Happy New Year! 2015 is upon us–what will the coming year have in store (no pun intended)? Here are three retail marketing trends we predict will occupy many CMOs’ attention for the months ahead and how they may impact marketing strategies.
1. Silos vs. a Connected Customer Experience
Many CMOs will still struggle with internal structure/silos, skill gaps and cumbersome legacy technology/tools that prevent them from more aggressively focusing on the customer experience. For example, retailers are investing in mobile, omnichannel and eCommerce, but many CMOs/CEOs/CIOs manage these efforts in a disjointed manner—they are not connecting the consumer journey and experience across all devices and channels in a context and timing that best serves the consumer and brand in unison.
This is especially true for mobile: only 10% of CMOs feel they are very effective at understanding their customers’ channel preferences, and only 12% believe they are very effective at assessing customer satisfaction with their existing mobile engagements. The most telling finding regarding the state of mobile is that marketers admit they are likely out of sync with their customers but are challenged to find the path to alignment.
Retailers who continue to operate in silos do so at their own risk. This illustration shows the ongoing impact on earnings and return on invested capital of online migration:
We are, however, seeing multiple RFPs from retailers that are trying to address these issues, and there are big retailers already making great headway. The investments of Wal-Mart, Target and Macy’s in omnichannel and mobile are widely written about.
If you haven’t started down this path yet, it will be important to develop a plan to be more customer-centric in your strategies, execution, media mix and attribution of results next year. The additional revenue that could be gained if tight cross-channel integration and unified commerce were in place today for a billion-dollar retailer would amount to about $100 million.
2. Customer-Level Relevance vs. “Merchant Knows Best” Mindset
In addition to issues with structure, technology, and talent, many CMOs also face another challenge to one-to-one contextual relevance using dynamic content: their internal culture. Many merchants believe they know best what the consumer should buy. They want their content to be shown to all of their targets on their timeline. Many storewide events are still one-size-fits-all. For many consumers, this results in an ineffective experience that is not contextually relevant, and the approach squanders the limited opportunity you have to truly connect with your customer.
Marketing’s job now is to identify and use context to create a repeatable cycle of interactions, drive deeper engagement, and learn more about the customer in the process. The more you can internalize and act upon what you learn, the easier it is to make future interactions that much more engaging.
Let’s be honest here…are you stuck in the “Merchant Knows Best” mindset? If so, it will be important to tackle a plan or create a pilot for greater relevance and one-to-one marketing early in 2015.
3. Pressure on Brick and Mortar.
The on-going systemic reduction in store/mall traffic will continue, as consumers have less time for shopping and instead use mobile and the web to browse. Shopper Trak has reported that unique consumer visits have remained flat for several years, while the number of stores shopped per mall visit has fallen from 5 to 3—leading to billions fewer footsteps.
This trend in fewer footsteps is requiring that brick and mortar stores have much higher in-store conversion rates and average purchase rates to grow same store sales.
As the Deloitte 2014 digital study projected, 50% of in store purchases are influenced by consumers being online before and/or during the purchase. It is therefore necessary to better connect the unknown shopper browsing digitally to the shopper that comes into the store (a continuous or unified profile). This allows the retailer to improve the customer experience and supply chain efficiencies by enabling streamlined dialogues across channels to enhance customer experience and track conversions. Unified profiles help you to use trigger, one-to-one, real-time, contextually relevant messaging through quick content personalization—which gets open rates at 74.9% higher than other non-relevant, unpersonalized emails.
For many retailers, a large portion of interactions are ‘anonymous’ and are not tracked, which hurts customer relationships. You can begin tracking these interactions and turning online visitors from anonymous to known with progressive profiling. Progressive profiling helps you to build a continuous profile of all unknown and known prospects and customers across all channels, devices and touch points over time. The consolidated view of customers created by progressive profiling enables you to provide a unified online/offline experience—contributing to a seamless journey and a contextual experience flow. If you haven’t implemented progressive profiling yet, you should get started in early 2015.
Need Some More Convincing?
These three trends will occupy many CMOs this coming year, but if you need data to help encourage your senior teams to consider these trends, check out these statistics. According to a recent SAP survey, 86% of those that have invested in a personally relevant, omnichannel approach to marketing driven by unified profiles agree that the benefits to consumer sales clearly outweigh the challenges of implementing the programs. In addition, most companies say their organizations’ efforts:
- Increased sales (74%)
- Increased consumer loyalty/acquisition (64%)
- Improved competitive advantage (62%)
- Improved customer experience (57%)
Best wishes for successful marketing in 2015!