5 stories that shaped retail marketing in 2018
Some stories — and trendlines — stuck out more than others, both because of their impact at the time and for what they say about other moves in the space.
It's been an interesting year in marketing. Social media platforms have moved more aggressively into retail, with Instagram, Facebook, Pinterest and others launching new features to make shopping easier. Retailers including Victoria's Secret and several athletics retailers have faced scrutiny for striking the wrong tone, while others have been praised for inclusive sizing partnerships and diverse ad campaigns.
Nevertheless, some stories — and trendlines — stuck out more than others, both because of their impact at the time and for what they say about other moves in the space. Here's our list of the top five stories in retail marketing for 2018.
Nike opens Nike Live store in LA
In July, Nike unveiled a new store concept that was notable for two main reasons: it was limited to members of the athletics retailer's NikePlus program and it featured heavy mobile integration. The store was built on the idea of using member data in the Melrose neighborhood of Los Angeles to provide a more personalized, local experience for shoppers — and hopefully convince some non-members to join, adding more data to the pool. Many of those features, including a locker pick-up station and a section of localized merchandise, have been carried over to the retailer's recent New York flagship, and the retailer has plans for more Nike Live stores, with the next one underway in Tokyo.
The store is just one example of the trend toward experimental concepts, which retailers are increasingly using to lure shoppers into stores in a variety of different ways. Many offer in-store services, high-touch experiences and even product demonstrations to differentiate themselves from the usual shopping trip or to better position themselves in a given market. CVS, for example, started piloting a beauty store concept in August to help it compete in a crowded space — an approach that comes with several new offerings for customers, the most notable of which are salon services.
However, Nike Live is also notable for how it reimagines the way retailers use loyalty programs, and what they give customers in response. The integration of the retailer's mobile app means Nike can collect data on its loyalty members fairly easily, ostensibly creating a positive feedback loop for both the retailer and its customers. It also speaks to a larger trend in retail, one in which retailers are giving their loyalty members more than just a few rewards points for their attendance/repeat visits. The same impulse can be found in Sephora's members-only social platform, which launched last August, and both say a lot about the changing role of loyalty in retail.
Black Diamond demands Walmart remove gear following Moosejaw launch
In August, Walmart's seemingly endless acquisition spree bore fruit with the launch of an Moosejaw outdoor gear store on Walmart's website, after acquiring the small outdoor retailer the previous February. But the launch was a mixed bag for Walmart, and premiere gear brand Black Diamond sent the big-box retailer a cease and desist letter a day after the launch demanding the retailer remove its products from the new Moosejaw page.
The gear brand claimed its products were being sold without permission and objected to them being used, “in a manner likely to confuse consumers into believing that Walmart is an authorized dealer of Black Diamond or that the new outdoor Walmart.com site is otherwise associated with or sponsored by Black Diamond,” according to a release at the time. The complaint brought into sharp relief the struggle Walmart has had in the past with branding, especially with its attempts to move into a higher value space through the acquisitions of Modcloth, Bonobos and, most recently, Eloquii.
Many loyal customers of those retailers have openly objected to the acquisitions, as the name Walmart, so often associated with low prices and low quality, left a bitter taste in their mouths. It's taken the retailer some time to ease quality and culture concerns with its takeover of those brands, though Bonobos notably claims that nothing has changed for the brand except that employee paychecks now say “Walmart.” Nevertheless, Walmart's branding troubles are not unique — Victoria's Secret has also struggled recently with a shifting tide in consumer opinion, and for young consumers shopping their conscience, it's increasingly important for retailers to get it right both inside the company walls and out.
Macy's drops out of plenti loyalty program
At the start of the year, Macy's revealed it would no longer be participating in the multi-retailer loyalty program, one of several changes the department store's loyalty strategy has undergone in the past year and a half. Signs of an upgrade arguably surfaced in September of 2017, when the retailer introduced a new loyalty program that automatically enrolled Macy's credit card holders into one of three tiers. That program has since also been upgraded, allowing customers who don't shop with a Macy's credit card to benefit from the rewards as well.
All of these changes speak not only to how much of a focus loyalty has become for Macy's, but also how loyalty programs as a whole are getting a revamp. Macy's wasn't the only retailer this year to drop the store credit card requirement — Target did the same in March for a pilot loyalty program, and many other retailers have also taken 2018 to reexamine (and upgrade) their loyalty offerings. Among others, Kohl's combined its three loyalty programs into one centered around Kohl's Cash in May, J. Crew launched a card-free program in August and Nordstrom unveiled The Nordy Club — which also paved the way for non-card holding members to participate — in September.
Many of the changes seem aimed at bringing loyalty programs in line with customers' expectations, a potentially difficult feat when beauty retailers like Sephora and Ulta have set a high bar (and keep upgrading their own programs to raise it higher). Even traditional players in the beauty space, like Sally Beauty, have upped perks. All in all, this year has been a big one for loyalty programs, both for mass merchants and department stores updating their programs and for new players like Wayfair introducing membership-based ones.
Target ends contract for Champion activewear line
Target has been moving toward private labels for some time now, but an announcement in August that it would be cutting ties with Champion in 2020 brought the mass merchant's actions into sharper focus. The C9 by Champion line was exclusive to Target, and has been on the retailer's shelves since 2014. Indeed, some analysts at the time expressed surprise that Target would drop the line when it was generating success for the mass merchant, but the move toward private label has proven to be a defining characteristic of Target's differentiation strategy.
In 2018 alone, Target has launched a host of private label lines in a wide variety of product spaces, including home decor, women's apparel, home and kitchen goods, and even a low-price consumer goods private label that takes aim at the Brandless model. The retailer's name has increasingly been tied to a private label strategy that shunts out brands no longer working with the mass merchant's image and replaces them with homegrown brands that match the retailer's chip chic branding.
Target isn't alone in that space, either. Retailers have been moving more and more toward creating their own private labels, complicating their relationships with the brands that sell through them in the process. Amazon, in particular, has gotten attention (not always positive) for the number of private labels it has launched over the past year or so, with many brands that sell on the marketplace concerned that Amazon will take data from their best-selling products and use it to create (and promote) their own private labels instead.
Nike taps Colin Kaepernick for Just Do It campaign
Ad campaigns have become increasingly bold — in all senses of the word. That said, some advertisements stick out more than others, and Nike's choice to cast Colin Kaepernick in its Just Do It campaign is definitely one of those. The campaign drew plenty of scrutiny, including some people burning Nike gear, but it also garnered praise from younger consumers who connected with Kaepernick's protests and appreciated the athletics retailer for aligning with an athlete who takes a stance on social issues.
The move toward activist or more socially conscious advertising has been made at several retailers across the board, though. Patagonia's first TV ad campaign, in August 2017, was focused on saving national monuments from the political threat the retailer saw in the current administration, and other marketing stunts since then have served a similar purpose for the company. In the case of some, like Patagonia, this more activist form of advertising sits well with both the brand's messaging and the values of its customers.
Advertisements are also getting bolder in the way they use comedy to win customers over. Ikea has been an interesting player in the marketing space for a while now, and has used ad campaigns to both poke fun at other retailers and to engage shoppers with peculiar discounts, like — say — by peeing on their advertisements. All-in-all, the category of what's acceptable (and even encouraged) for retail ad campaigns is obviously growing.
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