Retail Marketing – A Seismic Shift

There is a seismic event building in the retail marketing world. Like any major event it is starting as a barely perceptible deep rumble. There are a few monitoring stations starting to pick up the cues. But like any earthquake there are bound to be casualties.

So what am I talking about here?

Well we need to go back to a bit of marketing theory just to provide the context, so indulge me a bit here.

As marketers we were all taught about the importance of market segmentation and its importance in identifying a specific target market. Just to refresh a market segment to be viable had to be:

  • Measurable
  • Differential
  • Accessible
  • Substantial

Now I am not suggesting that this has changed. Technology has changed the way we view segments. The analogy is that when this framework was first proposed we used telescopes and sextants to locate and view viable market segments. Today we have electron microscopes and satellite tracking to do the same job. We can see so much more today. Using tools (and I use this term specifically) like Google, Facebook, Linkedin and Twitter we can measure and differentiate segments with acute accuracy. We can then use a combination of the same tools to aggregate and access these segments, so much so that market segment that were never substantial enough to serve, can now be targeted efficiently and effectively.

So what is the impact on retail?

I predict that we will see the development of many more niche products. It will not take long for entrepreneurs to realize that modern production, logistics and marketing systems allow for the aggregation, sale and distribution to what were once considered uneconomic market segments.

The danger here is that traditional retail loses relevance in this model and is relegated to serving mass market products.

And to paraphrase Seth Godin in a recent blog post;

“you come to one inescapable conclusion: be better, be different or be cheaper. And the last is no fun”

The next 5 years will be challenging times in retail.

0 comments… add one

Leave a Reply

Your email address will not be published. Required fields are marked *