Eva Pascoe | Digital Retailer
  • Jul 20, 2017
  • Karolina Janicka
  • Comments Off on Retail Is Ripe For Change But Is Stuck In Old Routines
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Originally published on CMO.com on July 20th, 2017

The Adobe/Econsultancy Digital Intelligence Briefing “2017 Digital Trends In Retail” is a deep dive into trends, shifts in priorities, and pain points, and reveals an industry on the move and in a state of a considerable confusion. Google, Amazon, Facebook, and Apple (GAFA) fight for world dominanation, leaving the marketers on the receiving end of their big battles, seeing constantly shifting customer channel preferences as internet infrastructure is re-fashioned to suit the new quadropoly.

The customer wants value, fun products, and convenience delivered in a frictionless way via their preferred channel—or, more often, via multiple channels and devices, adding multiple layers to marketing complexity—while companies are still stuck in the old routine of selling overvalued, uninspiring, slow-moving stuff on siloed, disconnected channels run by teams that don’t talk to each other using fragmented data feeds that are not joined up. So how are marketers responding to this conundrum?

The answer surfacing in the survey is that the good old “ostrich strategy” of burying your head in the sand is still the most popular option. To deliver anything vaguely resembling a good multichannel customer experience, companies need to make joined-up online and offline data easily accessible to all in the business in real time to identify friction points and hunt for opportunities for adding value. However, only 9% of companies prioritise joined-up omnichannel and cross-device data integration, as it, clearly, falls into the “too-hard-to-do” category. Oh, well. Amazon is just going to eat you a fraction faster. If you want to fight back, it is not rocket science; we at The Retail Practice have delivered a number of new, cloud-based agile tools that allow the marketer to take back control by getting a handle on the “data tsunami.”

Love Affair With Social Media
The ostrich strategy also follows from companies’ self-professed love affair with social media, which is prioritised by 56% of marketers planning to increase their spending in 2017. This follows a rapid rise in users of Facebook and Instagram (the latter grew from 24% to 48% of penetration in 2016), significant increase in dwell time on social media, and also the vastly enhanced functionality of social platforms. In China, mobile payments via social media tools are now accounting for over 53% of ecommerce transactions. It’s all true—social media platforms are here to stay and increasingly provide the best brand discovery layer.

However, it is all very well to be exciting customers on social media, but this is predominantly an acquisition strategy. It’s not a sustainable model for any consumer sector, as retention must be where the focus is. This is where the optimisation of customer experience can really add value, enticing people to come back again as loyal fans of your brand and minimising future acquisition costs. That lesson needs to be relearnt as the new foot soldiers of marketing clearly think that marketing money grows on magic trees.

Priority Of CX Gets Recognised
Some hope for marketing’s chances of survival is in the section of the report on a shift in recognition of the importance of overall customer experience. The report picks up on a slight improvement in businesses recognising the absolute priority of delivering a smooth, cross-device, cross-channel customer experience which is fully personalised and delivers relevance every time. Over 22% of client-side respondents are prioritising it over content creation, and—much less popular this year—data-driven marketing, which is prioritised by 12%. This is well down on last year’s 53%, most likely influenced by the difficulty in putting in the correct technical infrastructure for real data-driven marketing.

Another inconsistency in marketing budget plans revealed in the survey is the somewhat dismissive approach to email. This channel just keeps giving; according to the respondents it brings in, on average, about 26% of revenues, but only gets the estimated 15% of the budget. It is also one of the very few predictable components in the marketing mix, stable from 2015 to 2016 and, as such, in the sea of rapid channel shifts, is a total gem and oasis of safety for marketing planning.

So why are only 46% of respondents planning to increase the budget for email? Do you think this goose will lie the golden eggs when fed on crappy grain and no love forever? Clearly, it will be one of those tools that will be missed only when it has gone! New fashion brands like bluebella.com and Miista.com or older brands like Coast-stores.com and TMLewin.co.uk get it, showing that there is still plenty of life in the channel.

A New Breed Of Choirmasters
Clearly, the biggest challenge of them all is organisational structure; having the choirmaster in place to make the separate teams join up in collaboration, cut the silos, and make marketing comms sing in harmony instead of the current cacophony. CMOs’ roles are changing, with Heineken leading the way and merging CMO and chief strategy officer into a heavier calibre of chief commercial officer, more akin to the old-brand director role.

At The Retail Practice, we developed the concept of chief data officer, a merger of CMO and chief security officer, with marketing manager and data security managers reporting in, as in the age of a constant risk of data breach, picked up by the report as “safety comes first” principle, this is the only way to make sure the person with marketing budgets using data is the same person whose head is on the line if a data breach happens. Next year the General Data Protection Regulation will be a big challenge for us all, and Lloyds Bank is already following the same path, with a chief data officer appointment to prepare the company for the upheaval.

In summary, the report highlights the fast-changing marketing scene, with alarming data skills gaps, organisational re-alignment gaps, analytics software gaps, and lack of clarity on performance measurement of channels as GAFA pushes on for world domination. Nothing like a challenge for all you bright sparks out there, so take the report with you for a spot of airport reading to gear up for what is possibly going to be a very choppy Christmas marketing season.

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