, 79% of Hispanics go grocery shopping with family members and 60% bring their children, which drives them to spend more. Also, they enjoy shopping more than non-Hispanics, and they like experimenting with new flavors, even more so if they have an opportunity to make healthy choices.
“The Why? Behind The Buy™ U.S. Hispanic Shopper Studies have continued to show that Hispanic shoppers bring family members to the grocery store, and often, their companions are their children,” said Marianne Quinlan-Sacksteder, Director of Insights, Acosta. “In fact, Hispanic children are more likely to influence grocery purchase decisions across many categories compared to children in total U.S. shopper households, creating opportunities for brands and retailers to speak to both parents and their kids.”
Hispanic shoppers also understand that digital marketing enhances their visit to the grocery store and “makes their lives easier”. 6 out of every 10 Hispanic shoppers enjoy digital technologies such as digital flyers, mobile coupons, loyalty programs, and shopping apps.
What are Grocery Retailers Doing to Benefit From This Opportunity?
In short, they’re joining strengths. In July, 2017, KKR and Victory Park Capital Advisors took proprietary interests in two grocery chains and merged them under one management unit. With this move, San Jose-based Mi Pueblo supermarkets and Cardenas Markets of Southern California became one of the largest chains of Hispanic-oriented supermarkets in the US.
“Cardenas Markets and Mi Pueblo are committed to the communities they serve, and through this integration, they will be able to better deliver for those communities,” said KKR spokesman Vishal Patel. “With a vision of becoming the leading Hispanic grocer in the country, Cardenas Markets LLC will continue to prioritize their loyal customers through the company’s continued growth, while creating jobs and offering rewarding career paths for employees along the way.”
Minneapolis-based wholesaler Supervalu has been trusting the success of ethnic-oriented independent stores. The company noticed the Hispanic expertise of Unified Grocers and Associated Grocers of Florida and acquired both of them.
“We’re obviously investing significantly in the Hispanic market and in people’s desires to have different types of food and authentic food,” said Mark Gross, president and CEO, Supervalu. “This is a core strength of our customers, and I see us building on that going forward.”
With the acquisition of Unified and AG of Florida, Supervalu intends to create a nationwide framework of distribution of ethnic and specialty foods.
“Unified’s retailers operate some of the industry’s most exciting and responsive Hispanic and other ethnic formats,” Gross said at the time of the Unified acquisition.
What: With its purchase of Whole Foods for US $13.7 billion, Amazon strengthens its position in the race for the retail industry, and opens the door to direct contact with the Hispanic community. Why It Matters: The U.S. supermarket sector is a business that moves about US $800 billion in sales annually, according to Bloomberg data.
Amazon’s acquisition of Whole Foods for $13.7 billion is the largest acquisition to date by the Jeff Bezos-led company, and the most important merger in the retail industry. With this deal, Amazon now has 450 stores in major cities in the United States, Canada, and the United Kingdom. What are the implications for marketing and multicultural/Hispanic marketing in particular?
“Consumers are increasingly demanding products and services in near real time or “on-demand,” and a physical presence in major cities gives Amazon an infrastructure to support consumers in near real time. This is especially salient when it comes to the grocery category,” Lee Vann, Chief Strategy Officer of Captura Group, told Portada.
The two companies will operate separately and the supermarket chain will retain its brand. Amazon founder Jeff Bezos points out that Whole Foods is “loved” by its customers for the quality of its products, and will maintain its corporate offices in Austin, Texas, for now.
“The acquisition, giving Amazon the in-store presence previously lacked at scale, represents a level of competition that brick and mortar retailers had previously been able to avoid. While this entrance has an immediate effect on grocery, it puts other industries on notice,” said Sean Cheyney, Vice-President, North American Business Development at Triad Retail Media.
The acquisition gives Amazon the in-store presence it previously lacked. This represents a level of competition that other retailers had previously been able to avoid.
Both Amazon and Whole Foods stand to gain from this transaction, according to the industry expert. The e-commerce giant is in the habit of being an industry disruptor. “Now is the time that grocers and retailers across industries need to be competitive in their markets with their digital advertising and in alignment with their suppliers.”
The announcement undoubtedly rocked the supermarket industry, as the acquisition of Whole Foods changes the rules of food distribution. This was reflected in the stock market, with some companies in the food industry seeing their shares fall immediately. Kroger’s shares fell 15%, while Target lost 11% at the start of the trading session, and Costco 7%.
Now is the time that grocers and retailers across industries need to be competitive in their markets with their digital advertising and in alignment with their suppliers.
The deal puts the U.S. market in an interesting situation, just a few months away from the arrival of German supermarkets Lidl, and its rival Aldi, owner of Trader Joe’s supermarkets. With their entry, the German companies will strengthen their presence in a market with high growth potential.
On the other hand, while all this was happening, Walmart also announced on Friday its purchase of online fashion store Bonobos for $310 million. With this move, the retail giant seeks to compete directly with Amazon in the fashion sector.
Walmart also announced on Friday its purchase of online fashion store Bonobos for $310 million.
Walmart has demonstrated an aggressive strategy to gain ground in the e-commerce sector, becoming a very strong competitor. Last year, the company acquired jet.com for $3 billion.
The acquisition appears to have been a smart move, as Walmart sales grew 63% during the first quarter of 2017 compared to the same period last year.
An approach to US Hispanics
“This purchase is something that the industry had been waiting for many years to give it seriousness, organize its data, and better align the industry’s digital efforts. With these metrics, retailers are able to give consumers a better experience,” added Cheyney.
Analysts agree that Amazon will put the retail industry under a lot of pressure, as it first did with bookstores and electronics stores.
On the other hand, “remember that Amazon rolled out a Spanish language version of Amazon.com. As they seek to win with the on-demand consumer, they know they must win with US Hispanics, and now they have a front end to service those who speak Spanish and a physical presence in major cities to deliver,” said Vann.
Remember that Amazon rolled out a Spanish-language version of Amazon.com. As they seek to win with the on-demand consumer, they know they must win with US Hispanics, and now they have a front end to service those who speak Spanish and a physical presence in major cities to deliver.
In addition, it has the necessary cash to invest and be aggressive, with the support of its current suppliers and those it keeps adding. Likewise, it will have the strength to continue offering its Amazon Fresh grocery delivery service.
It will also put its Amazon Go model to the test. The company opened its first automated food store in downtown Seattle, where payment is made through an Amazon account and a cell phone.
The idea has been described as “brilliant” by analysts, who see it as a “natural evolution.”
“Retailers across all industries should be watching closely to see how Amazon uses this acquisition and its effect on Amazon’s market share within the grocery sector. Given Amazon’s history, it will take the model developed for grocery, and then replicate it across other retail verticals. While watching closely, retailers can take steps to mitigate Amazon, blocking and tackling along the way. This includes getting serious about customer experience and advertising models that allow the retailer to earn its fair share of advertising dollars that its suppliers are currently spending to sell products on Amazon,” added Cheyney.
While watching closely, retailers can take steps to mitigate Amazon, blocking and tackling along the way. This includes getting serious about customer experience and advertising models.
What: North American company TRIAD Retail Media is beginning its operations in Mexico. The company that recently was acquired by Xaxis (WPP) will focus on Mexico in 2017 and expand to other Latin American countries in 2018 (see below interview with TRIAD Retail Media general manager Eduardo Picazo). Why it matters: Mexico has a strong potential as it relates to the development of e-commerce, particularly in retail sector.
North American company TRIAD Retail Media is beginning its operations in Mexico.TRIAD’s operations in Mexico respond to the important growth shown by ecommerce locally, specifically in Retail, and therefore, in digital advertising.
TRIAD is a company that develops, manages and operates digital media programs that enable the world’s leading brands to engage consumers on the largest digital retail platforms to turn shoppers into buyers.
>According to e-Marketer:
Estimated e-Commerce sales in 2017 in retail in Mexico: US$9 billion dollars (2% of total retail sales in the country). Expected growth in 2019 of US$13 billion dollars.
Estimated digital advertising investment in Mexico 2017: US$1.6 billion dollars (20% increase).
In addition, this week (May 29-June 2nd), Hot Sale takes place in Mexico, an online campaign with discounts in retail (more than 200 companies). According to AMVO (Mexican Association of Online Sales), it is expected that Mexicans spend around US$270 dlls per person these days, to sum sales of approximately US$1.2 billion dollars.
Estimated retail e-Commerce sales in Mexico in 2017 are around US$9 billion dollars
Eduardo Picazo joined Triad Retail Media as Managing Director to help grow the company’s international expansion into Mexico and specific Latin America markets. Eduardo will oversee the successful implementation of digital retail media campaigns in those markets and manage Triad’s day-to-day relationships with key retailers in the market.
Portada: How is Triad working with Xaxis as the company we understand was bought by Xaxis?
E.P: “In November 2016, Triad Retail Media joined the WPP family of companies as part of an acquisition by Xaxis. We’re excited about the opportunities ahead of us and the access to expanded resources, capability and technology that we will gain. With the global resources of WPP, access to GroupM and direct ties to Xaxis, Triad is poised to grow even faster.“
Portada: E-commerce is at a later stage in LatAm versus U.S. What experiences from the U.S. market can Triad apply to LatAm? E.P: “At Triad, we are in business to connect brands, retailers and shoppers in a meaningful way to enrich the shopping experience. We know that a positive and engaging shopping experience is key to driving e-commerce sales globally. We do this through meaningful creative and content experiences, which help convert e-commerce shoppers into buyers, not only in the digital space, but also in-store.”
Portada: In what other Latin American countries is Triad going to open offices and when?
E.P: “We are focusing our efforts on Mexico this year and look forward to growing throughout Latin America in the future.”