Stores still king as marketers fail the grade

Woolworths_MarrickvilleMetro_Store FrontRetail marketers are failing to understand how consumers are behaving in the market and what advertising influences their purchasing decisions, new research has claimed. 

Marketing services business Salmat’s latest research report has found a “strong disconnect” between the channels marketers are investing in and those that influence consumer decisions.

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The survey of Australian marketers found that while 50 per cent said their brand’s website was the top marketing channel they’d used in the last twelve months, only 35 per cent of customers said they had used that channel to inform a purchase in the last twelve months. 

More than two-thirds (69 per cent) of marketers responding to the Salmat survey we’re unable to name the ‘4 P’s of marketing’ – price, produce, promotion and place – with 46 per cent being unable to identify place as a marketing fundamental.

Salmat’s head of sales and marketing Andrew Lane said the results showed that there was a fundamental disconnect between the way marketers thought about how consumers behave and how they do.

“There’s an apparent disconnect with how marketers go to market and how consumers want to be marketed to.

“Marketers tend to continue to do what they’ve always done … but what they did two or three years ago isn’t as relevant as it was back then.”

The Salmat survey found that while social media was the second-most popular channel for marketers, it was not even in the top five for consumers, with the majority saying the channel had not influenced their purchasing in the last twelve months.

The top three channels which influenced consumers were recommendations from friends/family (72 per cent), search engine results (48 per cent) and TV advertising (38 per cent).

Search engine investment was not in the top five channels marketers had invested in, and neither was TV advertising.

Stores still front of mind

The research also found that 49 per cent of customers, on average across all categories, still prefer to buy in-store over online.

Consumers said their top reason for buying in-store was that it was cheaper (54 per cent), more convenient (50 per cent), and saves time (49 per cent).

Queensland University of Technology Associate Professor Gary Mortimer said that this was further evidence that physical retail was still king in Australia, with various estimates having put online as a proportion of total retail at just 9 per cent in recent months.

“Retailers tend to see the growth rates rather than remembering its coming from a very low base,” he said.

“That’s what creates this alarm and action that people are shifting to online … ultimately we know people prefer to go in-store and make purchases.”

Mortimer distinguished the transactional online experience, which he said was vast and convenient, with the relational experience of going into a store where consumers can touch products and speak to staff.

“We still want that engagement and we’re seeing centres moving away from places you can buy stuff, to places where you can spend an entire day,” he said.

 

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