It’s no longer digital or physical: today’s shopper blends online and brick and mortar.
Retailers and brands can optimize their ad spend by rethinking media.
To keep up with the retail revolution, digital transformation is key. Today’s consumer, after all, relies on both physical and online platforms in their shopping journey. That was the message at Shoptalk, the world’s largest conference for retail and e-commerce, which was held recently in Las Vegas.
On a panel discussion called “The Digital Transformation of Traditional Retailers and Brands,” The Hershey Company’s chief digital commerce officer, Doug Straton, joined Narayan Iyengar, senior vice president, digital and e-commerce with Albertsons; Suzanne Hader, chief marketing officer with John Hardy and moderator Zia Daniell Wigder, who is Shoptalk’s chief global content officer, to discuss the challenges and victories of their experiences working towards a more digitally enabled organization. They shared advice on creating a common strategy, evangelizing, rethinking media spend and more. Here are six key takeaways for retailers when it comes to digital transformation.
Today, the shopper journey isn’t digital or brick and mortar, rather, it’s a blend. Iyengar said that at Albertsons Companies, the bulk of shopping starts online, where people make their shopping list and clip digital coupons, and then ends in the physical store, where the purchases are made. Straton said that when he thinks of the grocery store of the future, he doesn’t discriminate between the physical and the digital. “What’s happening on the digital shelf is affecting what’s happening on the physical shelf and what’s happening on the physical shelf is affecting what’s happening on the digital shelf,” he said. “I think those things have to be thought of together not separately.”
At The Hershey Company, the first step towards digital transformation was defining an overall company strategy that could guide all aspects of the company today and well into the future. That strategy, said Straton, is called the “innovative snacking powerhouse strategy,” and it informs every decision the business makes. “Once you have a unified strategy, you find terminology and verbiage that goes along with it,” he says. “Once everybody’s speaking the same language, you can get them together on a common journey across the different functions and start to make different decisions holistically, as opposed to in silos.”
When you have that common language, you can start tying it back to the company’s initiatives so that everyone understands how digital initiatives connect to their role and vice versa. Straton said that about 50 percent of his time is spent evangelizing to different groups, “and getting them used to hearing the language of how things get tied together.” Iyengar pointed out that while evangelizing is vital in getting people to work together towards a common digital purpose, it demands a certain finesse. “The biggest risk to aggressive evangelizing is every now and then you come across someone who gets very excited and overstates the case and puts a lot of capital behind the flashy new thing that maybe six months later dies down,” he said. If that happens, then there’s a risk of everyone pointing to that time when a tech-driven initiative crashed and burned.
Retailers can act as publishers for brands. Iyengar pointed out that Albertsons can roll out digital ads that say “Buy Hershey at Albertsons” and share the results with the brand to show its reach. “Two-thirds of the coupons used in our stores are not physical coupons,” says Iyengar. Straton said that this kind of approach could be quite effective for some brands, especially if the retail partner has a national or regional reach. “It goes back to do I get the ROI and the efficiency and efficacy from Albertsons that I do from my media partners? And if they win, the investment will go there. If not, then it’s an important conversation that has to take place to try and make the most of it,” he said.
Suzanne Hader pointed out that some of the retailers John Hardy works with are also going through digital transformations themselves. Her team knows its customer in a deep and meaningful way and can share those insights and help retailers better understand the shopper journey. “We tend to share as much information as we can about targeting strategies, content, and best practices with merchandising to be able to grow those touch points,” she said. Straton pointed out that Hershey has category leadership and helps its retail partners make decisions about shelving and product placement. “There’s a lot of data sharing going on,” he said. He added that retailers and brands have insights that can complement one another. “Retailers would say we have more transaction data than you can ever have, and that’s true. But they’re never going to be able to think about what that specifically means to that category, and how can I use that more broadly? That’s where manufacturers and retailers can work together,” said Straton.
Just because you can collect it—should you? That’s something that retailers and brands need to ask themselves. Straton said that Hershey scrutinized its internal systems and whittled down data storage providers by about 50 percent. “We had to come through and say how many data platforms do we have? Why do we have that many data platforms? Why are we collecting all this data? What’s the use for it? How long are we going to store the data? We had to be very intentional about the types of data we wanted to bring in service of all of our consumers and our customers,” he said. He added that the team at Hershey also reduced tools for visualization and analytics by about 50 percent. “We made strategic decisions around where we want to be or what we want to be and from there, we asked how do we simplify this so the magic comes out in an easier and more fluid way?”
When it comes to established retailers and brands, that digital transformation process takes time, effort and evangelizing on the part of leaders. But to keep pace with the shifting retail landscape, and the ever-changing shopper, evolution is imperative.
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