Retail ecommerce is a tough business in the best of times. The margins are thin. The logistics are complex. The customer journey is ever-changing.
Throw in a pandemic, a shifting labor market, a supply chain in flux, continued market volatility, and you have a grab bag of factors that can seismically shift your business—some for the better, some for the worse.
Based on hundreds of conversations I’ve had with retailers over the past several months, it’s becoming clear that the strategies you used pre-pandemic will not work in this new environment. Technology has leveled the playing field and retailers must adapt.
Retail marketers have a choice to make. Do you want to be a transactional business focused on short-term goals? Or do you want to be a transformational business set up to thrive for the long haul? As the broader retail landscape continues to evolve, Now is the time to focus on the next chapter of ecommerce. To become a transformational brand, focus on three key imperatives.
Grow share responsibly
Growing share responsibly comes down to the following:
- Aligning campaigns to your higher order business goals (what your CEO talks about—e.g., profit vs. CPA)
- Using these higher order goals to power automation for the right outcomes at scale
- Casting a wider net to capture as many customers possible within your goals
To help grow share responsibly, you need a toolkit consisting of bids, automation and coverage that aligns your business with the ebb and flow of demand in a rapidly changing market while optimizing to your specific business goals. By combining solutions like Smart Bidding with powerful reach tools like Broad Match, you’re able to cast a wide coverage net across high-value queries and let automation do the heavy lifting of finding the right shoppers to meet/exceed business driving targets.
So, why is this so important? Because 15% of searches Google sees everyday are new. This is a tremendous amount of volume that cannot be effectively accounted for and actioned against with manual bidding techniques. In-house tools and systems that were once a competitive advantage put businesses at risk of falling behind, as more than 80% of Google advertisers are now using automated bidding. What was a differentiator is now table stakes in the next chapter of ecommerce.
Invest in your brand
Your brand is your greatest differentiator. It’s who you are and what you stand for. It’s the face of your company, and the driver of connection and relevance with shoppers. But, too often, retailers fall in the efficiency trap—trading a quick sale today for a new and/or loyal shopper tomorrow.
For a long time, that was a sustainable strategy. But with an increasingly competitive retail landscape, easy conversions are becoming harder and harder to come by and turning to the one thing that is uniquely “you”—your brand—is the path to sustained growth.
In bringing your brand to life, coverage across the shopper journey is paramount. A full-funnel branding strategy that introduces your brand to shoppers, cements your brand consideration set and ensures your brand is a determining factor in first-time and subsequent purchases will help your business move from transactional to experiential. YouTube, Discovery and Display are key tools for delivering engaging brand experiences across the upper- and mid-funnel.
Ultimately, investing in your brand and improving funnel coverage improves business results. According to McKinsey, allocating investment to high return media and implementing ongoing test and learn optimization for branding and demand generation campaigns can lead to a 15%-20% increase in marketing ROI. Incorporating brand building and performance drivers in the same campaign drives a better return than investing in performance alone.
Drive loyalty and lifetime value
Investing in your brand is a catalyst for loyalty and lifetime value (LTV)—delivering the shopping experiences that impact shopper sentiment and behavior. According to eMarketer, 92% of U.S. shoppers believe experience is an important factor when it comes to purchasing decisions, with 87% being more loyal to brands that focus on experience. And when the experience is engaging, the dollars follow: 82% of shoppers are willing to spend more for a better overall experience.
Driving loyalty and LTV requires a focus on the right mix of acquisition and retention with predicted and actual long-term shopper value being key underpinnings. It necessitates finding the balance where marketing programs are effectively identifying new customers that will drive long term value, while ensuring existing customers with high value are prioritized for dedicated retention efforts.
To help accomplish this, use measurement and analytics tools like Google Analytics 4 to build wider and deeper audiences that can inform your automation and bidding. In turn, delivering the right message, to the right shopper, in the right moment and paving the way for the seamless experiences that drive loyalty, LTV and your business.
Finding and retaining good customers is good for business. Don’t let a hard-earned, new customer go to waste, or worse, go to a competitor.
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Jane Butler is a 19-year veteran of Google and has held multiple leadership roles on the advertising side of the business. She is currently managing director of the pureplay retail business, responsible for the largest retail ecommerce players and DTC strategy.
