28 February 2018   

5 min read
2018 is shaping up to be a big year in the competitive retail space. Here are some of the brand and marketing trends the experts expect to see as retailers look to take a greater share of the pie:
Bifurcation of the proposition

“The middle ground of so-so offerings is disappearing,” says Philip Otley, a partner at PwC’s Experience Centre. “In 2018, we will see retailers increasingly strengthening their position around value, convenience or engagement. These are three classic marketing positions and they are very different.

“A lot of Australian retailers have tried to have their cake and eat it in the middle, but now they will have to get far better at executing their position around one of these three areas.”

 

More thoughtful engagement

Otley believes that in 2018, many retailers will rethink what consumer engagement really is and how to execute it.

“In the past, we have got away with thinking that dropping a catalogue into a letter box is consumer engagement,” he says. “It’s the crack cocaine of retailing in Australia. It’s not terribly commercially or emotionally engaging, yet we are hooked on it.

“But consumers are now inundated with messaging across a plethora of channels and the 24/7 digital world is becoming almost invasive, so it’s going to be increasingly hard to get and retain the consumer’s attention and to get signals through the noise.”

In their drive to create better engagement, Otley expects retailers to increasingly use programmatic commerce and artificial intelligence (AI) to target their markets. He believes platforms like Albert will help retailers reinvent how they make their marketing dollars go further, without alienating their consumers.

“If someone hasn’t clicked through the last 10 EDMs, do something different,” he says.

“Understand that there are certain things that machines do better than humans… Don’t rely on siloed, non-connected, non- measured humans to drive a campaign. That will soon be looked upon as quite quaint.”

 

The decline of shallow branding

Otley supports marketing expert Byron Sharp’s view that consumers often have assumptions about brands that don’t stack up against the evidence.

“In Australia, we still seem to equate brand with logos, advertising and shouting loudly. The evidence overwhelmingly shows that is ineffective. But a brand that lives and passes the test when savvy consumers dig under the surface, will resonate and get the word of mouth going.

“We may find a dialling down of overt and shallow branding and a building up of brands that can be supported by experience and evidence.”

  

The slow death of demographics

Brian Walker, founder and CEO of the Retail Doctor Group, expects retailers to focus more on understanding consumer behaviour and the drivers of purchasing decisions in 2018.

This will include using the rise of neuroscience and consumer profiling.

“We will see more of the death of demographics because where I live or how old I am is no longer representative of my behaviour, but understanding the psychology of my brain definitely is,” he says.

 

Greater segmentation

With the study of human behaviour revealing that consumers are not predictable, orderly or rational, Walker expects a much bigger focus on segmentation in 2018.

Retailers are investing heavily in segmenting their data bases and are using that data to build relevant stories that are extremely targeted and which really zero in on the power of one, he says.