Time to sharpen retail marketing

December 31, 2012

It takes the right organizational structure, analytics and consumer insights to push the right food-store appeals.

Does your retail organization have a chief marketing officer? Does he or she have the power and authority to make your enterprise truly consumer-centric—that is, to build marquee brand equity and customer traffic through targeted customer appeals rather than merely shout about item-price?

Just 23% of respondents to a new state-of-retail-marketing survey say the highest-level marketing executive at their chain is the CMO with the right span of clout and control to advance customer-centricity. Therefore, the industry has some distance to go to achieve its vital “power shift from merchandising as the heart of the enterprise to marketing as the prime occupier of that role,” according to Marketing in Retail: Making the Case for the CMO, the new RSR Research study.

“The conversation with customers has fundamentally changed. Just when consumers were becoming so much more price-sensitive, retailers found they needed to be able to engage with customers on so much more than just price….[and] successfully engage with that customer in more meaningful ways,” the report says.

Retail Winners (which RSR defines as achieving 5% or more annual comp-store growth) outpace laggards by nearly 6:1 (28% vs. 5%) on the CMO measure. This difference gives the chief marketing executive “an opportunity to fight for resources at the top of the organization,” line up supporters, and influence company culture to recognize that “the customer is just as important as products and stores….Retailers are rapidly coming to the realization that the customer may be more important than previously thought, and more change is needed to successfully differentiate the customer experience."

Yet no one is clearly in charge of the customer experience, say 24% of respondents. Other choices are fragmented, including chief marketing executive (22%), CEO (19%), VP Stores (9%), and COO (7%).

Retail Winners understand that to target successfully, they should know who their best shoppers are. By a 66% to 44% margin, the winners say they target more effectively by capturing more detailed customer preferences. By a 62% to 32% margin, they say they can develop better products and services through more direct customer input. By a 55% to 43% margin, they focus more on customer experiences and less on product. Also, by a 61% to 45% margin, winners leverage social media to converse directly with consumers.

The Lempert Report concurs with findings that urge the right internal retail structures, mining of consumer data, and direct communications with customers to maximize the relevant appeals of stores.