RAKUTEN ATTRIBUTION MEASURING THE MODERN SHOPPER RAKUTEN ATTRIBUTION
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1 RAKUTEN MARKETING Measuring the Modern Shopper
2 Measuring the Modern Shopper Introduction Modern retailing is developing fast and the lines between online and offline are increasingly blurred. We have come a long way from the early ecommerce model where a good product proposition, a functional website and a limited number of direct response marketing channels was all that was required. This model worked with less complicated consumers but gradually, as businesses started to better understand the user journey and consumers behaviour became more complex, the scope of digital marketing activity increased. Marketers now know that focusing on a single channel means missing the modern shopper at crucial stages of the purchase journey. A competitive omnichannel retailer now has to have an integrated online and offline proposition and needs to participate in any number of marketing and advertising channels. The operational challenges to achieve this are significant, but the real challenge is to accurately measure performance. What campaigns, channels, products and devices are actually working? What are the relationships and dependencies between them? How much budget should be allocated to each? This whitepaper will identify the underlying reasons behind this complexity, and show that the top performing retailers are those who have realised that accurate performance measurement is the key to modern retail success. We will also demonstrate how these retailers are utilizing measurement to make the most effective decisions.?
3 WHAT IS DRIVING THE COMPLEXITY? The online or offline shopper doesn t exist. A recent survey from Deloitte suggested that around 95% of online sales are incremental to store sales 1. The modern shopper encounters endless messages through a wide range of online and offline marketing channels. They browse across multiple devices and purchase wherever and whenever it suits them, influenced by factors often beyond the retailer s control. As a result, it s clear that one type of activity in isolation won t drive a user through the purchase funnel. Marketers need to consider a range of different activities to engage users and support their choices all the way through to the point where they decide to purchase. THE MODERN SHOPPER IS REAL Consumers are a lot more demanding than they used to be. They have higher expectations of their online shopping experience and their confidence in the web means they move around very quickly between devices, channels and websites. They know what they want and understand how to find it. This increased confidence is reflected in Rakuten Attribution data, which suggests consumers are making more comparisons between retailers and returning to sites numerous times before making the decision to buy. VISITS IN CONVERTING JOURNEYS Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Providing a first class service for these demanding consumers has never been harder. They are influenced by a greater number of media types, marketing channels, devices and applications than ever before, both online and offline. 1 The Omnichannel Opportunity: Unlocking The Power Of The Connected Consumer, Deloitte and ebay, February 2014
4 MARKETING CHANNELS IN CONVERTING JOURNEYS Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 THE TECHNOLOGY AND EXPERTISE EXISTS We know that user journeys are more complex than ever, so is it even possible to track and join up all of this complex behaviour? The answer is, of course, yes. There are many companies that produce tracking tools and others, like Rakuten Attribution, which focus on consolidating, joining and clarifying this data. Econsultancy cite data integration as one of the largest opportunities for digital analytics to help companies gain further insight and make customer communications more relevant 2. It is a complicated task and unique to each business, but the technology and expertise is there to make it happen. MEASUREMENT IS COMPLEX, SO WHY BOTHER? In a recent survey from Forrester, 73% of CMOs agreed on the importance of having a single view of the customer but fewer than 20% of companies have been able to achieve the goal. 3 It s a multi-dimensional challenge that involves significant investment in both technology and expertise, so why not continue with the same marketing activity but just spend more? Whilst measurement has an associated cost, it must be considered in the context of benefit and value. In reality, a shift in budget from an ineffective activity to an effective one has the potential of both saving budget and at the same time generating additional revenue. 2 Digital Analytics Buyer s Guide 2014, Bola Awoniyi, Econsultancy, June The Evolved CMO In 2014, Sheryl Pattek, Forrester, March 2014
5 Omnichannel Success Stories There is already a clear correlation between the omnichannel pioneers that have embraced measurement, and those experiencing significant success. Omnichannel retailing offers a more flexible shopping experience: up to 25% of recent online or mobile purchases in the UK and Germany involved products which customers could not have purchased locally. This represents nearly 9bn in online and mobile sales in the UK in 2012, and up to 7bn in online and mobile sales in Germany 4. A BRC and KPMG report on trading in December 2013 found that online sales of non-food products in the UK grew by 19.2%, in comparison to the previous year. David McCorquodale Head of Retail, KPMG commented: December 2013 was all about nerve, margin and multichannel those retailers who held their nerve and provided a seamless service between channels will feel pleased, whilst those who discounted heavily to force sales will count the cost in margin. The new year will lead retailers to invest more in multichannel capabilities or face the prospect of losing out further. 5 The businesses that are growing are those that have already embraced trading in all channels, not left it as a decision for the future. The next page shows some of the standout success from The Omnichannel Opportunity: Unlocking The Power Of The Connected Consumer, Deloitte and ebay, February British Retail Consortium - KPMG Retail Sales Monitor December
6
7 Why are they doing better?
8 Measurement is only valuable when it delivers actionable insights, which are used directly to power decisions. The decisions it enables broadly fall into four categories: BUDGET PLANNING Rather than simply looking at last year s budget and making small instinctive adjustments, a solution that pulls together all marketing channels, and shows their impact on sales, allows marketers to accurately identify the performance of each channel and how they work together. This shift towards a results oriented approach to budget planning ensures that the whole process is much more focused towards the activities that achieve results. CHANNEL OPTIMISATION To ensure individual channels are running as efficiently as possible, it s not only crucial to have a transparent view of how each is performing independently, but also how they are interacting together. This cross channel clarity enables marketers to effectively target consumers at every stage of their purchase journey. Investing in the best people and technology is severely limited if the measure of success, such as the longstanding last-click-wins model, is not providing a clear view of performance. SUPPORTING PERFORMANCE MEDIA A better understanding of how each touchpoint contributes to the conversion allows all channels and partners to be effectively rewarded. The traditional last-click-wins payment model for awarding commission to publishers only acknowledges the final touchpoint before the sale, overlooking any interactions that occur earlier in the user journey. Multichannel retailers now understand that by measuring and consolidating all performance data they can create commercial terms that reward all contributors, wherever they are in the sales funnel. TRADING ANALYTICS A joined up view of marketing can be easily extended to a joined up way of trading a business. Adding data, like stock feeds and order processing information into integrated marketing and sales data produces a resource that not only supports marketing decisions but also trading decisions. When businesses understand the relationship between marketing activity and the products that are actually selling as a result, it becomes easier to design strategies for organising business so that the products they need to sell are the ones that are marketed, rather than those that would sell anyway.
9 MEASURED SUCCESS The strong correlation between the brands already utilising this technology and implementing truly multichannel marketing strategies and success shows that this decision must be taken if you want to get to grips with the modern shopper. We are operating in a more complicated e-commerce environment than ever, with more channels, more devices and more complex user behaviour. This omnichannel world is not going away it s only going to get more complicated. Up until now the perception has been that the costs were too high and the process too complicated to make solving the measurement challenge worthwhile. We now know that the increased complexity combined with the problems this causes for optimising marketing budget and individual channels means that the cost of not having a consolidated solution is substantial. Accurate performance measurement will arm you with the data and insight you need to make your decisions data-driven, more scientific and more effective. It is far easier to solve the measurement challenge than it is to solve the challenge of marketing optimisation without it.
10 Rakuten Attribution has been implementing attribution solutions since With offices in the United States, United Kingdom and Germany, Rakuten Attribution works with more than 1,000 websites worldwide. Rakuten Attribution is a division of Rakuten Marketing, a global digital marketing company whose services encompass affiliate, attribution, customer acquisition, mobile, product and data feeds, display and retargeting, and measurement tools. Rakuten Marketing is backed by global Internet retailer Rakuten, Inc.
11 DISCOVER WHAT RAKUTEN MARKETING CAN DO FOR YOUR BUSINESS AT OR CALL
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