The Challenges Of Retail Marketing

Chris Gilroy has built his career with a keen focus on the top and bottom line through retailing in media, telecommunications, big box retail and building a global retail network. For all the clichés about retail, the fact is that retail marketing is more sophisticated and more accountable than ever. The proximity to the point of sale and the moment of truth makes retail marketing particularly challenging and exciting in this day of data and technology. Chris shares his experiences from studying economics at university and an interest in the impact of low-cost airlines through to his most recent role building the Decathlon brand and business in the UK.

You can listen to the podcast here:

Follow Managing Marketing on SoundcloudPodbean, Google Podcasts, TuneInStitcher, Spotify, Apple Podcast and Amazon Podcasts.

We did machine-to-machine technology, which is what we called it at the time, which was IoT but was showing the capabilities between ordering a pizza off your phone and getting it delivered by a moped. Obviously, now we call that Uber Eats or Deliveroo.

Transcription:

Darren:

Hi, I’m Darren Woolley, founder and CEO of TrinityP3 Marketing Management Consultancy. And welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.

This week, our attention turns to making the cash registers ring as we stack them high and watch them fly in the world of retail.

But for all the cliches about retail, the fact is that retail marketing is more sophisticated and more accountable than ever. The proximity to the point of sale and the moment of truth makes retail marketing particularly challenging and exciting in this day of data and technology.

My guest today has built a career with a focus very much on the top line of sales and the bottom-line profit in media, telecommunications, big box retailing, and building a global retail network. He also sits on the regional board of the Chartered Institute of Marketing.

Please welcome to Managing Marketing, Chris Gilroy. Welcome, Chris.

Chris:

Thank you, Darren. Great to see you.

Darren:

Well, look, yeah, I’m interested in this conversation because I actually started in advertising at what was called a retail agency. And back in those days (because I’m talking last century Chris, or last millennium, as some people point out), retail was seen as the down-and-dirty end of marketing.

But a lot’s changed, hasn’t it? In the last 20 years, when you think about retail.

Chris:

When I think about retail and in terms of businesses, I think of it as the physical expression of your brand. It’s where a customer is seeing your brand come to life. It’s where you’re putting your best foot forward regarding what you can offer your customers in terms of products and services.

And from a retailer’s perspective, it’s where you can really understand that customer needs. You can see your customers, what segmentation, what demographic they might be. How can I look at that customer over a period and understand their lifecycle? How can I market to them different products? How can I build loyalty with that customer and stickiness with them?

So, retail is very much alive. And now, I guess you’ve got more touchpoints in terms of communicating with the customer and you’ve got online as part of that journey. You’ve got the apps and you’ve got partnerships.

Darren:

Yeah look, you’re right, it’s become more complex. But I think one of the things that’s enabled that, and you touched on online and e-commerce, but I think one of the things that’s really helped is data. The ability to be able to scale the knowledge that you have about your customer, whether that’s through supposed loyalty programs. But almost all retailers have a way of capturing that data around their customers, don’t they?

Chris:

Yeah, a hundred percent. You’re able now to understand the frequency of visit. You’re able to understand obviously the basket of goods that they’re buying, how often they’re buying them, what the value is of them.

And then you can absolutely upsell and cross sell to them in a way that is going to be useful to them. You’ll see online the likes of an Amazon or offering you, serving up to you what might be a suitable added purchase, a suitable added product that you have. Again, that’s something that we need to take better into our retail stores.

And to your point, you can do that with loyalty. So, if I’m going into a supermarket and I’m doing my weekly shop, what am I more likely to buy again? Is there something seasonal that I can be pushing to a product, to a customer? Is there something that their family may be interested in?

Darren:

Exactly. Because one of the things, Chris, is your career is not just like what some people might think traditional retail, like supermarkets and the likes. But it’s actually retail in service industries, which you had a long career at Vodafone, where a lot of that time was really thinking about the customer interface through retail, wasn’t it?

Chris:

Vodafone and telecommunications was very advanced in customer data. I guess similar to the banks and retail banking. So, telecommunications, customers were signing up for 12, 24-month contracts. It was still very much a fast-moving business, new technology every year, and customers were upgrading their phones.

You were having to understand what was the life cycle of the customer. When should I be communicating with them? How should I be keeping them warm? What does my brand stickiness look like? How do I keep being top of mind to that customer?

And that’s where things like sponsorships, value ads such as giving customers, again, things like access to-

Darren:

Rewards.

Chris:

Rewards, to tickets for concerts, for Formula 1, for crickets, for Wimbledon this summer in the UK.

Darren:

No telcos were really good at that.

Chris:

Telcos are very good at it.

Darren:

And I think better than banks. You mentioned banks as part of that sort of services business, but telcos for some reason immediately realized that it wasn’t just additional services, that it was rewards for buying or engaging more in the services, wasn’t it?

Chris:

Yep. No, a hundred percent. And then you’re also as a marketing team, able to focus your attention to the right places as well. So, customer marketing was so important in telecommunications. You had to be very clear on the amount of time and effort you put into customer marketing versus acquisition.

Darren:

Well Chris, I want to go back because your start into marketing was quite interesting in that you didn’t do a marketing degree. You actually did a Bachelor of Economics at the university in Northumbria.

Chris:

That’s right. I was-

Darren:

Why Economics? First of all.

Chris:

I was very, very interested in international economies. And I’d grown up in Northern Ireland.

Darren:

So, that’s why the accent, I thought you were just putting it on for charm.

Chris:

Well, and I remember my thesis at the time was about low-cost airlines, and their impact in local economies. And Northern Ireland was this area of the UK that it was hard to get a flight in and out of until the likes of easyJet, Ryanairs and British Airways Go, at the time started flying into Northern Ireland. So, it was very, very interesting what impact that had on the place where I lived.

Darren:

I think people have forgotten how disruptive that innovation was. Before that the airline industry was pretty much a close shop at a premium price.

Chris:

Yeah.

Darren:

And then Ryanair, I think was one of the first innovators to break that, didn’t they?

Chris:

That’s right—Ryanair, which was, again, an Irish company. But you also had the British government had set up an incentive called the Airline Development Fund. So again, that allowed I guess the Northern Ireland executive at the time, which went through the peace process, it was the first few years of the peace process allowed them to incentivize new airlines to fly into the region.

So again, it was interesting to see how that had a ripple effect across the likes of retail, farming and manufacturing across Northern Ireland. So, that’s what got me in the economics.

I always remember my first summer doing work experience, which was with a company called Datamonitor at the time, which was a big multinational, worked for the likes of Coca-Cola and lots of FMCGs. Again, I’m not theater crunching understanding customers and insights. So, I guess that’s what’s led me then into a marketing career.

Darren:

And in fact, into media.

Chris:

Yeah.

Darren:

At EMAP. So, that’s quite interesting because media for me is always an interesting position. It’s a bit of B2B, the editorial’s often B2C, it’s quite a unique challenge, isn’t it? From a marketing and sales perspective.

Chris:

Listen I was at EMAP at a time where it was, I think one of the biggest media companies in the world. It was at a time where I was in the radio station, the largest radio station in Manchester. We were doing partnerships internally with the likes of FHM, Heat Magazine, those types of things.

It was the start of music TV and just the beginning of On-demand music online. So, EMAP was a fantastic part of my career, very much. I loved the partnership side of it. And that actually brought me out to Australia originally.

Darren:

Oh, right. When they expanded into the Australian market.

Chris:

Yeah.

Darren:

And then a jump across to Fairfax with the Sydney Morning Herald. So, you’ve got quite a good foundation in media.

Chris:

Yes, thank you. I love media. I loved at the time the physicality of the newspaper, the supplements, those products. Fairfax was a great part of my career. I managed the food and wine category, good living and a good food guide. And also took that online, took the clients online too across Fairfax Digital.

Darren:

And then we met when you moved to Three, Hutchison Three was when I think we first worked together.

Chris:

Yes. Hutchison Three, hugely innovative business. It had a startup culture, very creative. And during our time there, we were very much working with our media agents and the publishers directly to test out new, again, advertising products.

So, for example, with the Sydney Morning Herald, we would’ve done homepage takeovers. We were probably one of the first brands in Australia at the time, to do video advertising and pre-rolls for news stories. So again, I was very much-

Darren:

So, media first-

Chris:

Media first.

Darren:

The agencies love to have their media firsts.

Chris:

Media first. And I guess always trying new things. So, I was always working with publishers to try and understand, well, what are you working on? How can we be bolder as a brand to get the attention of our customer?

And it always goes back to that. It’s how I get cut through. So, we get so caught up in the day-to-day of product marketing and product and price and offers and your calendar of activities based around that. It’s actually, how do I get cut through? How do I grab their attention at that moment, but also in a way that makes it memorable? So, I stay top of mind for longer.

Darren:

Because a lot of people will probably have forgotten that this is at a time — less than a decade after the Australian telecommunications market had been demonopolized, they actually had to have a survey of customers to choose between Telstra and Optus, because Telstra had been the dominant and only monopoly player up to that point.

So, we are talking about in this market when Hutchison Three were launched and operating, it was still a very young competitive market for telecommunications.

Chris:

Hugely. And that’s what attracted me to it to be honest. So, Hutchison Three was a challenger brand, and the same way Virgin Airlines would’ve been to British Airways. So, Hutchison had that startup innovative culture within it. I was building a team there from scratch trying again, new channels. So, starting out, I think we were at the time still building microsites for every campaign. We were building widgets.

Darren:

The early days of digital.

Chris:

We were at the early days of digital. That’s right. All sorts of things to get our customers attention. And yeah, it was a-

Darren:

Yeah, you then went through that merger and it was a merger, wasn’t it, of Hutchison Three into Vodafone. The two just came together in this marketplace.

Chris:

Yes, it was very brave. It was very ambitious. And it’s good to be part of an ambitious project. I don’t think we realized at the time how ambitious it was trying to merge two networks from a technology perspective. My role there was to, I guess primarily look at the merging two brands into one. And they were two very different brands in the Australian market. Three was very much more youth-based. Vodafone-

Darren:

And challenger. Yeah.

Chris:

And Challenger. Vodafone was very much an international brand that had more of an enterprise segmented. And so, I went through a long process of working through new brand strategy for Vodafone. But also, the big challenge there was merging two teams, two cultures and building the right capabilities within the team.

Darren:

Now, if I remember rightly, during that time, you took on the responsibility of creating or consolidating the retail face of the Vodafone brand after that merger, didn’t you?

Chris:

Yeah. So, I love advertising as an industry and storytelling. And I guess after we kind of got the foundations right for the new Vodafone brand was looking like, we had to look at, I think we had 500 plus company-owned storage for Vodafone and Three.

What does the physical expression look like? How do these two brands present themselves to the Australian customer, in a way that appeals to both of those customer sets?

Darren:

Yeah.

Chris:

So yes, absolutely went into that part of that discipline of store design, how we brought our products to life. So, learned a lot more about bringing to life for technology in those stores. Working again with partners like Samsung and Apple to create spaces to bring life there.

Darren:

Yeah. It’s interesting because people talk about brand experience and then don’t necessarily translate that into a retail experience, but I think that’s one of the challenges, isn’t it? What is the brand experience, first of all for Hutchison Three and then merging that into Vodafone.

Chris:

Yeah.

Darren:

And then what does that actually feel like in a physical space. And then the big challenge is, what’s that feel like in an online space with e-commerce? And how do you make the feeling of the brand actually translate into each of those?

Chris:

The feeling of a brand can be emotion, but it also can be functional. So, if you take e-commerce, first of all, so Amazon, obviously the biggest e-commerce retailer in the world, they’ve got one of the highest MPSs. Why? Because-

Darren:

It just works.

Chris:

It just works.

Darren:

It works.

Chris:

Product availability and I get it the next day when I want it. If I want to take something back, it’s simple. It’s straightforward. I’ve got everything there. I’ve got subscriptions, I’ve got all of my account details, I’ve got all of my account history. So, it works. So, that’s a functional brand, a functional retailer.

Then you’ve got the likes of something if you think of a brand like Disney, which again would’ve been stores, but that’s an emotional connection. So, customers love Disney because they’re connected to it emotionally.

Darren:

And the magic of Disney is always reproduced in store. The experience when you walk in there, it’s fantastical. All the characters there, the way it’s presented, the way the staff interact with the customer, it just has that feeling of being a special place. You almost feel like it’s a very small version of going to Disneyland or the theme parks.

Chris:

Well, there you go. And that’s what you want. No matter if it’s a Disney store, National Geographic store, a Samsung store, you want customers to come in and go, wow. And the brand is being brought to life.

So, with Vodafone, we certainly did that with our partners, but at a global level, I worked on amazing projects in-

Darren:

Yeah. Because Vodafone took you back to the UK.

Chris:

Yep, yep.

Darren:

Yeah. You went from Australia doing this role back to a global role.

Chris:

Yep. I’ve been in London for 10 years, and the global rule saw me work across 25 countries. I spent a lot of time in the Netherlands, Germany, Spain, and Turkey, and again, bringing that brand to life inside different physical environments was my remit.

In the Netherlands, we did a B2B store, which was we worked with Microsoft on that bringing to life their products such as the Microsoft Cloud at the time. And we built these environments inside this 300 square meter store. We brought to life roaming across Europe by building a train. Like a mini Euro store carriage inside the store.

We did machine-to-machine technology, which we called it at the time, which was IoT but was showing the capabilities between ordering a pizza off your phone and getting it delivered by a moped. Obviously, now we call that Uber Eats or Deliveroo. But this was in 2012 or ‘14.

Darren:

And that’s one of the things, thinking of a technology company, not just as providing a network, but actually providing the technology that makes it functional across that network.

Chris:

And makes your life as a consumer or a business easier. So, the telcos role today can still be, well, how do we make somebody’s life easier in their home? So, remote working, could be with your kids.

Darren:

Smart homes.

Chris:

Smart home. Managing your kids’ internet use, walking late at night wherever you might be going, how you can have a tracker app, things like that. So, there are multiple things that telcos still have a role to play in society and can inspire people to do more with the technology.

Darren:

Other than what we’ve noticed, many telcos globally say, “Well, we’ve got the pipes. What we need to do is buy a whole lot of content and ram it down the pipes,” which is becoming a media company.

I think following the path of a technology company is a lot more interesting because it opens up so many more verticals that you can then impact on.

Okay. So, you’re at Vodafone; you’re back in the UK, and you’re working across multiple countries and doing retail. Then you go to a big box retailer and look B&Q is a big successful, home improvement. That’s the category?

Chris:

Yes. So, there’s 300 stores across the UK, turnover 700, 800 million per year. It’s big box retail, so similar to Bunnings in Australia. So, everything from your barbecues to your drills to your decking and your paint.

B&Q were, I guess, on the start of a brand transformation journey. And again, the way I look at brands and look at brand planning and the brand architectures from a long-term perspective, what we want to look like, I repositioned the brand there under do it for less, which was around everyday values.

So, we wanted to move away from every weekend having new deals to being, well, actually how do we-

Darren:

Every day of the week.

Chris:

Yeah. Every day of the week. So, that was-

Darren:

Try to grow the weekly revenue by increasing Monday to Friday rather than having the weekend peaks drop. Huh?

Chris:

That’s right. And again, the reason for this was because we were getting more sophisticated with loyalty and understanding customer behaviour and preferences in terms of product.

So, we didn’t have to do events every weekend to be able to target down Willie and at certain times when it might be seasonal, when the sun’s out prompting him to paint his fence or buy a new barbecue because he bought one three years ago where the likes of kitchens were, you might be on a 15 to 25-year life cycle in terms of customers changing that out. But understanding that those customers then needed maybe to upgrade their taps or upgrade their cupboards.

Darren:

And moving them through that process.

Chris:

Moving them through that, us managing that life cycle and segmenting our customers into ways that we could start targeting them different with marketing. So, that was being-

Darren:

Because I was going to say, you were there running marketing in B&Q and then COVID hit.

Chris:

Yeah.

Darren:

And it hit particularly hard in the UK.

Chris:

Yep.

Darren:

Yeah. It was oh there’s this thing called COVID, oh, hang on. Are we going to shut down or not? Yeah, yeah.

Chris:

B&Q, we were already going through a digital transformation of our website, enhancing our capabilities online and on our app. So, that project was already in a good place.

But COVID for any marketer was a hard time and any marketing leader was particularly hard, so-

Darren:

Well, it’s the uncertainty. Because there wasn’t any clear direction. Was this something that was going to last a couple of weeks-

Chris:

Three weeks.

Darren:

Months? Yeah. Or three years as it turned out. It’s very hard to make decisions with so many uncertainties.

But good that you are in that place of already having well and truly commenced the transformation. Because a lot of retailers who’d been dragging their feet on that then had to suddenly accelerate and pivot their e-commerce and fulfillment strategies.

Chris:

A hundred percent. And certainly, it’s all always about being as best planned as possible, but also being agile. So, I think at that time it taught us as well how fast we could think in terms of click and collect and customers coming into your big car parks. And we set up different bays for them to collect their goods to be able to service them.

Darren:

Yeah. The logistics.

Chris:

The logistics side of it. And that was incredible teamwork from a retail operations perspective and a marketing perspective and the guys on the ground, so-

Darren:

And then you went to Decathlon, that was sort of the end of that 2020.

Chris:

Yeah, so Decathlon is a sports retailer. It’s one of the biggest sports retailers in the world. 12 billion point turnover. Decathlon was relatively unknown in the UK and about 47 stores, been there 20 years.

Darren:

Wow.

Chris:

And it’s the incumbent in France. I think an average French person shops there once or twice a year. In the UK that wasn’t the case.

So, my job there was an appetite to invest in the brand. And again, I started off looking at, well, how can we be single-minded with what Decathlon stands for in the UK? What’s its purpose here? How does that differ from France? Where are we on this brand-building journey if people don’t know us?

So, very much started off that brand strategy piece with our board and relaunched the brand in the UK to be a fun, family-focused brand and having every sport under one roof.

Darren:

Well, to make it a destination, I guess.

Chris:

Make it a destination, a hundred per cent. Make it a destination. But top of mind is your KPI on that. So, how’d I drive a top-of-mind awareness of the brand across the UK, which is a highly complex market, with 65 million people?

My budget wasn’t anywhere near our competitors. How do I do that on a lean budget? So, the targeting was something that I had to get right. Where I distributed our funds and what products I advertise in different places of the UK.

Darren:

Because there’s an argument that if you have bricks and mortar compared to just being e-commerce, that you have a physical presence in the world that makes it easier to be a destination.

But that’s not necessarily true. You still have to be top of mind, don’t you? Just having bricks and mortars like having now storefronts, like having a big outdoor poster that says, look at our brand, but they’ve still got to give people a reason for thinking about it.

Chris:

It all has to work, Darren. So, it’s back to that analogy you discussed for Amazon. So, if I see a billboard talking about a kayak and it’s a nice summer’s day, well, okay, I might decide I want to go kayaking this weekend. But the availability has to be there online or in-store, and it has to be delivered to me within 24 hours otherwise, I will go to your competitor.

So, Decathlon over the last two, or three years, we’ve gone on a tremendous growth journey in logistics and warehouse capacity. To be able to service those customers and to be able to compete with the elephants in the room like Amazon.

Darren:

Because it’s no point in making a brand promise and being top of mind unless you can fulfill on it. It’s the fastest way to lose a customer for life.

Chris:

A hundred per cent. Or come in store and you don’t have any staff to service the customer.

Darren:

Or any products.

Chris:

Or any products.

Darren:

Or any ability to get it to them.

Chris:

That’s a hundred percent right. And that’s why again to my earlier point, you’ve got to remain agile as a marketer in retail because you’ve got to move sometimes your retail, so your media spend around the country depending on where stock availability and weather is. So, the UK also is — the weather up in Scotland can be very different to South Hampton.

Darren:

Exactly. So, I’m just wondering, I’m listening to you, Chris, and I’m thinking to myself, I’m wondering if it’s your early interest in economics because economics is the study of commercial and financial systems.

Chris:

Yeah.

Darren:

Whether it’s that that’s always seemed to attract you to that interface where money exchanges hands, you’ve always had this retail focus, whether it was in telco media or pure retail. Is that the part of this that you like? Is putting strategies in place and seeing virtually instant results or instant feedback.

Chris:

Yeah. Economics, it’s demand and supply and the demand comes from understanding your customer. So, where I start in any role is market orientation. What does the customer want? Why is there a need for this product? Has this just been fantasized by a product team?

And sometimes that’s right. But hopefully, it’s been based on actual customer insight and living and testing products with customers.

So, I like to see results since instantly, I guess with, we’re always looking at … I always look at marketing as it should be, as topping up the funnel. So, and when marketing teams are speaking with their seals and commercial counterparts, you should always be thinking about, well marketing always has to be doing the job of awareness, where that’s what the message is-

Darren:

In driving consideration

Chris:

Driving that consideration piece. So, we’re always topping that up. Think of it like a bucket. You’re topping up the bucket regarding customers thinking of your brand.

Then you have to have the product. And you have to have the price. And it has to be available, and your sales colleagues must come to the party.

Darren:

So, in the middle and lower part of the funnel, you need to ensure you’ve got the products people are looking for.

Chris:

That’s right.

Darren:

And can fulfill on that.

Chris:

So, that’s where I guess, yes, I am analytical, and I guess I use my economics background to look at customers, is what I’d say.

Darren:

Yes. The other exciting link and we couldn’t have a conversation, Chris, about retail without talking about the rise of retail media. We’ve seen major retailers not just in Australia but worldwide starting to identify the opportunities they can provide manufacturers with advertising inside the retail environments, both online and in bricks and mortar stores.

And that must be of interest to you with your career starting in media, and now with so much of your time in retail, what are you seeing is happening?

Chris:

You’re a hundred per cent right. I love the space because again, it’s about footfall traffic and it’s about eyeballs to your website. And some websites, if it’s an everyday retailer, you’re getting millions and millions of customers there every day looking at your website.

Again, if I use the example of a grocery store and I’m looking at my minced beef on the website, how does that promote Barilla Pasta brands or outdoor meals and tomato sauce with it to me? How do I sell that as media space, as banner ads?

And so, absolutely that’s important. And I guess retailers have to re-look at their platforms and start seeing that as a revenue opportunity. And I think that’s very, very important in these cost-conscious times that we’re in.

Darren:

Yeah. Well, it’s an opportunity as well for manufacturers to then influence that moment, what’s called the moment of truth when the customer’s actually in the store and reaching out to select a product in a category. All the work that you’ve done, building brand recognition and brand desirability and consideration, comes down to the person, do they choose product A, B, or C?

And I remember a marketer in alcoholic beverages who said, “The salespeople always tell me we have to make sure we look after the salesperson in store because they have such an influence over customer’s decisions.”

If the customer doesn’t have a clear brand preference, they’ll usually turn to the salesperson and say, “Which one do you recommend?” And that is incredibly powerful. In some ways retail media or retail advertising is an opportunity to actually remind the customer of your messages around your brand at that point.

Chris:

Remind them and reinforce that message.

Darren:

Yeah. I like that idea. I think people are probably a bit cynical about how effective that’s going to be, but I’m sure Google if they could put search a point of sale, well, they do; they have it on the phone, don’t they?

Chris:

No, my advice to any marketer out there, if you haven’t started this part of your digital transformation journey, it’s an area of focus for both the marketing area and the sales area. And it’s not just the website, it’s not just in-store. It’s also your life cycle and being able to email customers directly.

So, when you then start to sell your retail media, it’s your e-commerce advertising formats, it’s your in-store screens, it’s promotion in-store, it’s EDMs-

Darren:

I think it’s going to be particularly challenging for consumer package goods. Because they’ll often have a marketing department and then a retail sales team. And those two operate quite separately. What retail media requires is of them to work together because you need to look at it as extending all of the work you’ve done in building brand preference into that retail environment. And that’s not just the salespeople; that’s a marketing function. And the two have to go hand in hand.

Chris:

And ultimately, you need to consider the customer and what’s useful to them.

Darren:

So, trade marketing, which used to be the thing that was just hanging off the sales team, now becomes part of core marketing capabilities. Yeah.

Alright. It’s been fantastic having this conversation, Chris. Thanks for making the time. I know you’re busy having many meetings and conversations around retailing, advertising, and marketing. So, thanks for popping by and having a chat.

Chris:

Darren, thank you. Good to see you.

Darren:

One last question before you go, with so much of your career in retailing, what’s the brand, that retail brand that Chris Gilroy could not do without?

By