How the local BTL services market has evolved and what is the impact of rising prices on the strategic decisions taken by companies

The substantial decrease in the share of BTL services in the local advertising market, over the past three years, has led to a reconfiguration of development strategies for companies that relied on this line of business before 2020. To compensate for the lack of classic BTL programs (Below-the-line, a term that refers to advertising through unconventional means), and at the same time, to be closer to consumers, the solution applied by a large part of the players was to return to printed communication materials.

“In 2021 and the first quarter of 2022, significant investments were made in the logistical component. ESSA, as an advertising agency, has invested enormously, in a very short period, to be able to ensure the national presence of communication materials. From a business of less than 1 million euros in 2019, implementation and management services for communication materials have grown to 5 million euros in just two years,” said Eugen Saulea, founder of the ESSA Group, which focuses locally on several lines of business, specializing in trade marketing and sales services.

According to market data provided by ESSA, the BTL market had three essential stages of evolution between 2019 and 2023. By far, 2019 was one of the most productive years for companies, a year of digital experience, when BTL activations had a mandatory “experiential” component. All brands positioned themselves well in sales spaces, prices were attractive, visibility was maximum, and getting out of the “shelf” was mostly done by highlighting these aspects through customized BTL programs.

In the following year, the coronavirus pandemic blocked all classic BTL programs, specifically those with direct interaction between promoter and consumer, which was easy to notice in all supermarkets that carried out such promotion campaigns. In other words, until the spring of 2022, all tasting projects, informative campaigns, consulting, etc., were suspended. However, during the lockdowns caused by the pandemic, online and SMS programs remained active and developed.

Drawing the line now, it is clear that, more than three years after the pandemic started, the volumes related to BTL campaigns are much lower than what was invested in the reference year 2019.

“In the case of ESSA, the BTL structures were internally redistributed to other active and growing divisions at that time, such as the personal leasing part, which allowed us an immediate return, in full formula, when partners made new activation requests for BTL programs. Availability of resources only when there is a need from partners – who thus have cost control – represents the success factor of the moment regarding BTL programs,” says Eugen Saulea.

TRENDS – Why are consumers no longer loyal to a brand?

Along with the major price increases in 2022, caused by unprecedented inflation, the large supermarket chains have started to develop loyalty programs for consumers, through which basic products are kept at an attractive level. A trend that manifested itself last year and continues today refers to the behavior of the consumer, who has given up being loyal to a brand and has directed their shopping budget towards purchasing as many products from their needs list as possible. In practice, the trend has shifted from preferred brands to private labels, from larger individual packaging to smaller portions, and there has been a decrease in impulse purchases, those outside of the shopping list.

“In general, BTL programs have three main objectives: brand consolidation (with consumer loyalty), trial (applicable especially for new products), and sales boost. There have been many price increases in 2022 and unfortunately, consumers’ income has not kept up with them. Consumers no longer have the financial availability to buy outside their shopping list,” details Eugen Saulea.

ESSA, which is an implementation agency, has an active portfolio of clients – leading companies in certain market segments – who have decided to completely abandon BTL activations and instead use their budgets to reduce prices on the shelves, adopting product strategies to increase sales.

“Large retail chains want to keep consumers in their own stores and focus on loyalty programs, such as benefit cards. The role of ESSA agency is to support the enrollment of consumers in these loyalty programs. Consumers want fair and affordable prices. If they buy a product on promotion and in the next purchase the price of that product is no longer competitive, their intention to buy changes immediately,” adds Eugen Saulea.

One of the reasons why some suppliers focus only on price campaigns for “core SKUs”, meaning those that bring in large volumes in purchases, is because they have realized that the price increases are too high for consumers and have generated campaigns to put those products back on the shopping list.

Another trend in the BTL services market, which has been noticed recently, is the adaptation to digital requirements. Frequently, in stores, there are vending machines similar to coffee vending machines, but with much larger display surfaces, which offer some products in campaigns for free, only through the simple interaction of the consumer with the application interface. There is a digital interaction where the consumer actively participates in contests, games, and award mechanisms.

ESSA is currently a company with a permanent structure of over 2,400 employees and several hundred collaborations in the BTL field. In almost 20 years of implementing trade marketing, marketing, and sales programs, ESSA has accumulated vast experience, able to identify its clients’ needs and provide the most suitable recommendations for them to achieve optimal results. The company covers various services, including local logistics and warehousing, managing over 40 warehouses. For instore, it specializes in campaigns such as premieres, tastings, informative events, raffles, etc. For outdoor, ESSA is present with caravans in high-traffic areas such as parks, the seaside, mountain areas, and more.

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