Trends in Retail and Consumer Goods Marketing

Insights from nearly 900 marketing leaders

Trends in Retail and Consumer Goods Marketing

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Salesforce Research

22About This Report

Salesforce Research surveyed nearly 900 retail and consumer goods marketing leaders worldwide to discover how:

• Cross-functional dynamics are shifting to satisfy customer and business demands

• Data is transforming the way marketers operate• Personalization is becoming more refined at the

crossroads of intelligence and trust• New standards of engagement are inspiring and

challenging marketers

Data in this report is a subset of findings from the fifth edition of the “State of Marketing” study conducted August 13 through September 23, 2018, that generated 890 responses from full-time retail and consumer goods marketing leaders — those holding a manager or higher leadership role. Survey respondents are from North America, Latin America, Europe, and Asia Pacific. All respondents are third-party panelists (not limited to Salesforce customers). For further survey demographics, see page 15.

Due to rounding, not all percentage totals in this report equal 100%. All comparison calculations are made from total numbers (not rounded numbers).

196

285

276

133

Salesforce Research provides data-driven insights to help businesses transform how they drive customer success. Browse all reports at salesforce.com/research.

http://www.salesforce.com/research

https://www.salesforce.com/research/


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3State of Marketing

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4Contents

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Contents

Executive Summary ..................................................................................................................................................... 4

Marketers Push for Cohesive Customer Experiences ................................................................................. 5

AI and Trust Underpin Customer Experiences ............................................................................................ 7

Marketers Strive for Real-Time Engagement Across Channels .................................................................. 9

New Realities Up the Ante for Data Unification .......................................................................................... 11

Last Look: Marketing Metrics Evolve for a New Era .................................................................................................. 14

Survey Demographics ................................................................................................................................................. 15

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02

03

04


Salesforce Research

4Executive Summary

Today’s shopping experience is no longer defined by the boundaries of brick-and-mortar. Consumers expect companies to meet them whenever and wherever they are, offering a shopping experience tailored to their individual needs. Retail and consumer goods marketers are tapping into more data sources and channels to create this type of relevant and engaging customer journey.

Here’s an overview of how the industry’s marketers are adjusting to the evolving retail landscape.

With insight into consumers’ needs and behaviors at each point of interaction before, during, and after a purchase, marketers are uniquely positioned to enhance the shopper journey. However, the effort must be integrated – across departments and channels. Fifty-four percent of retail and consumer goods marketers view the customer journey as the primary vehicle for improving customer experiences.

Marketers Push for Cohesive Customer Experiences(See page 5)

01

More powerful marketing technology – including that powered by artificial intelligence (AI) — enables marketers to craft highly relevant, cutting-edge customer experiences. Yet this revolution comes with its own challenges as marketers need to strike the right balance between personalization and customer trust. Eighty-eight percent of retail and consumer goods marketers say personalization has improved their overall marketing program.

AI and Trust Underpin Customer Experiences(See page 7)

02

Shopper journeys are more complex than ever, adding pressure for marketers to engage with consumers on their terms, in real time. This pressures marketers to deliver a cohesive, conversational brand communication strategy across a growing number of customer touchpoints. On average, 33% of retail and consumer goods marketers describe their channel coordination as dynamic, up from 28% in 2017.

Marketers Strive for Real-Time Engagement Across Channels(See page 9)

03

Access to more data expands personalization opportunities for marketers. With this comes the challenge of managing and unifying these disparate data sources. Retail and consumer goods marketers are still experimenting with a hodgepodge of customer identity solutions to paint a cohesive picture of each customer’s needs; un-unified data pain points remain. Forty-nine percent of retail and consumer goods marketers report having a completely unified view of customer data sources.

New Realities Up the Ante for Data Unification(See page 11)

04


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5

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Today’s consumers expect not only highly personalized experiences, but contextualized customer journeys before, during, and after a purchase. Sixty-seven percent of consumers say connected experiences — like seamless handoffs between departments and channels — are very important to win their business.*

This is particularly relevant in the retail and consumer goods world, where technology is blurring the physical-digital divide and disrupting how consumers shop and pay. Today’s consumers are exposed to cashierless stores, mobile payment and digital wallet services, and seamless buy (or reserve) online and pick-up-in-store programs. The result is mounting pressure for marketers — and their cross-functional counterparts — to deliver hyperpersonalized, concierge-like shopping experiences.

Yet only 13% of consumers say companies generally excel at delivering connected experiences.* Increasingly, marketers are at the helm of crafting customer journey strategies to close this gap. Forty-four percent of retail and consumer goods marketers say they lead customer experience initiatives across the organization, versus 24% in 2017.**

01 Marketers Push for Cohesive Customer Experiences

Customer Journeys Are Expanding Marketing’s Mandate

* “Trends in Integrated Customer Experiences,” Salesforce Research, September 2018.** 2017 data is based on responses of “strongly agree” on a five-point scale, whereas

2018 data is based on responses of “yes” on a binary scale.

54%of retail and consumer goods

marketers view customer journeys as the primary

vehicle for customer experience improvements


marketers are actively mapping the customer journey across

the company

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6Trends in Retail and Consumer Goods Marketing

Connected experiences are an elusive goal without strong alignment and shared objectives across all customer-facing teams, such as peers in customer service, sales, and commerce. Shared goals and technology, therefore, are now table stakes across teams.

In the retail and consumer goods industry, marketing and advertising teams are furthest down this path, with the majority also having integrated their technology platforms.

However, advertising and marketing alignment is not enough. This unified front has to span the entire customer journey. Within the retail and consumer goods space, alignment between marketers and their commerce and service counterparts is less common, with only about half saying their goals are aligned.

01 Marketers Push for Cohesive Customer Experiences

Cross-Department Goals Are Commonplace Within Retail and Consumer Goods Organizations

Retail and Consumer Goods Marketers Who Share Common Goals and Metrics with the Following Teams

88% of retail and consumer goods marketers have integrated technology stacks with advertising teams.

62%share common goals

with advertising teams

53%share common goals with service teams

SERVICE teams

51%share common goals

with commerce teams

COMMERCE teams

ADVERTISING teams


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7

Retail and consumer goods marketers are increasingly turning to artificial intelligence (AI) to enhance their programs through highly relevant, cutting-edge digital customer experiences. One-quarter are leveraging some form of AI, with that figure projected to skyrocket by 176% over the next two years. Use of voice-activated personal assistants like Siri and Alexa is expected to nearly triple in just one year’s time.

The growth of these technologies is not surprising, given the confluence of consumer expectations and business benefits. Sixty-eight percent of millennials and Gen Zers like when retailers personalize based on their purchase history.* For marketers, AI use cases span the gamut from personalized product recommendations to 1-to-1 emails to chatbots that automate answers to questions like “where’s my order?” The majority of the industry’s marketers (88%) say that this type of personalization improves their overall marketing program.**

Personalization through AI also offers a financial upside: Online shoppers who act on AI-powered product recommendations yield 14% higher average order values.†

Marketing Is Undergoing an AI Revolution

02 AI and Trust Underpin Customer Experiences

Retail and Consumer Goods Marketers Who Use or Plan to Use AI

Retail and Consumer Goods Marketers Who Use or Plan to Use Voice-Activated Personal Assistants

45% plan to use within the

next two years

37% plan to use within the

next 12 months

25% currently use

29% currently use

+176%

+127%

projected growth rate of AI

projected growth rate of voice-activated

personal assistants

* “Shopper-First Retailing,” Salesforce and Publicis.Sapient, August 2018. Strongly agree/agree.

** Major or moderate improvement.† “2018 Holiday Shopping Report,” Salesforce, January 2019.

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8Trends in Retail and Consumer Goods Marketing02 AI and Trust Underpin Customer Experiences

In an era when opaque data use policies and associated scandals have prompted a crisis of customer trust, marketers are increasingly cognizant of balancing personalization with privacy.

Ninety-one percent of consumers say that maintaining control over the flow of their personal information is important for companies to earn their trust. Eighty-nine percent say the same for transparency in how their data is used, along with a commitment to privacy on the part of those companies.

Though retail and consumer goods marketers recognize the importance of trust, striking the right balance between personalization and trust continues to be a challenge, with just over one-quarter of marketers feeling they’ve hit the mark.

Trust Has Become a Marketing Imperative

* “State of the Connected Customer,” Salesforce Research, June 2018. ** High or moderate priority.


marketers say balancing privacy and personalization is

a priority**


marketers are completely satisfied with their ability to balance personalization and privacy


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9

Personalized engagement isn’t the only customer expectation marketers must manage.

In a hyper-connected, always-on world, speed is critical. Half of repeat buyers make a second purchase within 16 days of their first. Though this purchase cycle is short, the majority of consumers (69%) still expect to see new merchandise when visiting a site or store.*

To win sales and increase loyalty, retail and consumer goods marketers are striving to engage consumers in the real-time, conversational manner they expect. This is no small feat, given that the average consumer uses 10 different channels to communicate with companies.** Marketers in the industry are turning to a variety of established channels — like websites, email, and social advertising — and are ramping up their use of emerging channels, such as virtual assistants, augmented reality, and connected devices.

Marketers Employ a Growing Roster of Channels

03 Marketers Strive for Real-TimeEngagement Across Channels

* “Shopper-First Retailing,” Salesforce, August 2018.** “State of the Connected Customer,” Salesforce Research, June 2018.

Current and Intended Usage of the Following Channels among Retail and Consumer Goods Marketers

Website

Plan to use within 12 monthsCurrently use

Email marketing

Display/banner ads

Social publishing

Social advertising

Video advertising

Mobile app

Affiliate marketing

Mobile messaging

Native advertising/sponsored content

Customer communities

Paid search/SEM

Internet of Things (IoT)/ connected devices

Voice-activated personal assistants

Virtual reality (VR) or augmented reality (AR)

Projected Growth Rate

+17%

+24%

+30%

+37%

+45%

+58%

+68%

+65%

+56%

+71%

+64%

+69%

+91%

+127%

+218%

14%84%

18%76%

22%73%

25%67%

30%65%

33%57%

37%

34%

54%

53%

30%

37%

33%

36%

38%

37%

41%

54%

53%

51%

51%

42%

29%

19%

The average retail and consumer goods marketer uses eight channels, and plans to use 13 within a year.

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In an omni-channel world, the gold standard is dynamic conversations between customers and brands — in which messages evolve across channels based on an individual’s actions. This allows customers to access the same capabilities and have the same experience interacting with a brand no matter their point of communication. Sixty-eight percent of consumers say consistency across channels is very important to win their business.*

Retail and consumer goods marketers are making headway in their quest to drive two-way conversations across channels. On average, 33% of them describe a given channel as dynamically coordinated.

Yet the industry’s marketers still struggle to meet their shoppers where they are, no matter what channel they choose. Over one-quarter (27%) of retail and consumer goods marketers describe their channel coordination as generally siloed.

03 Marketers Strive for Real-TimeEngagement Across Channels

Dynamic Messaging Remains the Exception to the Rule

Retail and Consumer Goods Marketers Who Describe Their Cross-Channel Coordination as Follows

Base: Retail and consumer goods marketers currently using indicated channel.* “State of the Connected Customer,” Salesforce Research, June 2018.

Mobile app 23%

27%

32%

42%

39%

Website

31%

29%

Social publishing (e.g., any non-paid marketing messages on platforms)

Video advertising (e.g., YouTube)

Social advertising (i.e., any paid placements/ads on platform)

Email marketing

Mobile messaging (i.e., SMS, push, group messaging)

Display/banner ads

Paid search/SEM

Voice-activated personal assistants (e.g., Alexa, Siri, Google Home)

Dynamic (messages evolve across channels based on customer actions)

Duplicate (identical messages are broadcast across channels)

Siloed (no coordination of messages across channels)

41%

41%

41%

41%

37%

28%35%36%

24%35%

25%

26%

34%

34%

28%38%33%

27%40%33%

28%39%33%


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11

Marketers have more data at their disposal to create personalized shopper experiences. With this comes the challenge of unifying data from an average of 16 data sources, a 60% increase in just two years.

To understand who customers are and what actions to take based on their unique needs, retail and consumer goods marketers are increasingly using second-party data — that which is shared between consenting parties like brands and publishers — to extend audiences and refine growth targeting. The use of second-party data has grown 24% over the past year.

04 New Realities Up the Ante for Data Unification

Marketers Are Turning to More and More Data

2017

2017

2018

2018

2019

1012

16

Median Number of Data Sources Used by Retail and Consumer Goods Marketing Organizations

Retail and Consumer Goods Marketing Organizations Using Second-Party Data

55%

68%

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Data unification is a top priority for retail and consumer goods marketers seeking to fully reap the benefits of all available customer information. For many of them, however, a unified view of the customer remains a dream.

While the industry’s marketers are turning to a hodgepodge of solutions to provide a comprehensive view of customers’ needs and expectations, no dominant solution exists. This is, perhaps, unsurprising given the number of high-traffic systems retail and consumer goods companies must manage, such as loyalty, point-of-sale, and commerce infrastructure.


* “State of the Connected Customer,” Salesforce Research, June 2018.

Note: Respondents were only shown a technology if they reported using the indicated technology. The base includes all respondents.

49% of retail and consumer goods marketers report having a completely unified view of customer data sources.

Customer Identity Solutions Run the Gamut

Most Common Technologies Used for Customer Identity Purposes Among Retail and Consumer Goods Marketers

Customer relationship management (CRM) system

Customer data platform (CDP)

Email service provider (ESP)

Marketing database

Data management platform (DMP)

1

3

5

2

4

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Data management platforms (DMPs) are gaining traction for data unification purposes — among others — in the retail and consumer goods industry, broadening the use of this technology beyond its traditional use case of media buying and optimization.


DMP Adoption and Use Cases Are Growing

76%Marketing analytics and advertising performance measurement

64%Content personalization

63%Media buying and optimization

60%Identity resolution and management

56%Creative testing and optimization

Current and Intended Use of DMPs Among Retail and Consumer Goods Marketers

35% plan to use within the next two years

55% currently use

+63%projected growth

rate of DMPs

Top DMP Use Cases Among Retail and Consumer Goods Marketers

Base: Retail and consumer goods marketers who use a DMP.


Salesforce Research

14Last Look Marketing Metrics Evolve for a New Era

As marketing leads the charge to map the customer journey across the company, an expanded set of metrics is needed to evaluate success. This includes traditional metrics — such as revenue growth — along with more granular metrics — such as web traffic and analytics — to measure engagement across channels.

Sales effectiveness and customer retention rates — areas that have historically been success indicators for sales and services teams — have risen to the top tier of marketing KPIs. This underscores the evolution of cross-department collaboration to enhance the customer journey.

New Success Measures Join Tried-and-True Metrics

Top Metrics Tracked by Retail and Consumer Goods Marketers

Revenue growth

Web traffic and/or analytics

Customer retention rates

Sales effectiveness

Marketing return on investment (MROI)

1

3

5

2

4


Salesforce Research

15Survey Demographics

SUBINDUSTRYRetail .......................................................................51%Consumer goods ..................................................49%

COMPANY SIZESmall (21–100 employees) ...............................................22%Medium (101–3,500 employees) .....................................61%Enterprise (3,501+ employees) .......................................17%

COMPANY TYPEBusiness-to-business (B2B) ....................................12%Business-to-consumer (B2C) .................................50%Business-to-business-to-consumer (B2B2C) ........38%

COUNTRYUnited States .........................................................13%Canada ..................................................................... 9%Mexico ...................................................................... 9%France ....................................................................... 8%Japan ........................................................................ 8%Germany .................................................................. 7%India .......................................................................... 7%United Kingdom/Ireland ...................................... 7%Australia/New Zealand ......................................... 6%Brazil .......................................................................... 6%Hong Kong ............................................................... 6%Belgium .................................................................... 4%Netherlands ............................................................. 3%Singapore ................................................................. 3%Nordics ..................................................................... 3%

REGIONEurope ....................................................................32%Asia Pacific .............................................................31%North America ......................................................22%Latin America ........................................................15%

DEPARTMENTExecutive management ......................................17%Marketing ...............................................................83%

ROLE WITHIN MARKETINGCEO, owner, or equivalent ..................................17%CMO........................................................................21%VP of marketing ....................................................12%Director, manager, or equivalent .......................51%

GENERATIONBaby boomers/Traditionalists (born before 1965) ....... 5%Gen Xers (born 1965–1980) ..........................................51%Millennials/Gen Zers (born 1981–1999) .....................44%


Salesforce Research

16Related Resources

LEARN MOREGET THE REPORTTAKE THE ASSESSMENT

What are the strengths in your strategy? Take the digital marketing self assessment.

See what shoppers are saying about their customer experience.

Discover Salesforce for retailers.

https://www.salesforce.com/solutions/industries/retail/overview/

http://www2.publicisgroupe.net/shopper-first

https://www.salesforce.com/form/marketingcloud/conf/digital-assessment-tool/?leadcreated=true&redirect=true&chapter=&DriverCampaignId=cta-body-promo-127&player=&FormCampaignId=7010M000001ygM2QAI&videoId=&playlistId=&mcloudHandlingInstructions=&landing_page=/form/marketingcloud/digital-assessment-tool

Browse all reports at salesforce.com/research.

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Trends in Retail and Consumer Goods Marketing

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