A Fine Balance: Optimize Marketing Automation and Merchandising

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Retailers seeking higher conversion rates must adopt an “innovation attitude” to guide them amid a fertile landscape for new ideas, advanced technology and customer behavior learnings.

So advised speaker after speaker at the Shop.org Merchandise Summit held earlier this month in sunny Huntington Beach, California. Despite the pleasant weather, attendees stayed focused in the conference rooms (strategically chosen for their lack of windows!). It’s clear there is a pressing need to optimize the use of both new and old technologies to create compelling customer experiences, especially in today’s socially connected marketplace.

It’s a marketplace that rewards rapid change and adoption of new channels. Consumers and business professionals research online – usually not on our own websites – and come armed with opinions, preferences and, perhaps more importantly, options. They want to do business across multiple channels, and even on the go. Chris McCann, President of 1-800-Flowers, advises retailers to expand to new channels in order to “Fish where the fish are.” For his company, those waters includes Facebook, mobile devices, email, the web and yes, even brick and mortar stores. Known for being a first mover, 1-800 Flowers had the first transaction via Facebook, but has since updated their store. They have also opened a mobile commerce offering, with limited SKUs and a log-in to access address book and payment options.

While every channel opens up the need for new technology, new data integration and new ways to optimize customer experience, the approach is always the same. In his opening keynote presentation, he said, “Build relationship first, do business second. Connecting with customers is basic, and central to success – no matter what the channel.” No marketer focused on customer satisfaction would disagree. However, it can be overwhelming to consider the myriad of technologies, platforms and social networks.

In fact, the theme of the entire conference was around “harmony” between balancing the need to optimize current assets and investing in new technologies. “It’s like walking a tightrope,” says Shop.og Director of Content Larry Joseloff. “On one side, I must embrace new tools, but on the other hand, I have an opportunity to optimize what I already have in place. How do I choose?” It’s particularly hard when marketers consider the vast number of new vendors eager to help them.

“Everything sounds really wonderful and valuable in concept, but the hard part is figuring out how to prioritize, synergize and make existing investments more valuable,” says Shop.org Board Director and long time retail marketing executive Anne Ashbey. “The technology can sometimes mask the art of merchandising – the part that relies on us really knowing our customers, helping them uncover new needs or find the perfect item or gift. The science can be so overwhelming, but we must be careful to use digital platforms and all that data intelligently in order to empower and nurture the art that retail merchandisers do so well.”

Not only are vendors eager to help retailers, but consumers seem eager to help themselves. “Does anyone make a buying decision on their own anymore?” lamented McCann of 1-800 Flowers. The social nature of buying has changed how consumers interact with brands. Retailers that enable social buying are finding some success. Wet Seal offers their teen buyers a group chatting feature so that choices on the best outfits can be made with inputs from friends.

Jeremy Stayton of Adgregate Markets showed some very cool social sharing and group buying features enabled in their Facebook store platform. For example, I can invite several friends to join me on a virtual shopping trip and to earn a major discount when we all buy the same items(s). Retailers can now take full advantage of the unique power of a Facebook store to increase sales and grow the customer base by creating ambassadors of existing fans.

Across all channels, it’s imperative to balance both your marketing and your merchandising needs, says September Fleming, Internet Content Manager at Woodcraft.com. “Customer acquisition and conversion efforts go hand and hand,” she says. “Both are important, especially if you’re spending money to send people to a landing page. Marketing can drive all sorts of visitors to a destination, but without coordination with the merchandising team, conversion could suffer. A great landing page experience is about answering needs – which is specific to the customer source, need and the channel.”

Conversion optimization is different between channels, even when channels support each other, Fleming says. “My needs when I shop online from a catalog are different than when I shop via the internet or come in via an email promotion,” she says. Everything from customer service links, to the wording on a button, to cross promotions can impact order size and conversion.

Optimization and search expert Bryan Eisenberg agrees. In his keynote, he offered dozens of site optimization tips based on testing with many retailers. “Acquisition is not about targeting. It’s about experience and conversion,” he says. “Budget where the customer experience happens: On the website. The website is the center of the universe for your customer experience.” His advice: Just start. “Next week, do something to improve conversion. When you start it will be hard. It will be a huge effort. But it gets easier. Keep practicing. Keep doing it.”

He offered a five step process:

  1. Identify a hypothesis (a problem and opportunity).
  2. Create a to-do list of what you would like to improve.
  3. Document your hypothesis. (e.g.: Screen shots of competitors, case studies)
  4. Prioritize based on potential ROI.
  5. Start testing.

That is inspiring advice – we’d all like to be proactive when it comes to higher conversion. However, testing is complicated and hard to do well. “Who wants to be the one who suggested the idea that lost 10 points on conversion?” Woodcraft’s Fleming laughed. Having a testing methodology and getting support within the organization is still a challenge for many marketers. Too many organizations are not supportive of failure, even when it helps move the needle on conversion in future. Plus, ensuring that hypotheses are measureable and provable is not trivial.

Still, the only way to improve is to innovate – which is, perhaps, reliant on a combination of that “innovation attitude,” access to powerful technology, and some honest perspiration.

If you were at the event, what did you learn that you’d like to share? Or, comment on these learnings and please share any ideas or comments below.

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