Internet retailing (eCommerce) is the fastest growing market in the retail industry.
Not only that, but while retail sales in brick and mortar stores have been dropping over the last few years, online retail has grown massively, including retail advertising expenses.
This consumer switch affected big brands predominantly (some recent examples are Sears and Toys “R” US) and led to a surprising statistic: across the US, almost 6,000 stores closed in the first three months of 2019.
Don’t get alarmed yet if you run a brick and mortar store.
The chances are that consumers will never entirely abandon offline shopping, but, as we can see, they already started to favor online shopping more.
When you have an offline and online presence, retail advertising needs to be part of the marketing mix. This is going to help you expand your reach, drive more (foot) traffic, and convert visitors into customers.
But What Exactly Is Retail Advertising?
Retail advertising is the process by which retailers use advertising (online and offline) to drive awareness and interest towards their products to generate sales from their target audience. Through advertising, a retailer attempts to influence their audience to take a specific action.
I can go even further and say that we cannot talk about a retail advertising definition without discussing the 4 P’s of retail marketing.
If you’re a little bit confused, just take a look at the image below so you can understand more easily how retail ads fit into the retail marketing mix.
Defining Retail Marketing
I explained what retail advertising is, but now I want to discuss the bigger picture, which is retail marketing.
Retail marketing is the process that entails everything from how you create the product, how you price it, where you place it for distribution, and how you promote it.
Let’s discuss each component of the retail marketing mix, namely the four P’s.
Before you market a product, you first need to decide on what you’re going to sell.
In this first step, it’s essential to think about the type of product(s) you want to add to your store, its features, the variety you’d like to provide, the number of products (you can create a limited line), and the packaging.
Pricing is a critical element in marketing, one that can make or break your retail business. Your competitors, the market conditions, the overhead expenses, the profit, the demand, and product positioning are some of the most important factors you need to consider.
In retail, a standard pricing method is the one called value-based pricing, where you set the price of a product by estimating how much your customers value what you’re selling.
Besides using this method, you also want to calculate the retail price so that you cover the cost of goods as well as additional overhead costs while thinking about profit as well.
Location is crucial when selling products offline. Here you need to decide whether you want to sell your products in a physical store that already exists, or if you want to establish your own.
On top of having a brick and mortar store, having an online distribution channel such as an online shop will help you reach even more customers, specifically those who don’t live in your country and can’t visit your offline store.
Promoting your products is an absolutely necessary component of the retail marketing plan. You can have a wide range of objectives when communicating about your products.
It can be everything from increasing brand awareness towards your company, sparking interest for the products you’re selling, or simply converting visitors into customers and increasing sales.
Promotion is all about having a deep understanding of your target audience and how to reach it, and retail advertising in an online era, as you’ll see later in the article, plays a massive role in that sense.
Now that we’ve talked about the four pillars of retail marketing let’s get into the strategy.
What Does a Retail Marketing Strategy Entail?
A retail marketing strategy is a plan you use to attract new customers and convince them to either shop in-store or place an order online.
Acquiring new customers is the top of the mind for all retailers. To ensure peak performance, the retail marketing strategy needs to be continually assessed.
A powerful strategy is going to help you differentiate your retail business from your competitors. At the same time, it’s going to highlight what makes you unique, why customers should pay attention to you, and most importantly, how you can effectively target these people.
Here’s what you need to know about crafting a robust retail marketing strategy.
1. Define your target audience
You need to be extremely specific when describing the audience you want to attract to your store. The most critical aspects that you need to define about your target market are gender, age, income, location, marital status, hobbies, their wants, needs, and problems they encounter in their daily lives.
The more specific you get, the better you’ll be able to market your products towards them, especially when doing online advertising.
Here’s how you can easily define your target audience:
- Gather data about your current customers so you can understand more about the people who are already buying from you;
- Take a look at your social media analytics to see who interacts with your brand the most;
- Check out your competition to figure out who’s also engaging with them.
2. Define your positioning on the market
Determining how your retail business is different from your competitors is a critical step in your marketing strategy.
In this stage, you can actually talk to your current customers to see how they perceive your store. This can be a good start because people who are buying from you are more likely to tell you what they like and dislike about your business.
Based on what you find out, you can then create a positioning statement that will let other consumers know what makes your business different.
Here are the main areas that you need to pay attention to when defining your market position:
- Figure out what sets your brand apart;
- Define which segment of the market you want to attract;
- Have a clear vision of the brand idea that pulls everything together;
- Come up with a value proposition which reinforces the promise you make to your customers.
3. Leverage omnichannel marketing
When you run a brick and mortar store and an online store, it’s essential to match the branding, messaging, and the visuals with one another. This is going to help you provide a unified experience to the consumer.
At the same time, you want to leverage technology to collect data about the shoppers and use it to personalize future shopping experiences for them.
Here are the best practices when it comes to omnichannel for retail:
- Research to see where your potential customers are engaging with your brand;
- Map out the customer journey to see how people buy from you and how long on average does it take since discovering your brand;
- Start small when choosing new customer paths;
- Analyze the data and adjust your strategy as you go.
4. Establish promotional tactics
When having both an offline and online presence, you need to think of a combination of digital and traditional promotional tactics.
This will benefit you for a few different reasons.
First, you can attract more visitors to your site by promoting it within the physical store. To entice more people to check it out, you can even provide a discount that they can use for their first order.
Then, when it comes to your online presence, it’s essential to define what type of tactics are going to help you attract more visitors and convert them into actual customers.
Here are some helpful questions to ask yourself before implementing promotional tactics:
- What time of the year is best to provide discounts in order to boost sales?
- Will the promotion work best in-store on online?
- What products will be the most effective when promoted?
- What type of promotions generated the highest rate of interest?
5. Set your budget
When you know your budget, you’ll know what ideas you can implement relative to the costs that would be required.
Some ideas, as brilliant as they may be, can prove to be quite costly to implement, which is why you need to assess them properly concerning your budget.
To set a realistic budget for your online advertising, pay attention to these crucial aspects:
- The media type you will be using to reach your audience (images, animations, or video);
- Your customer lifetime value;
- Your strategic goals;
- The advertising channels that are right for your strategy.
To get you started, here are some retail marketing strategy examples that can inspire you:
- Leveraging user-generated content. Encouraging customers to create branded content that can later be used for different purposes is a simple way to leverage social proof. To do this, you can either organize contests on social media so that your customers post pictures using your products, or you can entice them to leave reviews accompanying the product they purchased. This can be an extremely effective idea, especially if you sell accessories, clothes, or shoes.
- Harnessing data for personalization purposes. In the retail industry, primarily online, there are multiple customer touch points that a marketer can use to collect data from. There isn’t a one-size-fits-all type of solution here. Each business would need to figure out a way to gather this information about their customers to deliver personalized interactions. In essence, this is going to help you create more detailed customers profiles and hence use cross-sell and upsell techniques to increase sales.
- Using location to target consumers. When you’re running a retail business, you want to make it as easy as possible for consumers to buy from you. That is why using your customer’s location can help. For example, when a potential buyer is navigating either your website or app, you can show them where’s your nearest store, in case they want to shop in person. This simple yet effective strategy can help consumers overcome obstacles that would stop them from purchasing online, such as wanting to try the item first or see it in person to ensure it’s the right material and quality as advertised.
- Leveraging email to increase in-store sales. This is not a groundbreaking idea, but it’s definitely something that can help you as a retailer drive ROI of email marketing. People are more likely to visit your store, especially if they have one near where they live and can get a discount if they purchase something from you.
- Celebrating holidays throughout the year. Nowadays, every day of the year has attached to it a reason for celebration, whether it’s Pancake Day or Go Barefoot Day. It’s not necessary for your brand to celebrate all of these “holidays” but instead, identify those that make sense for your business and are relevant to your audience. This idea can be used not only for a promotional campaign but also to create a select limited-edition line of products around the holiday.
- Targeting people who are ready to buy. Not all of the people who enter a brick and mortar store or browse an online shop are ready to buy. In fact, the majority of them are just looking. That’s why it’s crucial to identify those who are looking for the exact products you’re selling and target them through advertising on social media and Google’s Display Network.
The Role of Using Retail Online Advertising
Retail is changing.
And brands such as Walmart represent an excellent example of how retailers can bridge the gap between offline and online.
More specifically, the most significant shift that has impacted this industry is the fact that people do their research online first before they buy something in an offline shop.
After the research phase, consumers move onto discovery and then to decide on a particular brand or product.
Retail online advertising plays a crucial role in the promotion of a brand, and Google research showed that there’s actually a connection between the rise of digital and in-store shopping.
The same research confirmed the fact that the majority of consumers conduct their research online before they make a purchase.
Which brings me to the focus of this portion of the article: online advertising.
More specifically, I’ll show you how to leverage online ads for your retail business.
Here are the most important principles to follow when it comes to online advertising:
1. The sales cycle
A smart way to think about online advertising for retail is by knowing and defining “where” your potential customers are in the sales cycle.
This is going to help you create ad campaigns that fit each category: boosting brand awareness, generating more interest towards your products, converting current leads, and encourage more walk-ins to your store.
For each sales cycle, you’re going to need a different strategy, approach, and messaging. Consumers look for different types of materials in these various stages so you’ll also need to think about the problem they’re trying to solve in each cycle and how your product can help them in each case.
It’s not new information that discounted products increase demand, but it’s definitely something worth emphasizing over and over.
When doing promotions, whether it’s for a specific holiday or a special event that it’s happening, make sure to not only create a sense of urgency but make extremely visible the discount you’re offering or the sale price.
This study showed that 85% of consumers would be more likely to shop in stores that offer coupons and special offers, which shows how effective this idea can be if implemented in the right way.
3. Shopping Ads
According to recent research, Google Shopping Ads spend has been dominating retail search, and it shows no signs of stopping anytime soon.
Not only do retailers prefer this online advertising method, but it turns out that the clicks these Shopping Ads got hit an all-time high of 63%.
In the US, 76.4% of retailers are investing their search ad budget in Google Shopping, so it’s definitely where you need to be right now.
Here are three significant advantages of using Shopping ads:
- Automatically generate shopping feeds, even if you have thousands of products on your site;
- Create supplemental feeds which are independent of the automated ones, which will enable you to groups products based on range, offer, or margins;
- Ability to set store visits and acquiring new customers as Smart Shopping goals.
Even if a customer had a positive experience with your store, they might forget about it. People are busy, which is why you need to remind them to purchase again from you.
The easiest way to do this is by smart remarketing.
Remarketing campaigns that target one-time buyers at the right time can prove to be hugely successful.
Aside from remarketing the same product they purchased, you can also remarket complementary products and gain more sales this way.
5. Knowing your audience
When you have a brick and mortar store, it can be quite easy to create the profile of your target audience. You can analyze the people who purchase something and then breakdown a detailed profile.
The more information you write down about them, the easier it will be for you to do the targeting with online advertising.
Now, let’s get a little bit more specific and see what the best tips you should know when it comes to online local advertising are.
Online Local Advertising
Despite the statistics I presented at the beginning of the article, local foot traffic still remains an integral part of retail.
The rise of online research first seconded by purchasing offline emphasizes the importance of online local advertising.
Consumers are always looking for the best deals and promotions so. Naturally, they will see them online first. This is why you need to take advantage of online ads so your target audience will be aware of your brand and what you’re offering.
Online local advertising can help a retailer in a few different ways:
- Drive foot traffic to your local stores. Some consumers are still hesitant when it comes to purchasing goods online because they’re afraid that they won’t get what has been advertised. This is one of the main reasons why they would be willing to visit your store if they see one of your ads online. Interacting with your brand, feeling the products, the material they’re made from, or actually trying them out will potentially establish a sense of trust in the consumer’s mind. Store visitors can actually leave being more confident in your brand and may even end up placing an order online. At the same time, shoppers feel more inspired to visit a store if they notice an ad that tells them a particular item they want is in stock, and they can try it out. For example, local inventory ads can be used by retailers to provide necessary details about the product that would entice consumers to move further down the funnel.
- Boost online sales. Most of the time, an offer or free shipping can be the push a consumer needs so they can finally place an order on your site. Not to mention the fact that, as we’ve already seen above, people are more likely to shop when they can get a better deal on a product.
- Capture consumers at the right time. People browse online as much as they do in stores. The most significant advantage of being online is the fact that you can capture consumers at the exact stage when they are ready to buy by targeting them through advertising. Ultimately, this will increase the chances of converting more potential customers and increasing your sales.
- Target consumers based on interests and online behavior. Thanks to Facebook Dynamic Ads for Retail, you can target users based not only on their location but also on their online behavior and expressed interests. This is a super-useful feature which can boost your sales thanks to the fact that you’re focusing only on people that are actually interested in buying what you’re selling.
In essence, online local advertising will benefit both your offline and online store, so it should be an essential part of your marketing strategy.
Now that we’ve talked about online retail marketing, let’s see what some best practices to keep in mind when designing retail ads are.
Best Practices When It Comes to Designing eCommerce Banner Ads
1. Keep it simple
The top-performing display ad sizes are not that big, which is why it’s important not to add too much information in that space. If you do that, the text can be overwhelming and hard to read.
The messaging, the imagery, and the CTA need to be clear and as simple as possible. That way, the consumer will be able to understand right away what your ad is about and whether it’s enticing enough so they can click on it.
Even Google recommends using three principles for ad design: be compelling, be concise, and be precise.
2. Use high-quality images
Although online ads are usually quite small in size, especially for the display network, you should still use the best images possible, whether it’s a picture of a product, an illustration, or a stock photo.
At the same time, when exporting the image, don’t forget to keep at maximum 150 kb, which is the file limit for Google’s Display Network.
Here is an excellent example from Pottery Barn when it comes to using high-quality images.
Below you can see an example of how not to design a banner ad. It appears as though the pillows that are being advertised have been taken from a stock photo and are not actually sold by the brand.
Check out this useful video we created at Bannersnack, where we show you how easy it is to create an ad with our online design tool.
3. Make it stand out
Whether you’re creating an online ad for social media or for display, it’s essential to make it stand out. Your ad needs to make the user stop scrolling, read your ad, and ideally, click on it.
One of the best ways to do this is by the use of color. You can use contrasting colors in the ad, which will inevitably attract attention.
The color of the text can be in contrast with the background you’re using because this will emphasize the message you’re communicating.
At the same time, you need to keep in mind what emotion-specific colors are evoking and what they mean. For example, yellow is an optimistic and youthful color. Pink is often used when advertising products for women or young girls, while black is usually used when marketing luxury brands.
Here is an example of a brand (Nespresso) that used contrasting colors to make their banner ad stand out.
And here’s one from H&M where their CTA blends in with the rest of the text, and it’s even smaller in font size.
4. Think mobile
So instead of designing an ad by thinking of how it’s going to look on desktop, you need to first create it for mobile devices which are way smaller than a desktop.
After the mobile version is done, you can then scale it and adapt it to desktop.
A good example is the one below. The CTA button is visible because of the contrasting color, there isn’t too much text on the design so you can clearly see what it’s advertised.
The second example is a big no because the font is too small and the CTA is not also visible in this case.
5. Use typography
Typography is an integral part of online advertising because it can draw attention to the vital information you want to send.
Ultimately, it doesn’t matter if you have terrific visuals – your audience won’t even pay attention to your ad if they can’t read the text.
And if people can’t read the text, they won’t click on it because they won’t have a compelling reason to do it.
As a tip, you may want to consider using a style or a bold typeface when you want to make a particular area of your ad stand out.
6. Define a clear frame
When it comes to designing Google display ads, you need to have a clearly defined border. A one-pixel border in a contrasting color will be enough to make a massive difference in the design and make the ad stand out on a webpage.
7. Use dynamic banners
Dynamic (or animated) eCommerce ads, due to their nature, may actually perform better than static ones because they draw people’s attention much more quickly.
With Bannersnack, it’s incredibly easy to create an animated banner. In fact, you can do it in just one click.
Whether you start with an already existing template or you can create your ad design from scratch, transforming it into animation is just as effortless in both cases.
8. Take advantage of the power of “free.”
Everyone’s always looking for free stuff, especially on the internet. And whenever we see the word “free” in an ad, it captures our attention because it’s a significant trigger.
The majority of retailers, when advertising their products, don’t give anything for free, and instead, they will tell how much their product costs.
Taking advantage of the psychology of free doesn’t mean that you need to give away your product. Instead, you could easily make free part of an offer, whether it’s about offering free shipping or gift with purchase.
Before I Wrap Up This Article…
I also want to show you a few creative retail advertising examples. I’ll make a brief comment for each one and tell you why they work.
- The first example comes from Sephora. As you can see, the first word that stands out in this display and is “free,” which by itself draws attention. The messaging is simple, clear, and it does not overwhelm the design, which has a pretty clean background.
- Below we have another example from Sephora but, in this case, the ad is for a brand that is sold at this store. In only three words, the ad manages to convey emotion (“need”) and action (“now”), which are two essential components of retail advertising. The way it’s created clearly shows that it’s targeted towards women who are passionate about skincare and want to test out the newest releases.
- The third retail advertising example comes from Adidas. This ad is so minimalist and yet incredibly powerful. You have the brand’s logo at the top. Then, you have an image of the product that’s being advertised, which is shown differently – the shoe is placed vertically, rather than horizontally. The only word that appears in the ad, other than what’s written on the CTA button is NMD, which is a sneaker style developed by the brand.
- Ray-Ban does an excellent job at not only telling but also showing that their sunglasses can really suit everyone. Even though the size of the visual is not that big, it managed to show how good their eyewear looks on both women and men. This ad also proves that in just three words, you can send such a strong message that can be easily understood by anyone.
- The difference between this ad by Zara and the other four I talked about is the fact that this one’s CTA urges people to visit their new brick and mortar store, and not the online shop. The imagery is elegant, simple, and it teases the audience by showing only small snippets of some of the clothing items people will be able to find in the store.
You don’t need a big budget to create effective retail online ads. In fact, some of the most effective visuals can be created with online design tools, such as Bannersnack.
In the end, it’s essential to simply experiment with many different techniques and ideas so you can figure out what works for you and what triggers a response from your target audience.
Play around not just with static ads, but also with animated ones.
Take a look at what the competition is doing as well and get inspired. Think about how you can address your customers and how to step up your game with online advertising so you can best serve their needs.
Retail marketing has definitely changed in the last few years, but it’s definitely not going to die anytime soon. It has just moved to digital, which is where all retailers should focus their efforts now.
Retail online advertising doesn’t have to be complicated.
You bring your strategy, we deliver the tool.
Give Bannersnack a try and see for yourself how easy ad creation is these days.
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