Contributed by DELVE
Last year, we saw the COVID-19 pandemic alter buyer behavior as consumers migrated to digital purchase channels. In 2020, McKinsey uncovered that 40 percent of consumers reported switching brands or retailers. Gartner noted that “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.” 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.
Now a year into the pandemic, what have we learned?
Some brands were prepared and COVID accelerated their growth (think Amazon.com) while others were exposed due to their lack of omni-channel attribution and data-driven personalization to capitalize on shifting consumer purchase behavior.
Data-Driven Marketing: Why Solve Now
Many retailers suffer from a lack of unified view of the 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 is leading to marketing waste as decisions regarding audience targeting, offer structure, and campaign delivery are relying on historical (inaccurate) or incomplete data.
Getting this right can lead to measurable performance gains in Return on Ad Spend (ROAS), average order size, customer acquisition cost (CAC), and customer lifetime value (cLTV).
What Retail Leaders Do Differently
Retail leaders understand that marketing efficiency is all about aligning the right message, in the right medium, at the right time, to the right audience to maximize conversion. Doing it well means having a deep understanding of audience segments (both prospects and customers) so that the appropriate message, medium and timing can be orchestrated. Simply put, when it comes to digital media, industry leaders “buy smart, not more” by hyper targeting high-value, high-conversion potential audiences. They also realize that consumers want purchase experiences — and that includes personalized offers that speak to their lifestyle, life stage, and/or aspirations.
By deepening customer understanding and orchestrating the right message and right medium at the right time, retail marketers can eliminate budget waste from their marketing investments.
The payoff of personalizing the right offer at the right time can be significant and measurable. McKinsey & Company notes that “Today’s personalization leaders have found proven ways to drive 5 to 15 percent increases in revenue and 10 to 30 percent increases in marketing-spend efficiency.”
While this can sound daunting for retail marketing teams that are struggling to assimilate their data and apply analytics, it doesn’t have to be.
So how do retail marketing leaders do it?
They apply 7 techniques to drive marketing efficiency and deliver superior financial performance:
- Tech stack optimization – consolidate and streamline tools to reduce license costs, data/reporting complexity, and lost staff time.
- Attribution modeling – map cross-channel touch points along the buyer journey that lead to conversion, and then segment by value (LTV, average order size, etc.) to understand impact to revenue and EBITDA.
- Audience suppression – improve campaign performance by weeding out audiences with low value or conversion potential.
- Conversion probability – identify audiences with a high potential to convert, therefore refining audience targeting to improve ROI and ROAS.
- Hyper-local targeting – granular geo-targeting that can be combined with other data sources to refine audience to improve ROI and ROAS.
- Bidding automation – optimizing machine learning capabilities in platforms such as Google Ads to refine paid media bidding to align with specific goals (ROAS, target CPA, conversions, etc.)
- Offer personalization – apply buyer journey data and dynamic creative optimization (DCO) to deliver highly relevant and timely offers (right message, right medium, right time).
The Business Benefits of Getting it Right
By finely targeting audiences and personalizing offers to their specific needs, retail marketers can deliver big financial gains:
- Reduce acquisition costs by as much as 50%
- Increase revenue by 5 to 15%
- Increase marketing spend efficiency by 10 to 30%
For a deeper dive, check out a series of white papers by data analytics agency and Google Top 25 partner, Delve — or talk to their experts at the virtual Transformational CMO Assembly and Transformational Retail Assembly, May 25-26.
DELVE helps brands improve marketing ROI and accelerate revenue growth by identifying and converting their most profitable audience segments. As a data science expert, we integrate disparate data sources and technology stacks to deliver analytics and predictive insights that business leaders trust to improve decision making. As a digital marketing partner, we act as an extension of brand marketing teams to plan, deliver and optimize analytics-first media campaigns to accelerate lead generation and recurring revenue growth. As a technology consultant, we provide digital skills training and technology integration services to sharpen digital competency. With locations in North America and Europe, DELVE is trusted by brands around the world for efficient revenue growth. DELVE is a certified Google Marketing Platform Partner, a Google Cloud Certified Services Partner, and one of Inc. 5000’s fastest-growing companies.