When it comes to trade promotion, manufacturers are slower to adapt than their retailer trading partners to the digital options that are available, show the findings of Kantar Retail’s 2016 Trade Promotion Study, Confronting Trade Promotion Fragmentation — Exceptional Agility Required.
According to the study, as trade promotion activity and spending migrate to digital, just 14% of manufacturers have separate brick-and-mortar and e-commerce budgets, and 24% have no e-commerce budget at all. One in three retailers (33%), meanwhile, have a dedicated e-commerce budgets with just 8% having no e-commerce budget.
Different approaches to digital marketing are also being taken, according to the study that is based on an analysis from more than 200 manufacturers and retailers and in-depth interviews with 20 retail executives. It found that manufacturers are increasingly focused on promotion through retailer websites while retailers are deemphasizing their own websites in favor of social media, email and mobile couponing.
“The proliferation of digital options for directly engaging with shoppers has significantly fragmented the trade promotion market,” says Brad Golden, VP of consulting for Kantar Retail. “Manufacturers must act with exceptional agility to keep pace and optimize spending. Right now, retailers are demonstrating considerably more agility than suppliers. As a result, we are seeing considerable misalignment between the two.”
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