At the heart of this challenge is the interaction between online and offline. During the pandemic, consumers moved most of their shopping activity online. Retailers responded with new services such as curbside pick-up and buy-now-pay-later. Post-pandemic, the balance shifted again. People wanted to visit real-life shops, to see and try products before they bought them. But, crucially, the relationship between physical and digital retail didn’t go back to the way it was before Covid-19.
Consumers now want the best of both worlds. They want the tactility of physical shopping and the convenience and choice of digital. For marketers in the retail sector, the priority is now to understand the effect every touchpoint has on sales, and to use that knowledge to deliver better, more efficient and more effective advertising.
Key trends in the retail market
Retail sales growth is slowing in Western Europe as the cost of living crisis continues to bite, according to Insider Intelligence. But the company also reports e-commerce bouncing back in the region after a slump last year. It predicts e-commerce will account for 13.7% of all retail sales by 2027, up from 12.6% this year. Meanwhile mobile commerce continues to boom, with retail sales in the UK expected to reach £105bn by 2024, according to Statista.
Personalization also continues to grow in importance. Research by eMarketer found almost 30% of UK shoppers now prefer retailers that use their preferences and past behaviors to tailor their shopping experiences.
This is why the turn to first-party data is such a big issue. Google plans to switch off third-party cookies in Chrome early in 2024. That leaves marketers in need of a replacement for the technology that has powered targeting, retargeting, measurement and attribution for the last 25 years. Right now the most popular choice is first-party data, usually starting with email addresses. That’s why every retail site you visit suggests you sign up for their newsletter, and why almost every shop wants to email you your receipt.
Bring all this together, and the size of the challenge facing retail marketers becomes apparent. They need to create multichannel advertising strategies that deliver tailored, relevant messaging to individual customers. These need to be based not only on their previous history with the brand, but also on where they are in their journey to purchase right now, and which device and channel they’re using.
Coping with constant change
Responding to these trends means putting a number of things in place:
1. A 360º view of customers – bringing data together from across the business, retail partners and trusted data suppliers, to form a ‘single source of truth’
2. A detailed analysis of the customer journey, including on- and offline elements
3. An assessment of emerging channels customers might be using, and whether to trial them
4. A set of KPIs for the campaign, and an understanding of how to measure them
5. A customer experience that is consistent and coherent across channels.
Trialing emerging channels
A number of channels are starting to attract marketers’ attention; not because they’re particularly new, but because they’re now addressable. In other words, you can buy media on them programmatically. These include connected TV (CTV), digital-out-of-home (DOOH), audio, and in-game advertising.
A great example of a campaign incorporating CTV alongside traditional online video was carried out recently in the US for Challenge Butter by agency Matrixx Shopper Marketing. The brand wanted to cut through during a highly competitive period. The agency was tasked with driving high video completion and click-through rates.
Working with StackAdapt, the campaign exceeded Challenge Butter’s awareness goals. And it surpassed their video completion rate benchmark by 3%, their CTV video completion rate by 1% and their CTR benchmark by 21%. It saw a video completion rate on CTV of 98.31%, compared to an online video (OLV) completion rate of 85.25%.
As marketers address the real-time, multichannel challenge, a number of targeting strategies are bringing success in the retail sector.
Browsing audiences involves targeting topics relevant to the campaign. Machine learning and artificial intelligence (AI) are increasingly being used to create audiences showing particular interest in given topics. They’re also weeding out those that might superficially seem relevant, but aren’t.
Contextual targeting is the oldest form of media targeting in the book, but it’s being turbocharged by AI. The technology can identify not just the overall content of a page, but also individual terms and – increasingly – sentiment, in order to make targeting more precise than ever.
First-party data enables the delivery of personalized messaging to people who’ve shown an interest in products, or have already bought them. And it also allows marketers to carry out lookalike targeting by finding online audiences who display the same behaviors as customers.
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Measure what you want, not just what you can
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. Fortunately, technology is bringing marketers closer to metrics that match meaningful KPIs and can increasingly measure cost per engagement and cost per action in real time.
And the closer marketers can get to being able to attribute sales to individual campaigns – as is possible in closed e-commerce environments – the closer they get to measurement of return on ad spend.
Real-time measurement also means marketers can optimize campaigns while they’re in progress. In the Challenge Butter example above, the agency saw AI-driven contextual targeting was delivering the best completion and click-through rates. So it was able to switch budgets from under-performing channels to increase the overall performance of the campaign.
How can I up my retail marketing game?
There are three fundamentals to think about:
1. Leveraging data for dynamic campaigns: harness data-driven insights to create dynamic programmatic campaigns that can adapt in real-time based on consumer behaviors and trends.
2. Offering a multichannel experience: advertising across multiple devices and channels will drive greater reach, resulting in a larger pool of potential clients for retargeting.
3. Crafting irresistible creatives. Develop ad creatives and formats that capture your brand’s essence and drive conversions, from interactive banners to video ads.
To find out more about innovative programmatic strategies to take your next e-commerce campaign to new heights, visit StackAdapt.
This content was originally published here.