Omnichannel Marketing and Digital Media Budgets
BARD is always following shopper marketing with a focus on trends within manufacturing and retail partners. As 2015 is coming to a close we wanted to examine the latest information regarding digital media budgets, strategy for 2016, and the pulse within omnichannel marketing. Is it really dead as some recent articles profess? Absolutely not, its form has just evolved. We’ve looked at some specific food, CPG and retailers to give a sense of the shopper marketing landscape.
Campbell’s Digital Media Focus
As part of Campbell’s strategy to become a more nimble organization, they have nearly doubled their digital budgets in 2015 from 22 percent to just over 40 percent. As part of their strategy they are trying to adopt a consumer-first mindset and focus on where consumers are.
Currently Campbell’s organizes around brand strategies. They have implemented daily huddle meetings for the category team in an effort to become more agile, discussing hot topics of the day and dividing up the work.
For the Integrated Marketing Vice President, Yin Woon Rani, the focus includes the 4 Ms, measurement, multicultural, mobile, and doing things that matter. For example, messaging about food focuses on “real food” that matters.
Target’s Digital Media Focus
Target has allocated 61% of their budget for digital and social for Q4 2015, up from 51% in Q4 last year.
If we look at the focus and strategies for Target and Walmart, they are breaking down silos, and not looking at online versus offline sales. They are becoming channel agnostic. It’s all about giving the consumers what they want, on demand and being guest obsessed, not channel obsessed.
Walmart and Omnichannel Investments
We know that average spending is highest by customers shopping both online and in-store at Walmart. The same holds true for the Target guest as well. According to a recent article on Trefis, an average in-store only Walmart customer spends approximately $1,400 a year at its stores, compared to $200 among online customers. Customers that shop through multiple channels spend $ 2,500 a year.
Based on the revenue opportunity and competitive retail space, Walmart must compete with an enhanced customer experience through seamless shopping. This includes online order and store pick up, a faster fulfillment network, and building new data capabilities to enhance customer experience. According to Treflis, Walmart plans to increase its capital expenditure on digital initiatives and e-commerce from $700 million in FY15 to $1.1 billion in FY17, with the belief that this expenditure will improve future growth.
The challenge for marketers is still ensuring that they have proper measurement in place to track cross channel efforts. According to a June 2015 survey of CMOs from eMarketer, more than one third are not using a robust form of measurement for cross-channel marketing efforts.
Only 11% of CMOs worldwide said they have an advanced omnichannel strategy implementation at their company, which is defined as cross-channel integration between online and offline.
Based on the measurement challenges and opportunity for tracking cross-channel efforts, and that large retailers such as Target and Walmart are still figuring out and investing in creating a seamless customer experience, there is still a ways to go in solving omnichannel.
Source: Ad Age Oct 29, 2015, Trefis, November 11, 2015, eMarketer, Nov 11, 2015