Trade Digital Marketing is fundamentally the technological use of the different digital platforms and tools. These allow us to adequately reach and know both the target shoppers and the different customers and channels, and this helps us speed up the Selling Out of our products in online and physical stores, through the appropriate omnichannel approach.
Uffff how many things in four lines!!!
Let's see this in detail.
Competitive pressure is growing significantly for both manufacturers and retailers.
To the brands, apart from the eternal pressure of margins and other commercial conditions demanded by retail, there is now a less loyal, more informed, and empowered consumer. The resurgence of private brands in many markets and the rise of new players: very agile entrepreneurs called “digitally native vertical brands” (DNVB), and as if that were not enough, international competitors with excess productive capacities and very low-cost products flooding new markets, among others.
On the retail side, the situation does not look very flattering either.
The different purchase options are significantly fragmenting the possibilities of acquiring the same product. Fragmentation essentially means that the Shopper is dividing their purchases into more channels and journeys (both physical and online). The entry of disruptive channels and ecosystems; Marketplaces, Dropshipping, E-commerce DTC (Direct to Consumer), and even Social Networks, become alternatives, but also serious threats for Retailers.
Trade Digital Marketing to the rescue!
Properly and agilely managing new technologies and integrating them with the new business models that are emerging will, to a great extent, be the only option to compete in the continuously changing scenarios. Digital transformation must go hand in hand with commercial transformation (agile structures, skills, processes, practices, etc.) so that commercial teams can carry out their management in this new reality.
We are annoyed to see large technological investments wasted or underutilized due to the lack of human capacities, processes and current and standardized practices, among others.
Let’s see what aspects the concept of Digital Trade Marketing includes:
Knowledge of the Omnichannel Shopper
The purchase becomes omnichannel in the sense that the different purchasing processes are integrated and combined through showrooming (see/evaluate in a physical store and buy online) and webrooming (see/evaluate online and buy in a physical store).
The different segments of Shoppers in their different missions are rapidly learning and changing their purchasing methods and practices. This is just beginning, so knowing it will be an ongoing job, preferably collaborative between manufacturers and retailers. This collaboration allows us to increase the understanding of the new behaviors and purchase missions associated with each profile by category and brand.
Good execution in a physical store does not bring you a millimeter closer to the digital one.
Machine Learning and Artificial Intelligence in Digital Trade Marketing
In order to be competitive and stay ahead of these changing buying behaviors and missions, maximizing the use of Machine Learning (ML) and Artificial Intelligence (AI) will be of paramount importance. Once again, collaborative strategies between Retailers and Manufacturers make it possible to enhance the available technology.
Retailers and Manufacturers are seeing the applicability of Machine Learning (ML) to drive Shopper Experience (SX) improvements and operational efficiencies. For example, we now have data that allows us to predictively improve the shopping experience by ensuring that the product is always available when, where, and how the Shopper wants to buy it.
Powerful machine learning algorithms and data analytics platforms detect patterns and correlations that we can leverage in price optimization, inventory management, customer satisfaction, dynamic planimetry, personalized offers, and more.
Shopper and POS segmentation with Digital Trade Marketing
One of the main uses of Machine Learning and Artificial Intelligence will be to implement Shopper segmentation models based on profile, purchasing habits, and online and physical behaviors.
The fundamentals of Trade Marketing throughout its history have been based on its successful strategy of segmenting Shoppers and subsequently associating them with the predominant points of sale visited by them. Understanding, for example, how each segment is associated by purchasing mission, by point of sale (online and/or physical) will from now on be an important competitive advantage for those who know how to take advantage of technology. As we said before, the fragmentation of the purchase could be a threat or a possible advantage…it will depend on who knows how to take advantage of it or not. That is why we say that developing Trade Marketing Digital is an urgent task.
Route to Market Digital…The new frontier to conquer
The diversity, convenience, and speed with which buyers and consumers can purchase different products and services have grown exponentially. Thanks to the Internet.
The development of different business models, leveraging the Internet and digital technologies, is rapidly changing how products and services are reaching shoppers and final consumers.
Here are some interesting examples beyond Amazon, Alibaba, Mercado Libre, and Walmart:
Vertiginous growth of shopping and delivery platforms and applications, such as Uber Eats or Glovo, are radically changing the way of buying and consuming certain categories and services. From the largest to the very small retailers can leverage these platforms.
Ecosystems (specialized or general marketplaces) are allowing small businesses to leverage online platforms without having to carry out digital transformations to reach their customers. The Coral or Deca Store in Brazil or the Nearby Little Store of Grupo Modelo in Mexico are good examples of these advances.
Super specialized marketplaces by industry or category and excellent shopping experiences. Net-A-Porter and Zalando have revolutionized the Online Fashion Market. But we can see them grow in almost any industry. Solo Artesanas (Beers) is one of my favorites in Spain. The breadth and depth of their assortment and offer make them very appealing to shoppers.
Manufacturers creating or acquiring Marketplaces to increase market coverage and influence over the shopper and/or final consumer. All this leverage in the existing Retail. Pernod Ricard's DrinksCo (formerly Uvinum) is an excellent example of this model in Europe.
New Online distributors, whether via Marketplace or Dropshipping (without inventory management or delivery) with digital platforms that allow small businesses to purchase products directly from the manufacturer and/or distributor. In LATAM, platforms like Chiper are making rapid progress with these models. Already more than 4 million traditional stores are operating on this platform.
Recognized manufacturers establishing Direct to Consumer (DTC) models, where the physical store and the online store are combined, such as Nespresso or Apple. Additionally, hundreds of thousands of new ventures (the so-called vertical digital natives) are advancing rapidly with models combined between Marketplaces and DTC.
Manufacturers, Distributors, and Retailers will have to understand and evaluate the different possibilities, available options, and challenges of each one in their Route to Market designs or rethinks. The rapid and changing evolution of new business models will require a continuous review of the RTM to maintain competitiveness. A challenge of Digital Trade Marketing.
Omnichannel Shopper Experience (SX) and Excellent Execution.
Today we get up and see on our tablet a product that interests us. We go on the subway and continue to inform ourselves about the product on our smartphone through the RRSS or the E-commerce of the brand, then we go to the physical store and experiment with the product. We return home at the end of the day and conclude the purchase in a Marketplace where we get the best prices. This is the Omnichannel Path to Purchase (OPP).
The OPP, whether you are a Retailer or a Manufacturer, has to be continuously designed, managed, and optimized to ensure a smooth and exceptional execution and experience. The integration between Marketing, Trade Marketing, Sales, Operations, and Supply, supported by the available data (of which there is a lot), predictive analytics, and support technology platforms, will be the only way to ensure that the omnichannel buyer experiences the same sensations and possibilities at every step of the buying journey.
New tools such as Augmented Reality, Virtual Reality, Beacons, Retail Apps, and Retargeting, among others, emerge and breakthrough to improve, on the one hand, the Experience (SX), and on the other, to influence the buyer in their different purchasing processes. All fundamental in the Management of Digital Trade Marketing.
The New Business Organization
The omnichannel conceptualization, design, and execution will require more than ever the proper integration of agile and technically and managerially enabled multifunctional teams. As we mentioned before, the Digital Transformation, so that they do not become large underutilized investments, indisputably goes through a previous or a parallel Commercial Transformation.
Commercial structures, occupant profiles, skills, and operational and managerial processes incorporating best practices will have to be reviewed and updated in order to carry out the Digital Transformation.
As we have mentioned in other articles, a deep and lasting Commercial Transformation can be a great challenge that will require a lot of leadership and courage from the company's management, but it could be the only way not only to generate business growth in the future but also to simple survival in some of the cases.
Is your Sales Team ready to tackle the Digital World?
If you think that your Marketing, Trade Marketing, or Sales team needs to strengthen any of the topics covered in this article, we recommend our Digital Trade Marketing course.
On the other hand, if you think you need support in your Commercial and/or Digital Transformation processes, at TMC Comercial Consultants we have accompanied a large number of companies in Latin America to carry out their projects successfully. We have a portfolio of success stories that we are very proud of.
Need help? Just write to us contacto@tmcconsultores.com