Category: Retail Marketing

Digital Pop-Up Stores

As lives become busier and consumers demand faster access to information, products, and ideas, marketers are constantly looking for new ways to deliver brand messages to consumers on the go. An exciting new innovation in digital marketing has emerged that has the potential to revolutionize the way we do our shopping. Digital “pop-up stores” are making an appearance and are causing quite the stir.

This month, Walmart and Mattel launched their first test-store in downtown Toronto near Union Station.

Mattel and Walmart^s digital pop-up store located in downtown Toronto^s PATH system near Brookfield Place.

The digital store is essentially an elaborate billboard design with product images and information. The billboard showcases a select product offering from Mattel with corresponding QR codes. Consumers can scan the codes and purchase the toys on the spot. Products are then shipped directly to the buyer’s home.

Busy parents, who are faced with an often-times hectic commute, can get a portion of their Christmas shopping done without having to step foot in a store or having to surf a website. Walmart and Mattel aren’t the first to come up with such an innovative digital marketing strategy. Tesco has been using interactive billboards over the past year for groceries and other home goods in a variety of locations including Gatwick Airport and South Korea. These digital stores have married OOH advertising with online capabilities.

So what does this mean for marketers? We’ve seen the decline in traditional “bricks and mortar” stores and an increase in e-commerce. But here is a new trend that seems to be a combination of the two ideas that encompasses out of home advertising. But with a new marketing idea comes the question on how can a company afford to test-drive yet another marketing technique without taking away from traditional outlets?

By using Corporate Trade a company can use under-utilized assets to off-set the costs of an interactive OOH display. As Christmas merchandise is being displayed, what happens to the autumn-themed inventory? Using Corporate Trade can allow a company to use past-season stock to fund a current season’s media campaign, and to foray into the exciting new realm of digital pop-up stores.

A digital marketing campaign that allows me to purchase Christmas presents without having to enter a hot, overly-crowded mall while I’m on my usual commute? That’s an idea that certainly puts me in the Christmas spirit.

By: Andrea Allen

It is a question I inevitably get at every networking event, friend or family gathering, and discussion surrounding what I do.  Thankfully it’s a question I love to answer, so today’s blog post gets back to the fundamentals of our business model – what exactly is Corporate Trade?

In its simplest form, Corporate Trade is the business of restoring value where it has diminished and creating value where it is needed. Also known as Corporate Barter, it is a strategic tool used by many Fortune 1000 corporations to maintain book value on slow-moving, returned, or obsolete assets such as:

  • Last season’s clothing or accessories
  • Perishables e.g. groceries
  • Product labeled with expired promotions
  • Outdated electronics or technology e.g. mobile phones
  • Obsolete capital equipment
  • Excess real estate
  • Almost any asset that could result in loss of value to a business…the list is practically endless

Many organizations have turned to Corporate Trade (Corporate Barter) as a means to mitigate the risks associated with inventory and asset management, and to reduce the negative impact on the bottom line.

In a typical Corporate Trade transaction, assets are acquired in exchange for cash and/or Trade Credits at two to three times the best offer available through typical liquidation. In return, Trade Credits are combined with cash to purchase necessary goods and services such as: desirable advertising space; printing and retail marketing; freight and logistics; travel, event space, and hotel rooms.

With Corporate Trade organizations can:

  • Realize higher returns on excess inventory and other assets
  • Decrease cash outlay by using excess assets to partially fund expenses
  • Extend the reach of marketing and advertising budgets
  • Improve and sustain growth by making assets work harder
  • Increase product distribution to new markets

How does Corporate Trade work?

 A Corporate Trade deal can be tailored based on business needs.  For simplicity’s sake, we will use the most common type of Corporate Trade transaction: a Trade Credit Deal.

 Problem: A manufacturer has a cereal brand that performs significantly below expectations resulting in excess inventory. For the purposes of this example, let’s assume that the wholesale value of the cereal is $1M. If the manufacturer were to liquidate the cereal the value would be reduced to $300,000 – a loss of 70% against expected revenue.

Solution: Using Trade Credits, a Corporate Trade organization purchases the inventory at the full wholesale value of $1M. In return, the manufacturer agrees to acquire $5M in pre-planned media such as primetime television advertising using 80% cash and 20% in Trade Credits. To mitigate competitive threat and to protect existing retailers, the Corporate Trade organization sells the cereal to buyers approved by the manufacturer.

Result: The manufacturer avoids a financial loss on the under-performing cereal, purchases a pre-planned $5M advertising buy for a cash outlay of $4M, and maintains a positive relationship with the existing retail distribution channels.

I’ll admit that the concept of Corporate Trade can sometimes seem complex for those unfamiliar with it.  We’ve also created this video explaining the nuts and bolts of Corporate Trade, and hope you find it useful.

Your Turn:

What obsolete assets are weighing your business down and how do you minimize financial loss?

Kimberly Armstrong

Active International

A Flat Economy presents opportunities for CPG

It’s Earning Season! Not to be confused with the significantly more fun Christmas season, earning season is a time when publicly traded companies report their quarterly earnings. It is also a time for general macro-data. The latest is the US retail sales numbers which reported this week that sales slid for the third straight month, falling 0.5% from May to June.  So does this mean that consumers have just given up? Of course not! A study done by SymphonyIRI, a market research and consulting firm for retail clients, gives us a little bit of insight into the sliding trends. Generation Y (those born around 1983 to the early 1990’s), a group traditionally set with higher than average under and unemployment numbers, is increasingly turning to home treatments bought at your local drugstore instead of more expensive professional services in order to save a few dollars. While this means that aggregate numbers are down it does bode well for many of our CPG clients with this latest trend confirming what many have already known; hard economic times make consumer goods more relevant in the consumer’s mind. While it would be wrong to suggest that recessions are good for business, we will go as far as to say that there is an element of safety in the world of consumer goods.

It’s all about ME!

The first thing they teach you in Marketing 101 is that you need to have a well-defined target market because if you try to appeal to everyone, you will appeal to no one. While I am sure that many of you are currently rolling your eyes this back-to-the-basics lesson may be even truer today. With the growth of technology has come the growth of smarter advertising platforms that have somehow figured out that I like rocking out to Taylor Swift and can serve me ads accordingly. As a new study by EMarketer Digital Intelligence points out, the Canadian consumer is smart. They know that a platform has these capabilities and has come to expect that the ads being served are relevant to them. So at the end of the day does a more personalized campaign make the all-important dollars and cents? This study suggests that it does with 51% of consumers saying that they would be more likely to purchase a product after viewing a more personalized ad. Sure, 51% isn’t an overwhelming majority but when you compete in such a globalized market can you really afford to discount it?

Have you seen a better return on your more personalized campaigns? Feel free to share your thoughts below!

The Smartphone reigns supreme!

Does anyone remember when they sat down at a desk, waited 10mins for the computer to start-up and another 20mins for the dial-up connection to connect you to the internet? For some of our younger readers, yes, this actually happened and you know what? We actually considered this cutting edge! Technology seems to change as frequently as the weather as a new study by state-run CINIC and reported on by the BBC notes that mobile phones have eclipsed the desktop as the most common method of accessing the internet in China. As with all technology trends there is an underlying driver here. Smartphones are getting cheaper as new players entering the market put a downward trend on prices. This opens up the once elusive market to the vast rural areas of China. There are two issues that arise here. Firstly, we can see that people are not all that different based on a very similar study reported on by CNN in 2010 that notes increasing mobile internet usage for Americans, especially among younger users.  So what does this mean for retailers? It means that at a fundamental level, consumers have the same wants. They want to stay up-to-date in a manner that is convenient and cost-effective regardless of their geography. The second issue here is how advertising revenues will be affected as there has been concern over the ability of many social media sites to deliver and subsequently monetize advertising on its mobile platforms. Whether this remains an issue for much longer may be up for debate as Twitter has recently seen some success via cracking the elusive problem. In the end, as with many markets, competition will drive innovation. As along as a demand exists there will be those looking to capitalize on it.

That’s all for this week. Be sure to follow us on Twitter @ActiveIntlCA

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