Marketers Face 'Revolutionary Change'

Chicago — Acosta Mosaic Group president Aidan Tracey thinks marketers need to follow Walmart’s lead, if they haven’t already. The mass merchant launched Facebook pages for each of its approximately 4,000 stores, shoots about 30 local video spots per week using local production companies, and has cut its television budget by 60%.“They’re adapting their traditional media to be very local and very social,” Tracey said during an October presentation at the Shopper Marketing Expo. “They’re creating some of their best brand recall and best brand traffic in years. … This is profoundly disruptive. It gives them tremendous power in the world where we’re going right now.”Tracey laid out a “new marketing manifesto” that rests on three principles: “trans-media” storytelling, participative marketing, and integrated marketing communications. “Any idea you’re going to bring to market is going to be deployed in so many different media,” he said. “You need to think about how consumers are going to respond.” Also, “What’s your strategy around integrated marketing communications?”To illustrate how quickly the media landscape is changing, Tracey provided figures on the annual revenues of the newspaper industry, which rose from $20 billion in 1950 to $60 billion in 2000, before plummeting back to $20 billion in 2010. “The newspaper industry has gone through gut-wrenching change in a very short period of time,” he said. “TV could face the same thing.”Chief marketing officers are talking about moving 40% – “not 4%” – of their TV budgets into social and mobile marketing, Tracey said, partly due to a DVR technology provided by the Dish Network that skips TV commercials.Marketers need to adjust to the continued growth of online retail, which Tracey predicted would comprise 15% to 20% of CPG sales within 10 years. Amazon has a stated goal, by the end of this decade, to deliver 80% of products to 80% of households the same day the order is placed, he said. “We need to be ready for a seismic shift in shopping habits.” Internet penetration has reached 80% of households, Tracey said, while smartphones are at 50% and predicted to be 80% by the end of 2014.That doesn’t mean retailers will experience the same decline as newspapers or television, Tracey said, but “you’re living in what’s called a revolutionary period. You need to be prepared to change. Using the same playbook as even 24 months ago won’t work.”Retailers shouldn’t panic, Tracey said, but they do need to recognize and react to the trends. They and their brand partners should start by creating trials and allowing consumers to participate, then amplify the impact of those trials through social media, he said. Tracey cited a study showing that after participating in experiential marketing, 76% of people under age 35 felt more positively toward a brand, 98% were more likely to purchase, and 87% became a regular customer.Retailers and brands need to be working with several agencies that complement one another’s expertise, he said. “It is moving so fast within each competency that no one agency can do it all anymore. It’s impossible.”Bricks-and-mortar retail will survive despite its inability to compete on price or selection, Tracey said. “You better win on experience. You better win on service. You better win on features you can’t get anywhere else. There are going to be competitors you didn’t see coming. The tools you’ve been using aren’t going to be as effective.”A “bricks-and-clicks” model where people order shelf-stable groceries online, then come in to pick it up and select their own fresh produce and meat, could be a hybrid model of the future, Tracey said.

Marketers Face 'Revolutionary Change'

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