Response Magazine's 13th Annual State of the Industry Report1 Sep, 2008 By: Thomas Haire Response
How are changes in the retail marketplace affecting DR products that are seeking to find that ever-yearned-for shelf space?
Bruckheim: Latin American retailers are becoming increasingly open to DR products, especially considering the amount of television exposure the products are getting. Concurrently, local distributors are multiplying their owned-and-operated stores in many countries, and adding to traditional retail sales significantly also.
Eden: It's creating a more expensive entry to market. Many are finding that having a continued presence with one product or another is helping to break into major retailers.
Lee: There are more and more returns.
Medico: Retailers love DR. I truly believe this. The more an offer is seen on TV, the greater the sales at retail. Getting consumers into the store to buy is what our mutual goal should be.
Orsmond: In the U.K., there is really only one person and company that understood the power of using TV to drive sales into retail early on — John Mills. He started out more than 40 years ago by placing in-store video screens in many of the U.K.'s largest retailers. JML has since expanded into running its own infomercial channels (currently seven). However, it is its increased use of short-form DRTV that now drives buyers into retail. Using this marketing strategy has paid dividends and JML continues to be the U.K.'s most successful DR advertiser.
Sarnow: Shelf space exists if the media purchased is substantial enough to build awareness. Products that test well and rollout at more than $100,000 per week in short form will find retail space available. Marketers are quick to learn that using DRTV to build brand awareness only occurs if enough media is purchased. But enough media is purchased only if the direct response component of the spot is strong.
Stacey: The retail marketplace has consolidated significantly, so there are fewer retailers but they are very large in size. Small marketers with "one-off" items will need to work through established retail vendors or reps to get placement. It is increasingly important to have a differentiated and competitively advantageous product, with good media support, good packaging, good margins and good price/value proposition. You must also be able to operationally and logistically deliver it. Speed-to-market and continuous innovation are critical.
Given the current state of the DR industry, what would you change to ensure its continued health and growth?
Bruckheim: In Latin America, pan-regional cooperation has always been an important key to success. That will never be more important than in the coming year, or we'll quickly price ourselves out of the market. With a cooperative approach by product and media suppliers, we can ensure a more stable and profitable future for the clients we share.
Eden: Most of the change requires the broadcasters (cable, syndicators, local, etc.) to be the gatekeepers. Today, any form of advertising can be DR, regardless of having a response mechanism or not. By definition, this is not DR. They need to truly manage who gets DRTV rates and who should be paying retail, with extended cancellations.
Fays: My largest concern is ensuring networks and agencies take the time to hire young, bright, energetic people to support the business. Fair and just compensation needs to be discussed in our business to ensure some of the best and brightest young minds come our way as opposed to national ad sales. We, as an industry, have to invest in people or we are only fooling ourselves.
Knight: The key word is adaptability. In the best of times, you need to be able to react and make decisions quickly. In more challenging times, such as this year, when you have a soft market coupled with a changing media landscape, it is of the utmost importance to be at the ready to identify and seize any available opportunities.
Lee: As a marketer, I would make sure that my vertical has touchpoints in all the various marketing channels.