Commentary

Digital And Mobile Drive In-Store Sales

According to new research  from Cofactor with Altimeter, From Web Traffic to Foot Traffic, 60% of CPG and retail marketers said they created digital messages to drive in-store purchases. However, only 37% of those companies said they had a strategy in place to provide a unified customer experience in the path from online information to in-store purchase.

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The study's most noteworthy findings, says the report, indicate that personalized content and localized digital activation must be a priority for brands looking to create fluid cross-channel relevancy with consumers and influence in-store sales.

Rebecca Lieb, former Altimeter analyst and author of the study, says "… reports on the demise of brick-and-mortar stores aren't just greatly exaggerated… they're simply untrue… in-store purchases still account for 90% of customer transactions… walking into a physical store to purchase … will continue to be… the most important touch point… "

Driving customers into stores has long been the end-goal of nearly all types of advertising, says the report. However, traditional campaigns are limited in their ability to continue doing this, as consumers require more than just brand awareness to make a purchasing decision. Harnessing the power of digital content and media to reach customers, and influence their decision not just to come into a store, but to take action once they’re there, is an opportunity reinforced by the study.

The study further reinforces the challenges and need for building a unified content plan. According to Alison Corcoran, Staples SVP for online marketing North American stores, "… when it comes to marrying online with offline efforts, technology… is critical in making it happen… in-store, e-commerce or digital marketing… "

Despite the wealth of customer demographic and behavioral data now available at any advertisers fingertips, brands still experience considerable challenges in effectively utilizing this type of information. According to 500 CPG brands and retailers, their biggest challengs are shown in this chart:

Biggest Challenges to Using Digital Ad Campaigns (% of Respondents)

Challenge

CPG

Retail

Lack of budget

56%

57%

Not an immediate priority

53

54

Lack of the right roles

46

34

Technologies don’t offer this functionality

36

28

Limited access to tools/training

29

31

Lack of executive support

24

35

Insufficient coordination between departments

16

17

Source: Altimeter Digital Strategist Survey, September 2015

Most brands believe digital marketing is best deployed as a brand-building tool, which is why the social media presence of a lot of CPGs and retailers is limited to being entertaining, and announcing upcoming promotions, says the report. By focusing only on awareness, brands end up not taking the entirety of the offline/online customer journey into account.  Today’s digitally empowered shopper doesn’t just need a brand message, or generic item and price; they need/expect/demand more robust and relevant information to make decisions, says the report.

Maturity Of Digital Advertising/Marketing Strategy (% Strongly Agree/Agree)

Strategy

% Agreeing

Our digital advertising/marketing messages are tailored to drive a local outcome i.e. make a purchase in-store.

60%

Driving in-store traffic and sales is a key success indicator of our digital advertising/marketing strategy.

59%

Our mobile strategy helps customers bridge the online to offline shopping experience.

51%

We have a strategy in place to create a seamless customer experience from getting information online (web, social, mobile) to purchasing in-store.

37%

Source: Altimeter Digital Strategist Survey, September 2015

When it comes to digital advertising, the most commonly used metric for success is number of impressions. While this may serve as a good indicator of how much reach a brand has on any given channel, it’s not necessarily a measure of engagement, and its link to sales is tenuous at best, says the report. Focusing on impressions usually means the goals at the top of the funnel and the bottom of the funnel aren’t aligned. It’s only when digital ads are coupled with targeting and action-driven messaging that they start truly contributing value.

In a world where the rate of innovation is moving at breakneck speed, brands and retailers can’t afford to be stagnant. The risks of not embracing digital to be a primary driver of all types of sales are far greater than the risks they incur of wading into new territory. The major risks, according to the report, are:

  • Not fulfilling customer’s wants
  • Frustrating loyal customers
  • Less foot traffic
  • Inability to track, measure and report on local advertising

The report develops a series of conclusions/recommendations resulting from analysis of the study by digital marketing expert sources, and the research.

  • Incentivize visits to retail locations, with features such as order online, pick-up in store, store returns, in addition to sales, coupons and other promotional activity designed to attract foot traffic
  • Be mobile first, or at least primary, when it comes to formulating a content engagement strategy
  • Leverage the mix of paid, earned and owned media to maximize value from the budget, and engage customers outside the usual realms
  • Think online-to-offline when mapping the customer journey.
  • Rethink the print circular; It can provide more value when used in conjunction with other modes of communication.
  • Plan for online cross channel content with similar teams and processes that are in place for delivering offline content.
  • Eliminate silos between departments, and channels for a unified effort for the best customer experience. 
  • Reconsider budget allocation to devote more towards digital spending, as well as identify the digital marketing tactics that give the most return on investment.
  • Implement a measurement plan to track the effectiveness of local multi-channel campaigns. Discard vanity metrics.
  • Leverage loyalty data to personalize/contextualize offers.
  • Remain sensitive to customer privacy by not bombarding them with overly personalized messages.

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