• by Graham Ratcliffe , September 19, 2014

Attribution is a way of understanding how marketing initiatives drive different types of revenue. A recent study by consulting firm A.T. Kearney found that consumers spend 61% of their shopping time in brick-and-mortar stores, 31% online, 4% on mobile devices and finally 4% in catalogs.

However, this data only tells part of the picture. We live in a world where consumers can easily make contact with products several times before a purchase. Crediting an entire sale to the last consumer touch-point gives no recognition to other marketing efforts or channels that may have influenced a consumer.

Attribution Challenges

Forrester Research and NRF's 2014 State of Retailing Online study, made in partnership with Accenture, shows that channel attribution is an issue for retailers. It’s the classic chicken-or-egg situation: did the customer convert because they saw search advertising or did they search because they already wanted to buy?
Or, did they convert when they saw the product in a store window, or while browsing the business’s app? Did multiple channels contribute to the conversion? If so, which channels were the most important?

Most retailers are sitting on data that could shed light on the sales processes. Yet, few retailers employ staff dedicated to data mining, or have the tools to automate mining in a sophisticated way. Issues of data complexity and problems with organizational structure both contribute to the attribution processes being so poorly understood by many organizations.

Dizzy from Data

When people think about data complexity, they often imagine a problem of sheer volume. However, having multiple sources of data or missing critical information also contributes to data complexity.

Many retailers use different systems to track repeat-customer activities. This is a problem because, if a business uses separate systems to monitor e-commerce behaviors and track email responsiveness, that could lead to missed connections in the data.

Additionally, some retail channels are not robustly tracked. Mobile platforms, for example, tend not to provide great data for analysis in the same way that e-commerce or store platforms can.

Yes, data issues are complex. But, ultimately, this complexity is a good thing. To understand attribution, we need to understand the behavior of as many individuals as we can across as many channels as possible.

Playing Nice in the Sandbox

The flawed last-click attribution model can persist because of problems in an organization’s structures. Marketing executives are often compensated to match the sales volumes they drive for the platforms they are in charge of. Yet, marketers should be working together to promote performance across a variety of channels.

In leadership theory, this is called a misalignment of incentives. Retailers expect an omni-channel outcome, but their staff may be financially incentivized to pursue single-channel goals. This can lead to fighting between channel-specific teams; IT wants credit for the technology, Marketing wants credit for the tactics, E-commerce wants credit for the digital sales.

One solution some companies are trying is to add big data scientists to the organization, an in-demand group in our increasingly high-tech society, as The Wall Street Journal pointed out.

Interim Solutions

Changing organizational structures and incentives is a long-term process for many retailers. Still, there are short-term changes retailers can benefit from immediately. Many retailers are moving away from building solutions internally and looking to companies such as ourselves who can provide software to understand attribution in a deeper way.

Before signing on with any attribution vendor you should make sure you know where you data is, how it is being captured and how it is being stored. Furthermore, retail is a complex business and you should ensure the vendor has software than can handle this complexity and translate massive amounts of data into meaningful information.

Attribution done well should allow retailers to ensure that they are getting a complete picture of the individuals interacting with their product, and of how different strategies are contributing to their sales. Even if you can’t restructure your organization immediately to help your company understand attribution, deploying an interim solution is key if you want to end up on top this holiday season.