Navigating Channel Disruption and Evolving Consumer Technology Retailers compete across both channels and verticals for the greatest customer experience Achieving the Greatest Customer Experience As retailers begin preparations for the 2017 holiday To rise above their competition, successful retailers season, they fnd themselves on a highly competitive must achieve the “greatest customer experience.” But landscape that is becoming increasingly intense. to both meet consumers’ hightened expectations and With dozens of new technology—and data-driven differentiate themselves from direct competitors, they approaches for engaging consumers, retail brands need innovative cross-channel techniques that provide will look to achieve not only the highest standards of personalized, contextual experiences. These efforts products and services, but the highest standards in must be driven by intelligent consumer data to help terms of cross-channel customer experiences as well. acquire new customers and drive existing customers Additionally, customers’ quality expectations no longer back to purchase. differ from vertical to vertical—customers expect agility, responsiveness, and satisfaction from every retailer, no Worldwide Business Research partnered with matter what they’re selling. IgnitionOne to analyze cross-channel marketing practices and holiday readiness based on a survey of 550 leading retail executives. The results show marked success with cross-channel marketing efforts. The vast majority of retailers manage their cross-channel 60% advertising campaigns in house, which gives them of retailers claim acquiring more fexibility in terms of achieving a complete view of customer data and streamline investments in new new customers is the most technologies. Additionally, successful retailers are important marketing challenge leveraging offine customer data for online marketing, for 2017 – 2018. and attributing traffc and sales across channels using multi touch and last-click attribution methods. Many retailers are positioned for success in terms of holiday readiness. They are using customer data to identify targeted customer segments to make specifc 67% offers, to personalize experiences with dynamic creative across channels, and ultimately differentiate their of retailers identify personalization brands in the competitive retail market. as a goal for cross-channel But in an industry where customers’ perceptions of marketing in 2017 – 2018. retail brands and their heightened level of expectations in terms of customer experiences—an industry where customer engagement with retailers’ brands can quickly fuctuate in an online environment—retailers will continue investing in sophisticated marketing techniques and measure brand perception to drive successful cross-channel experiences in 2018. 2 Retailers prioritize acquisitions in their cross-channel marketing efforts. In modern retail, acquiring customers and preventing Far fewer retailers identify selling more to new them from engaging with competitors is critical. customers or engaging with inactive customers as Although retail brands prioritize retaining customers a priority. 11% of retailers claim selling more to new in 2017 – 2018, acquiring new customers is the customers is their most important marketing challenge, most important marketing challenge among 60% indicating acquiring new purchases is more important of retailers—the only majority among four choices than their volume; and 7% of retailers identify available. In comparison, selling more to existing reactivating lapsed customers, which may not be the customers is the most important marketing challenge best application of retailers’ time and effort given the for only 20% of retailers, the second largest; although climate of the market. In fact, 59% of retailers claim selling more to existing customers is the most or reactivating lapsed customers is their least important second-most important marketing challenge for over marketing challenge—by far the largest group of half of retailers (57%). retailers to rate any option in this way. Please rank the following marketng challenges in order of importance for 2017 – 2018, “1” being “most important.” 1 2 3 4 Acquiring new customers 63% 18% 11% 8% Selling more to existing customers 20% 37% 31% 12% Selling more to new customers 11% 31% 37% 21% Reactivating lapsed customers 7% 13% 21% 59% 78% of retailers manage cross-channel advertising in - house. 3 Leveraging all existing resources to engage with category is agencies, which manage cross-channel potential customers as consumer expectations advertising campaigns for only 39% of retailers—half evolve requires agility, which the vast majority of as many as retailers managing campaigns in - house. retailers appear to achieve by managing cross- channel campaigns internally. Among fve options, Only 6% of retailers employ tech providers with where retailers could select all that apply to them, services to manage their cross-channel advertising 78% of retailers claim to manage their cross-channel campaigns, while 4% of retailers don’t advertise. 1% of advertising campaigns in - house—the only majority retailers use some other resource for managing their among the options available. The next most popular cross-channel advertising campaigns. Who manages your cross-channel advertsing campaigns? (Select all that apply) In-house 78% Agency 39% Tech provider with 6% services Other 1% We don’t advertise 4% Retailers are leveraging rich data for targeting and cross- channel capabilities. At the core of successful cross-channel initiatives 85% of retailers claim they are using email lists—the are retailers’ abilities to leverage customer data, and only majority. Almost half (43%) of retailers claim they maintain data that is consistent with real customer use ecommerce shopping cart software. experiences as they occur. Consequently, retailers are using their own data to carry out sophisticated cross- A substantial number of retailers claim to use each of channel marketing efforts for customer acquisition the less popular types of data as well. 36% of retailers and retention. claim they use POS data, and 36% of retailers claim they use direct mail lists for cross-channel advertising. Retailers report use of internal data sources to Only 5% of respondents claim their companies use leverage in their campaigns. When asked what CRM other types of CRM data for cross-channel advertising. data they are leveraging for cross-channel advertising, 4 What CRM data are you leveraging for cross-channel advertsing? (Select all that apply) Email list 85% Ecommerce shopping 43% cart software 36% POS data 36% Direct mail list Other 5% Meanwhile, most retailers’ cross-channel marketing Some sophisticated cross-channel marketing tactics tactics have become sophisticated, using targeting, are used by fewer retailers. However, over one- segmentation, and remarketing strategies to acquire quarter of retailers (26%) use remarketing based and retain new customers. When asked to select all on next-best product to drive customers back to tactics currently in use for cross-channel marketing, purchase. Among two time-oriented strategies, 13% three majorities emerged. First, 65% of retailers use cross-channel frequency capping, and 10% use identify targeted segmentation for specifc offers dayparting tactics. Only 3% claim they use some other as one of their tactics—the largest group among tactic for cross-channel marketing. the options available. Second, 56% claim they use remarketing based on product of interest as a tactic for cross-channel marketing; and third, 51% identify dynamic creative and personalization as such. What tactcs are you using for your cross-channel marketng? (Select all that apply) Targeted segmentation 65% for specifc offers Remarketing based on 56% product of interest Dynamic creative/ personalization 51% Remarketing based on next-best product 26% Cross-channel 13% frequency capping Dayparting 10% Other 3% 5 Cross-channel measurement and attribution techniques have a ways to go for most retailers. As the industry evolves, retailers are discovering a better view of the customer’s path to purchase. that performance metrics and attribution that do Another 11% claim they use media-mix modeling to not capture the extent of customers’ cross-channel measure their cross-channel advertising, allowing experiences paint a limited picture of how they engage them to estimate the impact of assorted marketing with those retailers’ brands. This leaves uncertainties techniques on sales, then forecast the impact of in critical areas like discovering how customers are future techniques. acquired and both how and when retention techniques are succeeding with existing customers. That means 32% of retailers are taking a holistic, multichannel approach to measuring cross-channel advertising. But the remaining 68% of retailers continue to approach marketing on a limited or channel-by-channel basis. As opposed to multitouch 32% attribution, 27% of retailers—the largest group among of retailers take a holistic, the fve options—continue to use last-click attribution to measure cross-channel advertising. 22% of retailers multichannel approach to claim they enhance and optimize each of their channels measuring cross-channel individually, which may make it diffcult to achieve advertising. The remaining 68% a seamless cross-channel experience. And 19% of of retailers continue to approach retailers are not using a measurement technique at all. marketing on a limited or As part of their