DELVE GOES DEEPER: Retail Marketing
Improving Retail Marketing Efficiency
Learn how a full-cycle understanding of customer behavior helps drive ROAS, CPA and ROI across online and offline touch points.
This is the first post in our Retail Marketing series, dedicated to helping brands improve their marketing ROI and accelerate revenue growth by identifying and converting their most profitable audience segments.
The COVID-19 pandemic has altered buyer behavior as consumers have migrated en masse to digital purchase channels. As a result, historical shopper data and marketing tactics may not apply in the new normal. A recent article in the Harvard Business Review states “even businesses that had amassed great volumes of customer data before COVID-19 are finding themselves in the same cold-start position as businesses venturing into unknown markets or reaching out to new audiences.” This means marketing dollars may not be delivering their potential return on investment as sales go lower and the customer acquisition process is muddied. In addition, budget cuts compound this issue.
“Marketing organizations are ill-prepared for COVID-19’s impact on the global economy and consumer sentiment, and this crisis will only exacerbate the budget strain we saw developing in 2019,” says Ewan McIntyre, Vice President Analyst, Gartner for Marketers. “We expect COVID-19 will mark the inflection point in which marketing budgets begin to significantly decline. It is critical that marketing leaders take action now to help mitigate the inevitable risks to those budgets.”
Indeed, in this new world where retail marketers are being asked to do more with less, it’s imperative to search for ways to attract more shoppers, increase purchase conversion, and generate more repeat purchases. Figuring out how to do that will take introspection, analysis, and work.
Why Solve Now?
Many retailers suffer from a lack of unified view of customer journey to inform marketing mix decisions. A report from Salesforce.com found that “only 51% of retail and consumer goods marketers are actively mapping the customer journey across the company.”
This data may be even more dire today due to the complete reinvention of the way we browse and shop since the COVID-19 pandemic began. As the August 2020 Retail Reimagined: The New Era for Customer Experience Periscope report by McKinsey & Company detailed, the lockdowns that most Americans faced meant that “consumers reset their [shopping] expectations and preferences, and forced retailers to change their trajectory, priorities, and operating model tactics.”
Industry Spotlight: JOANN Stores
One example is JOANN Stores, a large retailer that sells fabric and crafts. The company, which has 865 stores across 49 states, was closed down like other retailers, but it raised its awareness by offering consumers curbside pickup of fabric and supplies to make masks for first responders. The program was supported across all channels including display, email, social, and mobile, with a heavy focus on Facebook and Instagram. It was able to generate significant interest using this marketing campaign that its online sales rose to three times its normal holiday volume.
By integrating marketing, customer experience, and product data sources for a unified view of the customer journey, JOANN Stores was able to collect data along the customer journey and develop a full-cycle understanding of customer behavior to pivot its overall marketing strategy. Not coincidentally, the retailer was also able to target shoppers and customers with highest conversion and profit potential. For instance, sending out emails offering free mask supplies to customers it knew had already purchased sewing materials in the past meant they had a higher chance to convert those prospects to customers.
JOANN Stores’ success demonstrates that a key to marketing efficiency is automating personalized offers to high-value audience segments to increase conversion rate and return on ad spend (ROAS).
The takeaway? Buy smart—not more—by hypertargeting high-value, high-conversion potential audiences.
Ready to take your ads, and your business, to the next level? Get in touch with the DELVE team today.