Reimagining Channel Marketing for Consumer Durables in the Omnichannel World

70-80% of sales for most brands in most consumer durable categories happen from multi brand retail outlets. In most categories across consumer durables(despite the increase of digitally influenced offline sales), the final decision of brand is made at the point of purchase. We all understand that trade marketing is very important, but the way activities are carried out and measured leaves a lot to be desired. Two things are of paramount importance at the point of purchase:

a)      Visibility of the brand and the product

b)     Advocacy by the seller

But more often than not, we end up tracking a host of things (activities completed, cost of each activity etc) which might not be the right metrics to track and move. At the other extreme, you will find ROI driven marketers who will try and track spends in each counter and the sales from each outlet. While sales will be the ultimate metric, but directly linking sales to spends in a counter will be wrong as your sales will depend on a number of parameters (product, price, Initial consideration set) which the trade marketing activities don’t play any role in.

I propose a way wherein we draw parallels from e-commerce, and try and identify the right metrics to track and move:

Similarities in e-commerce and offline point of purchase

Query by Customer: In the online space, the consumer types in his query on Google or Amazon to begin the purchase process. In the offline space, the customer comes and verbally puts his query to the retailer.

Results Shown by Google/Amazon/Retailer: Here, the retailer is Google. Just like Google or Amazon, the brands that the retailer puts in front of the customer based on his query are those which maximizes the chance of a sale.

SEO = Top of Mind for Retailer: Just like brands do SEO for certain terms in the digital space where you create content for years so that you rank on top for certain relevant keywords, brands can do the same with retailers. If you reinforce certain associations with your brand, and the retailer accepts it and your brand becomes top of mind for the retailer for that feature/benefit, whenever a customer query contains that feature/benefit, the retailer puts your brand in front of the customer. Just like SEO in digital gives results only in the long run, if you want retailers to introduce your brand for certain customer queries, it needs a lot of constant effort of months and even years by the team visiting the retailers. 

SEM= Margins and Schemes: Just like you spend on search Ads, giving retailers the extra margins/schemes will get them to put your brand in front for certain queries, provided the retailer thinks that there is a chance of conversion. In lieu of higher margins, the retailer will push your brand few times, but if the conversion is not there, they will stop doing it very similar to how Google stops showing your ads if it is irrelevant to the consumers. But just like SEM, the cost of this will always depend on how what schemes your competition is running(similar to how Google CPC depends on competition bids)

Brand Searches= Customer Walk in Queries: These are the easiest to convert as the customer came and asked for your brand. But just like Google/Amazon shows competitor brands as ads even for your brand queries, it is possible (though unlikely) in a few cases that retailer will try and push other brands. This is something that brands should keep a track and reduce it to zero. Again, the number of brand searches/customer walk in queries depends on the awareness levels of the brand and the category behavior

Display Ads=In Shop Branding and Display: Sometimes we see ads even before we enter our search queries (by virtue of Google and FB determining that we are in-market audience). Similarly, when you walk in, even before you ask the retailer, you will see Glow sign boards of brands outside the counter, and you will see multiple point of sale branding material (posters/danglers/one way visions) of multiple brands. And just like on Google/FB, when you see a relevant ad and click on it, even in the retail environment, if customers see something exciting, they ask the retailer about the product/brand. This makes it much easier for the retailer to initiate the discussion of sale.

Now once the product is introduced (either by the retailer or asked for by the customer), the conversion depends on:

Retailer Pitch+ Display+Brochure=Landing Page: Like we have a Landing page in ecommerce which has all the information to convince a potential customer, the retailer pitch must have everything required to convince the customer about the brand and the product. In addition to the audio pitch, the display of the product for touch/feel, and the product brochure in the hands of the customer also plays a major role in convincing

Final Purchase=Checkout and Payment: Just like the final checkout which depends on primarily 2 things: deals and reassurance about the potential deal breakers, the final purchase in the retail environment also depends on how convincing the retailer sounds in his pitch and while giving assurance about the quality, service etc. It also depends on what kinds of discounts the retailer is willing to pass on to the consumers.

What can Brands Do?

a)      Mapping activities to end outcomes- Each activity in trade marketing is a cost. While doing the activities, brands should be clear on what purpose it is solving. Eg- If a brand is increasing schemes, retailers can do 2 things:

1)     Because they are getting more margins, they can introduce the brand to more people (read SEM)

2)     Because they have additional margins, they sell the product at a lower cost to people who come and ask for the brand (to ensure 100% conversion in the checkout phase).

If the brand’s goal from schemes is 1 and the outcome is 2, there will be no incremental sales for the brand.

Similarly, if the team spends a lot of effort in training retailers and engaging with retailers, but the retailer still doesn’t introduce your brand for certain customer queries which includes your key features/benefit, the effort is failing

b)     Defining objective Goals: Specific goals can be defined at every stage. Eg- If there is a startup which sells smart ACs and has the best smart ACs in the market, a goal can be that” Whenever customer asks “Smart AC” the first brand that is introduced by the retailer should be that startup. These goals will then become joint goals for the local sales team and the marketing team.

c)      Measuring and Tracking the Objective Goals: Yes, measurement across 1000s of outlets is not possible, given that every retailer/market is unique. But if we can measure brand metrics amongst crores of customers, this is also definitely doable. Having an internal team of mystery customers, observers at retailers place of sale(provided they allow) and working with measurement agencies can help brands arrive at a cost effective way of measuring these metrics. I am sure there is a huge opportunity for startups who want to enter retail measurements in depth in an authentic manner.

Offline retail is here to stay and will co-exist with e-commerce. As brands move and invest towards being omni-channel in the truest sense, it is time they put the same time, money and energy to win at the offline point of purchase.