Shopping Carts and Supply Contracts: What Retail and Commercial Marketing Can Learn From Each Other
- Retail marketing focuses on creating an immersive shopping experience.
- Commercial marketing, on the other hand, aims to build long-term relationships with customers.
- Commercial marketers can use emerging trends in retail marketing to make their strategies more effective.
In this Article
It was a busy Saturday afternoon at the brand-new SuperShopper grocery store. Store manager Jenny watched excitedly as customers filled their carts with produce in the fresh farms’ section. In the bakery, the smell of fresh bread wafted through the air. This was the result of months of preparation – determining store layout, selecting merchandise, training employees, and investing in visual displays. For Jenny, the comings and goings of happy customers meant their retail marketing strategy was working, but she was also eager to explore the intricacies of retail marketing vs commercial marketing to optimize their overall approach.
Across town, the office of Commercial Goods Corp. sat empty except for the sales team gathered in a conference room. As they reviewed last quarter’s disappointing numbers, they brainstormed ways to improve lead generation and showcase their expertise. They discussed revamping their trade show booth, producing more industry whitepapers, and improving sales training to highlight ROI data. Their goal was to land big deals with Fortune 500 companies.
At first glance, Jenny and the Commercial Goods team couldn’t seem more different. One focused on impulse buys, colorful displays, and promotions to drive sales in retail marketing, while the other relied on profound industry knowledge, custom proposals, and long-term relationships to earn contracts in commercial marketing. However, while retail marketing vs commercial marketing differ significantly in their focus, strategies, and metrics for success, they share common principles. This post examines the similarities and differences and shows how understanding them helps marketers across both sides learn from each other.
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Retail Marketing Overview
Retail marketing is the collection of actions that retail businesses take to get customers interested in their products and, hopefully, purchase as much as possible. These actions have three primary goals: build brand awareness, develop loyalty among the target audience, and drive sales.
Retail marketing has different flavors, which is essential because any objective is easier to achieve when approached from multiple angles. Retailers like Jenny can deploy the various blends to achieve the primary goals faster and more effectively.
The main types of retail marketing include:
In-Store (Store-Based) Marketing
This flavor of retail marketing leverages the physical space and sensory experiences within physical locations. A shopping location, such as a grocery store, may use in-store retail marketing strategies to help entice customers to make purchases once inside.
For example, the grocery store can place fresh bakery items near the entrance so their appealing smell whets shoppers’ appetites. It can display fresh produce in the first aisles to emphasize freshness and position popular staple items like milk toward the back to expose shoppers to more products as they walk through the store.
Additionally, the store can place merchandising displays, signage, and even employee interactions strategically and optimized based on customer traffic patterns. For instance, the store may offer free samples of a new product near aisles with complementary items and train staff to engage customers and answer questions on the aisle to improve customer service. The goal is to make the in-store experience inviting, intuitive, and enjoyable, increasing shoppers’ likelihood of buying impulsively and becoming repeat customers.
The main strategies under the in-store marketing approach can be boiled down to:
- Store layout and floor plan – Arranging aisles, departments, and traffic flow to guide customers through the store. The store can place popular or promotional items in high-visibility locations.
- Visual merchandising – Using displays, signage, lighting, and props to showcase products.
- Scent marketing – Using pleasing smells like fresh bakery items or coffee to activate hunger or positive associations.
- Music – Playing upbeat, familiar songs energizes customers and keeps them in the store longer.
- Product sampling – Offering free samples of new items to encourage trial and purchase. The free samples are often placed near related products.
- Point-of-purchase (POP) displays – Stores can leverage POP displays with promotional pricing or multi-buy offers. The items can be located at end caps or near registers to trigger impulse buys.
- Customer service – Employing friendly and knowledgeable employees who can answer questions and make recommendations.
- Special events – Hosting in-store events like brand ambassador visits, gift-with-purchase promotions, or holiday activities.
- Mobile integration – Using mobile apps and features like digital maps or scan and pay to enhance the in-store experience.
Traditional Retail Marketing
Traditional marketing is one of the two non-store-based approaches for retailers to showcase their products. The other one is digital marketing, which will be discussed shortly.
Sometimes, retailers may want to showcase their products to the target audience through legacy channels like billboards and print ads. This promotional strategy is best described as traditional retail marketing. Some examples of traditional retail marketing tactics include:
- Print ads in newspapers and magazines promoting sales or new products, which allows targeting by geography/demographics.
- TV commercials aired during primetime or programs with relevant viewership focusing on brand building through sight, sound, and motion.
- Radio spots on local stations, often with humor or offers.
- Direct mail, including catalogs, postcards, or brochures, is sent to known/potential customers.
- Sponsorships and partnerships amplify reach, like sponsoring a local sports team.
This flavor of retail marketing has one overarching objective: to achieve blanket exposure across demographics to increase brand familiarity and purchase consideration.
Digital Retail Marketing
According to Deloitte’s 2023 Retail Industry Outlook, 60% of executives foresee strengthening digital commerce offerings as a top growth opportunity. This development is not a mistake, considering that, according to Statista, the average time spent with digital media increased from 6.8 hours per day in 2019 to 8.1 hours in 2021. Thus, it makes sense for retailers to use digital technologies to target potential customers, which is only possible if one understands digital retail marketing.
Digital retail marketing describes the product/service promotional tactics that use online (internet-based) platforms to target customers and drive sales. The venues, called digital channels, allow retailers to reach shoppers anywhere, personalize messaging, and optimize campaigns using analytics.
Some examples of digital retail marketing strategies include:
- Ads on search engines like Google/Bing that target keywords relevant to products or services.
- Product listing on shopping platforms like Amazon displays products to intent-based shoppers.
- Retargeting ads that follow users across sites by tracking cookies and pixels.
- Email marketing like promotions, cart abandonment reminders, and personalized product recommendations sent to subscriber lists.
- Social media marketing through platforms like X (formerly Twitter), Facebook, and Instagram.
- Affiliate marketing partnering with influencers/bloggers who promote products and publish reviews.
Overview of Commercial/Industrial Marketing
Characteristics of Commercial Markets
When we talk about retail marketing vs commercial marketing, we can highlight that the former aims to showcase products to commercial enterprises. For this reason, commercial marketing is often referred to as business-to-business (B2B) marketing. You may also hear a lot about industrial marketing, which describes the branch of marketing that focuses on promoting and selling products on an industrial scale. All these aspects of marketing refer to the same thing, and this discussion will refer to commercial marketing repeatedly.
A discussion of commercial/industrial marketing must begin with an understanding of some of the features that distinguish industrial markets from consumer markets. They include:
- Derived demand: The demand in industrial markets is derived from consumer demand – no industrial purchase would be made if it weren’t for some consumer demand.
- Reciprocity: This is the practice of buying goods and services from those who buy from you. It’s an important issue in an industrial purchase decision.
- Multiple buying influencers: In industrial purchases, everyone from the receiving clerk to the board of directors can influence the final decision.
- Stable buying relationships (long-term relationships): Once a buying relationship is established in industrial purchasing, it is challenging for outside sources to break into the purchase chain.
- Rational buying motives: Factors influencing an industrial purchase are generally more sensible than those affecting consumer purchases.
- Concentrated markets: Industrial markets are concentrated both in terms of number of customers and location. For example, you can find that three of the top ten manufacturers are headquartered within a single business district.
Knowledge of the characteristics of industrial/commercial markets is essential, especially if commercial marketers want to design an effective and successful marketing strategy. For instance, this understanding will enable them to identify the main goals of commercial marketing: lead generation and making strategic sales. They will also know that the target audience for their marketing campaign is the business decision-makers across industries like manufacturing, healthcare, technology, and more. However, commercial marketers often target specific roles like operations managers, IT directors, or procurement officers.
One of the main features of industrial markets is stable buying relationships, in addition to indicating that relationship building is crucial. This means strategies focus on consultative solution-selling, while emphasizing how offerings solve clients’ pain points and provide a reliable return on investment (ROI). Furthermore, marketers produce customized proposals and pricing to meet business needs – the suggestions and pricing details are solidified in contracts, which also define the length of purchasing relationships.
Commercial Marketing Channels
Besides the characteristics of industrial markets, marketers should also acquire sufficient knowledge of the various channels for commercial marketing. Some examples include:
- Digital marketing channels: include all channels that rely on the internet and related technologies to promote products. Some examples include blogs, video marketing, emails, social media, organic search (search engine optimization, SEO), and paid search.
- Word of mouth: This strategy relies on referrals or recommendations from your customers.
- Traditional marketing channels: This includes direct marketing methods like television, radio, billboards, and print advertisements. Although traditional marketing methods can reach large audiences, they often lack the precise targeting capabilities of digital channels.
- Trade shows and exhibitions: Participating in trade shows, presentations, and industry events provides an opportunity to showcase products, network with potential clients, and gain industry visibility. It’s a valuable channel for face-to-face interactions.
Differences in Strategy
One of the main areas that retail and commercial marketing depart from each other regards how marketers design their strategy. First, both retail and commercial marketers rely on carefully developed strategies to run marketing campaigns. These strategies may vary in many ways, primarily because they cater to unique audiences, but certain specifics are standard. These include product focus, buyer journey, pricing strategy, and customer relationships. The table below indicates how strategies across retail and commercial marketing differ based on these common aspects of marketing strategies.
Unique Aspects of Retail Marketing
The key takeaway so far regarding retail marketing is that retailers rely on a personal touch to convince consumers to purchase their items. They employ specialized strategies like extensive in-store merchandising, seasonal and holiday promotions, loyalty programs, and omnichannel coordination to achieve this goal.
Several features distinguish retail marketing strategies from commercial marketing. They include:
- Carefully designed store layouts, signage, and visual merchandising displays: Retail stores strategically place high-traffic departments near entrances and popular items at eye level. Additionally, they also use feature areas to highlight promotions and new products, and visual cues like mirrors and lighting enhance the space. The goal is an immersive, interactive experience that encourages customers to browse and buy impulsively.
- Retailers leverage seasons and holidays to prompt targeted sales. The stores tie offers and store ambiance to events like summer barbecues, back-to-school, or Christmas. Common tactics include limited-edition products, gift guides, and themed displays.
- Loyalty programs: Retailers recognize that tying down a consumer is challenging, given plenty of alternatives. Thus, they devise strategies like loyalty programs to encourage shoppers to return. Most loyalty programs provide points, discounts, and tiered rewards to encourage repeat visits and higher spending. Some examples include members-only promotions, personalized deals like birthday coupons, gamification through points, and status tiers.
- Conversion optimization: Retailers optimize conversion rates through testing and data analytics. They collect and analyze information like cart abandonment rates, time spent on the site, page-load speed, optimized product detail pages (PDPs), and page layout. Other tactics deployed include streamlined checkouts and flexible fulfillment options to minimize lost sales.
Unique Aspects of Commercial Marketing
It has emerged that commercial marketers care more about relationships with customers – longer relationships positively impact the business bottom line. Obviously, a customer who stays longer has complete trust in your ability to satisfy their purchasing needs.
Commercial marketers deploy several strategies – unique to this niche – to earn customers and retain them. Examples of the strategies include content marketing, trade show engagement, consultative sales, and request for proposal (RFP) creation. How do these strategies make commercial marketing unique?
- Content marketing is often built around thought leadership, providing value to prospects while demonstrating expertise. Some specific approaches include white papers, case studies, and blog posts that aim to attract and nurture leads. Marketers leverage search engine optimization (SEO) techniques to ensure content ranks highly for relevant queries.
- Industrial brands participate in events like trade shows and conferences for direct outreach. These events have exhibition booths where brands showcase products and offer the opportunity to build brand awareness among attendees. Sales representatives use the occasion to network, give demos, collect prospect details, and begin relationships.
- Brands create and share sales presentations – these should resonate with commercial buyers’ key concerns to generate leads. The presentations allow companies to showcase how a solution addresses pain points, improves operations, and delivers favorable ROI.
- Marketing campaigns take a consultative approach that involves profoundly understanding clients’ challenges to provide tailored solutions.
Shared Principles and Best Practices
Granted, the retail marketing vs commercial marketing comparison has much to cover, especially when picking the differences. Still, the similarities are plenty, and there is no better way to identify them than by evaluating the principles and best practices that apply to both situations. Let’s go over some common examples:
Conducting Market Research and Analysis
This provides important insights into the target audience’s needs, behaviors, and preferences. Furthermore, both spheres rely on research to identify customer pain points and influencers in the purchasing process. The resulting insights inform product development (for industrial brands) and marketing strategy.
Developing Customer Personas and Understanding the Buyer Journey
Retail and commercial marketers create a detailed fictional representation of the ideal customer to guide strategy development. The process focuses on demographics, challenges, values, and behaviors. Additionally, the concept of customer persona is helpful, especially for effective messaging. For example, retail marketers may target brand lovers. In contrast, the commercial sphere may target specific organizational roles, such as procurement officers, but both require deep audience knowledge.
Creating Targeted, Contextual Messaging and Campaigns
In both spheres, promotions should resonate with the specific audience based on personas and stage in the buyer journey. Moreover, marketers should tailor campaigns for channels – for example, the digital channels should suit the online audiences, and the traditional channels should leverage their unique strengths.
Focusing on Lifetime Customer Value, Not Individual Sales
While commercial focuses on large contracts and retail on smaller purchases, the big picture is expanding long-term spending. Regardless of the scenario, marketers measure success by repeat business and sales numbers through cross-selling and customer retention.
Leveraging Automation and Digital Channels
Retailers and industrial brands grapple with vast product data and digital assets. Product Information Management Software, such as Catsy, centralize product information, enabling distribution across various channels. Crafting marketing campaigns involves handling numerous digital assets, necessitating Digital or Data Asset Management (DAM) platforms for efficient organization and distribution. While some vendors offer PIM and DAM separately, providers like Catsy integrate both into a single platform. This integration streamlines product information and marketing collateral management in a familiar environment.
PIM and DAM systems offer substantial benefits to retail marketing vs commercial marketing. PIM for retailers ensure access to up-to-date information from a single source of truth, facilitating the creation of effective marketing campaigns.
Conclusion
Retail marketing vs commercial marketing, management, and technology play essential roles in the dynamic field of marketing. These two areas exhibit distinct differences, particularly in their primary focus – impulse buys for retail and long-term contracts for commercial marketing, as well as their respective target audiences. However, it is also true that these two fields share several commonalities, especially concerning the principles guiding the formulation of effective marketing strategies.
One aspect that is often overlooked when comparing retail and commercial marketing is that the two spheres have a lot to learn from each other. A good example involves monitoring and adapting to changing consumer behavior. New marketing trends often emerge first in consumer markets, impacting business-to-consumer (B2C) marketing before industrial markets. Therefore, industrial marketers should closely monitor retail marketing and learn from it to stay ahead of the curve, leveraging technology and effective management strategies to remain competitive in their respective markets.
Retail marketing focuses on creating an immersive shopping experience through store layouts, visual merchandising, and targeted promotions, while commercial marketing aims to build long-term relationships with customers through content marketing, trade show engagement, and consultative sales.
Retailers can use loyalty programs and conversion optimization techniques to encourage repeat visits and increase sales. Loyalty programs provide points, discounts, and tiered rewards to encourage repeat visits and higher spending, while conversion optimization involves testing and data analytics to optimize conversion rates.
Marketers in both industries should conduct market research, develop customer personas, create targeted messaging, focus on lifetime customer value, and leverage automation and digital channels.
Businesses can use product information management (PIM) tools for effective product data management and digital asset management (DAM) platforms to manage and distribute digital assets appropriately. Some vendors, like Catsy, provide PIM and DAM within a single platform.
By learning from each other’s strategies, marketers can achieve greater success in their respective industries. For example, retail marketers can benefit from commercial marketers’ focus on long-term relationships with customers, while commercial marketers can benefit from retail marketers’ expertise in creating an immersive shopping experience.
