The Evolving Marketing Landscape

The Evolving Marketing Landscape

The concepts of Retention and Predictive Marketing have been around for quite some time; however, at its inception, only the largest stores could afford to invest in this type of data warehouse and management. Over the past few years, solutions have evolved to help retailers gain access to their data and enable retention and predictive marketing, but adoption has been mostly exhibited by innovators and early adopters. Over the past three years, we’ve conducted the Retention and Predictive Marketing survey to better understand trends in the marketplace, adoption of retention and predictive marketing, and barriers and successes retailers, who’ve invested in this technology, are experiencing. This year’s survey was completed by hundreds of retailers, spanning industries and revenue levels. Here’s a breakdown of the results from the 2017 Retention & Predictive Marketing Report.

RETAILERS ARE SAVVIER THAN EVER BEFORE

As retailers and brands are beginning to understand the power of harnessing data to create retention and predictive campaigns, they’re investing in more complex data integrations. In fact, this year’s survey saw a 61% increase in retailers investing in data integrations with predictive capabilities. In the same vein, there was a 40% decrease in retailers reporting they did not have a data integration.

Not only are retailers taking time to invest in the technology, they’re iterating on foundational campaigns to incorporate predictive triggers and dynamic elements, such as product recommendations. We’ve seen a significant increase in retailers using a predictive set up for key campaigns as compared to last year.

Campaign

% Increase in Retailers with a Predictive Set Up

Browse Abandonment

334%

Win-Back

184%

Post Purchase

155%

Cart Recovery

117%

Purchase Anniversary

91%

Product Replenishment

82%

Product Recommendations

23%

Across the board - retailers who reported using a predictive set up also reported moderate to strong performance of the marketing campaign in question. Retailers and brands are building on successes they’ve seen instead of starting from scratch, which points to a level of sophistication that we haven’t seen in the past.

Not surprisingly, retailers and brands self-reported feeling more at ease with retention and predictive marketing. When asked to rate their proficiency in retention marketing on a scale from 1(completely new to the concept) - 10 (expert), 34% were beginners, 34% were intermediate, and 21% rated themselves as advanced. Interestingly, 60% of the beginner cohort was comprised of small retailers - under $5 million in online annual revenue. We saw a similar pattern emerging when we asked the same question about predictive marketing - with a 49% increase in retailers reporting a proficiency level as intermediate and a 12% increase in retailers self-reporting as advanced - both of these increases were largely driven by medium - $6 million - $25.9 million in online annual revenue - and large retailers - $26+ million in online annual revenue. This is an overwhelmingly positive trend; however, it will be interesting to keep an eye on the gap in proficiency between medium/large retailers and small retailers and see how that changes over the next year.

THE RISE OF SOCIAL

While email still remains king, social is quickly rising as a preferred marketing channel. Social media budgets have doubled worldwide, sitting at $31 billion. In the US alone, budgets are expected to increase to $17.34 billion by 2019.1 Along with marketers giving social a larger budget allocation, marketing platforms, from ESPs to Predictive Platforms, like Windsor Circle, have created seamless ways to incorporate social media (Facebook and Instagram) campaigns into their existing marketing plan; creating a reinvigorated social media strategy. Retailers and brands on average are allocating a quarter of their advertising budget to Facebook. We expect the social channel to open up even more in the coming year, with retailers realizing the power of a multi-channel strategy and capitalizing on the ability to reach customers where they consume media.

BARRIERS & SUCCESSES

Beyond the looming shadow cast by Amazon, the biggest barriers retailers and brands face for implementing effective retention and predictive marketing strategies are a lack of internal resources, budget, and access to data. What we continue to see is that with access to data, the ability to use the data in a predictive fashion, and the right set of tools, retailers and brands are empowered to increase revenue, drive growth, and grow customer lifetime value.

In fact, retailers who’ve been able to surmount these barriers are seeing successes, anecdotally sharing results, such as a 15% boost in customer growth, increases in loyal customers, a 15% increase in lifetime value, and better conversions. Proving that delivering a relevant message at the right time leads to more revenue.

We’ve seen a steady increase in the number of retailers buying into retention and predictive marketing over the past three years. As retailers and brands see their colleagues’ successes, validating that there is merit in predictive marketing, they’re willing to double down and invest in higher quality data integrations, explore ways to use predictive marketing techniques beyond email, branching out into social, and really dig in to create a more positive customer experience and, ultimately, drive more revenue. Download the 2017 Retention and Predictive Marketing Report to access the entire report, including all of the questions and aggregate data.

Source: Hootsuite Social Media Advertising Stats

 

Comments 1

Bill McCloskey on Wednesday, 09 August 2017 14:11

Good morning Matthew, and thank you for this article. Do you have any similar information for the Financial industry?

Good morning Matthew, and thank you for this article. Do you have any similar information for the Financial industry?
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Monday, 06 July 2020