Retail marketing effectiveness at a six-year high

New research from the Data & Marketing Association (DMA UK), in partnership with Sagacity, reveals retail marketing effectiveness is at a six-year high.

The Retail Marketing Effectiveness 2023 report found that while the overall cross-sector picture of marketing effectiveness has remained muted in the past year, retail marketers have bucked the trend by recording one of the most successful years in marketing effectiveness in the last half decade.

After retail marketing effectiveness experienced a significant course correction decline in 2021, following the effectiveness highs seen during the pandemic, there was a return to strong growth this year.

A balanced approach to campaign strategy very much sat at the heart of this trend, with retailers driving short-term response through promotions and discounts, while keeping one eye on the long-term by also investing in brand building activity. This balanced approach has resulted in growth across the board in terms of brand (where the number of effects has more than doubled year on year), response (61% growth in effects), and business effects (67% growth).

In addition, a focus on online growth and customer retention, plus the success of DIY retailers have all contributed to this performance.

“Trading conditions have been undeniably tough during the cost-of-living crisis. Consumer demand has been impacted by squeezed household budgets, while retailer profit

margins have been hit by cost inflation. However, retailers have got the balance right in terms of campaign strategy. There is an even split between acquisition and retention activity, and the most even balance between brand and response activity seen in the last six years, with a third of campaigns having some sort of brand goal,” Ian Gibbs, Director of Insight at the Data & Marketing Association (DMA UK).

How retail marketers remain effective

Ad Mail, Email, and Radio and Audio are key response marketing channels for retail advertisers — delivering promotions, discounts, and offers to existing customers and new acquisitions alike.

“The role of each channel, such as mail and email, can seem small in isolation but when combined, they help to ensure the successful outcome of a campaign and often build towards an end goal, such as brand building,” added Scott Logie, Chief Commercial Officer at Sagacity. “High-level targets are often set at the macro level — acquire more customers, increase the retention rate, and drive more visitors to the website — but the complexity of multi-channel campaigns and attribution means that there are often many layers to how measurement takes place.”

Conscious of the need to counter the increased price sensitivity that comes with heavy discounting, retail marketers have combined response activity with brand activity to great effect in 2022. TV, out-of-home, press and magazines, and experiential marketing are key brand-building channels.

Retailers are also maximising their opportunities through effective customer engagement techniques.

Gibbs concluded: “The confluence of data, creativity, and technology has been used to maximise retail marketing effectiveness. Data- and technology-driven campaigns have proven themselves to be particularly adept at boosting response campaign effectiveness, while highly creative campaigns find their strengths in boosting the number of brand effects per campaign.”

Further information can be found on the DMA website:

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