LONDON: WPP Group CEO Martin Sorrell argued that companies are “wrong” to consider marketing as a cost in a slow growth environment. Instead, they should view it as an investment.
Speaking at WPP's Future of Retail conference Tuesday morning, Sorrell said he does not detect any significant change in client behavior this year, but believes there could be a more positive outlook in 2014.
Sorrell claimed the rise of e-commerce means there is unlikely to be a "structural recovery," but "there will be a cyclical recovery" next year as companies regain their poise after the global recession.
Legacy retailers will have to change their formats and patterns of investment to cope with the digital environment in the same way the music and newspaper industries are being forced to adapt, according to Sorrell.
Two areas of investment cited were 3D printing and the improvement of companies' CRM systems.
Sorrell described 3D printing as an "amazing technology" that will have major repercussions on the retail industry due to it altering the manufacturing process.
3D printing will remove the need for some labor-intensive activities and benefit more developed economies such as the US, Sorrell predicted.
Meanwhile, Sorrell believes the inability of IT systems to "talk to one another" is another legacy issue that needs to be dealt with because some stores do not know who the consumer is even if they have previously shopped with the brand.
This story originally appeared on the website of Marketing.