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GUEST COMMENT Retailers reimagined

It’s easy to be pessimistic about the state of retail. Prevailing media narratives suggest struggles across the sector. In traditional retail, dwindling sales and diminishing margins are pushing more household names towards administration. Even online retail, long depicted as the source of brick-and-mortar retail’s demise, is experiencing challenging market conditions, with insolvencies in the sector surging 20% last year.

Look beyond the headlines today, however, and you see an industry in transformation, with innovative online retailers finding new paths to growth.

The industry’s newfound creativity is leading online retailers to create business models that are radically improving customer experience while driving greater market share. Escaping the confines of rented go-to-market channels, this new breed of retailer is reaping the benefits of their owned and earned channels, laying the foundations for more profitable and sustainable business growth.

Scaling the walled gardens

The renaissance in online retail hasn’t been without its challenges. The winner-takes-most nature of the Internet has undoubtedly brought an inbalance of power weighed in favour of tech giants like Google, Amazon and Facebook. Pioneering online retail brands found great success in reaching new audiences through these platforms, employing tactics such as display advertising, branded webstores and sponsored posts to great effect. There is, however, an obvious catch with this approach.

The power that the tech giants hold is based on the size of their audience and the strength of their data. To market through them is to leverage the power of their reach and scale. You can engage with a wide audience, but largely on their terms. As the rules of the platforms chop and change and competition for real estate increases, online retailers are finding they have to continually allocate greater ad budget to maintain that reach. In essence, they are renting the audience and are bound to the Internet oligarchs for their sales and marketing strategy.

The walls the internet giants are erecting are only going to get higher and there will likely be less sharing of information back to brands and retail partners. This not only puts retailers in a race to the bottom, fiercely competing with similar businesses for ever-shrinking margins, but also adversely affects long-term planning and budgeting. This latter point is due to the lack of control, misalignment of incentives and uncertainty over future traffic sources and subsequent revenues. In short, successful tactics rarely last.

Testing different models

In order to get the desired level of control, online retailers have been reappraising their customer acquisition approach. Engagement is the new differentiator, and so they’re seeking models that give them greater visibility across the audience and allow them to extend their reach without reliance on intermediaries.

To build their own audience, and accrue valuable data in doing so, retailers have had to find new ways to engage shoppers. The following are just some of the strategies that are being applied across the online retail space to great effect:

Approach 1: Retailer as publisher

The marketing mantra ‘don’t build your home on rented land’ is ringing increasingly true as the ‘rent’ on ecommerce and social media sites escalates. Utilising content marketing (materials that deliver value over and above showcasing products and services), brands are able to establish greater trust with existing audiences and attract new visitors to their owned channels.

Content marketing involves producing interesting and valuable content such as blog articles, videos, photos, infographics and other formats that appeal to the brand’s target audience. Examples of this include Net-a-Porter’s Porter magazine and Lush’s use of video content to educate their customers on the importance of cruelty-free cosmetics. Successful tactics can also extend to leveraging user-generated content or engaging with relevant influencers to provide social proof of a product’s plus points.

Approach 2: Leveraging partner networks

No business operates in isolation. Opportunities for online cross-promotion and amplification have changed the rules of the game from competition to co-opetition. For retailers, this means assembling a symbiotic network of businesses with similar values and commercial goals. Combining their reach and giving reciprocal access to their respective audiences creates a range of mutual opportunities. Examples of successful collaborations include running joint events or webinars, co-branding reports or creating special offers for each other’s customers.

Approach 3: Email marketing as a storytelling channel


It may come as some surprise that despite the host of new marketing channels and martech innovations, humble email remains the most effective and powerful tool. It’s estimated that email campaigns generate an ROI of 40:1, which far surpasses alternatives such as AdWords and influencer marketing. Email is also typically cheap, repeatable and easily personalisable.

Brands with a resolute focus on building their email database are reaping the benefits of direct communication, while others that have relied on channels such as social quickly find themselves gated from the audience they have nurtured. Email can also be effectively combined with commercial channels to capitalise on shopper interest at every touchpoint. Examples of this include email communication subsequent to shopping cart adandonment, such as targeted communications through Programmatic Mail, or ‘bump’ offers following a sale. Email marketing can also be combined with content marketing to great effect, delivering assets to customers at the exact point where they become most relevant.

Approach 4: Incentivise, incentivise, incentivise  

As unpredicatible as shoppers may be, their collective behaviours may be better understood through the lens of incentives. Consumers want to be rewarded for being early adopters of a brand, for telling their own network about it, and for staying loyal when alternative offers become available. Brands can capitalise on these consumer impulses by making sure they reward their greatest evangelists and encourage repeat purchase. This means structuring their owned assets with offers and referral opportunities that bring more traffic directly to their site. It’s estimated that return customers account for 22% of a retailer’s revenue, while making up just 11% of the total customer base, so it makes great business sense to capture their enthusiasm.

Approach 5: Build a more robust ecommerce platform


An ecommerce site is prime real estate, yet many retailers don’t make full use of the opportunities this presents. Those that do are making their online stores more dynamic and more personalised, creating richer and simpler shopping experiences. This is helping to drive brand recognition and enhance their owned properties as a principal source of revenue.

Focusing on conversion rate optimisation (CRO) through optimised product pages and exit intent pop-ups can help drive a sale, or at a minimum capture an email address for future communication. Further, brands can enhance user experience by making their platform mobile friendly. It’s anticipated that by 2021 more than half of all online shopping will happen on mobile devices, so this is vitally important.

Approach 6: Start a conversation

From a retailer’s point of view, one of the biggest innovations in recent years has been the growth of live and automated chat capabilities. Gone are the days of expensive call centre operations and bloated customer service teams. Now, retailers can get those same capabilities at a fraction of the cost through live chat and chatbots directly on their website. These can be heavily customised to suit the brand and solve customer queries without the hold music that usually characterises these interactions.

Standing out

As in many industries, the internet has been the single most disruptive force in retail in recent times. For traditional retailers, this force has highlighted the flaws and inefficiencies in their go-to-market strategies. Those retailers that have made the transition from brick-and-mortar to digital, and those native to the online realm, have had to choose carefully how they capture the benefits of digital. An over-reliance on the Internet’s gate-keepers has led many to suffer a disconnect from the audience they seek to engage and maintain. Not your audience, not your sales opportunity.

The businesses that stand to gain the most from the next wave of retail are those that have structured their operations to build their audience and reap the benefits of that data to nurture and grow their consumer base. By being more creative and more collaborative, these businesses can still utilise the services offered by companies like Amazon and Facebook as part of a broad strategy, but without relying on them for future sales growth.

By reimaginging their marketing model they create the richer customer experiences that allow them to stand out – and stand strong – against an ever more competitive web landscape.

John Gillan is managing director, Northern Europe, at Criteo

Main image: Fotolia

Author image courtesy of Criteo

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