The digital path to purchase is increasingly dominating retail sales. By that I mean consumers are increasingly using mobile devices (especially smartphones) at some point during their journey. The good news for retailers is that this means useful data is constantly being generated. Taking advantage of emerging opportunities to influence buying behavior on the customer’s digital path to purchase requires autonomous, cognitive marketing tools because those opportunities can pop up instantly and disappear just as quickly. “Analyzing customer data is paramount for businesses today,” writes Daren Baker, CEO of Jumpshot. “The competitive advantage provided by basing business decisions on customer behavior has led businesses to adjust budgets accordingly for data and analytics solutions.”[1] Baker asserts the evidence shows many companies believe they understand their customers but customers don’t agree. He points to a 2016 study published by IBM and eConsultancy that found, “A total of 81% of companies believed they had complete views of their customers across touchpoints and devices. … Unfortunately, 63% of consumers disagreed, insisting their favorite retailers don’t understand them. An increased analytics budget doesn’t equate to knowing more about your customers. For that, you need to connect the dots between customer touchpoints and analyze the full customer journey.”
Reaching Consumers on their Digital Path to Purchase is Becoming More Difficult
Brenda Do observes, “Consumers are bombarded with marketing messages at every turn, swipe, and click. To cut through the noise, marketers must aim for quality versus quantity.”[2] You can’t fault companies for their efforts. Do explains, “CPG and consumer products manufacturers are among the biggest spenders in advertising — to the tune of nearly $6 billion in digital advertising for 2016 alone. In an effort to target consumers more, they’re focusing on mobile, video, and programmatic marketing. As smartphones and videos continue providing more convenience and entertainment, increasing spend in these channels just meets consumers where they’re at. Programmatic marketing lets companies take advantage of the mountains of proprietary and third-party data to better target consumers. Although programmatic isn’t widely used now, it’s so effective that it’s predicted to make up 50 percent of digital ad sales by 2018.” What is programmatic marketing? Robert Allen (@Rob_H_Allen) defines it this way, “Programmatic marketing is automated bidding on advertising inventory in real time, for the opportunity to show an ad to a specific customer, in a specific context.”[3] In other words, programmatic marketing takes advantage of what Google analysts call “micro moments.” They explain, “When people shop, their smartphone is now their go-to advisor and assistant. For retailers, this means big opportunities to be there and be useful in shoppers’ micro-moments.”[4] They go on to explain how mobile technologies are redefining the consumer digital path to purchase.
“Consider this: Foot traffic in retail stores has declined by 57% in the past five years, but the value of every visit has nearly tripled. What’s happening? Mobile is driving local. People use their smartphones before heading in-store — to gather ideas, research products, and then search for local information. It’s no wonder that searches for ‘near me’ have doubled in the past year. But research isn’t the only way mobile is changing the shopping experience. Shoppers buy on mobile, too. A person today might make a buying decision about a $15 tube of sunscreen, a $300 camera, or a $3,000 handbag on a smartphone while on her commute to work, as she walks the dog, or waits to pick up her son in the carpool line. Time on site for mobile users in the U.S. is down 5% year over year, however retail’s share of online purchases is still growing. Thirty-four percent of online retail purchases now happen on mobile devices. The bottom line: In this mobile-fueled shopping landscape, the retailers that thrive see the opportunity to be there and be useful for shoppers in what we call micro-moments — those intent-rich moments when people turn to their smartphones or other devices to know, go, do, or buy something.”
To my mind, the most important point being made is that retailers need to “see the opportunity” and “be there” when it emerges. Obviously, it is humanly impossible to monitor and react to micro moments; however, it’s not impossible for a cognitive solution, like the Enterra System of Insights and Actions™.
How a Cognitive Solution, Like the Enterra System of Insight and Actions, can Help
Brenda Do agrees with Google analysts that omnichannel sales are becoming the norm. “While the internet drives online sales,” she writes, “it’s shown to bring more people into physical stores too. Because today’s shopping journey often involves multiple channels, a customer may start by researching online, use an app to download a coupon, then make a purchase in-store. Mobile is often a key part of most omnichannel experiences since it accounts for 60 percent of U.S. internet usage. Omnichannel shoppers spend more, averaging a 30 percent higher lifetime customer value. What’s more, digital doesn’t end once shoppers step through the doors — while in-store, nearly half of them search for information online. It’s partly why a survey involving 50+ leading CPG companies ranked e-commerce as the second leading driver of change over the next five years.” The only way for retailers to “be there” at important micro moments when the consumer is ready to make a purchase is by taking advantage of data being generated by the consumer. As noted above, only a cognitive System of Insight and Actions can react fast enough to take advantage of those moments.
Do goes on to explain that big data needs to be turned into smart data if retailers are going to take advantage of the consumer’s digital path to purchase. “Big data isn’t a nice-to-have, it’s a necessity,” she writes. “Especially as more products like TVs, phones, and wearable devices are connected to the internet. But the flood of data this provides can be difficult to sift through and draw insights from. And it’s not always clear which trends are worth pursuing. Smart data helps make sense of the information by fine-tuning the analysis with intelligent algorithms.” Allison Snow (@AllisonSnow), a Senior analyst at Forrester Research, adds, “Since 73% of companies understand the business value of data and aspire to be data-driven, but just 29% confirm that they are actually turning data into action — it’s not a leap to suspect that organizations are at risk of collecting data without deploying them in ways that support deeper customer engagement. This concept — linking insights to action – is an example of a mission-critical imperative that transcends client roles.”[5] She goes on to explain that “systems of insight [can] embed intelligence into contextual marketing.” This is important, she explains, because “insights don’t always translate to valuable action, decreasing their value to organizations that have invested in them.”
Summary
The consumer digital path to purchase complicates the retailer’s job; but, it also opens new marketing opportunities as a result of the data being generated. In order to take advantage of these opportunities companies need to leverage the capabilities an autonomous, cognitive System of Insight and Actions. This kind of platform allows retailers to “be there” when a consumer reaches their decision to buy. It is the single most important micro moment that can be leveraged on the digital path to purchase.
Footnotes
[1] Daren Baker, “Four Ways to Gain a Holistic View of the Customer Journey,” MarketingProfs, 29 September 2015.
[2] Brenda Do, “CPG Trends: How Companies Can Keep Up (and Succeed),” Business 2 Community, 21 September 2016.
[3] Robert Allen, “What is Programmatic Marketing?” Smart Insights, 8 February 2016.
[4] Staff, “How Mobile Has Redefined the Consumer Decision Journey for Shoppers,” Think with Google, July 2016.
[5] Allison Snow, “Predictive Marketing Analytics and the Link to Customer Engagement Action,” Information Management, 29 September 2016.
