Conversant - Retail Marketer Insights The State of Digital and the Future of Personalization

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The study, conducted in December 2013 and January 2014, solicited information and opinions from leading senior-level retail marketers. The digital opportunities and challenges covered in the study varied from the current role that digital plays in marketing programs to the burgeoning interest and importance of personalized one-to-one marketing. For the retailer, this study provides a benchmark for today’s attitudes and efforts compared to those of a crosssection of other retail industry leaders. In addition, retail is often the “first mover” in digital when it comes to programs with a strong likelihood of ROI impact. Thus, these findings are very relevant to marketers outside of the retail/e-tail sector.

Transcript of Conversant - Retail Marketer Insights The State of Digital and the Future of Personalization

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RETAIL MARKETER INSIGHTS: THE CURRENT STATE OF DIGITAL AND THE FUTURE OF PERSONALIZATION

A research study by Conversant

RETAIL MARKETER INSIGHTS: THE CURRENT STATE OF DIGITAL AND THE FUTURE OF PERSONALIZATION

A research study by Conversant

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The study, conducted in December 2013 and January 2014, solicited information and opinions from leading senior-level retail marketers. The digital opportunities and challenges covered in the study varied from the current role that digital plays in marketing programs to the burgeoning interest and importance of personalized one-to-one marketing.

For the retailer, this study provides a benchmark for todays attitudes and efforts compared to those of a cross-section of other retail industry leaders.

In addition, retail is often the first mover in digital when it comes to programs with a strong likelihood of ROI impact. Thus, these findings are very relevant to marketers outside of the retail/e-tail sector.

Table of Contents

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EXECUTIVE SUMMARY

DIGITAL SPENDING

ROLE & EXPERTISE

PERSONALIZATION & RETAIL DIGITAL MARKETING

VENDORS, COMPLEXITY & INTEGRATION ISSUES

ATTRIBUTION PLATFORMS & METHODOLOGIES

COOKIE BLOCKING & DELETION

RETARGETING & RETAIL

DIGITAL MARKETING HOT TOPICS

FIVE THINGS RETAIL MARKETERS SHOULD DO NOW

METHODOLOGY

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As digital spending plays a progressively more important role for retailers, senior leaders have strong opinions about the opportunities and challenges they face in the digital space.

Strong evidence supports that senior leaders are doing their homework and understand the key importance of data management, personalization and measurement.

PERSONALIZATION: Personalization is clearly a hot button topic for this audience. Nine out of ten acknowledge that personalized messages work better than mass communications. And while many recognize the cross-device and omni-channel issues associated with executing personalized marketing, the vast majority are convinced that personalization represents the future of the industry.

VENDOR GLUT: Many senior leaders appear to struggle with vendor overload. Respondents indicate they work with an average of 12 digital marketing vendors, and many find it increasingly difficult to engage with the right partners and to integrate with those they already have.

PASSION FOR MEASUREMENT: For this group, interest in measurement and attribution platforms appears to be high, versus the industry average. And while the most common measurement utilized is the last click attribution approach, responses indicate many retailers are looking to change their attribution methodology in 2014. Further, a majority of retailers express concern about the potential impact of cookie blocking and cookie deletion on measurement and user identification.

PASSION FOR LEARNING: These senior retail leaders express a strong desire to learn about many of the key topics and issues that will affect their digital marketing efforts and success rates in 2014. Prime topics that interest these respondents include cross-device marketing, ROI measurement and mobile marketing.

EXECUTIVE SUMMARY

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DIGITAL SPENDING: AN INTEGRAL COMPONENT OF RETAIL MARKETINGYears ago, digital represented only a few percent of total marketing spending, but with consumers devoting more of their time in digital platforms and expanding digital marketing capabilities, there has been a dramatic shift.

The digital retail leaders we surveyed reported an average of 39% of their total marketing spend is devoted to digital 111% higher than eMarketer reports for US marketing as a whole (18%). Whats more, 39% of these senior leaders also report that digital represents half or more of their total spending, proving that retail tends to be ahead of the curve with regard to digital.

About what percentage of your companys overall

marketing effort is invested in

digital marketing?

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

40%

0-24%

22%

25 - 49%

20%

50 - 74%

19%

75 - 100%

Average digital allocation

39%

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DIGITAL EXPERTISEGiven the importance of digital in the overall marketing mix, its not surprising that marketers have placed a huge emphasis on developing understanding and prowess in digital marketing.

When asked, senior level retail marketers assess their understanding of digital marketing strategies and tactics quite favorably. Almost half rate their digital knowledge as expert or high. Another 42% rate their understanding as medium, and only 10% rate themselves as low or very low.

DIGITALS ROLE: GOING BEYOND DIRECT RESPONSEHistorically, marketers have primarily used digital in a direct response (DR) role. Today, thats no longer the case. Nearly 60% of senior-level retail marketers disagree that digital is better for DR than for branding. Recent eMarketer data also supports this enlightened view of digital with almost 42% of total digital spending now devoted to branding versus DR.

Digital marketing is better for driving short-term sales than long-term brand building

How would you rate your personal expertise using digital marketing to deliver on your business objectives?

StronglyDisagree

30%

Very Low

1%

Low

9%

Medium

42%

High

27%

Expert

21%

SomewhatDisagree

28%

SomewhatAgree

27%

StronglyAgree

4%

58%

Disagree that digital is better for DR than branding

48%

Say they are expert or have high expertise

35%

30%

25%

20%

15%

10%

5%

0%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

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PERSONALIZED MARKETINGLeveraging personalization as a marketing strategy gives retailers the opportunity to tailor content and media delivery of brand advertising and messaging at the individual level. It takes into consideration things like demographics, lifestyle, past shopping and browsing behaviors, as well as predicted future behaviors, and uses that data to personalize communications and pinpoint the best method of delivery to that individual.

More retailers appear to be interested in the potential power of personalized one-to-one marketing as part of their efforts to drive stronger results and ROI.

INDIVIDUALIZED MESSAGES ARE MORE EFFECTIVENearly 90% of senior retail marketers strongly agree or somewhat agree that individualized messages can be more effective than mass messages.

Personalized communications tend to be more effective because they tailor brand messages to precisely suit the needs, lifestyle, life stage and preferences of an individual consumer.

Individualized messages and offers

can be more effective than mass messages

and offers

SOMEWHAT AGREE30%

STRONGLY AGREE60%

NEITHER DISAGREE OR AGREE4%

SOMEWHAT DISAGREE5%

STRONGLY DISAGREE1%

90%

Say individualized messages are more effective

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OMNI-CHANNEL CONSUMERS MAKE PERSONALIZED MARKETING MORE DIFFICULTFifty-nine percent of senior-level retail marketer respondents strongly agree or somewhat agree that omni-channel consumer behavior, where consumers access digital experiences across multiple channels and devices, significantly complicates the delivery of personalized communications.

PERSONALIZATION IS THE FUTURE OF MARKETINGTheres little doubt among these senior level retailers about the importance of personalized marketing for the future. In fact, 72% agree that one-to-one communications represent the future of digital marketing for retail.

Multi-channel and multi-device consumer behaviors make personalized marketing much more difficult

The future of marketing is in synchronized personalized communications tailored to every individual

2+26+46+12+14Strongly Agree

Somewhat Agree

Neither Agree nor Disagree

Somewhat Disagree

Strongly Disagree

2%15%

26%

46%

11%

StronglyDisagree

7%

SomewhatDisagree

SomewhatAgree

47%

StronglyAgree

12% 12%

50%

40%

30%

20%

10%

0% 70% Agree personalized communications are possible

59%

Agree omni-channel behavior complicates

personalization

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Approximately how many marketing vendors and solutions providers do you do business with during the year?

On average, marketers are working with 12 digital vendors

RETAILERS RELY ON MANY PARTNERSSenior retail marketers face the challenge of working with multiple digital partners. Sixty-five percent work with six vendors or more, while 35% work with five or fewer vendors.

0 - 5

6 - 10

11 - 15

16 - 20

21+10+35+35+15+56% 10%

35%

35%

15%

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CHALLENGE: FINDING THE RIGHT PARTNERNearly half of respondents reported that finding the right digital vendor is somewhat difficult or extremely difficult. This trend will likely lead companies to opt to work with fewer, more versatile vendors.

CHALLENGE: INTEGRATING WITH MULTIPLE PARTNERSM