The new digital-marketing-commerce transformation has being going on for a while. This can be referred to as e-Business or e-Commerce, but the terms are blurring meaning. The consumer/ shopper are central in everything a marketer does. With this in mind there are a number of critical aspects that every digital marketer has to balance and adjust.
The acceleration of consumer adoption of digital interaction and shopping behaviors is transforming e-commerce into an essential element of every marketer’s omni-channel strategy. Although the focus of this article is at marketers, it’s really to entire commercial aspect of business (e-business) that needs to be addressed through this digital lens. Manufacturers and retailers need to build strong integrated capabilities that will drive engagement, purchasing conversion and loyalty with consumers. Manufacturers need to develop enhanced collaborative relationships with both pure-play online and clicks-and-bricks retailers.
Mobility through tablets and smartphones are making it easy for consumers to shop for products whether they are at home, on the go, or in the aisle. Consumers want easy and fast access to information to compare brand and product differences, evaluate prices to value choices, and make purchases almost instantaneously. This means that manufacturers and marketers must take full advantage of digital platforms, including those owned by retailers, to get their products in front of shoppers earlier than ever before — in some cases, even before consumers explicitly express their intent to buy.
Digital marketing is not only driving higher conversion rates, but raising consumer expectations for a sleek, simple browser-buyer conversion process. This requires manufacturers (e.g. CPG companies) to invest in behavioral design for their applications. These applications have to enable more compelling, omni-channel shopping experiences – online or in-aisle – that drive profitable growth and are instrumental in attaining and then defending a leadership brand position in their categories. The digital and e-commerce platforms need to deliver value to consumers through combinations of new ideas, education, convenience (e.g. subscriptions), value and targeted savings. And although many of the shoppers who engage in these digital solutions may not become e-commerce buyers immediately, their online engagement will influence their offline purchases.
The ROI of investing in digital marketing e-commerce solutions include a larger share of voice with consumers, market share, category penetration and profitability. But also it allows the manufacturer to gain a greater influence over traditional retail sales, and may lead to becoming the Category Advisor. Manufacturer’s digital marketing agenda and overall strategy will be determined through the partnerships, investments, and organizational structure best suited for each category or business. Successful brands will be able to develop more influential and collaborative relationships with their retail partners. They will gain a powerful means of driving sales growth and profitability through pre-sold demand of their products and brands. And, perhaps most important, they will obtain valuable insights into what shoppers want, why, and how through the integration of advanced shopper and consumer analytics.
Several research studies indicate that digital consumer product engagement can generate a lift in offline sales of 5 to 10 percent and positive brand awareness and consideration of 10 to 15 percent. Other studies suggest that every dollar in online sales yields an offline sales influence that is five to six times greater.
In addition to the hard benefits, there will also be softer but still measurable benefits such as strengthening shopper relationships and loyalty while simultaneously maximizing sales revenue. But even more important than sales volume itself is the opportunity for manufacturers to glean insights that can help them build engagement and sales across all their other sales channels, including those of their traditional trade partners. Much of the benefit of becoming a retailers’ Category Advisor is derived from the insights and learnings that you are able to share about the retailer’s shopper.
Strategic Elements to Consider
- Size of the prize – growth, market or category share, ROI
- Identify natural strategic partners – growth plan for both online and bricks-and-mortar retailers/partners
- E-commerce as part of a broader digital marketing agenda
- Consumer relationship and brand building (loyalty)
- Shopper conversions and preference
- Category and Consumer Marketing
- Revenue Growth Management leveraging Advanced Analytics
- Supply Chain Optimization (reduced OOS, etc.)
- Direct-to-consumer (DTC) sales channel
- E-Business organization structure – internal, external, hybrid, capabilities, etc.
- Organization needs to be very collaborative with all other aspects of the value chain – operations, manufacturing, sales, marketing, finance, etc.
A digital e-commerce strategy requires a holistic view of the entire business as trade-offs will need to be made between initiatives, opportunities and investments. For example, the finance department will have to account for ancillary recurring costs, such as new digital customer service, extra shipment costs and payment authorization processes. Additionally, there are one-off costs, such as site back-end development, new supply chain logistics, as well as ERP and finance integration. All of this must be thought through before one jumps into a solution.
A fully fledged e-commerce strategy will eventually require an integrated omnichannel approach that includes investments in clicks-and-bricks retailers, pure-play e-tailers, and potentially development of proprietary online stores. Success in digital-marketing-commerce channels will require significant investments in three core elements: content, data and analytics, and targeted media.
Content is king on the internet. Google predicates, with their sophisticated search engine optimization, a premium on authentic, new content that is liked or followed. Therefore, the basis for differentiated online experiences that offer value beyond the product itself is through product ratings and reviews, how-to video tutorials, personalized match-finder applications, and digital shopper experience. Targeted media spend is critical, both on e-commerce sites, retailer sites and across your omni-channels, is needed to reach your target shopper. Your investment in paid and earned media coverage is essential as you try to optimize conversion along the shopper’s path to purchase.
The simple ad in a magazine is all but overlooked today as the reader is striving to read the content of an article. There is, of course, still some interaction, but this is mostly subliminal and not engaged. What is engaging consumers are three things: Video content, virtual reality (VR) and Augmented Reality (AR).
Video content is going to dominate the future web space if it hasn’t already. Over 60%+ of all space on the internet is used up by video content. Where that is the new 360 videos or the family content, but videos are exploding. The gaming industry is leading the charge with virtual reality (and therefore clever ad placements there are critical), but also augmented reality is starting to surface more frequently.
Today Facebook and others have launched more efficient streaming videos and data content. This has greater consumer interaction and engagement with re-posting and follows going up dramatically. There is much discussion in the industry about content being reduced to less than 6 minute segments, to ensure mobile engagement. People on the go don’t have time to watch an entire hour long training video, but they will see it and learn from it in 6 minute segments. This transformation will cause many changes in the development content – turning everything into sound bites.
Entertainment shows and content will begin to reduce from their 30 minute TV shows down to 6 minute segments. There could be more opportunity for intro or exit ads, relevant to each consumer, but this will take larger investments in big data advanced analytics and consumer segmentation. Engagement content will need to be monitored just like ads with total impressions, share of voice and sentiment impact all tract.
The 360 degree video, where the consumer turns to see more of the video. Both the making and the consuming of such videos is becoming easier. Think of the GoPro being used by recreational enthusiasts and the speed with which their person videos are making their way onto social media sites. Or how influencers are recording their own “infomercials” to their followers. The interaction and enjoyment scores are increasing with the release of the latest content.
The VR and AR will need greater levels of investment, but the leaders will be perceived as Brands to follow. With drones now becoming more main stream, auto selfie drones will be able to follow consumers, sports enthusiasts or performers around events or spectacles. As we talk of spectacles, Snap Inc. has some more affordable Spectacles that deliver some augmented reality as you walk along. Wearables are starting to enter the market, with some companies like Fossil Watches trying to do new and innovative interactions – not just the Fitbit or iPhone monitoring of steps, calories burnt or heartrates – but ever more complex augmentations.
Big Data Analytics
Retailers can provide scan data (purchase item price, size, and volume) and purchase data from sales in-store by day-part, location, etc. Combine this data with consumer structured (shopper demographics, geolocation data, etc.) and unstructured data (e.g. twitter posts, passion, Facebook re-posts, etc.) and one can gain a true understanding of the purchasing intent and loyalty of shoppers.
All of this data in the digital world can be converted very rapidly into action because of the very nature of A-B testing and digital – If something isn’t working, replace it instantly with something that is. Data mining and analytics is the key to discovering consumer and shopper insights that can enhance and drive engagement across the myriad of touch points to the ultimate goal of consumer loyalty, purchase and revenues. Digital can create dynamic virtual learning labs that allow marketers to analyze consumer behavior and adjust rapidly at little cost.
The data can also inform management of changing shopper intent to purchase, predict OOS, improve forecasting, increase the efficiency of trade spend though category optimization, etc. If your forecast is accurate enough you will be able to inform your suppliers to allow them time to meet your new demand. In fact, an integrated ecosystem where you share your insights with your suppliers dynamically can reduce overall supply chain costs and increase margins. Don’t always just think of consumer looking, but backwards into your operations, because much efficiency can be gained from this collaboration.
Digital is no longer on an island but is integrated within the main body of the enterprise. This level of collaboration will allow the company to optimize its resources and maximize its growth.
7 Targeted Media Strategies and Tactics:
- Brands need to develop around omni-channel marketing strategies with very clear brand positioning statements and personas to ensure focused consumer targeting.
- Consumer data and the commensurate analytics from all sources will be key in developing and delivering meaningful content to the targeted audience.
- Pragmatic media buying based upon efficiency and accountability. Today there are tools that ensure consumer engagement is achieved through sophisticated analytics. This becomes even more important with the launch of multichannel campaigns.
- Develop more short content – 6 minute videos – content, not ads. This is about engagement, loyalty and long-term changing of consumer purchasing intent – namely brand building.
- Invest in 360 degree engaging advertisements – paid media is still going to be very important, but measuring its effectiveness will be critical. The 360 degree ads are the next line of engagements that consumers are turning to.
- Consumers are following thought and style influencers and leaders. Brands need to partner with video influencers on live streaming, live events and especially with mobile campaigns. Don’t forget the micro-influencers as they may have a much more targeted following with higher engagement and influence scores.
- Create their own live content, especially with live events such as shows, sporting events, etc.
What is needed will be more creative people to write, develop and star in the content. There will be a huge void to start with for this talent, especially for certain segments of the consumer population. But marketers need to seek them out.
The digital-marketing-commerce enterprise (e-Business) of the future will be fully integrated with the entire ecosystem of the enterprise. Not everything mentioned here is needed immediate or simultaneously. I have touched on many aspects that need to be considered.
A strategy and roadmap needs to be developed for each enterprise based upon their particular situation. The implementation of an e-business strategy may not be made on its own, as it is essential that it is integrated with the all other aspects of the enterprise. Understanding and adapting to different consumer intent to purchase is essential . . . not just for on-line interaction but also for the in-store experience. Shoppers are now in control, we need to allow them to lead us, but we need to influence them, educate them and react to them very quickly. A wonderful opportunity now lies before us.
#e-Commerce #e-Business #digitalmarketing #mobility # shoppermarketing