Weekly Furniture World Media Note #152 from Lance Hanish: The Changing Manufacturer Evolution
Furniture World News Desk on
6/28/2016
By Lance Hanish
A number of years ago, while speaking with the President of one of the biggest home furnishings companies at that time, I asked what his percentage of sales were devoted to marketing. He said to me directly, ‘If I spend one-tenth of one percent, shoot me.’ He continued, 'That is not our obligation. The advertising of product to the consumer is the retailer’s problem.’ Stunned, I spent the better part of the next few years, haunted by this one-dimensional thinking of a businessman caught in the vines of history in a changing world.
Today, even in the tradition rich industry such as home furnishings, change is a challenging word and it is slow to turn. The heads of today’s companies understand the influencing purchase decision and driving sales is part of their responsibility as much as keeping ahead of the trends in design, textures and taste. Thanks to digital commerce, consumers increasingly are in shopping mode at home and outside the walls of physical retail stores. According to Ryan Freeman, 'Shoppers have become increasingly informed. Shopping is less about trial and exploration and more about validating assumptions and hypothesis. That puts more of the burden on the brand and retailers to not just put their products and services on a pedestal, but to focus on how their products and services deliver value that their marketing promises.' After all, manufacturers and retailers are faced with falling foot traffic at their retailer’s locations; faced with everyday price sensitivity and most of all, they are faced with mobile-savvy consumers with ever-high expectations, according to a new eMarketer report, ‘Digital Shopper marketing Trends in the U.S: Getter Personal In The Aisles'.
But one thing that has not changed in all of these years is that the smart manufacturer is understanding the retailer’s communication problems and maximizing their programming to bring back an age old philosophy sell-through called personalization. Humans have to begin speaking to one another with more than a smile on their face. It is the ‘getting-to-know-period’ following an extensive campaign via digital/mobile to get them into the store. Together, by this time, the manufacturer and retailer will know exactly what shoppers want and communicate with them throughout the store and especially in-aisle at their prime decision-making moments. We need to bring the level of personalization to the forefront in each retail setting.
This mega-change with manufacturing philosophy began shifting between 2012 and 2014 when marketing’s share of the corporate annual budget doubled. This must have been the moment when that old President turned over in his grave. I can see his blood pressure rising just thinking about it. Now, marketing has become a major priority, which centers on digital investment more than doubling, to gain the attention of this changing target buyer, while spending on traditional advertising and promotions shrank. It continues to shrink to this day. The day of traditional marketing is over. It no longer does what it did. End of discussion.
This all requires a good deal of collaboration, not just among a retailer’s various internal departments but also with brands and, increasingly, tech vendors and integrated marketing specialists. The bigger a role that digital/mobile plays, the more data that is generated, creating a need for sharing and taming the volume of information.
The control of this information both in and out, is the exacting method for successful manufacturing/retail relationships of the future. Mobile is the most personal and intimate channel for marketing today and it is what consumers are staring at endlessly throughout the day. The mastery of this by the manufacturer and retailer together will form the core of their shared investment.
Today, the burden of getting the word out about the manufacturer’s brand begins with the manufacturer. It is both a B2C and B2B effort. It in fact is the key to survival. If manufacturers today do not adopt this philosophy from the moment the creation is thought of…to the local targeted audience’s moment of truth, their brand will not be able to compete in the future.
Someone once said that there is a bridge between manufacturing and the retailer. Both have different ways of thinking. Both have different approaches on how the product should be sold. Both have strengths. Now, both have to come together and do the improbable…trust one another. Both have to make the financial investment to get her into the store and buy the product.
It is the path to success.
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Lance Hanish is Co-Founding Partner in CNA | Sophis Integrated Marketing Communications.
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