Fragmentation in retail channels

Fraser McKevitt and Fiona Keyte of Grey Advertising London spoke at the Kantar Retail Insights Forum in Amsterdam on Thursday 30 March.

In their presentation they explored how communication and retail channels are fragmenting, and it can seem hard to capture consumers attention. The evidence strongly supports the theory that brands grow primarily though attracting new shoppers. Having accepted this, the question for brands becomes 'how do I increase my penetration, and how can advertising help me reach the right people?'

We are used to the theme of ever faster change, but it is worth remembering what has stayed the same. Store choice is still primarily a function of convenience, and in this digital age, television is still a critical way of reaching a mass audience for many brands.

Fraser and Fiona went on to discuss how personalisation at scale remains a major industry challenge. Digital services offer highly personalised user exeriences, something the FMCG industry has referenced through moves such as allowing names to be printed on packaging. The technology exists to offer more personalised pricing if retailers choose to go down that route.

Innovation thrives when category edges are blurred, with successful brands jumping across category divides or even creating new consumption occasions. Cutting edge advertising now combines both a brand message and the chance to shop interactively.

Kantar Worldpanel's Consumer Mix Modelling shows that advertising provides little return on its own in the short term, with the effects dwarfed by in store promotional support. Over the long term that picture is turned upside down, with engaging advertising essential for creating consumer loyalty and helping to keep brands on retailers' shelves.