Yahoo Finance Next-Generation Retail Marketing: Converting Net New Shoppers to Loyal, Lifetime Customers
As retailers brace for another digital-first holiday shopping season, experts are projecting a positive outlook with consumers showing excitement for traveling, seeing loved ones and get back to shopping in-store.
Though as a new wave of commerce is ushered in, traditional marketing approaches for merchants and brands won’t cut it in the competition for holiday consumers who now all hold the power. In fact, data shows 74 percent of a retailer’s customers are one-and-done buyers, according to Bluecore’s data. Still, as retailers scramble to increase conversions and build loyalty, insights from Bluecore show an enormous opportunity for brands to optimize data to drive long-term profitability instead of short-term revenue.
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In the latest Fairchild Media Group-produced webinar, Sherene Hilal, senior vice president of marketing and business operations at Bluecore, joined WWD executive editor Arthur Zaczkiewicz, to discuss how brands and retailers can increase conversions and get shoppers to return both in-store and online time and time again.
As companies prep for holiday and looks at how to approach marketing programs to drive top-line revenue for brands, Hilal told WWD that Bluecore has seen that a lot of brands are overwhelmed with the number of options to select from today when thinking about technology partners. With that in mind, she said, Bluecore has a very specific perspective on how retailers can grow in a digital-first environment.
“This point of view was born from a really clear dissatisfaction with both shoppers and brands with the online experience,” Hilal said. “James Allen, from The Founder’s Mentality, was quoted saying that all of this up-and-coming technology is at war against an industry on behalf of an unsatisfied customer.”
Notably, Bluecore’s data shows that 81 percent of shoppers expect to be digital-first beyond the pandemic and 88 percent of shoppers agree that a negative experience will cause them to abandon a brand.
“At Bluecore, we believe in the need for verticalized technology because we think every brand needs tech built for the purpose of retail to solve retail problems,” Hilal said. “Unlike every other industry retail has some really unique challenges around stock management distribution discounting, inventory management, purchase frequency — all of these feed into the key elements of how Bluecore has made investments in AI and workflow tooling and campaign management so that we’re really reducing the manual work a retailer needs to do to understand merchandising insights and act on their data.”
Currently, Hilal said, we are in an era known as “personal commerce,” where retailers are no longer competing solely with other brands, but also competing with every other digital experience. “As a result, shoppers expect that same level of one-to-one curation from retail brands that they’re getting from platforms like Netflix, Spotify, Instagram and all these other exceptional experiences,” Hilal said. “Shoppers expecting these highly curated environments and have access to all of these unlimited varieties of products need to have a better understanding of how a brand can relate to their one-on-one preferences.”
In the role of predictive intelligence and driving shopper experience, it is now necessary to think about fit, style and price points that can seamlessly connect to recommendations and create the experiences that consumers are seeking. Even not recognizing a shopper’s previous interaction with the brand’s website could be seen as a negative for a consumer. However, this intersection of personalization and digital commerce, Hilal told the audience, represents a massive opportunity for every brand as retention is business-critical.
In fact, Bluecore’s data shows the e-commerce market projected to be $10 trillion by 2027.
Hilal shared that as tech and retail converge at an intersection, retail growth looks like three things: identification, conversion rate and purchase rate. Put simply, digital transformation is an approach and it’s the approach to adapt your brand to the speed and expanse of digital, which means being really good at identifying your shoppers, which is not just about customer identification but the preferences and affinities of that shopper, improving conversion rate, which means actually connecting your shopper with the right content, product and offer as quickly as possible and making sure a customer is coming back.
To determine if your brand is acquisition-focused or retention-focused, Hilal said, a company will need to do a sort of self-assessment. If a company’s acquisition spend is higher than the spend on its existing customer base, or most of a brand’s marketing is broadcast marketing generalized to any shopper or maybe a few segments, then it is an acquisition-focused brand. In contrast, a retention focus brand is focused on optimizing for the second purchase which means leveraging existing customer data, perhaps having a robust loyalty program and marketing focused on post-purchase nurture streams.
“For a brand that’s more retention focused, what you’ll find is that it’s very easy to launch personalized campaigns that your second purchase rate is higher than say 30 to 40 percent,” Hilal said. “And the number of tools that you have to manage customer data tends to be consolidated with one or two platforms because you have done a lot of the work to make it easy to activate your customer data from one place, versus focusing on shuttling it from system to system to system, which usually means you have to again fall back to broadcast mass marketing techniques.”
Brands that focus on the value of reinforcing the value of the product, focus on the second and third purchase-built loyalty programs to help shoppers understand how to continue to engage with the brand, according to Bluecore’s data.
Looking ahead toward the holiday season, which continues to get stretched out over longer periods of time, Hilal advised brands who are struggling to determine what kinds of investments to make to “focus on adding campaign types that are automated that are personalized and that focus on driving repeat purchase versus on acquisition and competing against every other brand and experience for a shoppers’ attention.”
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