Retail Marketing Strategy: The Ultimate Guide for 2021 and Beyond+ Examples
Retail marketing as a whole doesn’t get the attention it deserves.
Most people focus on e-commerce alone and the potential it has but, in reality, it only accounts for 14% of global retail sales. The other 86% comes from people walking into stores and buying products in person.
This presents a unique opportunity to use both online and offline marketing to drive more revenue for your business. If you don’t take advantage of the right channels for retail marketing, then potential customers will go to a competitor without thinking twice.
In this guide, you’ll get a deep understanding of retail marketing and the tactics that’ll help you succeed in 2021 and beyond.
What is retail marketing?
Retail marketing is the process by which retail businesses promote their goods and services to their target audience in order to build awareness, goodwill, and generate sales.
There are countless ways a retailer can market their services. Some of them are free and others are paid.
It’s important to note that retail marketing is used by both e-commerce and traditional retailers. In fact, almost every retailer uses retail marketing in some form or another. It’s also apparent that online channels are becoming more and more popular. The majority of consumers use search engines to research retail products.
(Image credit: LSA)
When those searches are on a mobile device, 88% of consumers call or go to the local business within 24 hours.
Before you can get 88% of the people who find you to walk into your store or visit your website, there are a few things that should be in place.
The Four P’s of Retail Marketing
The fundamental approach to retail marketing can be broken down into 4 key principles: namely product, price, place, and promotion.
This might be a given, but it is considered one of the most important retail components- you first need an actual product to sell, or otherwise known as merchandise.
There are two types of merchandise- namely hard or durable goods and then soft goods. Some stores can sell a combination of these types, or they might sell only one type of merchandise.
Once you have a neat product to sell to your customers, it then comes down to the packaging! And the packaging is way more important than some retailers realize.
Here’s what they recommended for designing packaging that has a lasting impact:
- Understand your demographic
- Make cheap packaging look sophisticated and personalized
- Try to create a unique unpacking experience
- Use eco-friendly packaging options (a good example is Puma’s clever bag they decided to use, as opposed to using a cardboard box).
Your choice of pricing is a vital part of the retail strategy, as it needs to cover the cost of goods, and any overheads, as well as remain affordable for customers. There are four main pricing strategies for you to use as a retailer:
- Everyday low pricing: this is when retailers operate within thin margins and try to attract as many customers as possible. This strategy is used by retailers such as Wal-Mart and Target.
- High/low pricing: this strategy is mainly used by small to mid-sized retailers, and is when the prices begin at a high price and are later reduced, as popularity fades.
- Competitive pricing: here the retailer looks closely at what the competition is charging for the same merchandise and will base their pricing on the competition. This strategy is normally used after the retailer has exhausted the high/low pricing strategy.
- Psychological pricing: this is also known as price ending or charm pricing- when a retailer uses odd numbers to price products. This is so consumers think they are paying for lower prices, when in fact they are not cheaper. For example, if an item is going for $1.95, customers might associate it with spending $1 rather than $2.
You can also look at the following two pricing methods for your product:
This involves using a break-even price for your product, where you add a markup, based on the amount of profit you would like to make. This is a very simple approach and doesn’t take your competition or product’s value into account.
The best method is known as value-based pricing.
This method involves determining how much your product is worth to your target audience and using a price that will attract them to make a purchase. It might even mean using higher prices, allowing you to generate higher profits.
You may have the best product, packaging and price, but if it’s out of reach of customers, you’re in for a dilemma! So make sure you find the perfect location suited for your type of product.
The place for a product is where the retailer conducts business with its customers. While most of us think it’s a physical location such as a brick-and-mortar store or a shopping stall at a street market, it can also be the location of a product on another company’s online catalog or an e-store.
Promotion is the final, but certainly not the least of the marketing principles. Promotion has to do with knowing how to effectively communicate and spark an interest in your product with your customers.
These tactics can include sales promotions, in-store merchandising, face-to-face marketing, and publicity.
You can also use these different methods at different times, depending on your objectives, which could be introducing your customers to a new product, trying to increase sales, product positioning, or retaliating to direct completion.
What it takes to build a successful retail marketing strategy
It’s not possible to launch retail marketing campaigns without a plan and get everything to work out. It won’t.
Apart from the right tools, there are three key elements needed before you think about launching any retail marketing initiative.
Understand your customers and their needs
Do you have a clear enough understanding of your target customers?
Do you know what they want and the way they perceive certain brands and styles of marketing? Are you turning them off or hitting the right notes?
Until you can answer these questions with certainty, it’ll be difficult to achieve breakaway success. The good news is that you can get a deep understanding of your customers cheaply and effectively.
How do you do that?
By sending out questionnaires to past customers or the people who visit your store and website. This isn’t a customer satisfaction survey. Instead, you’re trying to understand what they’d like to accomplish with the kinds of products and services you’re selling.
For example, if you are selling beard care products you’d want to know why customers buy. Is it to boost their confidence, live better lives, get a date, etc.? The answers inform both what you offer and how you position those products.
Beardbrand has a deep understanding of its customer base and showcases that with its Keep On Growing® mission.
The company launched successful retail marketing campaigns which fostered loyalty and culminated in a partnership with Target stores.
Here are a few questions you can ask to get a better understanding of your customers:
- What brought you here today?
- What problem are you solving with X product?
- What’s your biggest challenge related to X (with x being the problem you address).
In online questionnaires, you’ll want to find out what the customer’s needs are. If you have a bigger, more expensive product that takes some time to consider, you also want to know which buying funnel stage they’re in. This gives you the ability to adapt your messaging accordingly. The AARRR leadfunnel framework is a helpful method to optimize communication for Acquisition, Activation, Retention, Referral, and ultimately Revenue.
Meet those needs with the right products & services
It’s one thing to know what your people want and why they want it. It’s another thing to give it to them with the right products and services.
For example, let’s say the fictional company Acme Inc.’s customers want a stronger, softer, and shiner beard and hope to achieve that by using natural organic products. A product with tons of preservatives and chemicals would be contrary to that. Even if it helped them achieve their main objective, it wouldn’t be appealing to them.
Part of the preliminary work for retail campaigns involves making sure you have the right products for the audience you’re targeting.
If you don’t, you can do one of two things:
- Change the product
- Change the audience
Neither option is ideal after you’ve launched so focus on building a solid foundation.
Location, accessibility, and convenience
The final piece of the retail marketing puzzle is being where your customers can find and access your products. If you opened a new physical store, would you go deep in the woods and put it in a place that could only be accessed after a 2-hour hike?
Of course not.
It would make a great getaway but a horrible store location. The same thing can happen online. A confusing layout, difficult product discovery, and lack of support will hurt your marketing efforts.
In either scenario, it would be hard to do business with you. Unless you’re one of kind in every aspect, people won’t work too hard to give you their money.
The takeaway is to make sure people can access your products and services easily and conveniently before you launch any campaigns.
4 retail marketing strategies for 2021
Now that you understand what’s required for successful retail marketing, let’s look at the different tactics you can use to make the most of it.
1.Targeted social media platforms
Social media, when used properly, is a powerful way to connect with your ideal customer. Advertisers from every industry have taken note. In 2018, US retailers spent $23.5 billion on digital ads. This is an 18.7% increase in spending from 2017.
This shows just how effective social media marketing can be for your business. There’s one problem most people don’t realize. It’s difficult to grow a large presence on all social media channels at once.
Look closely and you’ll realize that most businesses that are successful with social media started with one or two platforms. After they built up their presence, they expanded to other social sites.
If you want to succeed in retail marketing, it’s important to do the same thing. What channel works best for you based on the products you’re selling and the audience you’re targeting?
For example, brands such as Frank Body have built large Instagram followings. In fact, it used Instagram to grow to $20 million in annual revenue.
The platform is introducing even more tools like Instagram stories which retailers can use to grow their reach and build an engaged customer base.
Other brands are using Facebook to get in front of their ideal customer. Thursday Boot Company went from selling a few boots a week to selling thousands a month with targeted Facebook Ads that focused on the lifestyle of its customers.
Williams Sonoma focused heavily on and has grown a massive following with Pinterest. It now derives a lot of referral traffic and sales from the platform.
I’m not showing you these examples so you go and try your hand at each of them at the same time. Select a single platform that works well with your products and audience and focus on growing there.
2.Email marketing with a twist
Email marketing is one of the most effective ways to connect with customers and generate revenue.
There’s one big challenge, inboxes are crowded. The average office worker receives over 100 emails a day. Unless your emails can stand out from the crowd they’ll be ignored or people will unsubscribe.
Prevent this by using simple behavioral segmentation to send targeted emails to your audience members and past customers. I’ll touch on a few of the highest impact tactics.
The average ecommerce store has multiple products for sale and each one has a unique page. When someone visits, they’ll interact with the product pages they’re interested in and ignore the rest. Track this using your email marketing software and send out relevant email automation based on the pages a visitor has viewed.
There used to be a time that the software was very expensive, but there are modern email marketing tools that are quite cheap and they make it simple to segment people based on website activity. Start by setting an automation trigger that goes out to people who’ve visited a page 2 times or more within 30 days (or however long it takes people to go from consideration to purchase). If you have a large product catalog, focus on the most popular product first and expand from there.
Email opens and clicks
This segmentation method focuses on finding the kind of content your subscribers are interacting with and sending more of it. When someone first becomes a subscriber, it’s natural to lead them through a welcome series and send them different types of content.
After that, what do you do?
It would be far from ideal to send them multiple offers about products they may or may not be interested in. Get around this dilemma by tracking what kind of emails, subscribers are opening and the links they’re clicking.
For example, someone signs up for Acme Inc.’s mailing list which is about an active lifestyle and activewear. Acme Inc. doesn’t know whether they’re a man or woman, if they prefer running or weight training, or any other information about the subscriber.
It sends out all kinds of emails to the new subscriber and notices they’re only clicking on links related to women’s products and content. It also realizes that the subscriber likes yoga pants and running shoes. Going forward, Acme Inc. sends more content tailored to the subscriber’s behavior.
This is not a manual process. Advanced tools like ActiveCampaign or OmniSend make it possible to apply tags or update contact records based on behavior. You can then send messages to specific groups of people which get opened, clicked, and generate revenue.
This may be the most powerful type of behavioral segmentation. Your subscriber has told you they’re interested and is ready to spend cold hard cash.
You can send similar promotions to them regularly. Even if they don’t buy from you, it’ll be well received because it’s something they’re interested in.
ASOS takes this strategy to heart. The only things I buy from it are shoes and jackets. The company sends me an email every few days. About 70% of them are focused on shoes and outerwear. The other 30% are emails about interesting content and different product categories.
These emails are created through email content automation. The software inserts the right products for you. But there’s an important aspect to keep in mind when you’re segmenting based on behavior. Your customer may be interested in much more than you know. In addition to emails promoting similar products, be sure to add different product categories to the mix.
3.Pop up shops
Ecommerce has a significant drawback – you can’t touch, feel, or smell a product before buying it. In many situations, that matters. Another thing to consider is that some consumers only shop at places they’re familiar with. That means they’re not willing to try a new brand they found online.
A popup shop can help you reach a segment of your market that would otherwise be inaccessible. Other benefits include:
- You’re able to create a multi-channel experience connecting consumers online and offline
- More cost-effective than a full-fledged retail location
- The ability to create deeper connections with customers and get feedback in real time
- An opportunity to soft launch new collections at select locations and test market demand
These are just a few of the many benefits associated with popup shops and brands Like Kylie Cosmetics have taken note of just how powerful it can be.
People reportedly waited outside for 11 hours or more before getting inside. Smaller retailers are also creating meaningful experiences for their customers who, in many cases, travel to participate in the activation.
For an offline business, it’s also possible to partner with an online retailer to expand your reach and test demand.
There are a number of things to keep in mind when you’re planning a popup shop campaign. It’s more than choosing a space and sending out an email to your subscribers.
- Do you want a new space or a section of an already existing business? Kylie Cosmetics popup shops took advantage of Top Shop’s stores.
- Will you need any licenses, permits, or insurance?
- What kind of payment system will you be using?
- Will the furniture be provided or do you have to rent/buy your own?
- What’s the goal of the event (a certain sales figure, brand awareness, etc.)
- Staff policies and guidelines (or hiring new staff)
It takes a considerable amount of effort but it can be one of the most powerful ways to connect with a larger market because it’s an experience.
The RealReal launched a popup shop and had guests from Vogue and Vanity Fair cover it. The end result was exposure, revenue, and goodwill.
The last retail marketing tactic I want to touch on is using brand ambassadors to extend your reach both online and offline.
A brand ambassador is someone who’s paid (or otherwise rewarded) to endorse a company’s products and services. They work closely with your in-house teams to create and conceptualize marketing campaigns that build awareness and increase revenue.
In fact, it’s the exact strategy Lululemon used to go from a single yoga studio to a multi-billion dollar company.
I want to make something clear. A brand ambassador marketing initiative is different from an influencer marketing initiative. Take a look at this article to get a feel for how different brands are empowering their ambassadors.
Of course, your brand ambassadors can be influencers in their own right, but it’s not a prerequisite. Depending on your reach, products, and goals, there are many ways to run a brand ambassador program. Consider the following things before you launch it:
Take cues from successful programs in the past
Brand ambassadors have been in use for a long time. It’s not something that started with social media or the internet. Research companies that have gone before you to understand what set their campaign apart and how you can replicate that success.
Start small and iterate
This is obvious, right? Not exactly.
Many retailers are so excited about the thought of a brand ambassador program that they recruit as many people as they can. In the end, they’re unable to give their early ambassadors the tools and attention they need to succeed.
It’s better to move slow and steady in the early stages. Focus on finding people who’re already talking about you and recruit them to your cause. Use social listening tools like Mention or Brand24 to find them.
How are you compensating ambassadors?
Influential ambassadors may require cold hard cash but many of your early converts won’t. The best ambassadors are people who’re already familiar with your brand and would use your products whether they were being paid or not.
With that being said, they’ll be working closely with you to build awareness and drive revenue. This will require time and energy on their part so a simple thank you won’t cut it.
Daniel Wellington runs a college brand ambassador program that rewards participants with merchandise, exclusive event invites, concert tickets, gift cards, and more.
Finally, let your brand ambassadors do their thing. Apart from a few guidelines, it’s important to give them room to work.
They’re advocates of your brand and are best suited to communicate what makes you unique to them. They can add their own spin to your marketing which you may have never considered. If you make them rehearse that message or change it too much then it loses its ring of authenticity.
Retail marketing is constantly evolving and it’s important for you to evolve right along with it. If you don’t then it’ll be impossible to stand out from the crowd.
The specific techniques may change from year to year but the underlying strategies remain the same. It’s important to understand what your customers want and need from you then deliver it in a way that’s convenient to them.
Choose one or two of the tactics outlined here to focus on and you’ll be sure to see massive improvements in revenue, engagement, and brand awareness.
Let me know what your favorite retail marketing strategies are in the comments and don’t forget to share.
Frequently Asked Questions
The retail marketing mix consists of which of the following?
The retail marketing mix consists of the four primary P’s: Product, Price, Place and Promotion. Nowadays, it also includes other P’s such as Presentation, Packaging, Personnel and Positioning. The Product is the particular type of merchandise you are wanting to promote, either durable goods or soft goods. The Price is determined on a number of direct and indirect factors that need to be considered and whether the retailer wants to aim for: low pricing; high to low pricing; competitive pricing; or psychological pricing. The Place is the specific location where the retailer attracts the customers and where the point of sale (POS) occurs. The location of a product is often one of the most important variables in retail marketing. Promotion defines all the objectives and goals for increasing the awareness and sale of the product. This includes a wide range of marketing activities, such as digital advertising, word of mouth, press releases, customer incentives and rewards, contests and prices and personnel sales.
What is retail marketing?
Retail is the sale of consumable goods or services to customers in relatively small quantities through various distribution channels. These channels can be through large franchises or hypermarkets and supermarkets, to medium or small independent stores, including online stores and automatic vending machines. Retail marketing is the processes and strategies implemented by retailers (i.e. the merchant) to attract customers, generate goodwill, increase brand awareness and drive sales. Retail marketing incorporates a range of avenues that must be strategically planned based on the nature and type of business.
What is retail marketing example?
Williams Sonoma, a furniture manufacturing company in the United States focused its efforts on growing a stronger following on the popular social media platform, Pinterest. This retail marketing strategy generated a great deal of traction and has led to a higher volume of referrals and increased sales.
What are the types of retail marketing?
A retail marketing strategy is custom-designed according to the type of business and needs to assess the following criteria: target market, consumer needs and accessibility. A retail marketing strategy will incorporate different types of retail marketing. These include:
• The internet- through a website, which includes an online store for purchasing products or services; and having a strong presence on a wide range of social media platforms and forums.
• Word of mouth programs- through referral programs and networking events.
• PR marketing- connecting with customers before they even enter the store, by partnering with various local charities or events or CSR activities.
• Direct marketing- engaging directly with customers, through any form of print, audio or visual advertisements. For example through billboards, advertisements, brochures, catalogs and so on.
About the author: Daniel Ndukwu is the founder and CEO of KyLeads. There, he helps businesses create meaningful experiences and increase audience engagement while generating more leads using surveys, quizzes, and smart popups. When not working, you can find him spending time with his family or and traveling as much as possible.
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