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February 8, 2017
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How Media is being impacted by Brick and Mortar

It is undeniable that technology is growing and improving at a truly amazing rate and has impacts on all aspects of our lives.

It is undeniable that technology is growing and improving at a truly amazing rate and has impacts on all aspects of our lives. One of the most highly adopted and convenient aspects of technology is the wealth of ecommerce options out there, but how is that impacting our media and marketing strategies?

E-Commerce is not a new concept, it has been around almost as long as the internet has been around. The internet opened for commercial use in 1991, a year after the first World Wide Web server and browser was launched. By 1994 secure transactions were now being made all through this new concept of the internet. By 1995 we started to see brands that we know and love such as Amazon and eBay launch their now iconic sites. Initially e-commerce was fairly limited, over the years we continued to see increase inventory available which lead to increased adoption by consumers. Soon enough you had major brick and mortar retailers selling their goods through e-commerce to keep up with the trends.

The adoption of e-commerce by consumers can be attributed to their increase need for convenience in a digital age, as well as the pressures put on retailers to provide value to the consumers. Most retailers are now offering free shipping with a certain spend, easy returns if purchased online and many other alluring offers to buy their brand. This has led to significant decrease in sales in brick and mortar stores. In the 2016 holiday season, although total retail sales saw increases, this was driven by the large e-commerce sales despite brick and mortar sales seeing declines. In recent months we have continued to hear of major retailers, most recently Macy’s, closing a significant number of their physical locations due to increase maintenance costs and decrease margins to keep the stores running.

With the ever changing nature of the retail business, you can bet there are going to be significant impacts on the media industry. Retail is one of the top 10 industries for media spend and accounted for $13.1 billion in ad spend in 2015 and $11.7 billion through 11/30/16. Historically, retailers relied heavily on TV, Radio Outdoor and Newspapers to promote promotional periods and coupon distribution. As more and more consumer spend dollars shift to digital, you can anticipate the media spend will shift to hit the consumers where they are more likely to be receptive to the message. If consumers are shopping predominately online, they are not as likely to be redeeming a Newspaper coupon. Digital ad spend in the retail category grew 20% YOY from 2015 to 2016, it is forecasted to grow an additional 15% in 2017. These shifts are going to increase the need for data to drive targeting for retailers. Digital is going to continue to become increasingly competitive, forcing brands to narrow in on consumers who are most receptive to their messaging both in the digital space and with the media outlets they traditionally utilize.