TREND REPORT - Selligent Marketing Cloud...2015. Use of online voucher codes is also up 43% on last...

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TREND REPORT: DIGITAL TRANSFORMATION IS CHANGING THE RETAIL SEGMENT FOREVER

Transcript of TREND REPORT - Selligent Marketing Cloud...2015. Use of online voucher codes is also up 43% on last...

Page 1: TREND REPORT - Selligent Marketing Cloud...2015. Use of online voucher codes is also up 43% on last year. The only thing customers like more than rebate coupons, are personalized rebate

TREND REPORT:DIGITAL TRANSFORMATION IS CHANGINGTHE RETAIL SEGMENT FOREVER

Page 2: TREND REPORT - Selligent Marketing Cloud...2015. Use of online voucher codes is also up 43% on last year. The only thing customers like more than rebate coupons, are personalized rebate

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Out of all industries, the retail segment was first in

line to feel the full disruptive force of digital transfor-

mation. When Jeff Bezos launched Amazon.com

in 1995 as a mere book-selling website and Pierre

Omidyar started eBay under the name AuctionWeb

the same year, shopping for products on the World

Wide Web was still considered cutting edge.

Fast-forward to 2015 and online shopping has long

become the status quo for a growing number of

consumers – and Amazon, plus countless other

e-commerce players, deliver the full gambit of

products and services right to their doorsteps.

Within these past 20 years, the retail environment

underwent a major seismic shifts – all either directly

caused or intensified by digital transformation,

leaving many too-big-to-fail retail conglomerates by

the wayside. The graveyard of failed retail mainstays

already includes high street chains such as Borders,

Circuit City, and Blockbuster in the U.S., as well as

camera retailer Jessops and Virgin Megastores in

the UK. And while these tremors first appeared as

shockwaves of the 2008 global economic crisis,

something deeper was at work here…

Shopping, as we know it, is changing forever.

And digital transformation – deeply connected to

changing consumer behaviors – is the driving force.

EMARKETER PROJECTS NORTH

AMERICAN E-COMMERCE SALES TO

RISE BY 14% FROM $329 TO $376 BILLION BETWEEN 2014 AND 2015. IN

THE UK THEY PREDICT E-COMMERCE

SALES WILL TOP $99 BILLION IN 2015.

Nonetheless, only 7.1% of total retail sales come

from e-commerce – people still like to shop at

physical stores, although with much higher, digitally

enhanced expectations. Today’s hyper-connected

consumers want more than just old school shopping

destinations. In the long run, physical stores that

are mere storehouses of product are headed for

extinction.

The retailers that will survive – and thrive – through

this next stage of digital disruption are the ones

who learn to understand their customers and build

relationship through meaningful, relevant

engagement – online and offline. Because despite

all these landmark changes in the retail segment,

one thing never changed: The customer is king –

perhaps more now than ever before…

Shopping will never be the same

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Industry trend:The changing retail customer

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Never before in the history of mankind have consumers been given more choices on how, when, and

where to purchase new products. Digital technologies – most of all smartphones and tablets – are

putting a “BUY” button within consumers’ reach - 24 hours per day, seven days per week, 365 days of the year.

This unprecedented freedom of choice – fuelled by digital transformation – is having a profound effect on

consumer attitudes and shopping behaviors. In 2015, the average retail consumer wants to...

... BUY THE RIGHT PRODUCT AT THE RIGHT PLACE AND THE RIGHT TIME.

Consumers want to be able to buy what they want exactly when they want

it – and the pressure is on retailers to make it happen. According to current

research by the e-commerce software experts Nextopia, 44% of shoppers

are more likely to purchase online if they are able to pick up their purchase

in-store – preferably on the same day. And in the same study, 62% said they

are more likely to shop online if given the option to return an item in-store.

In other words: The retailers that will lead the way can do both online and

offline with tightly integrated, omnichannel sales models.

... LEVERAGE ONLINE INFORMATION TO MAKE INFORMED PURCHASE

DECISIONS.

Today’s hyper-connected consumers use smartphones to guide in-store

purchase decisions. Globally, over 85% of consumers have used their

smartphones inside a store (DigitasLBi Connected Commerce study), and

77% have been influenced by smartphones in their purchase decisions.

Overall, 55% respondents in the study said that the Internet and mobile

technology have changed the way they shop. According to a PWC study,

65% of U.S. consumers shop on at least two channels, while 21% use four

to five channels.

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… USE APPS AND MOBILE SITES TO SHOP AROUND THE CLOCK.

Marketers are well aware that the average consumer owns about 50

smartphone apps, while spending the majority of time on only five to seven

apps (most of all, on Facebook). Nevertheless, a well-designed, secure

e-commerce app goes a long way in winning over consumers. When it

comes to conversions, 81% of shoppers using a tablet actually make a

purchase, compared to only 52% using a smartphone (eMarketer).

… RELY ON SOCIAL MEDIA FOR RECOMMENDATIONS AND REVIEWS

– AND EVEN MAKING PURCHASES.

Word of mouth is a valuable currency in this brave new world of shopping:

According to research by Barilliance, 31% of e-commerce site revenues in

the 4th quarter of 2014, came from personalized product recommendations,

for instance Amazon product reviews. Customers who clicked on perso-

nalized recommendations also had a 5.5-times higher conversion rate than

non-clickers. And for those shoppers reluctant to leave their Twitter or Fa-

cebook apps to buy via dedicated apps, both platforms are adding “BUY”

buttons in cooperation with major brands to catch those in-app purchases.

According to Shopify, the amount of product orders from social media has

grown 202% in 2014, and most traffic comes from paid apps on Facebook.

… RECEIVE PERSONALIZED OFFERS, COUPONS,

AND PRODUCT INFORMATION.

The days of one-size fits all product bulletins and weekly flyers are coming

to an end. Consumers in 2015 want to be engaged on their individual

tastes and shopping histories. Over 64% of Millennial consumers actively

use their smartphones to browse for coupons before making a purchase

(eMarketer). According to the DigitasLBi study, 71% of U.S. consumers

would also welcome receiving personalized rebate vouchers or special

offers sent to their smartphones. In return, these customers are also willing

to – get ready marketers, here’s the magic word you like to hear – opt-in to

sharing their contact information and receiving tailored communications

based on their profiles.

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Viewed from a retail perspective, the profound changes in consumer habits translate into a clear-cut list of

to-do items. For instance, consumer demand to buy the right product at the right place and the right time

is driving traditional brick-and-mortar retailers into the e-commerce segment. And it’s also driving pure-play

online vendors into opening their own physical stores to bring the multi-channel customer experience full-

circle.

HYBRID SALES MODELS: CLICK AND COLLECTIt may sound unlikely, but the number one retailer giving Amazon a run for its

e-commerce money is quintessentially American powerhouse Wal-Mart. In

the 2015 fiscal year, Wal-Mart’s global e-commerce sales increased by 22%

to $12.20 billion, while time-honored retail giants such as Macy’s, Costco,

and Nordstrom are also reporting double-digit growth in e-commerce.

Their secret lies in aligning their inventory management systems and store

networks seamlessly with online sales platforms to offer services such as

buying online and picking up in-store, or having the store deliver orders to

customers’ homes.

Click-and-collect – buying products online for in-store pick-up – is emerging

as a major trend according to a new Forrester Research report: A stunning

70% of the 3,000 respondents in the U.S. said they use “buy online, pickup

in-store” services mostly to avoid shipping costs. “Click-and-collect” is a

major consumer trend in the UK, and the main reason why the overall share

of e-commerce purchases is double the U.S. number at 14%. Meanwhile,

e-commerce start-ups such as eyewear platform Warby Parker have already

opened brick-and-mortar stores, while European online fashion giant

Zalando may be next.

SAME-DAY HOME DELIVERY: CHANGING THE GAMEWhile Amazon home delivery with drones will most likely land in the near

future, the company’s Prime Now service already delivers purchased goods

within central London in less than one hour. Paired with easy and hassle-free

returns, same-day delivery provides another reason to skip the trip to the

store. When it comes to household essentials, Amazon in July introduced

push-to-order Dash Buttons: One push, and the Internet-connected buttons

automatically place orders for water, paper towels, and other basics.

Competitors, including the eBay-owned Shutl offer delivery times around

13.57 minutes in London, while Google Express, Yummy.com, and a slew of

other providers bring customers what their hearts desire at a wave of their

smartphone.

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The changing face of retail:

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Once again proof: Shopping, as we know it, is changing forever. Faced with digital disruption – and the

graveyard where failed retail operations loom – today’s most innovative retailers are driving the following five

disruptive trends to keep customers coming back:

Five major disruptive trends

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LOCATION-AWARE NOTIFICATIONS: GREAT TO HAVE YOU BACKShoppers at Apple stores, Starbucks, and other locations already receive

push notifications on their smartphones right upon walking into the door.

Behind the scenes, beacon technology identifies registered users’ signatures,

which opens the door to targeted, personalized customer engagement. U.S.

retail conglomerate Target is currently testing beacon technologies at 50

stores across the country. Shoppers with the Target iPhone App installed, will

be asked to opt-in to receive personalized recommendations and deals on

their phone. But even at this early stage, Target knows the biggest pitfall of

this approach: Notifications are limited to two per store visit to avoid churn.

Smart move.

PERSONALIZED COUPONS AND OFFERS: A SPECIAL DEAL – JUST FOR YOUAccording to UK-based website Voucherbox, the number of customers seeking

discounts while making purchases online grew from 23% in 2014 to 33% in

2015. Use of online voucher codes is also up 43% on last year. The only thing

customers like more than rebate coupons, are personalized rebate coupons

– reflective of purchase histories and preferences. According to a Monetate

infographic, 75% of consumers would like retailers to use their personal

information and shopping history to improve their experience. Customized

emails also prove efficient in driving conversions; emails generate twice as

much traffic to e-commerce sites as social media messages (Venturebeat).

Selligent customer SECRETSALES manages its relationships with more than

3 million registered members via Selligent’s data-driven marketing software.

By sending members highly personalized content features, SECRETSALES is

driving higher online sales and strengthening loyalty.

BEYOND SHOPPING: CREATING MEMORABLE EXPERIENCESWhen it comes to making a choice between visiting a store and shopping

online, customers are looking for the kind of memorable in-store experiences

only stationary retail can provide. Armed with data from customer profiles

and loyalty programs, innovative retailers are creating special retail moments

with birthday surprises or tailored rebates (see IV.), while the future holds

anything from interactive mirror displays fed with personalized data, to

personal robot stylists and bag carriers. According to research by Accenture,

51% of shoppers between ages 20 and 40 like the idea of “one-click checkout

retailers who know how customers want to pay and have items shipped”.

Upscale shopping mall stores in the UK and U.S. are already delivering bags

straight to shoppers’ trunks. And ultimately, a company culture built on ethics

and philanthropic engagement – including the TOMS brand “One for One”

donation for each purchased item – connects companies and customers to

a greater good for a lasting connection.

IVIV

VV

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Showcase: These innovative retailers have customers lining up The key to giving customers what they want, when they want, is simple: Customer data. Collect, analyze,

leverage, personalize, and repeat – that’s the mantra for successfully building long-term customer

loyalty. The following forward-thinking retailers are connecting to today’s consumers with data-driven marketing

powered by Selligent’s omnichannel customer engagement platform for personal engagement across the entire

customer journey.

KEY RESULTS81.304 Emails sent

55.42% View Rate

8.16% Click-through

14.72% Click-to-open

Founded in 2007, Brille24 quickly established itself as the leading

German online optician. With competitive prices, a wide range

of products and high quality service it rapidly began to provide

stiff competition for established brick and mortar giants who

had yet to develop a functioning digital strategy. Today it delivers

its products to more than 1 million customers in 117 countries.

Brille24 began using the Selligent platform to power its

marketing in late 2011 – progressively introducing new

campaigns and features to keep pace with the evolving habits

of its connected consumers. In order to engage consumers

with highly personalized content, the online optician launched

its “Optician’s Journey” campaign in 2015. Brille24’s campaign

creative encouraged users to provide their birthdate to receive

automated customer loyalty rewards. One set of personalized

communications—the “Glassify Your Horoscope” email—used

a customer’s astrological profile as the basis for eyewear

recommendations.

The recommendation engine also analyzed known and

unknown data to determine product suggestions based on

user behavior, browsing and shopping history (views, clicks,

shopping cart items and wishlists). Behind the scenes, the

Selligent platform allowed for personalization and dynamic

content elements for each and every mailing, resulting in some

37,440,000,000 possible permutations of content.

1. BRILLE 24: BUILDING LOYALTY WITH PERSONALIZED MESSAGING

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As the largest department store chain in the

Netherlands, V&D attracts over 100 million visitors to

its 63 brick-and-mortar shops each year generating

€630 million in annual sales. Early on, the company

had also made the leap into e-commerce with an

online store carrying over 300,000 products from

3,000 brands.

But as digital transformation increased in the retail

segment, the company wanted to find meaningful

ways to engage their customers in new digital

channels. As V&D’s twice per year, multi-week

sales event known as Price Circus (Prijzencircus)

approached, the marketing team used the Selligent

platform to maximize the campaign’s potential as a

major traffic and revenue driver.

V&D used email as the primary channel to drive traffic

to the site and outperform its previous year’s Price

Circus results. Using Selligent to test and learn in the

two-month period leading up to Price Circus, V&D

created a customer contact strategy that leveraged

its existing email sales channel to increase touch

points, boost engagement, and drive conversion.

Enriching customer profiles with data from multiple

touchpoints allowed V&D to send customized emails

through Selligent’s Dynamic Templates functionality.

And thanks to targeted, relevant content, opt-out

rates also dropped significantly, while sales increased

by a whopping 78%.

2. V&D: DRIVING CONVERSION THROUGH PRECISION PERSONALIZATION

KEY RESULTS

Number 1 online channel

(both by visits, and by %

revenue)

+78% sales

+40% open rate for

personalized emails

-25% change in opt-outs

for segmented targets during

Price Circus

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Selligent customer Chronodrive is a French grocery

firm that offers a hybrid model of online ordering with

customer drive-through pick up at one of 50 stores

across France. Before working with the Selligent

audience engagement platform, the company’s

business model had already gained traction, but

lacked a personalized communications strategy,

especially in customer emails.

The results from implementing the Selligent platform

proved nothing short of transformative for the retailer.

Selligent’s “360° profiles” for customers made all the

difference: Each customer received a unique ID

and all data is tied back to that customer. Selligent’s

industry-leading security protocols ensure that no

customer data is vulnerable, even as it is accessible

for marketing analysis and segmentation through

Selligent’s interface.

Within a single month, Chronodrive went from

manually sending generic e-mails to using automated

scenarios based on customer momentum, refined

with Selligent’s A/B testing tool. The company quickly

saw the open rate of their newsletter rise by between

3–5% and ROI increase dramatically.

3. CHRONODRIVE: ONLINE ORDERS, READY FOR IN-STORE PICK-UP

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Outlook: The future of shopping begins todayThe future of retail starts today. And it belongs to

innovative, proactive companies willing to put the

customer at the center of meaningful, personalized

shopping experiences. With a firm grasp on providing

a consistent experience across online and offline

channels, these retailers are leveraging customer data

to surprise, delight, and build long-term loyalty among

their customer base.

Looking ahead, the good news is that customer data

will not only increase in size and relevance thanks to

digital transformation in retail. Customers are also

increasingly willing to share data with retailers.

According to Accenture, 65% of respondents were

willing to share their gender, 53% their age, 52%

their contact information, and 24% share contact

information on social media.

Engaging hyper-connected customers with truly

integrated marketing based on sending relevant

messages to clearly segmented audiences and age

groups requires an integrated solution. And with a

growing number of successful retail implementations

under its belt, Selligent’s omnichannel customer

engagement platform emerges as a powerful choice

for forward-thinking retailers.

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About Selligent Marketing CloudSelligent Marketing Cloud is a marketing automation platform that enables B2C brands to

engage consumers across all critical channels. Built for the relationship marketer, Selligent

Marketing Cloud is the only marketing cloud built on a single code base, featuring artificial

intelligence and a Customer Data Platform with a universal consumer profile at the core of

every action.

More than 700 brands across retail, travel, automotive, publishing, and financial services rely on

Selligent Marketing Cloud’s proven platform. With 10 offices across the United States and Europe

and more than 50 agency partners, Selligent Marketing Cloud serves over 30 countries with

local, personalized service.

Learn more at www.selligent.com and connect with the team at Twitter, LinkedIn, and our blog.

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