Preparing for the future of retail
Since mid-March 2020, our relationship with space and mobility has been experiencing an unprecedented upheaval compared to the previous decades of overcoming physical and territorial limits
How to adapt to those changes in consumption patterns and consumer movement that the COVID-19 crisis has greatly accelerated? For data analysts, the challenge this transition period poses to brands in the retail sector is twofold:
- help brands identify weak (and strong) signals of structural changes in their local markets to which they will have to adapt, whether in terms of their physical location, their operations or their marketing approach
- help brands identify, recalibrate and optimise the most effective marketing channels to amplify the return to their physical points of sale, while continuing to support their digital growth
The omnichannel approach: connecting physical and digital
Omnichannel Marketing has long taken a place in retail in terms of supply, experience and access for consumers. What more recently came into focus is the understanding of the impact of each medium (ranging from national TV campaign to hyperlocal CRM campaign) towards each physical point of sale.
In above graphic, we highlight the impact from various marketing channels towards physical stores and website traffic as seen with one of our retail clients. Although lacking to represent the more complex reality, modeling available data makes it possible to capture certain very significant elements to guide or modify investment strategies intended to strengthen or redirect traffic. Some examples of results that particularly resonated with our customers:
- The power of hyperlocal anchoring: Optimising the marketing mix at a local level, whether it is display, digital targeting, flyers, or CRM activation. Measuring the relative impact of all of its tactics makes it possible to control traffic to points of sale and amplify post-containment rebound dynamics.
- The strength of a brand: Local traffic is nowadays more closely linked to the inherent power of a brand. It gradually erodes the preeminence of location as a key factor in generating traffic, due to an increasing number of consumers entering a brand directly into a search engine or GPS. The share of marketing investment and its optimisation with regard to these traffic issues (physical and digital) remains a fundamental element of competitive advantage.
- The conversation with the customer base: This is a tremendous asset. All our analyses confirm the effectiveness of engagement tools such as CRM or loyalty programs. Not only are the levels of ROI among the highest, but it is also an open door to the early signs of potential changes in consumption.
- Test, measure, adapt: And do it quickly! We are in a period where testing new ideas and learning quickly is essential. We therefore advise our clients to increase the frequency with which they measure the impact of their marketing investments, and to deploy more of their analytical budget on this type of measurement - as long as the methodology is robust.
Retailers will continue to explore how to adapt to changes in consumption in their markets, until they find a balance between physical and online traffic, between offline and online media investment. Generating and amplifying traffic to points of sale is based on the deployment of multiple marketing levers that mutually reinforce their impacts.
Analytical tools come to inform and help manage these transitions. Even if any model is still far from capturing the complexity of reality, of what a consumer's sensitive experience really is, they nonetheless provide concrete and reliable insight that can be immediately activated by CMOs and CFOs.
(Graphs, Case Studies and other data from Analytic Partners ROI Genome Marketing Intelligence Report: Omnichannel and a Brave New World)