Chief Marketing Officers Leaning Towards Conservative Approaches in 2021, Suggests Study
As the world continues to grapple with the impact of the pandemic, chief marketing officers (CMOs) in the retail sector are finding themselves in a delicate balancing act. On one hand, they are eager to expand digital capabilities and change strategies to drive growth. On the other hand, they are mindful of the need to minimize risk and maintain profitability.
According to a recent survey, marketers will focus on increasing sales of existing products (39%) or introducing new products to the same customers (34%) in the coming year. However, for every strategy they try to reinvent, another should return to pre-pandemic levels, as advised by Augie Ray, vice president analyst in the Gartner Marketing practice.
The challenges introduced by 2020 continue to make retail recovery difficult, and marketers risk exhausting their resources by being overly ambitious in their strategies. Last year was tumultuous for CMOs due to pandemic-induced budget cuts and multiple hirings and firings at top retail brands. In fact, 65% of CMOs were preparing for budget cuts according to a Gartner report in April 2020.
Despite the difficulties, marketers are optimistic that their budgets will bounce back after a difficult year. In the survey, half of the respondents plan to reinvent or rescale six out of 11 key marketing strategies. Gartner's most recent CMO report suggests that marketers should choose to reduce or retire a strategy for every strategy they rescale in 2021.
To navigate these challenges, CMOs are leveraging a variety of strategies. They are focusing on membership and subscription models to build steady revenue, forming marketplace partnerships to reach new prospects and fill gaps, and attending networking events to build brand presence and partnerships.
Marketers are also adapting pricing and sourcing strategies in response to supply chain disruptions and tariffs. This includes considering price increases, renegotiating supplier contracts, and reallocating marketing budgets to more cost-efficient, performance-based channels to optimize ROI and maintain profitability.
In addition, retailers are advised to fortify their business foundations by creating continuous, connected consumer journeys based on data insights, while balancing supply and demand, and managing compliance and operational risks due to tariffs and pandemic-induced disruptions. Media investment strategy is pivotal; some brands increased media spend during economic uncertainties, especially on efficient search channels, social media, and connected TV, to maintain brand presence, capitalize on lower competition, and gain a recovery advantage post-pandemic.
Despite the focus on existing customers, focusing on them may not be enough to fuel a company's growth, especially in a turbulent environment. In the survey, 73% of CMOs plan to rely on current customers for growth in the upcoming year. However, with competition heating up and consumer behaviour shifting rapidly, it may be necessary to look beyond the existing customer base to find new growth opportunities.
In conclusion, CMOs in retail for 2021 are combining customer-focused innovation, data-driven risk management, and strategic media investments to navigate pandemic challenges and position for sustainable retail growth. They are being mindful of the need to balance ambition with risk, and are focusing on building resilience in their strategies to weather the ongoing turbulence.
- In the process of navigating the ongoing pandemic challenges and positioning for sustainable retail growth, chief marketing officers (CMOs) are leveraging AI and data insights to create continuous, connected consumer journeys and manage compliance and operational risks.
- Acknowledging the volatile environment, marketers are not only relying on current customers for growth but also looking beyond their existing customer base to discover new growth opportunities in the face of rapid consumer behavior shifts and intense competition.
- While CMOs are embracing digital transformation and changing strategies to drive growth, they are also mindful of the environmental and financial consequences of their actions, striving for sustainable practices to minimize risk and maintain profitability in the retail sector.
