Understanding how target shoppers behave across different channels is set to be the next biggest battleground for retailers, according to advertising supremo WPP chief executive Martin Sorrell.
Speaking at WPP’s The Future of Retail conference today, Sorrell said the demise of the high street and explosion in e-commerce has sped up the development of shopper marketing in mature retail environments such as the UK.
“One of the areas growing significantly is shopper marketing. In the mature markets, this is where the battleground will be for retailers,” he said.
For retailers to succeed in the new era of smaller physical stores and expanding online offerings, significant investment must be pumped into shopper marketing in an effort to make it part of an overall integrated marketing approach, according to Sorrell.
He said: “This is a new era and new balance and it demands a new formula. Legacy retailers are going to have to change their formats and pattern of investment.”
Sorrell criticised ‘legacy’ retailers for failing to think of online shoppers and physical shoppers as the same entity. He also criticised them for failing to treat a customer who shops in the same store in the UK and abroad as one and the same.
He said ineffective IT infrastructures meant some legacy retailers were unable to “treat you as a customer on a coordinated basis”. In contrast, he said, new online retailers who are “starting from scratch” are able to do this much better.
While Sorrell acknowledged the growing power of pure-play retailers, he also spoke out in favour of traditional retail models and the role of the local shop in the community. “Congestion, lack of time and professional pressures means that people are going to do more online stuff, but they will still go to their local shop for the experience of shopping. The concepts of retailing are changing dramatically,” he said.