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online retail marketing strategy

Online Retail marketing strategy for an increasingly personalized customer experience

A change of perspective marks the inexorable return of the consumer to the center of business decisions. This has been a gradual process that began after the Second World War in an already mature consumer society (especially in America) and is perfected more each day in new scenarios created by the digital revolution.

This customer-centric approach is reflected in a model that has adapted to technological, economic, and cultural changes and is still widely used today: the marketing mix, which increasingly testifies to the subordination of brand awareness to the power of the consumer. 

In this post we will look at how the elements of the marketing mix are interpreted within non-traditional strategies, with a focus on those – personalization first of all – that are making the retail customer experience richer and more engaging.

 

The evolution of the marketing mix: towards personalization

“The marketing mix is the set of controllable variables that the firm can use to influence the buyer’s response.” (Philip Kotler, Marketing Management)

The marketing mix, in its original version, is conceived as a company-centric, supply-side paradigm (organized around the production and primarily to support the product or service offering), that is part of the famous 4Ps (product, price, place and promotion) as key tools for marketers. Since the 70s, scholars and professionals have questioned some of the assumptions of the model, adding more “Ps” to the existing four or replacing them with as many “Cs.” 

 

Reasons for a transformation

The first to describe marketing executive as a “mixer of ingredients” is James Culliton:

“A decision-maker, an artist – a mixer of ingredients, who sometimes follows a recipe prepared by others, who sometimes makes his own recipe, sometimes adapts a recipe to the ingredients available, and sometimes experiences or invents ingredients that no one else has tried” (James Culliton, 1948).

Neil H. Borden (Professor of Marketing and Advertising at Harvard Business School) coined the expression “marketing mix” by using it continuously in his university lectures and including it in an article published in 1964. Borden’s marketing mix includes 12 elements: product planning, price, branding, distribution channels, personal selling, advertising, promotions, packaging, display, service, physical handling, fact-finding and analysis. 

However, McCarthy introduced another version, which became standard and has been taught and studied all over the world, crystallizing the marketing mix into 4 memorable P’s (1960): product, price, place, and promotion. 

Over time, however, these four Ps prove to be inadequate to describe an increasingly complex reality. The most cited update on the four P’s is the 7P’s, which expands the definition to include: physical evidence, people, and process. 

 

From brand to consumer

In a 1990 article, Four P’s Passe; C-words Take Over, Bob Lauterborn goes even further and introduces his 4 C’s (customer, cost, convenience, communication), which replace the “Ps” of the original matrix. 

  • Here, the product gives way to the consumer, who becomes the real object for investigation, with his needs and unexpressed desires. 
  • Lauterborn replaces price with cost, highlighting the inadequacy of “price” category in reflecting the complexity of the equation with which the consumer makes his purchasing decisions. 
  • Place, in the era of the dematerialization of the sales experience, inevitably becomes less relevant (although, as we will see, this must be reviewed in the light of more recent events which restore importance to the physical store). Instead, it refers to convenience, which reconfigures the processes of communication, payment and delivery, capturing the specifics of contemporary lifestyles and consumption, made possible by digital technologies.
  • Finally, promotion is replaced by communication, which provides a more accurate account of the nature of the relationship between the company and its target audience.

The consumer is, therefore, the focal point of the marketing mix, the basis on which all sales activities are organized. The perceptions of the consumer, duly recorded and categorized, determine the value of the product, then the company’s objective, which is to maximize profits, must be adapted to achieve consumer satisfaction and loyalty. 

 

The Marketing Mix and the Customer Journey

The traditional marketing mix takes another form in a market where the customer has the “power” to make instant decisions and can count on a number of channels designed precisely to facilitate those decision-making processes, advancing in a single direction, marked by a list of distinct and successive elements.

One solution, therefore, seems to be to focus on the acquisition of an ever-increasing knowledge of human behaviour to be analyzed with the aim of identifying the trends that the behavior generates. 

The macroscopic changes that have taken place in the marketing mix following the advent of the digital era find a correspondence in another tool widely used by professionals: the marketing funnel, which has evolved into the circular form of the customer journey and specified in the three steps of the buyer’s journey (awareness, consideration, decision).

During the journey, a buyer persona proceeds, with a progressive but not linear pace, from the discovery of a need to the identification of the product or service that he will decide to buy. The four  C’s of the Lauterborn model influence and support customer decisions during the last stage of the purchasing process. Not only that, but they are embodied in the visible and tangible (physical or virtual) forms of the store. 

Packaging, product size, signage, interactions with sellers, even shelf positions are all variables that profoundly influence the “last” moments in a consumer’s journey. Likewise, an e-commerce site must have an immediate, comprehensible architecture and visuals in which the user’s objectives are constantly “at hand.” An unclear or even repelling UX offering a complex or, worse, a boring browsing experience, can lead to shopping cart abandonment and high bounce rates.

The post-purchase phase prolongs the trip even after the purchase, representing an increasingly important moment on the business side, not only in terms of targeting (it allows you to get valuable information about acquired customers), but also in terms of practices geared toward establishing loyalty and ideally turning customers themselves into advocates. Customers are called upon to “share” their purchases on social networks,  whether it’s a post on a blog, on Twitter, on their own Facebook page or on the brand’s page. The more authentic the story, the more it contributes to a global narrative of the brand perceived as authentic. 

 

Retail in the consumer’s journey

In the retail customer journey, several paths are possible. It could be an advertisement on television or in the newspaper, a video on YouTube, or a post on Facebook that could help you learn more about that specific brand. It can also happen that a potential customer goes through all the steps of the evaluation phase, looks carefully at advertisements, compares promotions on different channels, jumps from one type of media to another, consults friends, reads countless online reviews but then decides that he prefers to wait (perhaps he comes to the conclusion that that product or service will not meet the need).

These examples suggest that we are now in a ROPO context (research online, purchase offline). Recent statistics show that almost 9 out of 10 consumers consult online sources before going to the store and, among these, 58% use their smartphone in the store to search for information about the specific product or service they intend to buy. 

To be able to offer consumers in-store experiences that are engaging, useful, and personal (such as those offered online), it is necessary to combine all available touchpoints to create a relevant path that can go in both directions: the ROPO experience is called reverse-showrooming or webrooming when consumers look at a product in-store and then search the Internet for the best offer.

An example of a strategic solution that reverses the ROPO logic could be that of a physical retailer that directs customers to an app where they can scan the items on the shelves and receive real-time offers based on points on the store loyalty card, for example.

In any case, we are faced with two-way communication, typical of non-traditional marketing. 

Within an integrated marketing plan that is designed to enhance the moment of sale to the final consumer, the practice now seems to be about combining traditional tools with non-traditional tools that can provide company content (institutional and product) on multiple formats and channels, using conversational methods, which allows the brand to be responsive in receiving and metabolizing the feedback of their target audience.

A further clarification: non-traditional marketing strategies differ, according to adweek.com, based on the phase (such as the consideration or the decision phase). This includes the content published on the web or to those implemented directly in-store, from recommendations and towards personalization. Online personalization is about content, while in-store personalization would concern the customer’s journey. It would no longer be a matter, therefore, of writing and exchanging product advice, but rather of creating a more relevant experience for customers, both within the store environment and later, in their daily lives.

 

Phygital: the new frontier of Retail marketing

There is an expression that describes this mix of digital practices and physical context. Phygital is the attempt to recompose the most significant aspects of a rich and “complete” experience, in the material space of the store.

Phygital encompasses an awareness that the consumer’s purchasing process is fluid and for this reason, it can be linked to online or offline elements. This is why 22% of people who intend to buy a product or service, and perform a mobile search, prefer to conclude their purchase in a brick-and-mortar retailer. Interpersonal interactions continue to be a critical element, implying that the physical and emotional component of purchases cannot be neglected.

Phygital means developing, organizing, and contextualizing the elements of the marketing mix according to the specific situation, online and offline, and to the needs of the individual retailer. The sale to the final consumer can be designed for the digital experience, such as immediacy, immersive resources, and speed, but also for the in-store experience, such as direct and simultaneous communication and the chance to try the product in 3D.

Retail marketing is trying to find ad hoc solutions, drawing creativity and skills from unconventional marketing (for example using techniques borrowed from the world of Guerrilla marketing) with which to provide personalization (one which allows New Balance customers to use an in-store kiosk to design their own shoes by choosing from a wide palette of colors and styles).

Doxee, with its Doxee Pvideo®, has long chosen to take this direction to meet the needs of increasingly connected users.

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