Gore Vidal’s famous line, that “commercialism is doing well what should not be done at all” encapsulates perfectly the conundrum and the opportunity of modern marketing - how to reconcile personalisation and profit by accentuating the former and masking the latter.
DPL’s recent panel discussion on Emotion v Promotion in retail marketing dug deep into these topics and was where the star-studied panel were asked to reflect on their observations on marketing strategy and tactics, tone of voice, and true engagement with customers and prospects in the light of recent advances in behavioural science, AI and machine learning.
On the panel were Zoe Howorth, entrepreneur, non-executive director to high growth businesses and former marketing director at Coca Cola; Patrick Fagan, behavioural scientist with DPL, and Caroline Finn, marketing consultant to leading beauty brands. The panel was chaired by Richard Robinson, chief commercial officer at DPL.
Richard opened the session, inviting panellists to describe the fundamental changes they were witnessing in retail and product marketing and the responses were more complex than we had thought.
Caroline Finn highlighted the consumer-driven shift to sustainability and recycling in beauty and skincare. People, she said, are now looking inside brands and shopping by ingredients. They want to use natural products that are not damaging to the environment. For the marketeer, this requires a significantly deeper understanding of customer motivations and their subtlety. She evidenced this shift with the increase in vegan skincare sales month on month. Traditional brand marketing techniques, she said, used to matter the most, but now there has been a definite consumer shift towards complete product and company transparency and genuine advocacy, etc. Beauty is no longer a skin-deep business. To prop up margins in a cost-conscious environment requires, she said, an ability to appeal to consumers on the basis of what they want, what is important to them, what matters to the world and value for money. The marketing ingredients are as complex as the product ingredients.
Zoe Howorth highlighted the time and attention constraints of modern consumers. Shopper expectations have shifted, and people want things quickly and efficiently. It is a commercial landscape in which people favour doing their own research and making their own decisions based on reconciling various influences rather than through human contact. They’ll favour posts over complex reviews, chatbots over phone calls, instincts over education. It is now harder to get and keep your customers’ attention due to the amount of 'noise' in the marketplace.
Patrick Fagan said that as humans, our ability to concentrate is biologically decreasing. In parallel, there is a shift towards short-term decision making. Our compulsive and obsessive use of technology is fostering a ‘Tinder' mindset when it comes to retail. Purchases are transactional and brief. For marketeers, consumers’ increased reliance on tech provides more anonymised data opportunities to measure mood and personality from passive actions on websites, emails, and the like. On a macro scale he made the observation that with the collapse in belief in traditional institutions such as politics and religion, brands have extraordinary opportunities to provide consumers with a new group identity to affiliate themselves to. In parallel, he asserted that people are becoming 'cognitive misers’, potentially, and with their authority, creating opportunities for brands to become the trusted guardians of their data.
Richard Robinson then invited the panel to give their perspective on the role of promotions in modern marketing.
Zoe Howorth said that product is king in modern retailing. British people, she said, pride themselves on getting a bargain. Most now don't have a problem with shopping at emerging discount retailers, highlighting the rise of new supermarkets and reflecting the dramatic change in this sector. These retailers, she said, have made the shopping experience simple, effective and honest.
Caroline Finn noted, that people tend to wait for sales or discounts before making 'large' purchases. This is proven out by the fact that when at ghd, 30% of annual sales were made on Black Friday. For most people, a £100 pair of hair straighteners is still considered a luxury item so they can only justify the expense if they are on sale. Consumers are wise to the requirements of price establishment. Beauty Pie, a beauty subscription brand is having huge success as it taps into consumers love for getting discounts whilst also building a long term relationship with a brand. Something they are willing to pay for. Setting out your stall in contrast to your competitors is vital. In the luxury industry, little 'extras' are almost expected as a given nowadays. For example, receiving a small free gift when you make a larger purchase can make all the difference.
Patrick Fagan pointed out that in behavioural science terms, we get a big dopamine hit when we find a good deal that saves us money. There is a near-narcotic effect at play.
Richard posed the question: do brands focus on emotional engagement and retailers on promotion?
Patrick said that mass promotions can be slightly dangerous for brands if not done correctly as they can cannibalise future sales. People will stock up, which in turn damages value and price perception. He also highlighted that studies in North America had proven that discounting doesn’t work, at least not in the long term. To mitigate this, research has shown, flagging promotions as ‘special’ can make all the difference. Behavioural understanding is vital. He added that it is relatively hard for retailers to build personal relationships with consumers as they are selling so many brands, disparate products and services. This is especially true for larger retailers.
Caroline highlighted that retailers can and do successfully use loyalty programmes and give rewards to build a personal relationship with their consumers. But this takes work and a real understanding of who your customers are.
For Zoe cut-through linked to need is vital for successful marketing in the retail and consumer goods. Understanding motivations, building insights and engaging with consumers on a granular basis matter more than ever before.
Richard, in wrapping up, highlighted the resource requirement in marketing. In a world in which consumer motivations are more nuanced and personal than ever, marketing needs to be as sophisticated as the consumer’s buying decision, interlaces with many complex variables. Two consumers, he pointed out, can look near-identical, but who they are, including their attitudes, opinions, personality and need state dictate their motivations and routes to purchase can be fundamentally different. In this context, insight-driven machine learning and AI are vital to the modern marketing engine. It simply isn’t possible to compete at scale without them.
The panel was asked, finally, whether we are entering a post-strategy world for brands, in which millions of micro tactics are replacing strategy. The conclusion was that the flexibility to serve the individual customer is crucial to brand survival and that modern organisations need to deploy the latest approaches and techniques. Doing so requires, more than ever, a hand on the strategic rudder, reconciling individual customer wants and needs and brand purpose. We are in a world where emotion and promotion need to be used wisely for the benefit of consumers, brands and retailers alike.