6 reasons why digital trade marketing is so complex [Anzeige]

Companies that have not integrated the diverse possibilities of digital marketing into their strategy? Unthinkable in 2023. But the German retail trade is still struggling with the use of digital possibilities and an effective media mix. Why is that? Nicole Bucher explains: CMO the Offerista Group.

Trade marketing in Germany is faced with special challenges that companies in other sectors seem to have solved years ago. But what makes the world of (digital) commerce so complex? According to Nicole Bucher, CMO of Offerista Groupmultiple reasons.

Each platform must be contacted and managed individually

“The marketing world that is relevant for retailers is very rugged,” says Bucher. In her opinion, this is partly due to the many different platforms available to those responsible for retail marketing and the pressure on marketing departments to use all of these platforms: various social media channels, Google Ads, special platforms for retailers such as Germany Card, Bring! and Co. – all these platforms are significantly important for retailers.

Different price models, no programmatic connection and inconsistent formats for displaying local offers make stringent cross-channel optimization almost impossible. Because each platform used must currently be contacted and looked after individually. In terms of resources, this is not manageable for many trading companies.

Personalized playout is not (yet) possible across the board

Every one of us knows it: personalized advertising has long been part of our everyday life, the items we need just seem to be just waiting to be put in the shopping cart at every nook and corner. “The standard formats of the IAB (International Advertising Bureau), which are now established across platforms, such as medium rectangle, billboards or skyscraper, are only of limited use for retail companies,” says Nicole Bucher. “The digital world cannot (yet) be imagined without the print brochure, which has encouraged people to browse for decades.”

The current solution: the digital flyer. However, due to the static nature of the PDF format, a personalized display is not possible here either. Unfortunately, the flyer in the digital world is just as immobile as its print counterpart.

But in recent years there have been at least a few formats that fit much better into the digital environment and promise better playout. Product feed-based formats, ads with special offers or moving images are becoming increasingly important.

dependence on time and space

The factors of time and space add to the complexity, especially in retail. Nicole Bucher: “In local trade marketing, advertising material changes particularly frequently. In food retail in particular, it is common practice to communicate new offers twice a week, which entails additional complexity in the setup and ongoing campaign optimization.”

The location also plays a decisive role, because local offers require specific geo-targeting in the immediate vicinity of the branches in order not to waste money unnecessarily. For retailers, this means higher payout costs than national distribution.

“It becomes particularly complex when different offers or promotions are assigned to each branch,” says Nicole Bucher. Short-term out-of-stock or delivery difficulties for certain product groups make it even more difficult to plan communication.

Structured data only possible with suitable interfaces

As mentioned above, personalization is one of the biggest advantages that digital marketing offers over print. Unfortunately, without structured data that is available for evaluation, this will not work. “That’s why people often resort to the “highlight” offer of the week, which is advertised across the board in the vicinity of the branches.” According to Bucher, however, that cannot be the ultimate goal.

In order to implement dynamic content delivery that goes beyond the highlight offers, the right technical interfaces are required on the retailer side. Here, however, retail is still lagging behind in the digital transformation.

Measurability of measures still too isolated

In addition to the lack of a structured database, traders find it difficult to measure their marketing measures. “One can only dream of 1:1 attribution, as is common in e-commerce,” says Nicole Bucher. “Due to the O2O media disruption, it is difficult to measure the advertising impact of individual channels and to optimize the media mix accordingly.”

The solution for Bucher is as follows: other types of attribution measurement, such as measurement based on sales receipts, must be used. This allows a 1:1 assignment of the advertising effect by channel and thus shows the effects of a campaign on the total sales of individual branches. “Currently, however, this type of measurement is very rarely used in retail.”

Retail KPIs – what really matters?

Marketing managers from all industries know it: In order to measure the success of a campaign and to make further optimizations, previously defined KPIs are required. But this is precisely where retail is still struggling. Instead of relying on parameters established in digital marketing such as CPM, CPC and Co., retailers are mostly concerned with interaction with the offers – similar to the reading rate in the print brochure.

Nicole Bucher sees the solution in optimization and billing commitments. “This metric continues to grow in importance and includes more and more formats. For example, how do you define engagement with a 15-second video? Here it is important to define for yourself what counts as interaction.”

Conclusion

Digital marketing is a must-have for retail companies, but the complexity should not be underestimated. The German retail trade is therefore still struggling with the use of digital possibilities and an effective media mix.

In particular, the resources required and the associated costs pose major challenges for trade marketing. But large retailers such as OBI and REWE are showing the way and are already relying on more and more digital solutions and their advantages.

The successful planning and implementation of digital cross-channel campaigns to maximize local ROI must therefore now be the focus for retailers. This is the only way to master the challenges and reduce the complexity.

Find out more here