Customers, the protagonist of our retail narrative, are fundamentally changing. They are shopping in the moment, and that moment has become ubiquitous. Brands are challenging held business assumptions to remain part of the story.
CRITEO along with CONNECT MEDIA gathered a diverse group of leading retail executives to write the next chapter of this narrative. From conversion and attribution to segmentation and dissemination, there is no doubt the data-infused web that is retail can entangle brands. But for every shared struggle there is shared opportunity. Here is what they had to say.
We know that the customer is fundamentally shifting – they are shopping in the moment. These moments are evanescent and spontaneous; sources of inspiration are everywhere, opportunities to create awareness are abundant, and consumers are empowered to shop anywhere, anytime, from the palm of their hand.
CRITEO‘s Commercial Director pictured this new condition of retail readiness as a state of constant connection:
The retail experience has become much faster and frictionless, driven by consumer demands, new capabilities and the state of competition. Fulfilment too has been set on its trajectory by consumer expectations, Australia’s geography notwithstanding.
To establish a presence during these moments, brands are spending more time, more channels at the discovery stage. In this dynamic environment, brands must continue to drive penetration of new customers, they cannot afford to forfeit investing in attraction. But converting quality leads to sales, attributing influence across the customer journey, and retaining customers are equally fundamental to success.
Brands must untangle these forces and the data that represents them to truly understand their customers and deliver to expectations. This is the art and science of total retail.
We have never known more about customer journeys. We can now track consumer movements with specificity; touchpoints are littered across the online and real world, digital footprints that map a complex journey.
Many brands are nonetheless underestimating the value of their online business, an undervaluation that stems from siloing this function as a strictly online unit. There is immense value in where that site is influencing the experience into the store, beyond what is being traded into that site.
Online can be seen as a marketing channel jump, but only if leaders are communicating across the business and understanding channels of influence alongside channels where the sale occurs. The truth is that there are channels of sales and influence, but this duplicity is not often considered at the Board level, thanks in part to the difficulty of measuring and communicating the tangible value of influence. The last click, the final destination, the bottom of the funnel receives credit without due consideration of the driving forces behind the point of sale – in the words of one executive, ‘everybody’s looking at attribution through the bottom of the funnel, the top of the funnel is getting thrashed’.
Once you begin to work your way back from that last point you realise there are several other touchpoints on that journey – the struggle is delineating and attributing these digital footprints along the customer journey.
It is an important experience for brands to demystify customer journeys and understand the key paying trigger points. Only then can brands work to keep consumers in their sphere of influence, engaging them at the right time through the optimal channels.
Brands are constantly searching for new ways of understanding, and by extension, communicating with customers. Here segmentation is a crucial piece of the puzzle, but a piece that has inspired different approaches and strategies from brands.
This is no surprise given the complexity of ourselves as consumers – the wealth of data available around the customer journey affords different interpretations. Two dominant approaches to segmentation arose; firstly, a literal classification determined by fixed inputs, such as demographic and location, and a second methodology based on behavioural science and neurology.
The former segmentation model looks at the way people cluster and makes a determination that ‘that group of people is different to that group of people.’ The problem with characterising people on a base of difference then becomes ‘how do I deal with that group of people, what are the actual drivers? ’ For some in attendance, behavioural types such as adventurer and harmoniser were used to segment consumers, with each personality trait corresponding to a new different form of action like loss aversion or game exclusivity. For other executives in the room, the price of acquiring such behavioural analytics was not justified; the end result was not discernible from following the landscape.
A consensus was reached on the rising importance of reflecting consumer tribalism. Segments can be shallow and broad; one person can only belong to one segment. But the very same consumer can belong to many tribes. Retailers need incredibly sharp content marketing to resonate authentically with these tribes and drive conversion.
The current competitive state of retail has given rise to a number of unassailable conversion truths. Site speed is non-negotiable, interfaces must snap to attention as the patience of consumers can not be tested. Navigation must be intuitive and beautiful, and the right payments and fulfilment options around speed, price and proximity must be made available. Guest checkout is a staple of the current retail environment, removing any friction on the final stretch of the road to purchase. There are however more nuances to the art and science of conversion beyond these competitive imperatives.
Conversion rate can be seen as being synonymous with your audience. Optimisation requires that all leads and traffic created are highly qualified and targeted. For one executive, the driving force behind their high conversion rate was that all leads of quantifiable traffic were highly qualified, in other words, they stringently managed the quality entering the funnel.
Adjacencies are also key for optimising the conversion piece. Retailers are now taking learnings from the online space and adjusting store layouts to mimic online adjacent buying patterns. Retailers are collecting swathes of data, and it can be difficult to cut through the retail noise and discern coincidental purchases from verified trends in consumer purchasing behaviour. In order to drive adjacencies, brands are pivoting their language to convey the authenticity of adjacent products; a more weighted recommendation on the opportunity the adjacency provides.
Viewing the entire retail package, content is a lens that provides consumers with new angles and perspectives along their purchasing journey. In today’s competitive environment, content is non-negotiable; as consumers we are better informed, and we are constantly raising our expectations to meet the market leader. To keep consumers engaged, to keep them on the page committing time to your product, you need informative and alluring content.
Consumers want angles, product descriptions and stories, video content, a way of interacting with and interrogating the product to see how it will become an extension of themselves. Retailers must bring a product to life and empower consumers to visualise the experience. It is content that breathes life into the product and creates an experience. Consumers are dedicating more time in deciding which brands they align with; there are subcultures within subcultures, and brands must reflect these nuances to resonate.
Influencers are one way of infiltrating consumer ecosystems, but great care and attention must be applied to this task. Consumers are wary of brand influence, and only authentic representations will leave a positive imprint on consumers.
Brands are now searching for new ways to reach consumers directly. Brands have historically been built on a brick-and-mortar model, a model that allows retailers to capture and retain ownership of valuable consumer data. As John said, the question then becomes:
The answer to these questions lies in brand presence and authority. A sustainable and beneficial partnership rests largely on the range a retailer purchases; a significant range allows a brand to establish a presence and tell their story, while cherry picking winning products undermines the capacity to weave a narrative and create awareness.
If your brand is being disseminated by a retailer who owns the customer experience and all data assets, you are going to be diminished as a fulfilment option. The most effective brands in the world are going directly to the customer; you need to own the customer experience at the point of purchase, that is where the data is at its most valuable.
The retail game is changing. Understanding consumers and their motivations, influences and inspirations is crucial. Brands are now arriving at the realisation that customers are never truly lost. Knowing how to reach consumers in their own ecosystems, reengaging and reinspiring them to resume their purchasing journey is an immensely important capability.
As retail and consumers continue to evolve, the importance of engaging in continuous industry dialogue cannot be understated. Leaders around Australia are realising that maintaining a technical knowledge of the changing trends, threats and solutions in the retail space bears heavily on corporate and personal success.
CRITEO and CONNECT MEDIA will be continuing this series of executive conversation across Australia, empowering leading brands to lift consumer expectations.