Consumers are becoming more price savvy but it’s brand loyalty that must prevail: Price promotions and discounts attract but they don’t allow for customer loyalty. Deals may instantly attract customers but without loyalty they will flock elsewhere as soon as they see another deal, which is bad for customer retention. Brands that want to succeed in the long term need to work to wean off this model and implement price promotion exit strategies. The focus instead needs to shift to brand building and customer experience, something Grant Baillie, Head of CRM and Customer Marketing at Boots, acknowledged the retail brand is continuing to do. Antonio Silano, Interim Head of CRM at Screwfix, mentioned that, rather than heavily focusing on discounts and offers, Screwfix introduces loyalty discounts depending on orders, products and consumption in basket as this produces higher margins and greater loyalty.
Effectiveness metrics: The report categorises effectiveness metrics into business effects, brand effects, direct response effects and campaign effects, all of which can be measured independently. Retail had its best year for effectiveness in 2022 with response effects being measured as the highest of the metrics. But with a push towards brand, this metric has also grown in 2023 with Ian Gibbs, Insight and Planning Director at the DMA, highlighting that it is vital that the right balance between brand and response activity is met for successful marketing. Data reveals that ultimately loyalty campaigns amplify response effects, meaning that it is essential for brands to focus on both brand and response activity. Whilst ad placement is key in targeting audiences, with data highlighting that Ad mail, radio and email along with TV and print are key response drivers for retail, it is crucial that the creative sparks interest in the target consumer. Highly creative campaigns within the retail sector are responsible for driving five times the number of positive brand effects.
2024 – the key trends to anticipate as we go into the new year: The panellists gave their take on some of the key trends for 2024, AI tech personalisation will enable marketing to be more tailored and bespoke for loyal customer bases as well as being a tool to attract new customers. The panel referred tobehaviour as “showing up for more customers” rewarding loyalty which will ultimately have a greater impact on marketing effectiveness. By contrast, belief in bricks and mortar was another key trend, as customers still value in store experiences and experiential activations. There’s clearly an undeniable shift towards online but from a brand perspective, in store experience is still important for many, especially for notable household names such as Boots which rely on a varied demographic of shoppers.
Grant Baille at Boots ended the morning on a valuable quote, particularly in the retail “offers and discounts” cycle so many brands are fighting to move away from, saying, – “Reward people for behaviour you want to see – lifetime value never lies”.