The growth of digital channels and omni-channel consumer behavior is having a huge effect on marketers and merchandisers in retail.
Whereas marketing was once the communications arm of merchandising, tasked with promoting the categories and assortments negotiated with suppliers, it is now an equal partner. Today marketing is responsible for all things customer – customer insights, customer focus, customer communications, and customer promotions.
In the new RSR report ‘Bridging The Gap Between Merchandising And Marketing: Closing the Loop’ increased price sensitivity seems to be the biggest driver behind pricing strategies.
At the same time marketers are struggling with digital marketing. The RSR report also shows that the biggest two challenges facing them are knowing which tactics work best in which channels and measuring the effectiveness of different marketing tactics.
Unfortunately, the pressure to promote combined with a lack of understanding of digital channels is a dangerous one. Retailers find themselves running more promotions via channels they don’t understand with little visibility into how well they are working.
With being able to predict the impact of future pricing, assortment, and promotional decisions being a challenge for 52% of retail winners and 31% of others, it’s not surprising stock-outs occur in unexpected places and there are unanticipated margin reductions, which ultimately impact retailers’ profits.
The result is unforeseen impacts on merchandising’s carefully prepared plans, which is causing increasing friction with marketing.
What’s to be done? According to RSR customer segmentation can serve as a bridge to diffuse the tension. While focusing on specific categories and segments can help both parties understand the impact of promotional activities and reduce the unintended consequences.
Learn more with your complimentary copy of the report.
Joerg Koesters is a Technology Marketing Executive with passion for Retail and Consumer industries, and a retail ambassador for SAP.