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The state of Retail Marketing in Romania

21/10/2021

Creativity and retail communication

The advertising industry has some interesting challenges right now. On one hand, it is the competition for human resources that many companies in the IT sector have entered, on the other hand, it is also about the fact that creativity is limited and the constraints generated by the uncertain context in which we find ourselves. But creativity is found in abundance in many other aspects: the way channels are mixed, the way data is used, the way unexpected partnerships are created between brands, agencies, influencers, retailers, and the media.

In general, the industry has relied heavily on the implementation of campaigns/ideas that have proven successful in the past. But exceptional creative resources still exist in the agencies and I am convinced that we will see truly creative communication campaigns again. It is up to the agencies to "go the extra mile", not to give up proposing new, creative approaches, just because they have not materialized in the past. From this point of view, I think the pandemic has opened up a lot of customers' availability to try new routes and be braver.

If we refer to communication in Retail, I think we can say that things are maturing. That is, we tend to what is happening in mature markets. Brands invest much more in creative visibility solutions, such as spectacular placements or omnichannel interactions. From these, we see more and more. However, in terms of brand activation and retail promotions, we cannot say that there have been significant changes.

The immediate impact of the Corona pandemic.

At the operational level, Retail Marketing was clearly impacted in a negative way by the pandemic. Many projects have been canceled, postponed, reconfigured, resized. But at the mindset level, the impact was the opposite, a positive one. He reminded both agencies, brands, and retailers that our mission is a common one: to create pleasant shopping experiences, to increase the loyalty of shoppers, and to find creative ways to reward them for it.

The good news is that retailers have been much more open to new ideas. Some were even initiated by themselves. Interests have harmonized in the same direction: creating a safe, but also the pleasant environment in which consumers can shop.

The long-term impact.

There is a lot of talk about changing consumer behavior, about moving grocery purchases online. This is certainly a growing trend, but one that will not dramatically change the shopping experience in the medium term. In the campaigns we run we see that shoppers are still open to buying from physical stores, they are open to interaction with brand representatives. But there are also changes that will settle. For example, more calculated behavior, in which consumers use more shopping lists or use different stores in parallel for different categories of grocery, depending on the offer. I also believe that brands that prove to be truly responsible, that they are really involved in the community, will benefit.

Regarding the brands, I don't think the interest in retail marketing will decrease, because on the shelf you finally win the race for market share. What we believe will change in the long run is a better marriage between data and tactics. Brands had a break during this period to focus more on collecting data from the shelf and analyzing the impact that their actions have in stores.

Gauging customers’ interest

Retail Marketing is still a fundamental tool, especially for FMCG or Consumer Electronics brands. During all this turbulent period, the interest did not decrease. Even during the lockdown period, customers kept asking us, "What news do you have?" When do you think we can resume campaigns? What else can we do in the meantime? ” And what is true, they looked for any possible solution to continue to be active in retail: through hybrid promotions with online fulfillment, through special placements and POSMs, through sampling machines.

But indeed, probably more than 30% of retail marketing budgets have moved into online campaigns, e-commerce campaigns on retailers' online pages, in tactical promotions carried out on home-delivery applications. But video channels have also attracted some of these budgets, with both TV and video content for social media benefiting from the increased audience.

What we think is very beneficial for everyone is that it has increased on the one hand the appetite for experimentation and on the other hand the desire to measure the results. Now marketers can analyze and decide more informed which channels and tactics produce the desired return for their brands and decide more informed which mix is ??ideal for achieving the objectives.

In-demand retail marketing tactics

In the context of limiting face-to-face interaction, we would say that "Visibility is King". Many brands invest in increased visibility, through more numerous and spectacular POSMs, through special placements or even shops-in-shop.

The promotions did not stop for any moment, not even during the lockdown period. The number of national campaigns has increased and is still an important pillar in the marketing strategy of many FMCG brands. Instead, tactical campaigns, with instant prizes after the cash register, were replaced by a format that was growing in popularity even before the pandemic: hybrid promotions that extend shelf communication through promo cards attached to a TVC or social advertising display campaigns mediate.

There is also a growing interest in the online channels of traditional retailers. The fight for visibility has spread from the physical store to websites, online shops, or social media channels.

Price promotions or "Buy 1-Get 1" offers still exist and are used mainly in times of "crisis" to boost sales, but they are not really generators of brand equity.

Future trends

The pandemic has accelerated many trends that already existed in the market, both in terms of the retail ecosystem, retail marketing tactics and shopper behavior. Proximity shopping is one of them, but it has been going on for a long time if we look at the expansion of local retail formats. The digital transformation of stores is also something visible. Retail loyalty programs, often passed on mobile applications, self-checkouts, personalized promotions are already a reality in the shopping experience and this is an exceptional thing. Consumers had been preparing for them for a long time.

The emergence of new players in the tech area in the retail marketing system is also something we expect and to which we actively contribute through multiple projects in which we are involved. Feasy, Bringo, Sample it, Tappy, TheSquad, Tokinomo or Samplia are just some of the startups that come to complete the toolkit of a retail marketer. As a result, the industry is becoming more technological and eventually the shopper's experience will be more targeted and relevant.

However, there is a trend that no one expected and that will not disappear soon, in fact, most likely, never. We all realized that we can do many more things from home. Shopping, entertainment, but mainly: work. So we will see this phenomenon of cocooning, in which people stay longer at home or in their nearby communities. This translates into fewer shopping occasions, but more opportunities to activate consumers in their home, in an environment where they feel comfortable and safe.

Romania vs. Western Europe

Compared to consumers in the western markets, the Romanian consumer is much more similar than one might think, both in the positive and in the negative aspects. Throughout this period I have been in constant contact with the partner agencies of the EFMP association (European Field Marketing Partners www.efmp.com) and it is obvious that all markets face the challenge of recruiting and retaining human resources for everything that means retail work. In some countries the problem is even more serious, as it also affects the supply chain and the products practically do not reach the shelf. State benefits and jobs in everything that means gig-economy have a real impact on the labor market.

At the same time, in Romania, as in the West, the agencies do not stand still. Extensive retention programs are created, spread over even 3 years, and investment is made in the development of in-house IT platforms to streamline operations, training or data collection. And of course, many activities move to alternative or digital channels. We are talking here about product launches exclusively online, communities of ambassadors, on-demand sampling or digital in-store media.

An advantage that our country has is the fact that, despite all the existing home delivery solutions, many Romanian shoppers still go to stores with interest. They still want to see, touch, test products before buying them, they still want to walk through the shelves to see what's new. And this is an excellent opportunity for any brand that wants to stand out in retail and is willing to do it in a creative and responsible way.

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