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8 Jan

Five Future Trends for Catalog and eCommerce Marketing

Author: Larry Kavanagh

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Direct Marketing

Five future trends for catalog and eCommerce marketing.

We’re halfway through the decade of the “10’s”. Many things changed in catalog and ecommerce over the last five years. Here are five trends that we believe will shape retail marketing in the second half of the decade.

Audiences not Channels – the first half of the decade saw a technology-driven explosion of marketing channels. There was a sense that retailers had to participate in every channel to succeed. For many businesses, this led to an increase in marketing expense without a corresponding increase in sales and margin. In the second half of the decade, successful retailers will focus instead on audiences. Audiences are people who already buy from you or who are good prospects for your products. Retailers will create messages and merchandising with audiences in mind, and organize their marketing staff around audiences, not channels. Shoppers (audiences) make purchases. Channels are just places to find audiences.

Cultivate Audiences of Prospects – Many marketing vehicles today are designed for shoppers who are ready to purchase NOW. The problem with this strategy is that there is a lot of competition for these shoppers. There was a time, though, when marketers built “prospect lists” of shoppers who weren’t ready to buy today. They were “higher up the funnel”. We know today that more than 50% of all retail purchases begin with web research. There is a huge opportunity to engage future buyers online. Most search marketing programs, for example, focus entirely on the immediate sales return per ad spend, and ignore the bulk of searchers who are not ready to buy, but could be converted into a prospect list for later marketing efforts. For example, you can easily design programs to give these searchers a reason to provide you with an email address. You can send email to keep your offer top of mind to these prospects, as well as employing digital ads, based on their email address, through platforms like Facebook.

Incremental Marketing Effectiveness, not Attribution – the explosion of marketing channels means a shopper might see several different marketing efforts before making a purchase. They might receive a catalog, click on a paid search ad, receive a bulk email, see a digital ad “retargeting” them after a site visit, get an abandoned cart email, etc. Attribution models add up all the different marketing touches a shopper experienced before purchase and allocate revenue and marketing expenses based on factors like how much time has passed since the particular marketing event. The problem with this approach is that it justifies continued marketing expense until all of the gross margin on a sale is used up. It does not show what sales you would have had without a particular marketing activity. To know the true incremental impact, hold out a portion of an audience (buyers and prospects) from a particular marketing event and compare the results at the audience level to a group that received the marketing event. Note: Audiences among your customers and prospects will respond differently to particular marketing events. The key is finding the events that are cost effective for particular audiences.

Cookie Based Audiences – There are a number of ways today to match an “unknown” visitor to your website to a known audience. For example, Epsilon, DataLogix and Wiland can recognize whether a visitor to your website is a part of a known prospect audience (i.e. a shopper who falls into one of their prospecting models). They are not allowed to tell you the identity of this unknown shopper, so they can’t give you their name and address. However, they can tell you whether the visitor falls into an audience that has historically purchased from other retailers like you. You can use this information to create audience based campaigns through a number of channels. For example, if a site visitor is identified as a member of a known prospect audience, you might make a more aggressive offer to obtain an email address from this visitor. If you have an email address already, it may make economic sense to use an append service to find a land address for this prospect. You could also be much more aggressive in digital retargeting of these visitors. Note that all of these examples start with the fact that a shopper is in a known prospect audience and then use different channels to communicate to them.

Web Behavior at the Individual Level – Historically retailers have made decisions about how much to spend on customer groups based on past transactions. Customers who have purchased recently, frequently and in large dollar amounts get more marketing spend aimed at them. However, to repeat from above, today more than 50% of retail purchases begin with online research. Web behavior is a leading indicator of buying intent, in some cases even more powerful than transaction history. Web behavior also provides many clues as to which channel a particular shopper favors. For example, shoppers who only visit using desktop computers are more likely to respond to catalogs, while shoppers who visit significantly on a small screen mobile device are likely more responsive to digital advertising. The key is to capture this web behavior at the individual level and apply it effectively into your audience based marketing decisions.

CohereOne is evolving our product and services to help our clients take advantage of these five trends. We see plenty of examples of retailers producing great results using these principles. Contact us if you’re interested in discussing how you can use these trends to impact your business in 2015.

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