David Bielenberg
Consumer behaviour is changing. In the ‘uber-fication’ of categories, people increasingly expect shopping experiences to be immediate and on-demand as lockdowns and global supply-chain disruptions have accelerated a shift to ecommerce and omnichannel consumer journeys.
Technology is also facilitating a shift in behaviour. Retail media networks are enabling discovery at the point of sale; whilst creator commerce and shoppable media are enabling sales at the point of discovery.
This is reframing the role of media in the marketing mix. Whereas previously it was focussed on driving demand, there is a growing expectation for it to also fulfil it; blurring the lines between media channels that create mental availability, and sales channels that create physical and digital availability.
From funnels to flywheels
For all its flaws, the traditional marketing funnel provides a lot of utility. It helps us structure audience, channel, messaging, and measurement hierarchies; and it fits perfectly onto a PowerPoint slide. The main limitations are that it doesn’t accurately describe consumers’ relationships with the category they are shopping or reflect the dynamic nature of omnichannel consumer journeys.
The flywheel model is a cyclical interpretation of the consumer journey, incorporating all three elements of the demand chain: marketing, sales, and service; with consumers at the centre. Media has traditionally been a tool within the marketing function, but as consumer expectations and technology blur the lines between them, we need to start thinking about its role within sales and service as well.
The role of media in the retail flywheel
The flywheel model allows us to shift from structuring consumer touchpoints around stages of a linear journey, to aligning them against consumer need-states, which can occur at any time or in any order.
Instead of thinking of broadcast media as upper-funnel, digital media as lower funnel, and customer comms as driving retention/loyalty, this framework enables marketers to determine the optimal mix of paid, owned, and earned channels based on their ability to fulfil the consumer need wherever they are in the journey.
As media takes on a greater role across all stages of the demand chain, the tactics within each pillar need to reflect consumer needs through the lens of emerging capabilities.
Marketing: Making entertainment shoppable
Entertainment has always been a key driver of product discovery. The recent ‘White Lotus effect’ where program locations have driven tourism for Sicily and Thailand is a great example of this. Given so much inspiration occurs within media content, there is a growing role for media to build shoppable functionality into discovery environments.
Creator commerce has emerged as a powerful tool where influencers, content creators, and live commerce events blend entertainment with retail. The live commerce market is currently worth around $7 billion USD in China, and with measurement capabilities improving locally, we can expect to see rapid growth in this area.
Outside of social, turning every ad in an opportunity to shop is a top priority amongst marketers. According to eMarketer, over a third of US marketers plan to focus more on shoppable ads in 2025.
CTV is emerging as the fastest-growing shoppable channel in this space, especially amongst younger consumers.
Sales: Making omnichannel shopping personal
Even with high rates of ecommerce penetration, shoppers still value the personalised service that comes with the in-store retail experience. Research by Retail Express found that over half of all shoppers visit physical stores before making an online purchase, and that 48% shop in-store to receive personalised customer service. To address this tension, media needs to bring the more personal aspects of the in-store experience into digital touchpoints.
Technology adoption is unlocking opportunities product exploration. AR lenses can be embedded into digital media formats allowing for virtual try-ons and fit-outs; while AI shopping assistants, such as Amazon’s ‘Rufus,’ will revolutionise the way consumers find product information based on their specific needs.
Service: Facilitating customer communities
Extensive analysis by the Ehrenberg Bass Institute has shown customer ‘loyalty’ to be a side-effect of market share. However, the continued fragmentation and streamlining of customer experiences have made it even more challenging for retailers to win repeat purchases. Data from Ipsos shows that the number of retailers that Australians buy from increased by over 67% during the pandemic, with an average repeat purchase rate of only 28%.
To overcome this, media needs to leverage retailers’ first-party-data to create post-purchase experiences that continue to deliver value for customers, such as product tips, tutorials, and events. Bunnings Warehouse’s YouTube channel is great example of creating a satisfying post-purchase experience that keeps their customers engaged and builds ongoing relationships.
A generational shift in how we think about media
Consumer behaviour and technology adoption has created more complex consumer journeys and blurred the lines between the demand chain functions of marketing, sales, and service.
For retailers in particular, this means that the marketing funnel needs to evolve into a consumer-centric flywheel when it comes to designing ecosystems across both media and distribution channels.
David Bielenberg is National Head of Strategy at PHD.