Marketers increase investment in innovation
Nearly three-quarters (72%) of CMOs have increased investment in marketing innovation over the past year, with many seeing it as the main path to growth.
Marketing innovation now makes up more than 20% of the overall marketing budget.
However, while the vast majority have increased investment into innovation, 91% of the 400 CMOs surveyed across the UK, North America, France and Germany, say they struggle to measure its impact.
Senior management is also underwhelmed, with 83% of marketers saying innovation has not delivered to management’s expectations. Part of the problem is the fact there is often not a clear definition and shared understanding of what marketing innovation means.
Given 95% of CMOs have dedicated people in innovation roles and another 93% agreeing they organisation will fund high-risk initiatives, the price of getting it wrong could be high.
“Like ‘agility,’ the term ‘innovation’ has become ubiquitous in the language of modern business. However, there’s significant disagreement about what innovation actually means,” says Ewan McIntyre, co-chief of research and vice-president analyst in the Gartner Marketing practice.
“This isn’t just arguing semantics – definitions matter when it comes to delivering on business objectives related to innovation. Misunderstanding what innovation means to your organisation has consequences that impact the scope, intent and outcome of activities.”
Most marketers feel positive about the future of their organisation
Most UK marketers are optimistic about their organisation’s future, despite the challenges of the past 18 months, with 66% expecting revenue to grow over the next year and a half and a further 78% believing their company provides greater value than it did 12 months ago.
However, 78% suggest customer expectations are more difficult to meet than they were a year ago. As a result, digital transformation is continuing to rise up the agenda, while more than three-quarters (77%) feel customer experience is a key competitive differentiator.
More than nine in 10 (93%) marketers say the pandemic changed their digital engagement strategy, with an additional 89% saying it changed their marketing channel mix. Some 68% of marketers say they now engage customers in real time across one or more channels.
Retail sales remain strong despite rising high street vacancy rate
Retail sales remained strong in July, rising by 6.4% on a total basis compared to growth of 3.2% in July 2020.
However, a combination of wet weather and a smaller than anticipated boost to in-store sales following the lifting of restrictions means this figure is well below the three-month average growth of 14.7% and the 12-month average growth of 10.4%. Compared to July 2019, total retail sales grew by 9.1% in the four weeks to 31 July.
UK retail sales increased 4.7% on a like-for-like basis compared to July 2020. However, these sales are below the three-month average growth rate of 9.7% and the 12-month average growth of 11.1%. The slowing of growth in retail sales is thought to have been affected by the reopening of hospitality and leisure, which has diluted consumer spending.
Over the three months to July, in-store sales of non-food items grew 64.9% on a total basis. During the same period food sales increased 2.9% on a total basis and rose 0.8% on a like-for-like basis. Non-Food retail sales increased 24.6% on a total basis and 17.6% on a like-for-like basis.
Online sales remained strong as social events like weddings began to ramp back up, registering notable improvements in sales of formalwear and beauty. Furthermore, the end to mandatory work from home rules caused sales of home office equipment to finally begin to decline, although consumer appetite for furniture and household appliances held up.
Online non-food sales increased by 0.6% in July, against a growth of 41% in July 2020. The non-food online penetration rate fell to 48.4% last month from 54% in July 2020. While down on last year, the penetration rate was significantly up on the 29.7% seen at the same point in 2019.
Perhaps more worrying is the rising vacancy rate on UK high streets. Given the impact of the pandemic many high streets are crying out for investment, says BRC chief executive Helen Dickinson.
“Unfortunately, the current broken business rates system continues to hold back retailers, hindering vital investment into retail innovation and the blended physical-digital retail offering,” she says.
“The government must ensure the upcoming business rates review permanently reduces the cost burden to sustainable levels. Retailers want to play their part in building back a better future for local communities and government must give them the tools to do so.”
Looking ahead, UK head of retail at KPMG Paul Martin expects the retail sector to grow at a much slower rate as retailers face a growing set of challenges. “Staffing pressures, increases in commodity and component costs, rising inflation eating into households’ spending power and stalling consumer confidence could lead to a slowdown in retail sector growth as we head into autumn.”
Half of beauty sales to be online by 2026
The health, beauty and personal care category will add $305bn in global sales between now and 2026, with over 50% of that growth coming from ecommerce.
Shoppers are expected to buy an additional $156.1bn of health and beauty products online over the next five years, with ecommerce sales in the category forecast to hit $358.4bn by 2026.
Online sales in the category are expected to have a compound annual growth rate of 12.1% over the next five years, compared to a growth rate of 3.3% for store-based sales.
“Items that were once bought in-store are not only becoming available online, but in an increasingly mobile-first age, brands have been rapidly experimenting with innovative digital technologies to engage customers remotely, such as using augmented reality to allow customers to try on lipstick virtually and getting involved with seasonal events,” says Deren Baker, CEO at Edge by Ascential.
Source: Edge by Ascental
Employees fear diversity drops off the agenda without high profile cases
Two-thirds (67%) of racially diverse professionals feel frustrated that high profile acts of racism are the main driver of conversations around inclusivity in the workplace.
Meanwhile, 59% believe work around diversity and inclusion would drop down the agenda if it wasn’t for public acts of racism such as that directed at Marcus Rashford, Jadon Sancho and Bukayo Saka following the Euro 2020 final.
The study of 2,000 UK respondents also shows that Brits from black, Asian and ethnic minority backgrounds are more likely to agree momentum will slow without high profile cases compared to white Brits – 58% versus 48%.
Looking specifically at the views of people working in marketing, advertising, PR and journalism (albeit a relatively low sample of just 79 people), 55.7% worry businesses will drop the ball on diversity and inclusion without high profile cases to ensure it’s top of mind. This figure rises to 59% for ethnic minority professionals in these fields.
Indeed, 62% of people working in the industry say the racism following the Euros final spurred conversations at their workplace. But 78% agree it should be a continuous effort.
Sheeraz Gulsher, cofounder of People Like Us, describes the data as “heart-breaking”. “Diverse employees shouldn’t have to feel that it requires a celebrity or sports star being horrifically abused for racism in the workplace to be taken seriously. Prioritising diversity and your diverse employees needs to be approached in a consistent way, not just when it is a trending topic on social media.”
Source: People Like Us/Censuswide