State of In-Store Marketing 2021 Report3 November 2021
A word from our CEO
"Retail itself is challenging, and in-store marketing is one of brick-and-mortar’s most volatile components. Requiring a unique blend of artfulness and exacting analysis, in-store marketing is not for the faint of heart.
The era of big data has been a double-edged sword for retail marketers. While we have unprecedented insight into customers’ likes and dislikes, the cost of data acquisition is high. Too often, retailers struggle to translate data into actionable strategy—not for lack of effort or resources.
Marketers have become overwhelmed by data itself, as well as marketing tools that promise to interpret and deploy said data. More and more marketing tools have not necessarily yielded better marketing outcomes. And yet, what choice do retailers have but to accumulate more intel on their customers and hope that their latest marketing tool sticks?
At Raydiant, we’ve always been about finding solutions. Faced with a slew of challenges and unrelenting pressure to acquire and retain customers, we wanted to hear from marketing professionals on retail’s frontlines. We asked them what their greatest frustrations are, what is working, and what is not.
We’ve accumulated these unique insights from 228 in-store retail marketers, combining them with analyses from the most respected names in retail.
As always, we’ve done so in the spirit of finding sustainable solutions for retailers, and for retail marketers in particular.
I hope you enjoy Raydiant’s State of In-Store Marketing 2021 report.”
— Bobby Marhamat, CEO of Raydiant
41% of marketing professionals use 10 or more tools like digital signage, CRMs, self-checkouts, and more, to achieve their in-store marketing objectives. And yet, many of those professionals do not feel they have the necessary tools to succeed in their in-store marketing efforts. Remember, more tools do not always equal better tools.
30% of marketing professionals feel they are not provided the tools they need to succeed at in-store marketing. The tools that marketing professionals have are, in many cases, not the tools that they need.
38% of marketing professionals report spending $250,000 or more on in-store marketing tools per year, yet only 56% said they see an ROI from their technology investments.
38% of marketing professionals expect to see their budget for tools and technology increase over the upcoming 12 months. Retailers are in a massive competition for consumers right now but a critical question looms: Will growing marketing budgets be well-spent or effectively measured to achieve those customers?
Marketers’ greatest challenge is measuring the impact of online marketing efforts on in-store revenue. Marketers still struggle to measure the ROI of online marketing efforts. With consumers demanding seamless cross-channel retail experiences, this is a major problem.
From August 4 – August 18, 2021, we surveyed 228 US marketing professionals who are responsible for their organization’s in-store marketing efforts. The survey was conducted online via PollFish using organic sampling through Random Device Engagement (RDE). Learn more about the Pollfish methodology here.
Part 1: Profile of Who We Surveyed
Part 2: State of In-Store Marketing
Deloitte details a “Big Shift” in retail marketing, with the shift dictating how retailers allocate their in-store marketing budget. A critical element of retail’s Big Shift is stores’ status as “a stage for customized consumer experiences.” As customers increasingly demand in-store experiences tailored directly to them, marketing professionals find themselves thoroughly overstretched.
How can marketers possibly appease a massive customer base with each shopper demanding their own miniature marketing campaign? Technological innovations are essential to meeting lofty customer demands, and marketing professionals must embrace a tech-first outlook—for their own sake, and for the customer’s.
Marketers must also monitor their peers’ successes and failures. By understanding the greatest challenges that other brick-and-mortar marketers face, and the leading solutions for overcoming those challenges, marketing pros can trim the excess from their in-store marketing budgets, better target their customers, and increase ROI in the process.
In order to better understand the current state of in-store marketing, we asked what marketing initiatives are being used at the in-store level, and where marketing efforts are succeeding or need improvements or innovation.
21.5% of marketing professionals said promoting new products and services is the #1 objective of in-store marketing efforts.
You must first set clear objectives in order to gauge the progress of your in-store marketing efforts. In surveying retail marketing professionals, we found that:
21.5% said promoting new products and services was their leading objective
14% said that centralizing customer data in a single location was their primary objective
12.7% said that enticing more passersby into their stores was their primary objective
The broad range of responses we received—product promotion, data analytics, and customer conversion and retention— indicates just how many pressing responsibilities retail marketers face. Though marketing professionals may have their own specific pecking order of objectives, everyone we surveyed likely values each of these marketing objectives highly.
Using interactive displays and digital signage was the most impactful marketing change over the past year.
Marketers want to know one thing over all else: What works? What is the solution to gaining more customer traffic and sales?
Marketers told us that the most fruitful solutions they’ve implemented in the past 12 months were:
#1 – Began using digital displays and interactive screens (17.8%)
#2 – More overt promotion of in-store products, services, and offers (17.3%)
#3 – Began offering sample products (15.4%) and one-to-one services within stores (15.4%)
By and large, technology like digital displays, self checkout, and other in-store automated technology has markedly improved marketing outcomes—most likely due to the need to offer touchless or automated options in the midst of social distancing and restricted customer service interactions. Recommendation engines, predictive analytics, and interactive features like digital displays are all catalysts for better, more targeted in-store marketing.
Measuring the impact of online marketing efforts on in-store revenue is the greatest challenge marketers face.
You can’t review the state of in-store marketing without identifying the greatest challenges that marketing professionals face. Today’s in-store marketing professionals struggle most with:
#1 – Determining the impact of online marketing on in-store revenues (33.8%)
#2 – Overcoming outdated technology and tools (16.7%)
#3 – Scaling in-store marketing efforts across multiple locations (12.3%)
Reaching customers online became a necessity as stores temporarily closed for significant portions of 2020. Most brick-and-mortar retailers will only continue to scale their online marketing efforts. As they do, more insightful data will help gauge the effectiveness of omnichannel marketing to drive in-store sales.
Offering in-store Wi-Fi and communicating more often with sales associates improved marketing outcomes over the past 12 months.
When asked to identify the most effective marketing strategies of the past 12 months, marketing professionals highlighted:
#1 – Providing complimentary Wi-Fi to attract customers into stores (43.4%)
#2 – Communicating more frequently with sales associates to ensure adherence to marketing strategies (40.4%)
#3 – Using digital signage to upsell customers (39.5%)
Roughly 74% of businesses offer complimentary Wi-Fi, and for good reason. Free, fast internet gives potential customers reason to enter your stores. Once they’re through the doors, they’re in direct proximity to your goods and services—you have to like the odds that they’ll eventually buy something. Wi-Fi login screens also offer a direct promotional opportunity through custom landing pages.
Coaxing customers into your stores—with free Wi-Fi or other offerings—is only half of the marketing challenge. Marketers are finding that another challenge is aligning sales associates with the marketing message. In doing so, marketers ensure a cohesive strategy for converting each customer who enters your stores. Additional features like digital signage are reinforcements in the quest for customer conversion.
The state of in-store marketing is rife with challenges, and how couldn’t it be? With constantly evolving consumer tastes and competition around every corner, marketers are engaged in a never-ending juggling act, as we saw with the split focus on not just product promotion, but converting online efforts, pushing foot traffic through the door, and analyzing it all to improve future planning.
But help is here in the form of digital solutions. Technological innovations, from algorithms to marketing software, digital signage, and even complimentary Wi-Fi, have made marketers’ jobs easier.
Tech’s potential to help marketers remains largely untapped, though. 35% of brick-and-mortar shoppers have yet to personally experience in-store tech that they’ve heard about through popular culture. As marketers probe for weaknesses in their in-store strategies, they may consider not just how tech, but the right tech, can help them overcome their most pressing challenges
Part 3: Day-to-Day Challenges
As IBM notes, the broad challenge that retail marketers face is giving customers what they want, when they want it, in the manner that they want it delivered. We wanted to find out the more specific obstacles that marketers face on a day-to-day basis. How better to find answers than to ask?
Challenge 1: Delivering consistent customer experiences across locations.
Challenge 2: Implementing new in-store technologies.
Challenge 3: Getting all the different tools we use to work together.
Challenge 4: Protecting customer data and our systems from security threats.
Challenge 5: Spending time designing in-store promotions and marketing campaigns.
Challenge 6: Measuring the ROI of in-store marketing efforts.
Part 4: Tool Stack
Retailers spend a small fortune on marketing tools each year, from analytics tools to scheduling software to CRMs. Yet, the responses of marketers indicate that despite an overabundance of platforms and gadgets at their disposal, their tool stack leaves much to be desired. When surveying their digital toolkit, marketers are overwhelmed and largely unimpressed.
Harvard Business Review concurs with marketers’ sentiments, explaining how retailers can be easily wooed by promises of conversion-generating marketing software. Too often, initial promises fizzle into poor integration, crummy leads, disappointment, and more marketing dollars down the drain.
Marketing technology (or “martech” as HBR refers to it) is absolutely necessary to compete in retail today, but specific marketing tech often falls short. Retailers that want to get the most out of their marketing budgets will pay attention to marketers’ honest assessments of their tool stacks.
State of Adoption of Different Tools and Technologies
We asked our respondents to comment on marketing tools used at their company, and specifically how happy they are with the tool. Here’s what we found.
Already using — very happy with our tool: Respondents are actively using, and happy with, the following top three tools: Contactless payment technologies (45.2%), self-service checkout technologies (43.4%), and buy online, pick up in-store technologies (41.7%). We can see that these tools were most likely adopted and deployed during the pandemic shutdowns.
Already using – unhappy with our vendor, looking for a new one: The top three tools that might need a vendor switch include loyalty marketing platforms (27.2%), appointment scheduling software (21.9%), and buy online, pick up in-store technologies (21.5%).
Not using yet but actively searching for a vendor: Tools that retail stores have committed to adopting yet are still pricing out include customer relationship management (CRM) tools (21.2%), and a three-way tie for in-store analytics /data, appointment scheduling software, and in-store personalization platforms (18% each).
Not using yet and no plans to use anytime soon: Tools that marketers don’t plan to use include digital signage/displays (17.1%), in-store personalization platforms (16.7%), and automated/self-service checkouts (15.8%).
41% use 10 or more tools to achieve their in-store marketing objectives.
An astounding 15.8% of marketers use 21 or more individual marketing tools to achieve their in-store marketing objectives. One has to believe that greater consolidation is possible. Retailers that can locate and integrate more dynamic marketing tools may ease the burden on employees, slash waste from their marketing efforts, and improve customer experiences. However, the majority of our respondents (23.3%) are using only between one and five tools.
29% of marketers feel they are not provided the tools they need to succeed at in-store marketing.
An abundance of marketing tools generally reflects retailers’ insatiable appetite for customer data. Yet, even with the typical marketer using at least 10 marketing tools at any given time, 28.5% of them don’t feel they have the necessary tools to succeed.
Whether marketing tools fail to accurately capture customer profiles, provide accessible data, or fall short in other respects, it’s clear that more tools aren’t always the solution to lagging marketing outcomes.
38% of retailers are spending $250,000 or more on in-store marketing tools per year.
How much are companies spending on in-store marketing technology each year? The majority (21.5%) report that their company spends between $100,000 and $250,000 each year, with the second largest segment (17.1%) reporting expenses of $250,001 to $500,000.
Finding the right marketing solution is one of the five greatest challenges that retailers face. While context (i.e., size of the retail organization) is important, it’s clear that retailers are spending significant resources trying to find the latest, greatest in-store marketing solution. As marketers tell us, many of these expenditures are in vain.
It’s imperative that retailers listen to their marketers. You should regularly pose questions like “Which marketing tools work for you?” and “Which are more cumbersome than helpful?” to your marketing team. With an endless supply of marketing “tools” out there, you must be quick to cut the losers and double down on the winners.
More than 21% of marketers see no ROI in marketing tech or are unsure of their ROI.
When asked whether marketers are seeing an ROI from their usage of technology and tools, 54.9% said that yes, they were. This means that the adoption of technology into marketing efforts is having an effect, over half of marketers are seeing their investment in things like digital signage, touchless checkout, and more pay off.
However, 20.8% were not seeing an ROI, and 24.6% couldn’t tell if they were seeing an ROI or not—which is also telling.
While behavior tracking and analytics dashboards have enabled unprecedented insight into customers’ shopping patterns, many marketers still struggle to interpret data. As marketers spend more and more to acquire customer data and implement other marketing tools, it’s easy to lose track of ROI.
HBR suggests keeping your in-store marketing as simple as possible without becoming archaic. Bombarding customers with too many in-store marketing features can have a repelling effect. Simpler marketing strategies may also help your accounting. The more efficient your in-store marketing is, the easier it may be to track your ROI.
34.2% of marketers believe they should be getting more for their in-store marketing expenditures.
A sizable contingent of retail marketers (34.2%) feels that their marketing budget is not being maximized. Yet, 45.6% of retailers believe they are getting a strong return on their in-store marketing investments. This begs the question: Are some retailers simply allocating their in-store marketing budgets more dynamically and intelligently than others?
38% of marketers expect to see their budget for tools and technology increase over the upcoming 12 months.
Gartner explains how data is the key to agility and adaptability in retail. This need for more—and more insightful—data absolutely extends to in-store marketing efforts. It should be no surprise, then, that 38.2% of marketers anticipate an increase in their marketing budgets in the coming year.
In times of uncertainty, retailers have learned to bet big on data. In-store marketing remains a vital facet of brick-and-mortar retail, and should remain a prime focus of budget allocation in the next 12 months.
Competition for customers intensified roughly three years ago, when Harvard Business Review and Deloitte uncovered marketers’ plan to increase spending by 198%. Retailers sought to improve customer acquisition and retention, and they’d invest heavily in marketing to do so. And yet, as our findings reveal and HBR confirms, in-store marketing still suffers from noticeable shortcomings.
Retail marketing is eating an ever-growing piece of the budgetary pie, with an endless stream of marketing tools to show for it. Yet, marketers tell us that those investments aren’t necessarily paying off. Customer data isn’t any clearer, and the onslaught of marketing tools is producing modest gains at best, and significant losses at worst.
Even with these apparent problems, retailers feel understandable pressure to invest more in their in-store marketing. The question is, how can these retailers invest their marketing budget smarter?
Solutions must involve communication between marketers and their bosses. Understanding which marketing tools are providing tangible results, which warrant further examination, and which should be tossed aside is vital to marketing success.
There is also a healthy balance between blindly adopting every new marketing tool and tightening the belt to the point of suffocation. Retailers that are overly optimistic about marketing tech, or overly cynical, may both suffer dearly. The former may never achieve the marketing ROI they dream of, while the latter may fall quickly behind competitors willing to invest in effective marketing tools.
Marketing technology has perhaps the greatest potential to position retailers for long-term success. What every retailer must determine, though, is which marketing technologies are providing identifiable benefits, and which constitute an unpatched leak in your marketing budget.