The gateway to conversions: 5 ways retailers can create incremental opportunity
How can we find new shoppers and capture incremental purchases? Connexity's director of marketing for EMEA & APAC, Angus Quinn, shares five recommended strategies that have worked for retailers time and again.
In sport, as in most walks of life, competition is a good thing. Such is the spirit that will infuse this summer’s Euro 2024 football tournament and the long awaited Paris Olympics.
Unfortunately, as with all good things, too much competition can turn into a bad thing for retailers. Retail marketplaces where granular comparisons and extensive choice fuel intense competition, dominate online shopping - over 70% of consumers see them as the most convenient way to shop online. Moreover, fickle shoppers are less loyal to brands than ever before, with just 64% of UK consumers considering themselves brand loyal, compared to 73% in 2022. While the path to beat the competition on the track or field in Paris is clear for athletes, for retailers, the answer has been less evident.
Until now.
Focusing on incremental revenue, and generating more of it, can help retailers beat out the competition and overcome many of the challenges they face today. Having identified what I mean by incrementality, the first step in cracking it is gaining incremental opportunity.
So how can we find those new shoppers and capture those incremental purchases? Here are five recommended strategies that I've seen work time and again for Connexity retailers.
1. Over the walls
Everyone spends budget with the walled gardens. In fact, some estimates suggest that the likes of Google, Meta and Amazon capture as much as 60% of overall digital advertising spend. Given the big players' dominance in the space, wholesale abandonment of the walled gardens is likely not advisable as a strategy for retailers to combat current high competition for new customers and sales.
The open web, however, offers opportunities you won't find inside the walled gardens. Studies suggest that spend here is growing in 2024, and in some cases, outpacing the ongoing spend with the same old walled gardens: seven in 10 marketers planned to increase advertising spend on the open web last year. Opportunities across channels like commerce content, product display ads, social influence and retail marketplaces expand retailers’ reach beyond the saturated audiences they’ve reached year-over-year on the marketplaces.
2. Incentivize earned media
Is that a contradiction in terms?
No, but it reflects developments publisher-side advertisers should be aware of when they think about hybrid approaches to creating incremental opportunities for sales online.
Commerce content is big business, with the biggest publishers around the world running multi-million dollar affiliate businesses. The income they’re generating has allowed them to develop a range of additional models within ecommerce to work with advertisers.
The appetite to work beyond big marketplaces is rife too – while 64% of publishers have seen a decline in commission paid out from Amazon, 81% report increased commissions from alternative retailers competing for a slice of the ecommerce pie.
The traditional affiliate model based on cost-per-action payments has now, in many markets, been augmented by an increased focus on leveraging CPC budget to supercharge affiliate performance and boost incremental opportunity. Complementing traditional affiliate, branded content and PR initiatives, savvy advertisers spy an opportunity to expand their funnel on the open web.
Where CPC budgets are used to incentivize incremental promotion in content, I’ve seen notable increases in activity. One of our customers leveraged CPC rates to incentivize content creation last year, driving an over 130% month-over-month increase in shopper traffic from a top US news publisher.
3. Touch every part of the shopping journey
Paths to purchase continue to proliferate. What was once a linear journey from product discovery through purchase now typically takes in a multitude of touchpoints. On top of that, post-pandemic, more people from across more demographics are shopping online than ever before. Shoppers need more convincing than ever to make purchases, with the cost of living only complicating things further.
This additional injection of complexity into online shopping has had a knock-on impact on the path to purchase. People start shopping online in different places and retailers would be advised to cast their net far and wide to generate incremental opportunity. Equally, the ambition and ability to be present throughout every step of the funnel is more achievable than ever before.
Native advertising helps boost initial inspiration. Contextual native advertising is even better, but with the increase in online shopping, people are not always online with a purchase in mind. This is an opportunity for advertisers to find the audiences who want to buy from them. Commerce articles appeal to more educated shoppers with specific purchases in mind. Recommendations from influencers and discounted product listing ads help those at the bottom of the funnel move from consideration to conversion. Traditional retargeting ensures those you reach those elsewhere in the funnel who remain speculative can be won through new offers or persistence.
4. Escaping influencer hype
Influencers are as ubiquitous as Taylor Swift is in Spotify playlists. Everywhere and everything to everyone all at once. Social sales are big business too, with spend on UK influencer marketing up 16% to £820m last year.
For many advertisers, social media is a surefire way to put products in front of coveted younger demographics and gain incremental opportunities too.
The untapped space with influencers is going beyond the Kardashians of the world. Micro influencers can be both cost effective and influential options for advertisers driving up incremental opportunity. Hungrier to build business and protective of the influential communities they’ve created in a way larger creators are less discerning about, up-and-coming influencers offer a chance for brands to gain traction with audiences they aren’t reaching elsewhere.
Micro influencers can be a gateway to new customers: An established fashion and footwear brand we work with in the US found that 55% of buyers from our ShopYourLikes influencers platform were new customers, proving incremental value brought by the channel.
5. Consider consideration
Riding out the worst of the cost of living crisis, people continue to shop online and shop in volume. Putting off full payment has however become de rigueur and even those without need of spreading the cost are taking advantage of the rise of buy-now-pay-later (BNPL) players. Estimates show that nearly 40% of Brits used BNPL within the last year, 14% for the first time.
Tempting at checkout, BNPL platforms have become even more compelling as shopping opportunities are developed into full marketplace experiences within their own payment and financing apps. Platforms like Klarna and Clearpay in the UK have rapidly carved out significant influence in online purchasing. Partnering with leading platforms offers retailers a clear path to incremental opportunity, placing products in front of young, mobile-first shoppers and those who are often right at the bottom of the purchase panel just itching to get the fresh serotonin rush of a new order on the way to their homes.
Be where the shoppers are
It sounds simple, but incremental opportunity boils down to making sure as an advertiser, you and your products are in front of online shoppers.
Retailers shouldn’t aim to be everywhere all at once; rather, taking an experimental approach and swapping and changing a variety of channels, advertisers can create incremental opportunity. The quality shoppers are out there and the right mix of channels – and it is now a mix – will help advertisers to reach them. Find the right mix and you create the right level of incremental opportunity. Then you can turn toward incremental performance.