The Great Digital Disconnect

Like many things that come along in the world of retailing, digital content and especially digital coupons have been a disappointment to many with regards to their immediate impact to the business.  While shoppers are increasingly pre-shopping on-line, loading coupons and building shopping lists prior to their journey into the world of bricks and mortar, their activities still remain on the peripheral of most retailers mainstream focus.  This is particularly true in the grocery channel, where I have spent the majority of my career.

There are number of theories about why digital content has not become a more significant element of shopping.  Some of the barriers that are evident to me are;

  • Lack of Technology Integration In-store:  That translates to the inability for most retailers to allow the shopper to actually use their mobile device in-store to aid in the shopping experience.  Mobile payment capabilities, while catching on, is still not ubiquitous to the point of becoming mainstream for the shopper or the retailer.
  • Competing Value Propositions: Brand money and retailer focus always migrates to those elements that move cases, drive sales and can be measured.  While digital content is considered slick and most retailers believe it is the communication media of the future, paper coupons, weekly circulars, and other traditional promotions still bring drive the vast majority of sales and the quick return on investment that brands and retailers must have to run their business.
  • Dearth of Digital Content:  This is the biggest void.  Clearly many retailers and manufacturers are dipping the toes in the water, but digital offers and information continue to be an under-nourished entity, which is especially damning if the brand and retailer want to target this content so that it is meaningful to the shopper.  Hundreds of digital offers, covering some of the highest household penetration categories need to populate the offer bank, not a just few dozen, that mostly contain high margin, low penetration categories, that is the norm today.

Digital content has been wrongly positioned (in my humble opinion) as a series of stand alone events and content that often have no connection to the mainstream value proposition of the retailer.  To that point, there is an opportunity to gain acceptance and reach a degree of critical mass with digital content, if two things happen.

  1. The digital content is directly linked or layered to existing value elements of the retailer.  This means digital deals that are positioned as bonus savings on end cap items in the store, front page items in the circular, or even targeted offers that are in direct mail or email communications.
  2. There must be evidence of these digital offerings in-store.  Signs with QR codes to connect with content, references to how to load digital content to the shopper’s account while the shop in the store is rare.

When these conditions are met, shoppers will embrace the offers, engage with digital content programs at a much higher level.  Consequently, brands will be more likely to spend their trade or shopper marketing dollars with the retailer who can deliver a more holistic digital approach.  Then the fun begins.

 

mh

 

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