New Future for In-Store Marketing’s $500Bn Spend?

Trade Promotion - the King is dead; long live the King!?

Or so some would have you believe.

Trade Promotion or In-Store Marketing - The King of Prising Open the Retailers’ Iron Grip on Shelf Space - is perhaps still well and truly alive and kickin’; even in the depths of the deepest recession we’ve seen in decades. But, what if Joe Mandese’s prediction had been right in his article ‘Fast Forward: Is Mass Marketing History About To Repeat Itself?’, just over two years and a bold, ‘booming’ economy ago? Who knows what would be happening now in trade spending?

Joe had a point in his favor though. I guess there’s more than a grain of truth in the saying that what goes around, comes around, and he could see more change coming. His recollection of the impact of television on the advertising of post second world war days, the widedspread availability of product sales data and it’s impact on trade promotion in the eighties, the increase in the retailers’ influence on consumer marketing because of the insight gained from massive loyalty data sets and now, the unstoppable growth of advertising on the internet - it all looked to him like marketing history repeating itself.

We can all see that advertising, in the ‘traditional’ sense, is today under enormous pressure. Print is in slow decline and the media is fragmenting into a chaos of ‘noise’. The plethora of channels for marketing spend to dissipate into is increasing by the day - just think of the number of web sites carrying paid advertising, let alone the increase in cable, digital TV and satellite radio channels. Couple this with the state of the economy, the drive towards every day low prices (value) and the so-called steady rise of the Private Label, it’s no wonder there are questions about trade marketing spend and it’s current effectiveness.

The Decline of In-Store Marketing Spend?

Bob Houk, in his very able response, criticises Joe’s view, but I still think Joe was genuinely divining a river of change; just not a raging torrent. Bob thinks that, as the influence and market share of the internet grows, more traditional trade promotion spending will decline. I am not so sure. There are just as many opportunities for new forms of ’slotting fees’ etc., as there ever was - in Virtual Stores!

One thing is for sure. In-Store Marketing ‘investment’ will evolve - just as it is changing now under the microscope of loyalty data analytics. The coming of Virtual shopping worlds will most assuredly change the landscape too - especially if Brand Manufacturers create alternative business channels which might undermine the dominance of the real world retailers. I won’t hold my breath, just yet.

All of this makes a rivetting backdrop to the recent interview recording Bob’s current views on the subject. In it, he makes the important point that In-Store Marketing spend will move from a ‘cost-based’ model to a ‘value based’ one. He’s right on the button there. Internet shopping offers both an educational and a selling opportunity - for both parties! He makes the point that ‘Virtual End Caps’ may still have to generate a ‘benefit’ to the Virtual Retailer though. Hmmm, it will be fascinating to see how ‘old thinking’ unravels and new models take its place.

Tagged as: In-Store Marketing, Shopper Marketing, Trade Marketing, Trade Promotion, Virtual Stores