The e-commerce trend in marketing
The digitalization of nowadays world is on the highest level of all times. This trend is connected to each segment of business and marketing is not an exception. Globalization processes and deep diving into the digital world changes business models even in huge multinational companies. One of the brightest examples of digitalization is e-commerce segment, which become a real leader of retail industry in the last few years. People love to buy online because of simplicity and higher level of comfort (the main principle is “anytime + anywhere”). Moreover, e-commerce segment become one of the main fields for international marketing experiments and extraordinary solutions.
A few weeks ago one of the largest US retailers Target has shown its quarterly report for the first quarter of 2016. Despite all the important figures about profitability and operational margin, one indicator was really shocking. Target increased its online sales for more than 34% only in one quarter. Of course, it was a “holiday time” and it seems to be normal that people buy more, but one of the major competitors – Wal-Mart – increased its online sales only for 8% for the same period of time. Moreover, analysis of the US retail market shows that the average market, increasing was nearly 15%. So, the question is how Target got such a boost in online sales. And the answer, according to the company’s executives, hides in marketing.
According to cnbc.com, Target indicates its changes in online shopping segment as a “free shopping concept” [Gustafson, 1]. Generally, it means that there are no limits for buyers in shopping processes – there is no minimal order for free delivery (in contrast to other retailers that, mostly, indicate $50 order as a minimal for free shipping); buyers have an ability to choose how they want to get their order – in-store or via delivery. Furthermore, online shopping allows increased efficiency of stock management by better informational analysis.
All these things are a result of changes in marketing strategy. New Target’s strategy is based on the principle that buyer is a partner, but not just a consumer. Fair and simple promotion, minimization of shopping limits and increasing the comfort of shopping process – all these movements are based on the idea that a good relationship between buyer and retailer could be a key success factor. It’s not just about loyalty (when a buyer makes all purchases in one place), but about real integrity of the buyers in retailer’s business model. And the role of communication and marketing is to show the benefits of such relationship for the buyers. Digitalization and e-commerce could be an instrument of integration and deeper understanding of customers’ needs.
All in all, digitalization trend is extremely strong in the last few years and have extraordinary impact of all business segments including marketing. It allows companies to understand their customers better, make high quality marketing research, and use it as integrity tool for building strong relationships between producer and buyer. Example of Target that has changed its marketing strategy in order to use all benefits from digitalization shows that such transformation could be a key competitive advantage for companies from different industries. Better market analysis, direct promotions and day-long connection with your consumers – these are the benefits that any company could reach and the question is whether they use this opportunity in the same way, as Target did.
Works cited
Gustafson, K. Target closing the gap with Wal-Mart online. cnbc.com. 2 March 2016. Web. 25 March 2016. URL: http://www.cnbc.com/2016/02/24/target-closing-the-gap-with-wal-mart-online.html
