The communication channels to the consumer have expanded in number as well as complexity with the global expansion of the Internet and related information technology based products and services. Information technology has dramatically changed how consumers process (or avoid) information delivered by marketing professionals and has eroded the effectiveness of media advertising. The reason for this erosion is due to fragmentation of retail audiences caused by the introduction enhanced media sources such as cable television, blogs, video-on-demand, webcasting, webzines, video games, websites, digital video recorders, and multi-functional communication devices (cell phones). The result of these technological and media advancements creates a shift in bargaining power give consumers choices about how, when, and where they consume information.
An area where the impact of the changing marketing environment is visible is in the retail sale of products and services. In a recent study, researchers found personalized advertising increased consumer response rates. The growth of the Internet has changed how marketers interact with customers and how customers buy products and services. Research findings concluded the Internet shifted power from the retailer to the consumer due to the ease of comparing prices and/or product quality, resulting in decreasing profit margins. More specifically, today consumers are more advanced (at least 1 year of college education), have more discretionary income (household income of over $50,000) and have greater access to information (have a computer in their homes).”
Retailers cannot afford to ignore the Internet as a marketing and fulfillment channel. An average of 2.3 Internet sources influence over half of the purchases of high touch retail products such as clothing, appliances, and furniture purchases. Based upon these statistics, it is clear that marketers must integrate their retail and Internet marketing strategies for continued revenue growth. Alternatively, online retailers lacking a physical storefront, offer convenience, information sharing, user-generated content, and comparison shopping as differentiating factors to compensate for the in-store experience.
Therefore, retailers seeking to expand their brand into the online environment will need to invest in the online experience, as part of a multichannel strategy, to reinforce and complement the in-store experience. For example, if customer service is a key differentiator in a retail store, then the experience should be replicated by providing interactive help, rich media (video) demonstrations, and product comparisons. Consumers will demand the ability to order online and retrieve/return the product at the supplier’s storefront or other distribution points.
As domestic industries approach maturity, companies will to expand globally to continue revenue growth. Evidence of globalization is visible everywhere as companies face competitors in their home markets as well as from abroad. Not only will marketing managers have to compete with national companies they are familiar with, their new global competitors have creative products, ideas, and practices which demand innovative and aggressive responses including partnering with other firms and intermediaries to enhance their competitive capabilities.
The key learning’s from this article are marketers must personalize their marketing messages to navigate successfully through the tremendous amount of advertising background noise. Companies should undertake steps to identify customers, differentiate between them, find opportunities to interact, and finally customize its products or services to meet customer needs.