As part of The Drum's Retail Deep Dive, we explore why data-driven, AI-driven, real-time multichannel strategies are the way forward for retail marketers to deal with constant change.
The world of retail marketing is constantly changing with new channels, new technology, and new customer expectations. Marketers in this space need to be on the lookout for new ways to reach customers at every stage of the purchase journey.
Central to this challenge is the interaction between online and offline. During the pandemic, consumers moved most of their shopping activities online. Retailers responded with new services like curbside pickup and pay later. Post-pandemic, the balance has shifted again. People wanted to visit physical stores and see and try products before purchasing. But importantly, the relationship between brick-and-mortar and digital retail has not returned to its pre-COVID-19 state.
Consumers now want the best of both worlds. They want the tactility of physical shopping and the convenience and choice of digital. For retail marketers, the priority now is to understand how every touchpoint impacts sales and use that knowledge to deliver better, more efficient and effective advertising. .
Main trends in the retail market
Retail sales growth is slowing in Western Europe as the cost of living crisis continues, according to Insider Intelligence. But the company also reports that e-commerce in the region is recovering after a slump last year. It predicts that by 2027, e-commerce will account for 13.7% of retail sales, up from 12.6% this year. Meanwhile, mobile commerce continues to boom, with UK retail sales expected to reach £105bn by 2024, according to Statista.
Personalization continues to grow in importance. eMarketer research has found that almost 30% of UK shoppers now prefer retailers that use their preferences and past behavior to tailor their shopping experience.
This is why converting to first-party data is such a big deal. Google plans to disable third-party cookies in Chrome in early 2024. As a result, marketers need an alternative to the technologies that have powered targeting, retargeting, measurement, and attribution for the past 25 years. Currently, the most popular choice is first-party data, which typically starts with an email address. This is why every retail site you visit will ask you to sign up for a newsletter, and why nearly every shop will want you to email your receipts.
Put all this together and the magnitude of the challenge facing retail marketers becomes clear. You need to create a multichannel advertising strategy that delivers the right message to each customer. These should be based not only on their previous history with the brand, but also where they are in their purchase journey and what devices and channels they are using.
Responding to constant change
Responding to these trends requires doing a number of things, including:
1. A 360-degree view of the customer – brings together data from across your business, retail partners, and trusted data suppliers to form a “single source of truth.”
2. Detailed analysis of the customer journey, including online and offline elements
3. Evaluate new channels your customers may be using and whether to try them out.
4. Understand the set of KPIs for your campaign and how to measure them.
5. A consistent and consistent customer experience across channels.
Trial of emerging channels
Many channels are starting to gain the attention of marketers. Not because they are particularly new, but because they are now addressable. In other words, you can purchase media programmatically. These include connected TV (CTV), digital out-of-home (DOOH), audio, and in-game advertising.
A great example of a campaign incorporating CTV and traditional online video was recently executed in the US with Challenge Butter by agency Matrixx Shopper Marketing. The brand wanted to make a breakthrough in a time of intense competition. The agency was tasked with driving high video completion and click-through rates.
In partnership with StackAdapt, this campaign exceeded Challenge Butter's awareness goals. It outperformed the video completion rate benchmark by 3%, CTV video completion rate by 1%, and CTR benchmark by 21%. The video completion rate for CTV was 98.31%, while the online video (OLV) completion rate was 85.25%.
successful targeting strategy
As marketers grapple with real-time, multichannel challenges, numerous targeting strategies are proving successful in the retail industry.
Viewing your audience includes targeting topics related to your campaign. Machine learning and artificial intelligence (AI) are increasingly being used to create audiences with special interest in specific topics. It also eliminates things that seem related on the surface but aren't.
In this book, contextual targeting is the oldest form of media targeting, but is rapidly being enhanced by AI. This technology can identify not only the overall content of a page, but also individual terms and, increasingly, sentiment, making targeting more precise than ever.
First-party data allows you to deliver personalized messages to people who have expressed interest in your product or have already purchased it. Marketers can also perform lookalike targeting by finding online audiences that exhibit the same behaviors as their customers.
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Measure what you need, not just what you can measure
The history of online marketing is littered with proxy measurements. These are things marketers measured because they couldn't measure what they actually wanted to measure. Fortunately, technology is bringing marketers closer to metrics that align with meaningful KPIs, allowing them to measure cost per engagement and cost per action in real time.
And marketers can now attribute sales to individual campaigns, similar to what is possible in a closed e-commerce environment, moving them closer to measuring return on ad spend.
Real-time measurement also means marketers can optimize ongoing campaigns. In the Challenge Butter example above, we found that AI-driven contextual targeting resulted in the highest completion and click-through rates. As a result, we were able to shift budget away from underperforming channels to improve overall campaign performance.
How can you improve your retail marketing strategy?
There are three basics to consider.
1. Leverage data for dynamic campaigns: Leverage data-driven insights to create dynamic programmatic campaigns that can adapt in real time based on consumer behavior and trends.
2. Deliver a multichannel experience: Advertising across multiple devices and channels expands your reach, giving you a larger pool of potential clients for retargeting.
3. Create engaging creative. From interactive banners to video ads, we develop ad creatives and formats that capture the essence of your brand and drive conversions.
To learn more about innovative programmatic strategies to take your next e-commerce campaign to new heights, visit StackAdapt.
