Industry

Supply Chain Issues Foster Retail Marketing Evolution

February 28, 2022

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The relationships between brands and retailers are on the cusp of a fundamental and needed shift.

The relationships between brands and retailers are on the cusp of a fundamental and needed shift. There's always been a strict reliance on these two disconnected entities to provide necessary goods and services to consumers -- leaving shoppers wholly dependent on specific shops to secure needed items. We saw the detriment this caused various times throughout the pandemic, with many items vanishing from shelves across the country.

 Additionally, with the advent of the internet and mobile commerce, transaction fluidity increased so much that the notion of ‘retailer and brand loyalty’ has become more transient than ever before. When this is paired with shoppers' inability to secure needed or desired items, it only gets worse. Interestingly, a report from McKinsey found 75% of American shoppers changed their brand preference based on the ongoing instability in the world. It’s no secret that winning and retaining consumers is becoming increasingly challenging for brands -- however, there are new opportunities emerging that can rekindle loyalty, and even form unseen relationships with consumers. These opportunities are more timely than ever, particularly as we enter our third year of Covid, and journey through a critical period of global supply chain issues. 

 Here’s a look at key considerations brands and marketers need to keep in mind as we move into the new year.

 Digital Transformation Leads to Retailer Agnostic Approaches 

Covid forced a mass digital transformation for many brands, across industries. The ongoing supply chain issues are proving another wave of forced evolution, particularly as brands struggle to deliver desired goods via traditional sales channels.

 This reality puts new pressure on brands to identify strategies that maintain consumer attention, and also create fresh tactics for providing various goods or services to them. We’re seeing marketers double-down on digital marketing campaigns that showcase the effort brands are putting in to provide new inventory to consumers. For example, Kellogg's spoke about the lengths they underwent to evolve their supply chain and resource partners, when faced with a massive surge in demand amid the pandemic. Not only did they mention the innovations made around automation, but also how their staff pulled together to ensure consumer demands were met as quickly and seamlessly as possible. 

 A new industry perspective is coming to the surface -- that brands need to take a more retailer agnostic approach. I’m not saying brands should discredit and avoid optimising retailer partnerships or agreements, but they should look at the state of consumerism through the lens of modernity. Consumers have been conditioned to expect streamlined and frictionless engagements across most aspects of life, especially when shopping. With this in mind, brands and brand marketers must shift their digital marketing efforts to further simplify engagements. 

For example, many CPG and food brands promote recipes online, offering inspiring ways to use their products. These recipes can be commercialised through shoppable media, with brands providing a seamless path for people to add all the recipe items directly to a shopping cart. Given our lingering supply chain issues for various products, the brand can help consumers find the nearest location to purchase the needed items, or offer guidance on the next best substitute from their product catalog.

 Strategies like this help display how brands can take an active role in helping customers when they’re looking to complete shopping efficiently. 

 There are also more ways to provide benefits to consumers, while helping instil recurring brand touchpoints. 

Living in a Subscription Service World 

One thing that’s become apparent is the widespread adoption and consumer appreciation for subscription-based offerings. A recent report from eMarketer found that subscription ecommerce grew by 41.0% through 2020 and that 3.0% of US retail ecommerce sales will come from subscriptions in 2021, equating to $27.67 billion -- up more than $10 billion from two years ago. Despite much of the world’s return to normalcy, it’s forecasted that the increase in usage, and overall reliance, on subscription services will remain – especially as we grapple with new Covid variants and the looming shadow of city or town shutdowns. 

Brand marketers should take advantage of this, and realise that the subscription business model dovetails naturally with their core functionality. It also provides value that the traditional supply chain cannot. Subscriptions provide a direct relationship with consumers, generating valuable first-party data, and supports brand loyalty, improves demand forecasting, and offers opportunities for cross-selling other products in the CPG’s portfolio. It’s why PepsiCo launched PantryShop.com and Snacks.com; and Heinz UK launched ‘Heinz to Home’ in 2020 and why P&G announced it would grow its DTC presence after its ecommerce sales jumped 50 percent in Q3 2020.

The reverberating trend here is the need for brands and brand marketers to implement a strategy that facilitates a continued and frictionless path-to-purchase for consumers. In doing this, brands will bolster newfound loyalty and engagement in desired audiences. 

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