Infographic: CMOs facing a disconnect in their digital marketing strategies

by Marketing ON 24 May 2013

CMOs are facing a disconnect in their digital marketing strategies, a new survey has found. Of all surveyed, 65% of CMOs say a digital focus is important, however only 7% believed their performance was ‘leading edge’ and almost 50% of Australian CMOs surveyed believe their customers are becoming harder to reach and influence through traditional marketing channels.

Patricio De Matteis, managing director, Accenture Interactive Asia Pacific says irrespective of the type of media spend CMOs engage in, whether it be real-time bidding, convergence buys, performance buys or even direct buys, analytics are still essential in driving smarter digital purchases.

“Analytics allows for independent verification that the ads purchased ran accordingly; assists marketing teams to assess buy performance; has the ability to influence changes to forthcoming strategies and; assists companies in revising their media buying parameters therefore improving targeting and efficiency,” he says.

De Matteis, is also adamant that acquiring and retaining customer sales should remain at the top of the CMO priority list. “Today’s consumer has more control than ever before. They’re savvier, sceptical of traditional marketing methods and have greater access to products and services via the internet. Within this climate, it is becoming much more difficult to reach them and to measure marketing interactions,” he adds.

“Companies must evolve their marketing strategies to remain relevant to their customer. Ideally, businesses will restructure the organisation to work horizontally to deliver seamless and relevant customer experiences across all points of interaction. This delivery of a consistent customer experience is essential to survival in the global marketplace.”

Investing in data analytics to improve understanding of changing consumer needs is something that CMOs should begin to invest in, which will in turn help them ultimately succeed with their customers.

This was made obvious in the Accenture 2012 CMO Insights Survey where nearly half of all CMOs said that in order to help retain and grow their customer base they will spend more on managing customer data, 40% will increase budget spend on web analytics and 39% will spend more on marketing analytics.

De Matteis says the marketing function of CMOs must undergo a dramatic overhaul in the next five years if it is to stay on top of evolving consumer behaviour.

Some of the significant changes he expects to see include:

- The rise of digital – as previously highlighted, businesses lack confidence in their digital capabilities and are realising the need for increased digitalisation. For this reason, we predict that everything digital – including budgets, social media and dedicated digital employees – will continue to rise.

- Investing in big data and analytics – CMOs have recognised the importance of analytics in understanding consumer intent. We therefore expect marketers to increase their spend in areas such as managing customer data, web analytics and marketing analytics.

Retail marketers shift their focus locally

by Marketing ON 23 May 2013

A new study has found a strong shift in the balance of local vs. global marketing as Australian companies attempt to gain an edge on their competitors. Some of the country’s largest companies are planning to increase their allocation of localised marketing by up to 60% according to a report released by the Australian Centre for Retail Studies (ACRS).

The study commissioned by Retail Safari, part of the global CPM group, outlines the growing phenomenon of local and personalised marketing in a rapidly evolving and channel-saturated retail landscape.

ACRS research director Dr Sean Sands says the implications of companies developing stronger engagement within local communities is clear.

“Localisation is no longer just about customising creative messages and running a few local promotions, but has to integrate and involve all channels and touch points. It encompasses everything from strategy, pricing and merchandising to ﬁeld teams, websites and media planning,”

“Fundamentally there needs to be a paradigm shift in the way marketers develop strategies for acquisition and sales,” he explains.

Some of the key outcomes of the study indicate that by centralising the strategic and operational development of localised marketing activities, organisations can expect signiﬁcant cost savings while improving brand integrity and overall sales performance.

However, the benefits of thinking local also come with some barriers to developing a more locally focused approach – a key one being access to suitably skilled resources, understanding of local market dynamics, segmentation challenges and the high cost of Australian media.

Gingkai Tan, managing director of Retail Safari, believes the research validated the focus on driving local market penetration across multiple channels.

“This is not just an Australian phenomenon,” he says, “we are seeing our international businesses moving in the same direction, driven by the demands of the market and our clients.”

“The challenge for retailers and manufacturers today is clearly one of cost – how to manage national or global scale and resource availability with local market realities and proﬁt opportunities”.

Infographic: M-commerce and mobile shopping in Australia

by Marketing ON 17 May 2013

Online shopping still accounts for only a fraction of the $256 billion total retail market in Australia, and shopping done through mobile devices like smartphones and tablets is just a slice of that, but at $5.6 billion it’s a considerable slice.

In this, another original infographic developed by Marketing, we draw on sources from Nielsen, TNS, PayPal, Quantium, NAB and the ABS to paint a picture of which categories are most popular via mobile, which retailers get the most hits online, and who uses which devices to scratch their ecommerce itch.

Click the image for full-size version

Retailers: Start taking your mobile infrastructure seriously

by Shaun Dobbin ON 14 May 2013

Think long-term investment when it comes to your mobile strategy, Shaun Dobbin urges, noting that mobile works wonders… if it’s done properly.

Over 54% of Australians own a smartphone and just over 22 million Australians own some sort of mobile device. It’s now almost critical for businesses to ensure they are accessible over multiple mobile channels.

But is your retail business ready for this investment?

It’s time to take a step back and have a look at your digital infrastructure – is it second rate? Did you choose a cheaper system because you felt it would be better to invest money into a more tried, tested and traditional marketing strategy? If the answer is yes, then we need to have a frank discussion.

Too often I see retailers regret the fact that they didn’t spend that little bit more money and go for a higher quality digital infrastructure. Now they’ve realised mobile is the place for businesses to be and all of a sudden we have some problems.

Many organisations made the decision long ago to not put in a serious investment when it came to creating and building a digital product or service.

Today, as a mobile marketing solutions agency, we are seeing so many retailers and businesses coming to us for help with mobile, but having to delay the initiative due to some serious issues with the current infrastructure.

Instead of updating the system, however, sometimes we see organisations that are forcing their prior systems to be used, due to having neither the time nor the inclination to treat it as important for creating the best customer experience. Because of this, retailers are failing to deliver on great experiences for customers – experiences that their competitors can and will deliver better.

It’s now time for retailers to start thinking of mobile as one of their core marketing channels. Many retailers make the mistake of thinking that mobile is a one-off, short-term campaign that is going to deliver fast results in a cheap and easy fashion.

So who holds the mobile mantle in your business? Every business needs someone to take ownership and start to champion mobile internally to deliver the best customer experiences.

Mobile is a fantastic way to target on-the-go consumers and ensure a brand is visible, no matter what the target market is doing or what device they are using.

It’s not a quick fix, however. Mobile can be a slow burn and it must be considered a long-term investment – one that will be critical for business success in the upcoming years.

Take eBay for example; it is extremely successful in the mobile space and it’s because it put its money into investing in mobile early. It understood the shift that smartphones were going to provoke in consumers and began to prepare its business to accommodate this shift.

Obviously not everyone can be eBay, and not all retailers have a massive budget for marketing, but the point is that the mobile device is becoming the central control system in consumers’ lives. Many consumers would prefer to leave their wallet at home than their smartphone. It’s a very, very powerful tool.

I understand it is human nature to stick with what you know and it’s a common mistake made at board level to go with the status quo, because it’s what’s been done previously and it works. It’s so easy to think, ‘But what if it doesn’t work? How about we just stick with what we know has worked before, like our brochures?’

The problem with this mentality is consumer behaviour is changing so quickly that what has worked today, or last week, just may not have the same effect tomorrow and businesses need to keep up with these behaviours or risk being left behind.

There have been numerous reports created that show the high increase of ROI in mobile. It works, but you need to give it the attention it needs to execute an appropriate strategy. Don’t just put in money for mobile marketing – make it a core part of your business.

For those of you who are deciding to move into the mobile space, but may be worried about cost or the quality of your dedicated web infrastructure, I suggest moving your system into the cloud. There has been a massive shift over the last two to three years from dedicated infrastructure to organisations moving into the cloud, and it’s of great benefit to any organisation that takes mobile marketing seriously.

The cloud, when configured in line with best practices, allows your server system to scale infinitely-able to handle major increases in traffic during peak times. This is something that could have been avoided by the retailers involved in the Christmas Click Frenzy fiasco had they leveraged industry best practices. In case of a service disruption to a data centre, the cloud provides services that are across many regions to avoid downtime.

This is something that couldn’t have been achieved four years ago, but, more importantly, it could never have been achieved at the cost benefit that you can get now. For smaller businesses that are looking to invest but feel as though they can’t compete with the big retailers, this is the beauty of cloud computing.

Gone are the days where you had to create and build up a dedicated infrastructure and agree to a lengthy contract. Now even the smallest business can get started for as little as a couple of hundred dollars a month and this has really levelled the playing field.

The greatest characteristic of cloud computing infrastructure means it can expand as your business expands. Retailers don’t need to have million-dollar budgets anymore to set up a great customer experience online and on mobile.

So please, if you are seriously interested in investing in mobile and are dedicated to creating the best customer buying experience possible, then invest in a quality infrastructure, put together a serious mobile budget and strategy, and begin working with mobile as one of your core marketing strategies.

Omnichannel blueprint: sales events like Click Frenzy ignore retail brand fundamentals

by Simon van Wyk ON 7 May 2013

This time around, from an infrastructure capacity perspective at least, Grant Arnott and the people behind Click Frenzy got it right. While the promotion for the Mother’s Day event was muted compared to the crescendo of excitement bubbling around the inaugural sale, four hours into the event, Click Frenzy reported that it had registered just under a million clicks to participating retailers and approximately 3.5 million pageviews.

Yet consumers were hardly effusive. One tweet posted on BRW.com.au nicely sums up consumer response this time aroun: “Click frenzy wasn’t that bad… Spent $50 on loads of mossimo underwear that would usually cost over $130.”

Offers and discounts fail to excite

So while the latest instalment of this cyber sales push has been mercifully free of the problems that plagued and embarrassed the eretailing event last November, the level of enthusiasm from shoppers seems to have been lukewarm at best. While they still signed up in droves, the quality of the offers and deals that were promoted by the participating retailers seems to have left consumers more than a little unimpressed.

Yet I think this is part of the problem that is hardcoded into an event like Click Frenzy. The whole premise is discounting and deals. For retailers that have been discounting more or less round the clock – do they really need an online event that provides more of the same? Smart retailers are forging fully integrated customer experiences across the physical and online environments.

After all, buying stuff online is a daily activity for many millions of Australians. According to eMarketer, around the world, B2C spending on ecommerce surpassed US$1 trillion last year. Over here, in excess of 10 million Australians, or almost half of the country’s population, shopped online in 2012, and spent a sizable US$36.2 billion collectively.

This outlay amounts to an average spend of US$3547 per person, which eMarketer predicts will grow by a further 7.2% this year to more than US$3800 per person.

High level of per capita spending

Indeed, this level of per person spending rates second only to the UK, where average B2C ecommerce sales tallied $3585 per person for 2012. Australians are eager online shoppers where price, availability of brands, quality and convenience are all key factors driving the move online.

While events such as Click Frenzy make the headlines in Australia, over in the UK, the ongoing success of department store John Lewis continues to set new records. Online sales at the much celebrated store have now surpassed the £1 billion mark – more than a year ahead of earlier expectations.

John Lewis sets records

Quoted in the UK’s Telegraph, Mark Lewis, online director of the omnichannel retailer says, “Customers don’t view us as a store or a website, they view us as John Lewis. If you think about the world we are in now, it is more about customers choosing how they want to shop than retailers telling customers where their stores are. It is a different dynamic, it is being led by the customer. Our job is to follow that and stay ahead of it.”

He adds, “Omnichannel means we are there for the customers for how they want to shop, when they want to shop, in a way that suits them. That goes across the whole shopping experience, whether they are researching items, buying items, getting items delivered or collecting them.”

As all channels come together seamlessly for John Lewis, the company stands to benefit immensely from satisfying customer expectations.

The website is not a stand-alone thing

“Now we are at the stage where the website is not a stand-alone thing with a different set of customers,” explains Lewis. “Actually, it is part of the integrated business and we as a business want to fully integrate that and present a very seamless, single presentation to the customer.”

Indeed, looking at the success of John Lewis, Australian retailers now have an omnichannel blueprint and every opportunity to build a successful eCommerce business that’s wholly integrated with into current and future business plans.

Science in aisle three: Nielsen opens shopper experience lab in Sydney

by Marketing ON 3 May 2013

Global research firm Nielsen is claiming an Pacific-region first with its launch of a full shopper experience lab at its Sydney head office to help manufacturer and retail brands better understand shopping behaviour and test concepts.

The ShopperLAB will include interview, eye tracking and neuroscience capabilities. The eye-tracking equipment will help determine what shoppers see and virtual shopping devices will help to comprehend what shoppers do when faced with different products and shopping conditions.

The facility is aimed at marketers, category managers and sales directors to provide insights into how shoppers react to packaging, point of sale, range alterations, layout changes and aisle activation.

Associate director of Nielsen’s shopper practice, Rachel Shaw, says, “Nielsen research shows that 25% of new products fail in market. However, proper testing can dramatically increase a new products’ chance of success. Shoppers generally spend just 15 seconds interacting with a product category, so brands need to know how, when and where to communicate their strongest messages to shoppers.”

David O’Brien, customer marketing manager for Wrigley, says that working in the Nielsen ShopperLAB his company to explore the shopper psyche in a way they had not been able to previously. “Nielsen Shopper’s unique approach and cutting edge technology uncovered exciting new insights into shopper behaviour at Front of Store that identified significant growth opportunities for Wrigley and helped to enhance our position as experts in this area with our retail partners’,” he says.

Monolith seeks to be offline world’s Google Analytics

by Marketing ON 1 May 2013

Digital analytics startup company Monolith has launched pattern-recognition software that is capable of telling its owner which of a series of ads gains the most attention by potential customers in a given area, in the real world.

The software uses facial-recognition technology that can track eye movements, facial expression and gender of customers and will gather data about shopper behavior in retail stores. Monolith plans to attain most of its data from outdoor advertising, and intends to make what people watch on TV, and how they view billboards and placements in retail settings available for companies.

The product presentation was made at The Next Web Conference, in Europe, in which Monolith CEO and co-founder, Martin Birač, promised to address shopper’s privacy concerns by not allowing identification of exactly who the shopper is.

The hardware, which can receive upgrades over the air, is capable of communicating which one out of a series of ads gains the most attention by potential customers in a given area.

Co-founders Martin Birač and Tomislav Fistrić started Monolith after deciding to explore the potential of Microsoft’s Kinect accessory for the Xbox 360. The company has won multiple start-up awards and is set to work with Nike and Johnson&Johnson.

Retailers focusing on the ‘shopping experience’ to win back shoppers

by Marketing ON 29 April 2013

Retailers are focusing on creating a shopping experience, complete with designated children’s play areas and fine food options to lure shoppers back from online competition.

Discount retail outlet Brandsmart is the latest example providing an ‘end-to-end’ customer experience, relaunching the centre this week in Melbourne.

The new centre has seen over 20 new traders open stores, and is hoping to reinvigorate retail shopping. Current economic woes, the high Aussie dollar and the explosion of internet shopping have all seen the Australian retail market take a substantial decline in growth in recent years.

Brandsmart spokesperson Michael Kahane told Marketing the changes are a result of extensive surveys conducted on a cross-section of its existing customer base and also involved engaging a variety of consultants.

“We have taken many strategic steps to engage with a broader group of customers. We have and will always appeal to our core demographic being women between 25 and 65. However the relaunch, by virtue of both changes to tenancy mix as well as physical transformation of the building, definitely broadens our market both in terms of age and gender,” he says.

The new centre is occupied by discount outlets in homewares, accessories fashion and cosmetics, promising to provide a much cheaper deal for customers. High-end retailers like Aussie label, Sass and Bide are also following suit, launching their largest outlet store in the centre.

The emphasis on saving money doesn’t transfer over to the overall experience of the facility, the revamp has seen the interior and exterior of the centre get a makeover, looking more like an upmarket retail hub than a discount centre.

Playing favourites: Aussies will spend $1.4b on Mum this year, triple that of Dad

by Marketing ON 29 April 2013

Fathers everywhere are being ripped off by their kids, with a new study showing Aussies will spend almost three times the amount on Mum for Mother’s Day then they will on poor old dad.

The latest reseach conducted by IBISWorld predicts Australians will spend $1.4 billion spoiling our Mums this year, an increase of 2.7% from last year. The increased spend is being put down to a general increase in disposable income, low unemployment and positive consumer sentiment.

Australian general manager of IBISWorld, Karen Dobie says, “There are a number of factors driving higher spending on mum than dad, including the perception that there is less choice for dad in terms of gift type. Food, alcohol, sporting goods and tools are key Father’s Day gift categories”, Dobie says. “There is also a propensity to buy last-minute gifts for mum, resulting in consumers spending more than they may have planned, and the desire to spoil mum by showering her with the little luxuries”.

The research always found that the average person aged 18 years and over will spend $77.21 on mum this year compared to $76.47 they spent last year. Traditional favourites like flowers and cosmetics will be high on the shopping list and Aussies will spend $298 million this year taking mum out for lunch, up from $286 million spent last year.

Online gift certificates and coupons are expected to remain the third-biggest Mother’s Day spending category, but spending on this sector is actually expected to fall by 2.4% this year.

So when you’re watching mum arrange the expensive bouquet you have brought her while she is unwrapping the expensive hand cream you have has specially imported from Brazil, spare a thought for your poor father who is probably wearing the $6 Big W socks you splashed to get him last year.

Australia Post price increase puts online retailers offside

by Marketing ON 10 April 2013

The online shopping boom is being blamed for the price of postage bags going up, with some products set to increase by up to 30%.

Australia Post is pointing towards difficult business conditions and increasing operational costs for the price hike.

The changes have left online retailers concerned for the financial hit their businesses will have to endure due to the rises. An online petition to has been started on change.org, attracting angry online retailers, and has already been signed by almost 2000 people. The petition states:

“In Australia today many thousands of families rely on income produced through small businesses that operate online. It is not a new phenomenon but it is rapidly growing – well it was.”

The pricing changes came into effect this week.

Australia Post now receives more revenue from parcels than letters, with online shopping accounting for 70% of prepaid packages sent in Australia.

The value of the online shopping market has increased by $2 billion dollars over the past year. NAB’s Online Retail Sales Index found Australia’s annual online retail spending hit $13 billion in the year to January 2013.

The cost of a postage stamp will remain 60 cents.

Ecommerce and data: finding the gold in a mountain of dirt

by Marketing ON 4 April 2013

Vice president of ecommerce at omnichannel kitchenware retailer Sur La Table, Kevin Ertell stepped into the role nine months ago, bringing with him decades of experience in ecommerce and marketing for businesses such as Tower Records, Borders and OnlineShoes.com. Sur La Table blends a sophisticated online sales and marketing channel with a bricks-and-mortar presence that began almost three decades ago.

At the Ecommerce Conference and Expo in Melbourne later this month, Ertell will be presenting his views on data in retail in a talk entitled ’11 Ways Humans Kill Good Analysis’. He says that with the ecommerce world drowning in data, everything that can be measured will.

“The mountains of data can be full of gold if we mine them correctly, or they can just be big piles of useless dirt,” Ertell says.

“All too often, we misuse the valuable data we have and end up flailing away. Many of the reasons we aren’t happy with the results of the analyses come down to fundamental disconnects in human relations between all parties involved. Groups of people with disparate backgrounds, training and experiences gather in a room to ‘review the numbers’. We each bring our own sets of assumptions, biases and expectations, and we generally fail to establish common sets of understanding before digging in.”

Marketing: How does a marketer in an ecommerce business determine what is and isn’t useful data to their organisation – how does one know when they see the ‘gold in the mountain of dirt’?

Kevin Ertell Ertell: It’s tricky, but crucially important, to be able to decipher patterns in the data that drive results versus data points that are interesting but ultimately meaningless.

I think it’s important that marketing executives understand at least the basic concepts of statistics and remember all the nuances of statistics. As time has passed from our initial statistics classes, we tend to forget about properly selected samples, standard deviations and such, and we just remember that you can believe the numbers. But we can’t just believe any old number. All those intricacies matter. Numbers don’t lie, but people lie, misuse and misread numbers on a regular basis. A basic understanding of statistics can not only help mitigate those concerns, but on a more positive note it can also help decision makers and analysts get to the truth more quickly.

Ecommerce experts such as yourself talk a lot about the importance of continually improving the customer experience. Do you think bricks-and-mortar retail marketers can learn something from that?

I think bricks-and-mortar retailers can definitely learn something from the ecommerce approach to customer experience. We’re forced to look at it very closely because we operate self-service operations that must be incredibly easy and intuitive in order to be effective. To some degree, the brick-and-mortar environment has long had a crutch in that good sale associates can overcome bad design, poor signage etc to help get customers to complete the sale. However, it’s very difficult to track those kinds of assist (or lack of assists) from the corporate office on a national or international basis. That’s where a strong reliance on customer experience metrics in bricks-and-mortar environments can really show where problem area are and help point leaders in the right direction.

What other lessons in general do you think ‘traditional’ retailers can take from online retailers?

I think they should also know that their websites are doing a lot more for their businesses than just creating online sales. In addition to online sales drivers, ecommerce sites are great marketing vehicles, merchandising vehicles, customer research tools, and that works both ways, community builders, and in-store sales drivers. If they ask their customers, they’ll find many of them go to the site to research before ultimately buying in their stores. How they treat their sites can ultimately determine the success of those visits.

And vice versa?

Well, traditional retailers certainly know a lot about the business. They’ve been doing it a long time. They’ve spoken to customers face to face and they know what they way and need. I joined Sur La Table only about nine months ago, so I’ve been incredibly reliant on my store operations partners to understand our customers. They know them very well, and they’ve been incredibly helpful in giving me and my team and understanding of how we can create a better experience online for our customers.

What’s the biggest challenge at the moment for ecommerce businesses?

I continue to say it’s customer experience. Most online retailers still have single-digit conversion rates. Those are partly low because, on most sites, only a small percentage of people coming to the site actually have an intention to purchase online. However, the percentage of people who intend to buy still dwarfs the percentage of people who actually buy. There are plenty of reasons people don’t buy – like prices, shipping costs, and inventory availability – however bad customer experience continues to be an overwhelming reason why people ultimately leave sites before completing a purchase. We all need to be relentlessly focused on site usability to fully meet our potential.

This may be more prominent in tech-based companies, but for marketing executives spending more and more on tech (moving towards a point where it’s even more than CIOs) what are your predictions on the CMO-CIO relationship? Does it need improvements?

I think this is true in most industries. The reality is our businesses are highly dependent on technology. If we have ecommerce, then we have a consumer software application. And if we are developing consumer software applications, then we are technology companies. That means all executives should see themselves as technologist and should be pretty familiar with the capabilities of technology. And at the same time, technologists need to see themselves as business people. They are creating software that is driving the company’s business. Therefore, the ‘business’ team is not everyone but IT. It absolutely must include IT.

Aussie start-up helps local retailers listen and learn

by Marketing ON 25 March 2013

An Australian start-up is aiming to give small bricks-and-mortar retailers the tools to listen and learn from their customers through the launch of its social media analytics tool.

Local Measure, today announced the launch of its social media management solution for bricks and mortar retailers. Local Measure helps businesses, with one or many stores, improve customer service by engaging with frank and honest conversations on social media.

Local Measure aggregates data across Facebook, Twitter, Foursquare and Instagram to provide insights to retailers, capturing results in real-time so retailers can respond.

The solution comes from the creators of the consumer app, Roamz, which offers a similar social-media aggregation app for users.

Roamz CEO Jonathan Barouch says that while consumers ‘let loose’ on social media about the services and products they purchase in a way they might never do in person, retailers brave enough to listen and learn from these conversations stand to gain huge benefits.

Barouch says the platform has been specifically designed for smaller businesses without the budget or skills to monitor online chatter easily. ”We identified a pain point from smaller retail outlets, such as your local café or nail bar, who wanted a straightforward tool to better engage with their customers,” he says.

In addition, Local Measure enables retailers to build a rapport with ‘super customers’, those who are not only repeat customers but also share their experiences with their social followers.