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The Retail Apocalypse and Direct Response Marketing

April 25, 2017

As we look at today’s retail market we are beginning to see signs that were predicted before the financial crisis of 2008-2009. We can now see that retail as we've know it since the 1960’s is undergoing a dramatic reorganization. We see the signs everywhere, big signs - and they all read “Out of Business”. More than 3,500 stores are expected to close in the next couple of months. American institutions like JC Penney, Macy's, Sears, and Kmart are all shutting down stores. Some retailers like Sears and JC Penney are simply unloading unprofitable locations. Others are exiting the brick-and-mortar business and trying to shift to an all-online model. Still others are going out of business altogether.

 

Much of this has been precipitated by the rise of e-commerce, which has resulted in plummeting foot-traffic at retail locations. Cushman & Wakefield reported a 50% drop in retail visits between 2010 and 2013 alone. This and other similar reports were public knowledge but most retailers simply refused to acknowledge the trend. Others like the now ubiquitous Amazon did notice and have capitalized on it. It is estimated that more than 30% of all shopping malls will close in the near future due to lack of anchor stores while visits to Amazon.com will continue to rise.

 

One might ask, if the future of retail is really so dire, how is that affecting the marketing sector overall? How will businesses stay afloat as the tide of e-commerce continues to rise? Who is buying these days? Where should we be in order to be more visible and relevant to our customers? Many have tried to provide answers but few have offered any that are helpful. Various companies don’t actually seem to want the right answer. The shift to online commerce is difficult for many older companies to accept. The reality though is that those companies have been undergoing painful losses over the years, losses that have led to the dramatic contractions mentioned earlier.

 

The sooner the retail world accepts that the winds of commerce have shifted, the quicker they will be able readjust their sails and get back on course. Dump the dead weight, hire people who understand internet marketing and the buying patterns of younger demographics like millennials and the upcoming Generation Z. Get your business on social media and learn how stay relevant and stay smart in the ever shifting digital sea.

 

Marketing is undergoing a similarly dramatic shift. It is easy to foresee a future in which online ad revenue will surpass that of TV. Already, one can see ads that are targeted according to individuals based on their search activity and social media preferences. With more people cutting the cord and viewing entertainment through the internet via online tools and hardware like Apple TV, Fire, ROKU, it is likely that the marketing world will also shift more focus from traditional TV to these new platforms. There is no reason not to take advantage of these platforms now and meet buyers in their homes with online ads streamed onto their SMART TV devices.

 

Of course, as we said, these waters are constantly shifting. How will DRTV change and adapt? Does it even have a future? Or, is its boat sinking also? Can marketers and agencies manage to ride the trend?  Soon, the first direct response agencies should begin seeking ad placements in the online world, taking full advantage of social media and smart devices of all kinds. Acknowledge the future and embrace it is the best possible approach for the DRTV community.

 

 

brian@directresponse.tv

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''We are most likely at the coming-of-age for Direct Response TV, not its twilight.'' Enzo Stephens in ''How Internet Killed the DRTV Star''

'' The concept of addressable television ads has been proclaimed  for years as the Holy Grail of advertising.'' Mike Proulx, Social TV

The opinions expressed above are solely those of the authors and not of directresponse.tv, it's partners, management, advertisers or contributors.  

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