The Retailer Spring Edition 2022
THE RE TA I L ER
THE FUTURE SHAPE OF RETAIL AND THE TRENDS AND CAPABILITIES WHICH WILL DETERMINE FUTURE SUCCESS
Sophie Birshan Industry Head, Retail Google UK
W ith retailers facing significant changes in consumers’ shopping behaviour, what organisational traits are the hallmarks of marketing success?
2. Is your marketing measurement rigorous? Stronger retailers prioritise data projects which enable them to measure the impact of marketing across channels and formats. Consumers’ journeys increasingly include both online and shops. An Ipsos survey recently showed that 58% of UK consumers decide what they are going to buy before they leave the house. Last year, over half of UK shopping traffic for the biggest 30 retailers was to their app. So leading retailers prioritise joining up their data so they can track the impact of marketing across shopping channels - for example measuring if someone sees an ad online but checks out on the app or in store. They complement this data set-up with a rhythm of regular tests to evaluate the effectiveness of different channels so they can focus their marketing efforts where it has results, and reduce wasted spend. The phasing out of third party cookies has made it all the more important to prioritise robust data set-up, as it reduces retailers’ visibility of how marketing activity is driving conversions. Successful retailers have been the quickest to offset this data loss by implementing new data models. It isn’t enough to set up your data so the marketing team can report on the impact of marketing across channels. At the most successful retailers, several functions get on board to agree on the right marketing measurement approach - from marketing, to data analytics, to trade functions to finance. We recentlyworked with a retailer where the leadership teamwas frus trated at the marketing team’s frequent requests to flex annually agreed budgets. The finance team took time to build a deeper understanding of marketing measurement, including feeding into the roadmap of tests and data projects to prioritise using profit data, and working with the marketing team to agree which KPI mattered most. Once everyone had confidence in how results were measured, the marketing teamwas able to respond much more quickly to fluctuations in consumer demand. 3. Is your measurement owned cross-functionally?
It’s well known that the pandemic saw a step change in shopping behav iour. Consumers now shop online 24/7 at mind-boggling scale - there are around 16,000 searches for apparel in the UK every minute, buying a dress may involve over a hundred touchpoints, and consumers are using platforms like YouTube for inspiration and ideas. Plus consumers are shopping across channels - online, shops, and now apps - like never before. Meanwhile squeezed margins, and a fall in loyalty means retail is increasingly competitive. This poses challenges for retailers on how to market to consumers most effectively. At Google we work with retailers on their marketing and data strategies. What are the organisational and cultural hallmarks which distinguish successful retailers, and what should you look out for in your own business? Belowwe lay out five questions to ask to set yourself up for marketing success. Given the scale and complexity of consumer shopping, machine learn ing tools are critical to reach the customer at the right moment cost effectively. Digital technology evolves very fast with improved algo rithms becoming available continually. Leaders know that iterating their technology can give them an edge in finding additional profit or growth. But the difference in how fast retailers roll out new technology is striking. To take a Google example - three months after we shared news about an upgraded algorithm with one set of retailers, adoption ranged from some who had not yet tested it, to others who had tested it, measured the results and already scaled to more than 40% of their activity. Imagine this pattern repeating itself every month and you can see how easy it is to fall behind. 1. How fast do you scale new digital technologies?
functions to finance.” ‘‘
At the most successful retailers, several functions get on board to agree on the right marketing measurement approach - from marketing, to data analytics, to trade
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