Brands and brands increasingly value the visibility offered by these on their e-commerce sites in trade marketing agreements.
The subject of digital is increasingly interfering in the negotiations that are taking place each year between distributors and brands of the big consumer. Discussions on the price and quantities that will be purchased by the former, as well as all the communication devices they will put in place to support the sales of the latter. This practice named trade marketing evolves as French e-commerce is gaining weight (nearly 90 billion euros in revenue in 2018, according to the Fevad).
Until then, the agreements focused on setting up gondola heads at the point of sale, the presence of the brand in the retailer's paper catalog, and even the distribution of a common advertisement. But the rise of digital and the development of "retail media" offers among the main players in the sector, Carrefour, Casino, Auchan, E-Leclerc and the pure-player Amazon, have changed the deal. Everyone now wants to enhance the visibility in contracts that it can offer on its website.
The consumer electronics sector is the most active in digital trade marketing
Targeted brands are rather receptive. "They see that the online distribution channel grows by about 10% while the offline is sluggish, it is natural that they switch part of their trade marketing investments," says Alexander Mahe, partner in the firm fabernovel. Two sectors are particularly concerned, according to the head of Publicis Media's commercial practice, Frédéric Marty: consumer goods, FMCG, consumer electronics and consumer electronics. "The latter is the most active in terms of digital trade marketing because nearly 25% of its turnover is already achieved via e-commerce, Frédéric Marty analysis." The recurrence of purchase is lower than the FMCG This also explains why brands, which have fewer opportunities to sell, are more inclined to invest in this territory. "
For brands such as e-merchants, the financial stakes are substantial. Morgan Stanley estimates that trade marketing investments will account for nearly $ 178 billion in the United States in 2019. Almost as much as the $ 200 billion that will be invested in advertising the same year, according to eMarketer. Difficult on the other hand to find estimates for the French market. "It's very complicated to calculate the weight of investments in trade marketing because it is most often a few lines in contracts of several pages, which correspond to percentages", explains Antoine Champinot, head of the division e- France trade of the group Seb.
One certainty however: investments in trade marketing are less digital than those of marketing as a whole. "Between 20 and 40% of marketing investments are digitized against less than 10% of investments in trade marketing," says Alexandre Mahe. Frédéric Marty estimates that the digitized part of the sector does not weigh more than 100 million euros for the moment in France.
"Amazon has a market share in investment in online trade marketing much more important than its weight in the French e-commerce"
In France as in the United States, it is Amazon who takes the biggest part of the cake. The e-commerce giant has generated more than $ 10 billion in worldwide revenue in 2018 through its Amazon Marketing Services sponsored product offering and its Amazon Media Group display offering. "By its data and the effectiveness of its techno solutions, Amazon is far ahead of all French," says Alexandre Mahé. A statement shared by Frédéric Marty: "Amazon has a market share in investments in online trade marketing which is much more important than its weight in the French e-commerce. The e-commerce manager of a consumer electronics heavyweight confides to invest more than half of its investments in media retail at Amazon, while it does not represent more than 30% of its online sales . "Amazon can count on a commercial force with a very well-honed speech that focuses on the immediate ROI that the brand will get if it invests in media," he says.
French retailers lag behind
Retail players do not sit idly by. "They face a real challenge: value sites ads on their sites and the transactional data they hold," said analysis Mahé. Most have started their governance activity for this purpose. They are called 3W.relevanC at Casino, Carrefour Media at Carrefour, Conso Regie for Leclerc and ImediaCenter for Auchan. All are working on the launch of sponsored product offers, as proposed by Amazon, and the marketing of advertising sites that will be boosted by the use of their commercial data.
Some like Carrefour, Auchan or Darty rely on the technology of the French start-up recently bought by Criteo, Storetail. Others, like Casino, adopt different strategies depending on the site. Cdiscount had joined Mabaya's services to develop a sponsored product offer … but now wants to develop its own technology. Monoprix is the first e-merchant to test Google's offer. The latter allows advertisers to bid from Google Ads, to link their ads with the search results of some e-commerce sites. Proof that Google does not take the hype "trade marketing" lightly, the platform also launched Cofunded Ads, a format that allows a brand to finance a portion of the budget spent by a retailer as part of a joint SEA campaign .
This format of online shared pubs is set to take over the co-marketing campaigns that brands and retailers deployed in outdoor display or on paper catalog. At Monoprix, we decided to remove the paper catalogs by the end of 2018. The retailer is now offering brands to switch these investments towards 100% digital devices. "We are transforming this content that fed print catalogs into geolocated and targeted online advertising campaigns, thanks to 3W.relevanC's data and Adtech Armis' expertise," explains Florence Chaffiotte, Marketing Director at Monoprix. This new offer, spread on Google, Facebook and other media platforms, is not without consequences for the organization of the retailer. "We need to break down our buying and marketing teams to succeed."
"It is a comfort for Amazon to integrate non-targeted media into our contractual agreements because it is a budget on which it has no pressure of result"
The market is still in full structuring and deals are negotiated on a case by case basis. At some retailers, trade marketing agreements already include an envelope dedicated to the dissemination of online sponsored product campaigns. "This allows retailers to boost their corporate activities," says Frédéric Marty, "but brand sales teams are not always ready to commit to specific volumes." The agreements will then include on-site visibility packages, including non-targeted banners and highlighting the brand's products at the top of the organic search results (called "Boost search" at Cdiscount for example).
There is also no specific rule at Amazon, even if the investments devoted to Amazon Marketing Services are most often negotiated in margin of the trade marketing agreements. The latter will focus on the dissemination of non-targeted media campaigns within the site. "It is a comfort for Amazon to integrate them into our contractual agreements because it is a budget on which it has no pressure of result", explains our anonymous e-commerce manager. Even the data giant does not say no to the benefits of trade marketing …