Retail marketing is a set of strategies that retailers use to promote their products and stores to convince consumers to purchase products. Strategies focus on brand recognition, customer loyalty, and increasing customer lifetime value (CLV).
The strategies and tactics employed center around the four key components of marketing strategy: Product, Price, Place, and Promotion, but also add in two additional elements: People and Presentation.
- Product: What products should be sold that meet the needs of the target consumers?
- Price: How much to charge for products (everyday low prices, high/low pricing, competitive pricing, etc.)
- Place: Where to sell products (store locations, position in the store, or retailers (if a brand sells to a retailer).
- Promotion: What offers or promotions to apply to products and when?
- People: Training sales associates and other store staff to create a welcoming, helpful experience.
- Presentation: The aesthetics and design of the store, as well as how the products are displayed in the store.
A retail marketing manager is a person or team responsible for devising retail marketing strategies, reporting to either the store owner or a VP of Marketing or CMO. The retail marketing manager's role is to create the right mix of online and offline marketing tactics to drive awareness and purchases.
Instore Retail Marketing
Planning a retail marketing strategy for physical stores involves the products and services sold and the retail experience itself. In-store strategies consider how the store is laid out, the sounds, scents, and overall ambiance.
Additional strategies and tactics that drive traffic include:
- Retail displays and in-store promotions, including signage, window displays, and curbside features. Think about the red rollback signs in Walmart indicating price drops, the end of grocery store isles where popular products are displayed, or the center displays in a clothing store that feature the new fall fashion. These retail marketing tactics capture a consumer's attention while in the store.
- Bundling products. In this example, sales associates could recommend additional products to purchase that complement a product consumers are shopping for. For example, an associate would recommend a pair of shoes to go with a dress. Not only can the associate recommend additional products, but a display could be set up with a mannequin wearing the ensemble to entice a shopper to want more than a single piece.
- The checkout or return process. Retail marketing tactics also support buying or returning products by making things as easy and seamless as possible, improving the customer experience. This might include offering loyalty cards that provide discounts during checkout, coupons to shoppers as they browse to encourage spending a certain amount of money, or taking returns by swiping a loyalty card that has captured the purchase instead of needing a paper receipt.
- Popup stores. Popup stores are temporary setups to help promote new products, increase brand awareness, engage with customers, or explore new markets.
- Sample stations. Retail stores like Costco and cosmetic stores offer the ability to sample products and provide coupons to get discounts on those products at checkout.
Digital Retail Marketing
The traditional view of retail marketing revolved around marketing to support physical stores, but with the advent of ecommerce, it now includes marketing strategies that leverage digital channels to drive consumers to purchase on a retailer's ecommerce website or mobile application or to the physical store.
- Digital advertising. A key component of retail marketing today is getting in front of potential customers where ever they are. Digital advertising provides this ability, whether it's advertising for search or on popular social networks like Facebook, Instagram, or TikTok.
- SMS marketing. SMS marketing, or sending text messages to consumers to alert them of upcoming online and in-store sales, is quickly growing in popularity. One study found that the US SMS market will be valued at $12.6 billion by 2025.
- Contents or sweepstakes. Instant win contests, sweepstakes contests, and other awards help build brand awareness, encourage sampling products, and drive sales.
- Social media marketing. Retail brands leverage social networks to build brand awareness and create communities of loyal customers. Brands like Nike, Home Depot, Sephora, and many others create a presence on social networks like Instagram, Pinterest, TikTok, and Facebook that show their products in use and encourage product users to share how they use their products.
- Influencer marketing. Getting someone else to talk about the brand or retailer is a key tactic of retail marketing today.
- Email marketing. Email marketing is another way to get in front of consumers to provide offers or promotions. According to DMA, for every $1 spent on email marketing, retailers can expect an average return of $42.
Along with in-store and digital marketing strategies and tactics, there are also many other tactics, such as direct mail (catalogs, flyers), local advertising (newspapers), press releases, television and radio advertisements, and word-of-mouth (WOM) marketing.
Retail Marketing Analytics
An essential function of retail marketing is understanding how different marketing strategies and tactics work. Retail marketing analytics analyze shopping habits and patterns (including online sales and POS sales) to help retailers understand what products to sell, how to price them, the promotions to run, and so on.
If the retailer has a loyalty program, it can derive a lot of data from its loyal customers and understand the best tactics to build loyalty and retention, including personalized offers and promotions.
Retail Marketing Trends
Omnichannel marketing is a fast-growing retail marketing trend. The buyer journey is often a mix of digital and physical shopping, making it critical for retailers to understand how consumers are researching and learning about products and ensuring they devise retail marketing strategies that support those methods, regardless of the channel where they occur.
Cause marketing is another retail marketing trend where retailers or brands team up with a non-profit organization to support and promote the organization's work, creating brand awareness.
Another trend that is starting to develop is metaverse marketing. Retailers and brands can create fully immersive and interactive virtual experiences in the metaverse where consumers can virtually enter stores and view or try products.