Shopping has changed so dramatically over the past three years that it’s safe to say we haven’t seen a consumer revolution of this magnitude since the advent of mass-produced clothing and the dawn of department stores for the masses. Hyper-personalization, channel proliferation, and hassle-free global fulfillment have transformed the customer from a king into ruler of the commerce universe.
If you have ever taken business or marketing classes, you probably heard about the 5 P’s of marketing. In other words, the golden rules that each graduate was supposed to gleefully carry with them throughout their careers. However, that’s no longer the case – the consumer revolution has knocked two of the P’s off. Place, promotion, people, price, and product have been reduced to PXP: price, experience, and product. Let’s find out why.
What were the 5 P’s of marketing?
Before we look at the new marketing paradigm, we first need to examine the old paradigm that was taught in most marketing courses in the late 20th century.
1. Product
Products don’t need much of an introduction. They are the things you have that the consumers want. They can be tangible – things you can touch – or intangible – such as services or the recent buzzword everyone’s talking about – NFTs. The big question with products is how you connect them to your commerce strategy, which should inevitably connect the products to consumers. The products must be adapted to the right strategy to fulfill exactly what the consumer is interested in purchasing.
You can’t create sustained demand for something unless there is desire among consumers for that product. Their desire has to be connected to their need for the product, and this is where marketing comes in.
2. Pricing
Pricing is one of the key determiners of a customer’s decision because it often comes down to the value of a purchase – credit offers, perceived savings, etc. Consumers often look for second and third prices before making a purchase. Marketers have to offer competitive prices but also know how much their customers are willing to pay. This value can be intrinsic – the actual value of the product – or extrinsic – added benefits that owning that good bring, e.g. luxury goods or Apple products.
3. Promotion
Promotion refers to all of the activities made by businesses to make their brand or products more known to consumers. Advertising, public relations, events, and partnerships are all part of promotion. Older marketers in today’s commerce world would associate this P with paid and organic social media and search engine marketing. Successful companies will embrace omnichannel marketing plans where products are promoted to all consumers, wherever they are, or however they like to shop.
4. Place or Placement
The terms “place” and “placement” are both used to describe this second traditional P. Every marketer used to ask themselves one fundamental question before they began tweaking their strategy: Where does our target segment live? This was important for several reasons and it was influenced by several factors: population, demographic (buying power), and spending power.
As advertising started becoming digitized at the end of the 20th century, place extended to include the P of placement. Where marketers put their ads is crucial to the success of their campaigns. Should they go with search ads or display? Or both?
The nature of product data feeds and product content syndication has now made geography irrelevant. As businesses working with P2C platforms are aware, product data can be global or local with a couple of clicks.
5. People
Here we have another obvious P. You have to remember, “people” extends to everyone in your product-to-consumer chains, customers, and your colleagues and teams. All of these people are intrinsic to commerce. Strong marketing strategies consider people’s behavior, triggers, and other psychosocial elements – basically, everything that connects a person to your business.
What sounded like corporate esoterism 20 years ago is now a documented fact. Who you hire, what motivates them, how they work, and the overall atmosphere in your company are key factors in maintaining sustainable business growth.
While the staff is busy working on positioning your brand and products, it takes strategic planning to create the kind of authentic messaging, category selection, and packaging that will leave indelible marks on the minds of your customers.
Bye-bye, place, promotion and people. Hello, PXP!
The consumer behavior that emerged with millennials and Gen Z has now removed place, promotion, and people from the 5 P equation. Because all people, whatever place they are in, see their products in the form of product data on multiple touch points via promotion. Contemporary marketing theorists acknowledge that these three P’s are now reduced to one – experience (X). The new paradigm is PXP where price and product remain. Significantly, product now also denotes all product data, including status and availability and accuracy.
Why did consumers put the X into PXP?
Customers aren’t just becoming expensive to find. They are also becoming more discerning regarding personalization, shopping experiences, and sustainability. Consumers want their digital purchasing experiences to mimic critical aspects of brick-and-mortar shopping experiences: good service, easy returns, welcoming and pleasant shopping experiences, personalized advice, and product transparency in sustainability. Consumers have effectively transferred their offline shopping expectations to their online personas. This trend will only become more entrenched as the popularity of hybrid shopping models proves more and more popular. The companies that ignore these developments will suffer as they burn through marketing budgets trying to find and retain new customers. The companies that succeed will create shopping experiences that immerse, compel, and inform consumers in ways that meet all of their expectations.
Piecemeal fixes are over, time for a holistic P2C strategy
But it’s not just customer expectations surrounding experience that are forcing commerce to change. The proliferation of channels, touchpoints, and the pervasive change in consumer expectations have created a situation where many companies are just simply reacting to events as they happen rather than working on their longterm global product strategies – this is commerce anarchy.
Digitally native consumers now demand consistent, stimulating, and well-crafted shopping experiences from defined product information value chains, which also now include feedback loops from the consumers to the suppliers – we call this 3D commerce. Consumers don’t differentiate between the brands and the many channels that a brand is advertising on – one bad experience on one channel can have a negative knock-on effect for the brand on all channels.
This means that many businesses are burning a considerable amount of time and resources in feed or channel optimization, and much of this work is being carried out by individuals rather than being automated. As hard as it is to believe, spreadsheets are still ruling when it comes to product information.
There are myriad piecemeal solutions out there that claim to address the paradigm shift within marketing theory to PXP marketing, but many of these responses are old-paradigm solutions that were designed to accommodate 5P-thinking. As well as a strategic transformation across entire organizations, providing excellent customer experience all the time, requires holistic thinking. This involves the support of a comprehensive P2C platform underpinned with a full suite of P2C solutions.
A P2C strategy – and the tech that supports it – entails both mastering and overcoming the many obstacles that negatively affect consumer experience. This strategy will require transforming all processes to accommodate the marketing paradigm shift. Consumer demands are not going to stay the same and commerce anarchy is not going to end just because commerce businesses move to P2C. But the change will give businesses the ability to overcome and push through the commerce anarchy, meet current customer expectations and also be confident about their ability to deal with whatever comes next.
A PXP marketing strategy requires transformation, not optimization
Productsup’s innovative P2C platform gives businesses across the entire spectrum a new approach to strategic management challenges – from digital native hyperscale retailers and marketplaces to global and local brands, retailers, and service providers. The key driver underpinning all P2C strategies is the reality that businesses now have to meet their customers where they are and when they want to buy.
For most businesses, releasing a mature P2C management strategy as laid out here is essential to their long-term digital evolution, modernization, commerce reinvention, and success. The P2C category turns complexity into a sustained competitive advantage for those who implement similar strategies.
With metaverses and augmented reality channels looming large on our collective commerce horizons, now is the time for companies to be bold and take advantage of the current complex and anarchic market conditions and start transforming. Because their customers already have.