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Analysing the numbers: Catch and keep

Martin Shaw, head of research at InternetRetailing, explains how his team approached the challenge of measuring retailers’ engagement with customers.

Imagine a beautifully designed department store, packed with products that customers want to buy. But this department store isn’t in a prime location. Rather, it’s hidden down a hard-to-reach alleyway, never advertises and its staff don’t tell anyone about their workplace. Passers-by who stumble upon it, and then tell their friends, are the only source of new business. It’s not hard to imagine that trade would be slow.

Successful department stores and retailers do, of course, enjoy prime locations and active marketing. Those that succeed online are highly visible when people search for the products these retailers sell. They use tools including social media and email marketing to encourage customers who have bought already to buy again. It’s these brand engagement initiatives – the effort put into building relationships with potential and existing customers – that are the difference between simply having the products and the retail systems in place, and having an active and interested customer base. It’s the front end to all the effort that retailers are putting into logistics and warehouse management.

These initiatives are more vital than ever before. As potential customers go direct to

“With ecommerce so dependent upon search to win new customers, retailers are fighting a technological battle” Martin Shaw, InternetRetailing

brands or start their searches on marketplaces, and Amazon , the leader in this Dimension, constantly increases its scope, being front of mind with customers is essential. The approach of catching and keeping customers has to be consistently applied.

For the Brand Engagement Performance Dimension, we set out to measure the effectiveness of retailers’ efforts here, to quantify in particular how well retailers are profiting from the information customers share. If that sounds like a one-way street, we should emphasise that customers benefit here too, in that effective

brand engagement initiatives improve the experience for them.

To extract meaningful data from this complex interplay between retailer and consumer, we’ve analysed retailers’ performance at key points during the brand engagement journey – from first contacts through to a relationship that’s established, and which develops through regular emails and on social media.

First contact

When consumers are looking for a product they want to buy, they likely start with search. Search plays a role, whether shoppers know exactly which products they want to buy, or are looking for inspiration around a general theme, whether that be ‘new bed’ or ‘secondhand car’ – and being visible is key to successfully making that first contact with potential customers.

We judged that visibility in organic search, which builds naturally as searchers look and find, was a more telling metric than in paid-for search, where success can be determined by the amount of money spent. With ecommerce so dependent upon search to win new customers, retailers are fighting a technological battle. Strategy revolves around search engine optimisation (SEO) and victory is being in the top five search results.

Being large and well known will always give retailers an advantage in this Dimension. To do well, retailers have to be known – and to be known, retailers have to do well. Furthemore, higher visibility is achieved through displacing other retailers, so it’s a zero sum game.

Working with InternetRetailing Knowledge Partner OneHydra, we measured which IRUK Top500 retailers had the most keywords – a reflection of how many products companies

stock. We measured which had the largest UK

search volume (or how many times retailers’ keywords were searched); the largest search reach (or the number of people that see the website in search results); and the search reach per cent (gauging how well the retailer is presented for specific keywords).

We found that for sheer volume, Amazon, followed by marketplace eBay, had the most keywords, including those that were most frequently searched. John Lewis, Tesco, Argos and Debenhams complete the top six in terms of having the most keywords, while Google Play, John Lewis, Argos and Tesco are those whose keywords are most often searched. Debenhams,

a Top5 retailer in this Dimension overall, comes in eighth place in this listing.

When it came to search reach, Amazon and eBay remained in the top two, followed by Argos , John Lewis , Google Play and Tesco, with Debenhams again in eighth place. Breadth of range and the popularity of that range are important in determining the leaders in this area. But when we analysed search reach percentage, which can give insights into the effectiveness of search strategies, some very different names surfaced. Ferrari topped the list, followed by 24ace, American Golf, MAC Cosmetics, HP and Vision Direct. This suggests that even smaller retailers and brands can use effective SEO strategies when they have unique and popular keywords. (Note: we stripped brand terms out of the keyword list to keep the data comparable).

It’s likely smaller retailers will also need to boost ratings through the tactical use of paid search over a smaller basket of keywords. However, at the bottom line, results that are not in the top five are hardly clicked. All ecommerce retailers optimise top keywords, but the task is still manual and time-intensive, so many struggle to move further down lists. Most Top500 retailers have hundreds of significant keywords (where 100 searches per month is the threshold for significance) and these lower-value keywords drive more than half the organic search traffic

to some retailers.

Building an email relationship

Once traders have successfully converted that first contact through search into a purchase,

the next hope is to get the shopper’s email address in order to start longer-term customer engagement, to build a relationship. We judged that a useful measure of this relationship lay in whether marketing emails got through to an end recipient, and if so, whether they were read and clicked on the one hand, or deleted and marked as spam on the other. Knowledge Partner Return Path contributed its analysis of 16 top retailers within the Top500.

There’s more detail on this in the New Research feature on page 31, where we found big differences between best practice and the rest, and a gulf between the best practice of sophisticated retailers, those that send one or two emails a week, and those analogous to desperate stalkers, in touch every other day.

Are you reachable?

Relationships don’t work when communication is entirely one way. Customers must be able to reach retailers when they need to, whether it’s with a query, a complaint or praise. We analysed retailers’ use of 10 communication channels, from various social media platforms to phone, email and blog, and found retailers used an average of six. Only 2% used all 10, among them Mothercare, Matalan and Next.

When we looked at how efficiently retailers used those channels, we found the average time taken to respond to a Facebook query was 53 hours, and 27 hours to one made via email. This indicates a siloed approach to customer service – one that may be unhelpful, given that customers tend to view retailers as monolithic, with similar expectations for service across different channels.

Social interaction

Social media doesn’t rank as a key sales channel for most retailers, yet it’s an important and growing area of influence as traders look to talk

to existing customers, answering their queries and resolving their complaints as well as winning over new customers.

brand engagement

It’s an area where smaller retailers can level the playing field with those larger retailers that win out so conclusively at making that first search contact, since the power of social media is not about how loud a retailer’s voice is, but how many other people repeat what the retailer is saying. Of the IRUK Top500 retailers, Victoria’s Secret had the largest number of page Likes, at 27m, followed by H&M with 26.2m, Zara and Nike (23.8m), and Adidas (23m). These retailers enjoy instant brand recognition, but they are also savvy with how they use social media.

We found that 66% of Facebook profiles had a ‘shop now’ button to encourage ecommerce transactions, including all of the Top5 retailers, alongside statistics in areas from the number

of Facebook page Likes to the number of Facebook check-ins.

Through our Tweetailer Index we aimed to assess how interactive retailers are on Twitter, from how many followers they had, how often they tweeted and how often they favourite others’ tweets. Victoria’s Secret topped the list, with nearly 9.3m followers – 8% more than at the beginning of December 2015, and the brand’s social media team had been active, increasing

the total Likes of others tweets by 12%. The brand tweeted an average of 88 times a day, including replies to questions and comments received, and even ‘mentions’. Topshop came second, with

1.3m followers more than three months earlier, 7,600 Likes, and tweeting on average 14 times a day. Google Play (6m followers), Asos and Puma also performed well here.

Moving on

Our ongoing research here will evolve through 2016. The InternetRetailing–OneHydra Retail Visibility Index is online now, and can be found

at with the first four months of data. We’ll be updating the Tweetailer Index every three months at

We’ll also be focusing in more detail on the customer service aspects of brand engagement

in The Customer Performance Dimension Report, to be published this autumn.

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