Writing in the current issue of Admap, the focus of which is DTC, Greg Paull and Shufen Goh of the R3 consultancy, distil the thinking of leading CMOs around this topic.
“Companies in the midst of changing from a primarily brick and mortar retail strategy to an e-commerce based strategy face several challenges,” they note, “ranging from how to reorganize distribution and supply chain logistics to dealing with more demanding consumer expectations and managing the full-scale digital transformation of sales and marketing.”
For many big CPG companies this is a difficult shift as they remain heavily reliant on physical retail stores owned by third parties, collecting little or no consumer data and exercising little or no control over the consumer experience.
At one time, the use of online distribution giants such as Amazon helped drive sales for such companies, but that is changing, the authors note. (For more, read the full article: Insights from CMOs: How global brands can adapt to the e-commerce revolution.)
“Essentially what is happening is these brands are paying online retailers to give them aggregate data on their own consumers, but online retailers can leverage that data to take market share away from the very brands they are carrying.”
Hence the move to build or buy DTC businesses, such as Unilever’s $1bn acquisition of Dollar Shave Club.
In order to make e-commerce work, brands need to make sure they are interfacing with the consumer at all the right touch points – traditionally a marketing function – to ensure that the larger digital strategy and e-commerce strategy are the same thing.
At the same time, e-commerce can play a significant role beyond simply making purchases. The rise of O2O (online-to-offline) trends has seen companies leverage digital touchpoints to drive people into brick and mortar stores or use gamification in physical retail spaces to add a digital aspect to making purchases. These types of experiences can help drive brand loyalty.
The role of marketing has evolved beyond getting messages out to consumers, and now the function has the real power to affect change and bring in real ROI.
“Marketing’s role is not just about branding,” says Mastercard’s chief marketing & communications officer Raja Rajamannar.
“It’s about the brand, driving the business, and building platforms for sustainable competitive advantage.”
This issue of Admap features seven articles by thought leaders from across the globe. WARC subscribers can access a deck which summarises the key thinking and advice from all the authors.
Sourced from Admap