It’s no secret that digital innovation has disrupted the retail industry. Hybrid shopping habits such as showrooming are the norm for 75% of British consumers, and half (51%) spend more online than in physical stores.
When it comes to marketing, the continual emergence of new digital channels is both a gift and a challenge. Retail brands have the ability to reach audiences at larger scale, but their budgets need to stretch further – making accurate views of consumer journeys and campaign performance crucial for driving efficiency in every area of investment. In short, marketers need strategies built around smart measurement.
So how can this be achieved?
Let’s examine four key measurement strategy ‘musts’ for the modern retail marketer.
Amid growing store closures and job losses on the high street, marketing executives at retail companies are under more pressure than ever to prove the value of marketing and their team. In an effort to tie marketing activities directly to revenue and growth, many have adopted more advanced measurement approaches such as marketing mix modelling and multi-touch attribution. Both of these approaches enable marketers to evaluate performance and make more informed decisions, yet each has its own unique advantages.
Designed to support strategic planning, marketing mix models use summary level data to provide broad recommendations on where marketers should allocate their budgets to optimise performance. Multi-touch attribution, which supports tactical optimisation, incorporates person-level data from digital channels to measure performance at more granular levels, such as creative, offer, keyword, and more.
The differences between marketing mix modelling and multi-touch attribution exist for a number of reasons – both the needs they serve and the data they use. Therefore, it’s crucial that the data and modelling remain separate. However, retail marketers can benefit by bringing the insights from both types of measurement together. When these insights are used in tandem, marketers can get a comprehensive view of performance, and make a broad array of strategic and tactical decisions to maximise efficiency and effectiveness across their entire marketing mix.
Retail is a dynamic industry where consumer behaviours, needs, and preferences are constantly changing. Yet many brands often base marketing decisions on data that is weeks or months old. If retailers want to outshine rivals and deliver relevant, engaging experiences, near real-time intelligence is crucial. And this means selecting analytical tools that can keep apace with ongoing fluctuations in market conditions and consumer behaviour.
Specifically, marketers should prioritise platforms with automated data feeds and the capacity for daily remodelling. This will ensure access to a steady stream of fresh insight that not only enhances media buying, but also enables messages and creative to be tailored and optimised for each target audience.
As well as keeping a close watch on what consumers do, it’s also important to continuously test new campaigns and tactics. To do so effectively, marketers must look beyond short-term performance measures such as clicks and impressions, and evaluate the longer-term effect of campaigns on actual sales.
Lift analyses can provide retail marketers with powerful insights into which campaign elements are driving the greatest response. Sales impact is measured by analysing changes in consumer purchase behaviours – such as average spend, trip frequency and more – for buyers who were exposed to a campaign versus those who were not. By tying marketing activities directly to sales, retail marketers can not only prove the impact of their investments, but also justify future spend.
In the multi-channel world, there is no such thing as a typical consumer or journey; shoppers make their own unique paths across multiple online and offline touchpoints. Consequently, retailers need to set generic buying personas aside and acquire in-depth understanding of individuals — and their paths to purchase — by embracing people-based marketing. Rooted in the concept of combining IDs from many sources into one persistent identifier for each individual, the goal of people-based marketing is generating a complete 360-degree view of consumers: covering their likes, dislikes, and interactions. When successful, the insights can be used to power experiences with real relevance that forge strong and enduring customer relationships.
The challenges facing modern retail marketers might seem near impossible to overcome. But the good news is that more can be done with less – if the right strategies are in place. Incorporating the core tenets of comprehensive measurement, timely analysis, continuous testing and people-based marketing will help retailers pinpoint where to allocate their spend to generate more sales more efficiently, while keeping a firm grip on consumer favour.
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