With digital retailers continually proving to be an existential threat to the success of brick and mortar retailers, consumer product brands have faced a simple choice: join or die. But, according to a report by the CMO Council released on Monday, seeing which way the wind is blowing in the dawn of the digital retail age is just one of a number of hurdles marketers have to face.
Fifty-six percent of respondents in the CMO Council’s report titled “Ingenuity in the Global eCommerce Community” said that eCommerce is revolutionizing and reinventing the global retail marketplace and 43 percent say it challenges brands to evolve across all channels and markets. While views on eCommerce were positive overall, 14 percent said that it complicates relationships with traditional retail partners.
“When [marketers] realized that retail was reinventing itself, it was already too late,” said Liz Miller, senior vice president of marketing for the CMO Council, to AListDaily. “They couldn’t keep up with the pace of change that the Amazons and the Alibabas and the eBays of the world were precipitating. When you’re a day late to the party, it’s a little hard to catch up, and the only thing you can do is try to reinvent yourself on the fly or close.”
For many companies, the latter was the only option. Over 7,000 retail stores shuttered in 2017, and according to the report, 2018 is on track to beat that number.
“Any time CNN isn’t running a story about something happening in the White House, there’s a headline about a retailer shuttering stores,” Miller added.
However, according to Miller, the media doomsaying is largely overblown. Retail sales have grown 4.2 percent year over year, which, though not massive, is still positive growth. Though e-commerce giants are growing, they only make up 10 percent of total retail spending.
“Is every store going to close tomorrow?” Miller asked. “No! ECommerce is ten percent of the global shopping revenue base. But it used to be six. It’s growing at a much faster pace than anyone anticipated.”
According to Miller, the real sweeping change isn’t so much in the bottom line for retail brands, but in the minds of the consumer.
“These massive e-commerce communities are actively changing the baseline expectations of our consumers. And they’re forcing marketers and brands to reassess how they go to market, and the content that they’re using to engage their customers,” Miller stated. “How do we look at what these massive communities […] are doing that is successful, and how do we as brands, not just tap into that—it’s not about an ad spot—but transform to be able to engage with our customers across these communities in a way that fits their expectations?”
According to their findings, marketers have had to scrap the idea of a linear path-to-purchase model and reassess not only what content they put out, but fundamentally how they make strategic decisions. Brands no longer just have to provide products to choose from, but help guide consumers through the discovery process.
Survey participants were asked to choose the top three ways they plan to differentiate their brands in the digital retail marketplace. The most popular response, at 42 percent, was to produce richer, more visually engaging content. Only nine percent named chatbots or other AI technology as their go-to solution.
“What’s happening with these e-commerce communities is that every customer, every user, every member of the community is not being invited to shop, they’re being invited to explore. When you’re invited to explore, the brand responsibility is to be there with things that meet that need to explore.”
But brands shouldn’t lose track of the silver lining to the e-commerce clouds. According to the CMO Council, the new strategies brands have adopted to survive have given them access to swathes of new consumers whom they may never have reached before. For these new consumers, the shopping experience is an efficient one.
“It’s brands who advertise at really large malls who know that people are there, but they don’t necessarily know that they’re there to shop,” Miller stated. “People who go onto Amazon, people who go onto eBay, they’re there to shop. They’re there to find something new that they want to buy.”
For the CMO Council, reaching these consumers as they’re shopping is only small potatoes—getting them to consider a brand beforehand, or even seek it out, is the future of doing business. But for some marketers, fears over online sales eating into brick-and-mortar profits is keeping them from fully adapting.
“What could hold marketers back from success is they’re still super worried about cross-channel cannibalization. But the reality is, these communities are going to continue to grow,” Miller stated. “That expectation of diversity of product will spill over to a shopper’s expectation in a traditional retail environment. If we can’t see that the expectation of the shopper is being set by folks like the eBays, the Amazons, the Alibabas of the world, we’re in for a really bumpy reinvention ride.”
To assemble its report, the CMO Council surveyed over 200 marketers primarily in the areas of consumer packaged goods and durables as well as retail financial services, of whom 35 percent characterized themselves as either “chief marketing officer” or “head of marketing.” Of the companies the survey respondents represented, 31 percent reported revenues of over $1 billion last year.
“People are going to shop online,” Miller summed up. “We can all stop worrying about if it’s going to happen.”
Editor’s Note: This article has been updated with details from the report that were not available before publishing time.