The buzz on…
…ecommerce and the online customer journey
Chapter 1
Online and the consumer (ecommerce facts and figures)
Ecommerce continues to grow at a phenomenal rate. As broadband connections in the UK increase and security heightens, shoppers are now more confident than ever in using the medium to purchase goods and services, abandoning the high street in favour of the speed and efficiency of online. According to the Interactive Media in Retail Group (IMRG) £80 billion of consumer spending is either on or influenced by the internet. Within this £80 billion total, £30 billion of retail spending is online (10% of total retail sales), £20 billion of other consumer spending takes place online and a further £30 billion of offline retail sales are impacted by internet information, research or activity. In its May 2006 survey of over 3,900 consumers, IMRG found that 52% of respondents intended to reduce their high street spending in 2006. However, 45% of respondents intend to increase their internet spending this year.
IAB ecommerce best practice guidelines 2005 In 2005, the IAB published a set of best practice guidelines for traders in ecommerce, identifying 10 comprehensive steps to successful online retailing which can be used as a reference point when evaluating your online offering. These are by no means exhaustive, however they do provide an excellent starting point for all companies with an ecommerce site, from regional SMEs to global high street brands.
1. 2. 3. 4. 5. 6. 7. 8. 9.
Understand your customer Build a good relationship with your customer Provide an excellent level of customer service Make your site easy to use Provide a safe and secure online shopping environment Ensure full integration between online and offline stores Provide value for money (consider price comparison sites) Deliver; have strong fulfillment and returns policies Utilise search advertising effectively so that potential customers can locate your site with ease
For consumers, their first experience of a brand online could be a ‗state of the art‘ home page, which is easy to use and offers a wealth of affordable products and excellent customer service. Or it could be a search result where everyone looks the same, a display ad where you have only a few seconds to grab their attention, a negative comment on a blog or a ranking on an ethical website. First impressions count, and could make the difference between that all-important sale or losing out to one of your more internetsavvy competitors. This ‗Buzz on the online customer journey‘ will investigate the opportunities available for internet retailers, helping you make sense of the ecommerce explosion, as well as the change in consumer behaviour and perception. Through the use of research, best practice tips and case studies, we‘ve tried to cover every route and destination. However, for more information and further guidance on how you can use online to drive your sales, please contact us at info@iabuk.net.
This document will cover the major landmarks within the online customer journey. The concept 10. Have relevantly placed rich media advertising to drive may be mind-boggling to begin with, particularly if people to your online retail site you are new to internet advertising, but the IAB is here to hold your hand! We‘ll start by setting the scene -outlining a few consumer-based scenarios commonplace within today‘s media landscape. We‘ll then guide you along the ‗long and winding road‘ to the cash register, with help from research commissioned by Yahoo!
In order to profit from the changing customer journey, it‘s also essential to understand the consumer so that you can deliver a site that‘s easy to use with intuitive navigation. With this in mind an expert in the field, Marty Carroll from Foviance, provides a few guidelines on the customer experience and how to measure it. Once you understand your consumer, and have a site that fully utilises all broadband has to offer, how do you drive your consumers there? Well, after discovering how online can fit within a cross-media campaign, complimenting other media activity, we‘ll visit search and display, demonstrating how the two can be used to not only drive sales but build your retail brand. Finally our end destination will illustrate how you can put online at the heart of your business, even re-engineering your brand and overhauling your online presence to make your mark on the digital world. One recurring theme that you will see throughout this document is the need to put yourself in the customer‘s shoes, and to take that journey with them. This will offer a glimpse into how secure and effective your online presence is.
Chapter 2
Understanding the changing customer journey
Imagine you‟re a potential customer, sitting down to an average online session… it‟s quite difficult isn‟t it!
There is no average online session, because the internet has revolutionised the customer journey. What was once a simple route to the point of sale - easy to track and understand – is now a vast array of cross-media influenced purchase decisions, more convenient for the consumer yet infinitely more complicated for the retailer to manage. Those that have successfully established their online presence are reaping the rewards, yet a number of traditional high street stores are struggling to keep up. Around 80% of internet users in the UK have a broadband connection, which has greatly improved the online customer experience. The speed at which consumers can access information on products and services, research and compare prices means they are empowered more than ever before. Think about life before the internet. If you wanted to buy a washing machine you‘d see an ad on TV, maybe in a Sunday supplement, and know the store was there. Sometimes the ad would be promoting a sale or special offer. You went to the store, not knowing how much the washing machine would cost, or even how the different models performed. In the store, you checked what was available, taking advice from a sales assistant. It normally made sense to visit a few other stores to compare prices and ranges. Maybe you would discuss with a partner, friends or family before handing over your money.
The changing consumer journey
Buying a washing machine?
Pre-internet
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With internet ONLINE
Ya AOL! ho o Disc ussio n n Disc ussio w ith ith w p a p a rtner rtner Go oo g le Go g le Disc ussio n w ith p a rtner Jo hnis Lew Lew is Online Online Ga d g et Blog Chea p Chea p w a shing mw a hine a c shing m a sites w eb c hine
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Lew Jo hnis Online Lew is Online
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Source: Henley Centre / AOL 2005
It‘s quite remarkable to think about how much things have changed. With the internet not only do we have a wealth of information at our fingertips, but we also have the option to purchase
online based on an informed and objective decision, away from the glaring eye of the shop assistant eager to make a sale. We know that consumers are putting the internet at the heart of their lives, whether it‘s for communicating, entertainment, accessing information or shopping. So it‘s interesting that some retailers still aren‘t putting the internet at the heart of their business, and are failing to invest in the medium. The following are just 4 examples of the ways in which the internet has impacted upon the customer journey, and illustrates the extent to which retailers must be aware that a range of online marketing tools can affect the purchase decision; email, search, display, even blogs and forums. Regardless of whether a final sale is online or offline, the internet is now instrumental in both consumer researching and decision making, and when your competitors are just a click away an understanding of these processes is vital.
Scenario 1 - The unplanned purchase…
Whilst having a lunchtime check of your hotmail account, you notice you have received your first email update from Miss Selfridge. Having recently read on handbag.com that ‗the dress‘ is this season‘s must have item, you notice that Miss Selfridge have a new collection of summer frocks. Clicking through to the fashion store‘s website you are immediately drawn to a Zebra print dress that is the ‗daily discovery‘ for today. A quick glance at the ‗Press Pages‘ area of the Miss Selfridge site, where all the latest hot fashions are identified, shows that zebra print is a definite summer must. With your taste validated, you decide a zebra print dress is something you simply cannot live without. With your bank balance in mind, you check to see whether you can get a similar product cheaper on other fashion websites. Assured that there was nothing similar and for the same price on the TopShop.co.uk and asos.com, you return to the Miss Selfridge website and make your purchase, receiving an email confirmation shortly afterwards.
Scenario 2 - The planned purchase
After reading an article in What HiFi? you decide it‘s time to update your retro boom box with a stereo that manages to play an entire CD without skipping. Good things were written in the magazine about Denon stereos, so you type the brand name into Google. High up in the organic and the sponsored listings is an advert for price comparison site, Kelkoo, which assures you that you can find the cheapest online retailer for Denon stereos on their site. The Denon DF101 has all the specifications you are looking for, so you decide to go ahead and compare prices to see how cheap you can get it for. Finding one site where the price (including delivery) is well below your £300 budget, you go ahead and order.
Scenario 3 - Online research for offline purchase
Watching a mid-week episode of Big Brother you see an advert for an in-store PC world sale on at the weekend. Your attention is grabbed by computers discounted by as much as 50%. Being a big fan of online gaming you know that getting the right specifications for a PC is vital, so you visit the PC World website to investigate the soon-to-be discounted makes and models. A powerful desktop with a big memory and lots of storage catches your eye. To make sure it‘s the machine for you, you type the model name into a blog search engine to assess what the general consensus is on the computer. Positive comments on forums convince you it‘s the product for you so you head to PC World on sale day and make your purchase.
Scenario 4 – The engaging online advertisement
During a visit to your MySpace page you notice a rich media advertisement for mobile phone giant Orange. The advertisement engages you with an interactive execution and you roll your mouse over the ad to gain further information. You remember that your mobile phone contract is soon up for renewal, so click through to the Orange website and investigate the tariffs and handsets. You find the right deal for you that enables you to keep the same phone number, and order a new phone in minutes.
Whilst not every scenario may be familiar to you, these are regular occurrences for UK internet users. In assessing your online presence it‘s essential to make sure every aspect of the online session is monitored in order to maintain a competitive edge. Notice how much easier the ‗impulse buy‘ is with online; if you do a good job of convincing your customer that yours is the best product, best value for money, with a solid delivery and fulfillment policy along with good customer service, you can achieve a sale in seconds. Of course, not all customer journeys are so straightforward, and the next chapter will expand upon the various routes the customer can take on the road to the checkout.
Chapter 3
‘The long and winding road’ to the checkout
The main difference between our shopping habits pre and postinternet is that we now have access to an incredible amount of both formal and informal information on products and services that we never had before. A recent study from Yahoo! Inc. and worldwide media communications specialist OMD reveals the true impact of the internet in assisting consumers in the decision-making process, regardless of whether purchases are made online or at retail stores. The study found that a large majority of consumers turn to the internet for information as an integral part of the purchase decision on an array of products. The collaborative environment of the internet attracts consumers looking to tap into the experience of others, for weighing brands, discovering alternatives and distilling prices, as they weigh their purchase decisions. The ―Long and Winding Road: The Route to the Cash Register‖ examined how cultural shifts brought about by the proliferation of technology have radically altered the way consumers make their product choices. The study found that the Internet, along with related technologies like camera phones and text messaging, have given consumers a new kind of ―social empowerment‖ as they gather information before they shop. Whilst two-thirds of shoppers across several product categories still make the bulk of their purchases at physical retail locations, nearly two-thirds (62%) use a combination of online and offline sources to gather information before they buy. The role of online research The research shows that the Internet is crucial to consumers as they follow various paths on the customer journey to making a purchase. The Internet serves as a price leveler, has helped create a communal shopping experience, and is where consumers turn for trusted sources of information and dependable customer reviews. The Internet is now the most common method of gathering information. While consumers are online looking for information, the study found that three things are important when making a purchasing decision:
Trusted information. Consumers say the Internet is the most trusted shopping information source (54 %), followed by magazines (34 %) and TV (23 %). Seventyfour % of people use trusted, familiar Web sites when purchasing online, and 55 % opt-in for e-mail marketing messages from companies they trust. Choices. On average, consumers consider three brands before making a purchasing decision. The Internet helps narrow down options before they purchase either online or offline. 61 % agree that Internet search engines are one of their favorite tools for finding product information. Price. The research shows that 61 % of people consider themselves to be serious bargain shoppers. The Internet is changing the concept of fixed pricing by enabling consumers to search for the same product at various prices, as well as actively monitor a product for price discounts or find coupons and rebate offers.
Consumers travel four distinct paths
The findings from the Long and Winding Road research can help advertisers connect with consumers online at crucial stages of the decision-making process. The study uncovers four distinct paths that consumers take on their way towards making a purchase: ► QUICK: This path involves little consideration. Consumer packaged goods are often quick paths. ► WINDING: Comparison shopping between different channels, including online and offline retailers, typifies this path. Retail goods are often winding paths. ► LONG: This path involves researching various options over an extended period of time. Technology purchases are often long paths, particularly if the price tag is high. ► LONG AND WINDING: This path requires investing a considerable amount of time researching across several channels. Many big ticket items — including automobiles and financial services — follow a long and winding path. These paths offer marketers the most opportunity to impact and possibly sway a purchase decision in their favor, because consumers of these products are the hungriest for information.
From purchase “funnel” to “tumbler” The study also found that the shape of the traditional purchase ―funnel‖ has changed. In the past, as consumers began researching their options, they steadily narrowed their choices all the way to purchase. The study found that there is opportunity for marketers to affect purchase decisions with brand messaging – be it traditional, online, in-store or word of mouth – even after consumers have decided where to buy. 63 % of consumers gather information when they first begin researching a purchase, 57 % when they are narrowing down their options, 42 % when they are deciding where to buy, and 51 % when making their final decision. At each stage of the ―purchase tumbler,‖ the Internet is the first place that consumers turn to when gathering information. It is used more than any other resource (including friends and family, offline reviews and traditional media sources). Social shopping and sharing information As the most trusted source for information, the Internet also offers ―communal shopping‖ – access to a vast community of fellow shoppers, who share knowledge, shopping tools, product reviews and even coupons to help others make purchase decisions. The study showed that 25 % of people have posted reviews of products or services online, providing a service to other shoppers. Another new phenomenon, the ―coupon train,‖ has emerged, in which consumers clip both standard and online coupons and share them with others. Mobile and camera phones, email, text messaging and other digital tools have contributed to the strong influence of community in the path to making a purchase. Shoppers can now text message each other, send pictures of merchandise and use Internet enabled phones to compare prices, all from the point of sale. Consumers are seeking trusted advice, and know that no purchase decision needs to be made alone. “One conclusion that might be drawn from the study is that consumers have access to so much information that it often broadens, rather than narrows, their choices by the time they get to the store to make a purchase,” added Mike Hess, Global Director of Communications Insights and Research, OMD. “This makes the role of advertising, especially „just in time‟ advertising, and the buying cues in the in-store environment even more important. The use of a variety of traditional media, like television and magazines, can be potentially stronger than ever in influencing the 40% of shoppers in the store who are yet to make their final decision.”
Boosting profits online the easy way… by Guy Phillipson, CEO of the Internet Advertising Bureau
Chapter 4
Enhancing the customer experience.
So your consumer‘s half way through their journey, they‘ve done their research and have found their way to your ecommerce site. In the same way that a shop floor has to look attractive with products arranged in a coherent manner, any successful online retail store needs a solid structure with intuitive navigation. As explained by Russell Gould, head of ecommerce at Bradford & Bingley, maximising the effectiveness of a retail website is dependent on developing it from the customer‘s perspective, ―You can spend a lot of money doing a lot of nice neat stuff and end up with something nobody wants to use. It was critical we had an understanding of how users want to use it and then built to that spec.‖ Usability testing is fundamental to understanding the relationship between customer and website. Good design improves the sales conversion rates for online retailers, whilst proper information architecture helps customers find what they want and reduces enquiries to the business. If customers can‘t use a website, they won‘t. Through making the site easy to use, customers are able to engage with the retailer and buy its products. Retailers face further pressure in that customers are able to switch their loyalties in an instant. Those that keep on top of changing customer behaviour and attitudes to online shopping will most certainly see the rewards. Establishing the reason and motivation for an online purchase will enable the retailer to understand their customers‘ requirements and take steps to meet them. Online customers are proactively seeking out the brand, and based on any offline experience they may have had, they visit the site with a certain level of expectation. Marty Carroll, from analytics and usability company Foviance, outlines the importance of understanding your consumer in delivering an effective ecommerce service: In the retail sector customers have greater choice than ever before. With so many competing offerings it is imperative that organisations differentiate not just on products and service but on the entire customer experience. „A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it.‟ – Rupert Murdoch When he said this Rupert Murdoch was, of course, talking about the media industry but the same assumptions can easily be made about online retail. Retailers must deliver value to the customer who will reciprocate by returning value through revenue, loyalty and recommendations. To offer value the retailer must know and understand their customers. Despite the progress in online retail in recent years online shopping still remains a very poor experience. Those organisations that can most quickly and effectively close this experience gap will have a significant advantage. There is a direct correlation between the success of a website and the quality of the customer experience – for retailers
positive customer experiences result in increased numbers of transactions, higher customer retention, reduced support costs and strengthened brand equity. Customer experiences that deliver these benefits are the result of a desire to proactively manage the customer experience. The Internet is the most measurable medium we have available. Every day very real opportunities are presented to learn more about our customers but these opportunities arelargely unexploited. The ramifications for those retailers that don‘t choose to learn are potentially very serious while those that do have a compelling and sustainable means of staying ahead of the pack. Many successful online retailers also use web analytics in order to identify the key sources of visitors. This is crucial in not only keeping your existing customers but attracting new ones. Based upon your business objectives, a web analytics company can give assistance in developing your key performance indicators, providing measurable results such as number of visitors to your site, loyalty of visitors, number of registrations and so on. Through the tracking process you are also able to learn a great deal about customer behaviour; where they‘ve come from and where they go. Any action on a website can be measured. Online retailers also need to consider what counts as a ‗conversion‘, for example an online sale, the addition of a product to a basket or a simple registration. It is therefore important to identify your business goals and decide upon specific time frames. The manner in which organisations use web research techniques today is ineffective and fragmented. The key to successful customer experience management is integrating a number of data sources that tell us about customers‘ behaviour and attitudes while conducting the right analysis to ensure you derive insight that will affect positive change. The data sources include information gained from a set of techniques all working in concert to deliver pertinent data: web analytics, surveys (site and email), blogs/forum monitoring, call centre data, site feedback mechanisms, and technical performance monitoring.
A controlled approach to managing the customer experience follows 5 key steps 1. Define: consultation with stakeholders to establish which measures are important and communicating these throughout the business. 2. Measure: deploy the appropriate technologies in order to capture the measurements. 3. Analyse: scrutinising the data to discern patterns and aggregating the information from difference sources. 4. Improve: communicating (reports, meetings) where changes need to occur. 5. Control: monitor the effects of change, trends over time and ensure accountability.
Chapter 5
Your online and offline customers are the same!
Historically people have talked about understanding the difference between the digital and high street customer. The reality is that take up of the internet today is so widespread across all demographics, that there is no reason why digital customers shouldn‘t be treated the same. Whether it is high street or online, people expect the same brand experience, the same product range and the same level of customer service online just as when purchasing offline. The internet should no longer be an afterthought, or add-on to a traditional media advertising campaign, but fully integrated with all media activity. The following case study from Domino‘s pizza illustrates how media can work together, marketing across platforms and using all the internet has to offer in order to secure online sales. The online success story of Dominos Pizza People phone Domino‘s because they are hungry. People visit Dominos.co.uk for exactly the same reason, therefore it is essential to ensure the tone of communication and service with customers is no different online. For many ecommerce businesses, the lower overhead of a digital operation has encouraged the use of discount as a tactic to draw in customers. Domino‘s has never offered cheaper prices on the site, believing that speed and convenience of service counter the need to make a product cheaper. Their growth in sales suggests this is the case. Consumers expect brands to co-exist online which is to their benefit because the assets of convenience, product range and quality service are the big draw cards, not discount. With a service built around service and efficiency, broadband is having a hugely positive impact on Domino‘s sales figures. This impact is all down to the benefits behind broadband and the change it is having in the way people use the internet. People with a broadband connection on average spend twice as much time online than dial up users and they are increasingly consuming entertainment-orientated content. Crucially, the broadband user is well acquainted with transacting online. They expect content delivered quickly and efficiently. As broadband penetration grows Domino‘s are able to turn to offline media as well as online, without wastage concerns, to build awareness of the site and how it is a super-fast way of ordering pizza delivery. Domino‘s have recently launched a TV commercial absolutely dedicated to building awareness of ordering pizza online. The ad not only runs on TV, but also online on internet TV sites such as around Channel 4‘s web broadcasts of Lost and Ad2One‘s network of Broadband TV sites – both of which are obviously environments which will be heavily made up of high speed internet users. ―The customer hasn‘t changed, nor have our brand Online media is obviously a key acquisition vehicle for values. But the internet Dominos.co.uk in its own right. One of the major benefits of online has. It is a faster, better media is its immediacy and the ability to make advertising more experience which simply makes our service even more compelling.‖ Robin Auld, Brand Controller, Domino‟s Pizza
efficient by targeting people with creative messages that are relevant at that particular point in time. Domino‘s take full advantage of this by only advertising between 5-8pm when people are considering their evening meal, using sites like MSN Mail or Yahoo Mail where they can pinpoint specific demographic groups such as 18-34 year olds and isolate people of that profile who are on Broadband connections. As discussed earlier, speed of service is increasingly important for today‘s internet user and so this features as a key theme of both the creative messaging and the media Domino‘s selects, where it is most relevant. One example of this is a campaign that ran on Sky Sports.com on the night of the Arsenal vs. Barcelona game suggesting people should order from Domino.co.uk if they were staying in that night to watch the Champions League Final on TV. The ad units pioneered some new technology from streaming experts Flashtalking, which read the time on people‘s computers and showed in real time (using a countdown timer) how long people had to order before kick off. As the time got closer to the 7.45 kick off, the copy updated again to create a sense of urgency and then once the game started, the advertising again switched to telling people how long they had to half-time to order. Flashtalking‘s technology even updated the scores within the creative during the game. This resulted in a record night in sales online. Domino‘s have continued the association with watching football in the armchair, and have launched the website couchcelebration.co.uk as another vehicle to build awareness of the idea of ordering pizza online. Embracing the growing trend for user generated content, they have launched a microsite which encourages people to send in mobile clips of celebrating goals from the privacy of their own homes. The site has been integrated in to Lycos‘ World Cup microsite, and as Lycos are a great seeding area for viral, some amusing content is expected to generate some good coverage for the site. The success of Domino‘s reflects a major commitment to online and ecommerce as a business. The proliferation of broadband has not only impacted upon how a site performs, but retailers can use the medium find further innovative avenues for targeting new customers and building brand awareness. However, there‘s one avenue within online that we haven‘t yet looked at; try typing ‗pizza‘ into your favourite search engine…
Chapter 6
Use innovation in your search campaigns
Any effective campaign, whether it‘s online or offline should be underpinned by search advertising. With the majority of internet sessions beginning with search activity, the online consumer is using the internet to not only make purchases but also as their starting place to research and find out as much information on a product or service as they can before they make a purchase. The AOL/Henley Centre Brand New World research (2004) revealed that 71% of consumers value search as an important source of information, placing it above personal recommendation and product information in shops. Search is the fastest growing online advertising format. According to the most recent IAB/PwC online adspend study for the whole of 2005, paid-for search marketing increased 78% year-onyear to £768 million. Recognising that search is often the first step in the purchase process is key to ensuring the consumer continues their journey to your website. Also important is constantly monitoring the search behaviour of these customers. By analysing what words are most heavily searched upon, companies can make sure they are offering what is most in demand. Search is one of the most formidable direct response mediums; the advertiser only pays once the consumer has followed their link. Search results are increasingly being impacted by the rise of message boards and blogs. These personalised sites are useful sources of peer-to-peer recommendation but brands must be aware that this is not always positive and make sure their message is reflected in search results. The great thing about search is that you can test it, and what better way to understand your consumer? This way you can try searching for products and services yourself, see what works, see what your competitors are doing, and most importantly see how your brand performs in both paid-for and natural search listings. You can drive brand awareness and favourability by going above and beyond providing simple product details online and satisfying information-hungry customers with product or servicerelated articles or ideas. Search doesn‘t have to link to products but can also link to information-heavy areas of your site; customers are then more likely to not only make a purchase but be retained by the content and visit again. Essentially a successful search marketer is tapping in to consumer interest. Search companies will provide you with information on the most popular search terms; if you see a gap in the market, why not create the content? Search traffic itself may not be affected by seasonality, however customers‘ search terms inevitably will. Events or occasions like the Oscars, Christmas, Mother‘s Day and the World Cup will all be searched for at a particular time of year. Regardless of whether you are a seasonal retailer, the trick is to exploit these seasonal searches providing relevant matches.
Case study – Yahoo! Search Marketing and lookfantastic.com
Lookfantastic.com is a hair and beauty retail site. They approached Yahoo! Search Marketing for 3 reasons; to increase visitors at low cost, increase sales and increase sign-ups to product newsletters. Research had found that terms relating to ‗hairstyles‘ and ‗celebrity hairstyles‘ were receiving high numbers of searches, but Yahoo! Search Marketing had no advertisers for these searches. Lookfantastic.com created ‗hairstyle related content in order to capaitalise on this demand by their target market. Before the campaign, lookfantistic.com enjoyed around 369 new members per day. After the ‗hairstyles‘ campaign this had increased to around 674 per day. With 16.9% of these new vistors purcahsing products online, lookfantastic.com were able to exploit the minimum costper-click (CPC) and achieve excellent return on investment. This case study shows how retail advertisers can not only use paid-for search marketing to drive their sales but also build their brands, engaging their consumer at the final destination and establishing a loyal customer-base. Online retailers can profit immensely from the continual increase in search traffic and look for search queries relevant to their target market, identifying problems their product can solve and situations their product can help in. They are able to create relevant content, give a call to action to purchase and then track the results. We‘ve already seen how search marketing can achieve this, and display advertising is a further avenue which, when executed effectively can not only link straight through to the relevant area of your site, but can build your brand through establishing a dialogue with the consumer.
Chapter 7
Strengthening your online presence with display advertising and branding
With the proliferation of broadband, advertisers have even more creative opportunity for their online campaigns. Through the use of rich media, retailers can gain dwell time and build their brands whilst developing a relationship with their customer. Rich media has raised the impact of online even further, advancing the frontiers of what advertising can deliver.
In Campaign magazine, 12 May 2006, PHD President Jonathan Durden stated that: “….if anyone in marketing is in any doubt about the power of online as a branding tool and the major role it has carved out today, let alone tomorrow, then save yourself some career pain and shoot yourself.”
Strong words! However, there still are some retail marketers that do have doubts. This is reflected in the fact that despite the incredible growth in online sales, retail advertising expenditure only accounts for 2.7% of the total market. Relevantly placed rich media advertising can engage the consumer and drive customers to an ecommerce website. According to the most recent IAB UK online adspend tracking study conducted with PwC, display advertising expenditure totalled £334.9 million for the whole of 2005. Given its 40.6% year on year increase, this was far greater than any other display medium. In the face of media proliferation and audience fragmentation it is important to use display to create and affirm an online presence. We already know that consumer trends and media consumption habits are changing, and there are a range of ways to execute powerful rich media to enhance the influence and perception of your retail brand. Online is unique in its opportunities in that you are ‗talking not telling‘; the medium facilitates a dialogue with your consumer, within which you can engage them and persuade them to purchase. Display advertising can be a key part of this. Furthermore, there are number of ways you can measure the success, or impact of a display campaign: Dwell time Data capture Route to microsite How long was spent interacting with my brand? (microsites and advertising) Competition entries, brochure requests etc. How did people arrive at the microsite? Which other media are effectively driving traffic? How much traffic was driven to my site from the microsite? (When and where?)
Traffic to brand site
Online store sales In-store sales
Can be matched against online ad activity and flight dates Voucher downloads, reference # sales tracking
Online branding case study - Guardian Newspapers and Paul Smith Below is case study from Guardian Newspapers, which illustrates how display advertising and branding online can be used to great effect, not only for raising awareness but also disseminating information. For Christmas 2005, Paul Smith approached Guardian Unlimited with 2 main objectives:
Raise awareness of the Paul Smith online store Drive traffic
Guardian Unlimited developed an online microsite www.guardian.co.uk/paulsmith which was live for one month and featured a competition to win a Paul Smith watch, some information on the heritage and history of Paul Smith and a product gallery linking to the main store. The Guardian Unlimited site also carried co-branded adds which linked to the store, and consumers were given the opportunity to sign up to the Paul Smith newsletter. The microsite received 17,000 plus There were also 4,000 + competition average, the dwell-time on around 3 minutes, and the Guardian to the Paul Smith newsletter. As a result, the main online store saw sales up 200% for the promotional Paul Smith were able to build on an order to raise awareness of their display advertising combined with meant that consumers were able to visted the online store. Via the visit the microsite and once there Smith merchandise. Of course, one may not be suitable for all retail advertisers find the best way they can use online at page impressions and 7000 unique users. entrants with a 50% opt-in rate. On www.guardian.co.uk/paulsmith was helped drive a 15% subscription increase page impressions up 200% and ecommerce period. already established and loyal audience in brand. The eye-catching rich media the usable and information-rich microsite learn about the brand before they even competition, there was an incentive to were able to view a sample of the Paul size does not fit all, and such an approach brands. It‘s the role of the IAB to help the core their communication plans.
Chapter 8
Finally… putting online at the heart of your business
The internet holds excellent opportunities for every retailer from regional b2b companies to global high street stores, and putting the internet at the heart of your business can both facilitate growth and revive your brand for the digital era. Online has changed the way ideas are generated, shared and implemented in our society, and failing to keep up with technological development and consumer behaviour could result in a sales decline. Some retail brands have completely re-engineered their organisations to increase their ecommerce and high street sales, integrating online as a fundamental component of their business strategy. One cannot assume that a customer will visit an online store without having already experienced its high street equivalent, nor will they accept a lesser level of customer service online. The brand message, level of service and pricing structure must be consistent; emphasising a commitment to integration between online and offline stores. Inconsistent sales promotions and stock can cause customer confusion and dissatisfaction across mediums. Incredibly, some high street outlets (and some VERY well known UK retailers) still have a completely different pricing structure for their internet stores. When the web is the biggest store in your business, failure to make the online/offline transition as seamless as possible will only annoy customers and they‘ll undoubtedly look elsewhere. According to the 2006 IMRG survey, 73% of respondents stated that when an item is available in a retailer's store they expect it to be available on the retailer's website. In the same survey, 47% said that if they cannot find the item on the retailer's web site they presume that the item is NOT available in the offline store. Case study Blacks Leisure Group and Wheel – Things to consider when starting your ecommerce offering from scratch Black‘s Leisure Group is the UK‘s leading outdoor retailer, with over 400 stores also covering the Milletts and Free Spirit brands. Historically the internet arm of their business was established and run with minimal resources, and accounted for only 1% of turnover. They approached digital agency Wheel in order to re-engineer their business to incorporate the massive growth of online. They had strict objectives to be the best outdoor retailer on the internet, with their online store to account for 10% of their total sales. Through examining and researching the changing customer journey Blacks were able to restructure not only their site but their whole business to ensure the following:
The online site was restocked to provide everything they sold in store and more There was complete parity on product pricing In order to drive online sales, they set-up web-specific basket-driven promotions They ensured complete consistency between the online and offline stores and brand experience, keeping the brand fresh across platforms The site was to be treated as a store and deliver a pleasing customer experience
Below are just a couple of examples of the ways in which Blacks achieved this consistency throughout their stores, in order to meet consumer expectation:
A men‟s boot displayed within the high street store.
The web page for the same product, providing the same information.
Whilst still a work in progress, the Black‘s case study illustrates how important it is to translate offline stock, promotions and branding online, and how a consistent customer experience is fundamental in establishing brand loyalty across platforms. Far from achieving the 10% of total sales, they have passed that crucial first stage in making the internet a key part of their business strategy. Restructuring your organisation to meet the needs of the online consumer is a long process, but recognising that it has to be done is the most important step.
Don’t forget the other digital marketing tools on offer for retailers: Affiliate – Whilst retailers shouldn’t rely too heavily on this form of internet marketing,
affiliates are an additional tool for driving traffic to your own website and boosting sales. An affiliate (a web site owner or publisher) displays an online advert (such as a banner or link) on their website on behalf of a merchant (the brand or advertiser). If a consumer visiting the affiliate's site clicks on this advertisement and goes onto perform a specified action (usually a purchase) on an advertiser’s site then the affiliate receives a commission.
Email marketing- As a two way medium that can be personalised and microtargeted, permission based email marketing leads to the acquisition of quality and profitable customers and is also ideal for relationship building. Permission to send emails, or opt-ins, can be gained from registration incentives on websites through the use of online promotions.
Sponsorship – Sponsorship can help brands to raise awareness and create a ‘buzz’
around their product. This can encourage dwell-time with the product or service and when coupled with a promotion, can be an ideal means of data capture. Integrated with an offline campaign, sponsorship is a way of extending and complementing the consumer’s ‘touchpoints’ with a brand.
Tenancies - Tenancies are a more long-term strategic option for an advertiser
whereby they occupy or ‘rent’ an area of another website- usually an online publisher with related content to their business. The advertiser in effect becomes a ‘tenant’ of the media owner and agrees to them receiving commission on any revenue generated from this space.
Viral marketing - By exploiting the power of peer-to-peer advertising, brands are able
to raise their awareness and achieve valuable dwell-time through attracting the full attention of their audience for minutes rather than seconds. You can create a buzz around a new product or service at a relatively low cost, by distributing a cleverly constructed campaign to a specific and targeted database of internet users. Visit www.iabuk.net for more information.
Conclusion
When ecommerce first really started to make its mark, around 1998, there were clear differences between the online and offline consumer. Now these distinctions are blurring.
Whilst the motivation for online purchasing may be different to that of a high street shopper; the advantages of convenience, speed, product comparison and so on, consumers will have the same level of expectation when ordering via the internet as when instore. Retailers need to keep up with, and fully understand, the changing media landscape. If they fail to establish a secure online presence, monitoring every point along the customer journey, they stand to lose out to more internet-savvy competitors. The IAB strongly recommends that retailers simply take a walk in their online customers‘ shoes. By doing this you‘ll gain a greater understanding of what works, and what doesn‘t. This ‗buzz on the online customer journey‘ has shown us the following:
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Online sales show no signs of slowing down. £80 billion of consumer spending is now either on or influence by the internet. However there remains a huge discrepancy between consumer spending and advertisers‘ investment in the medium. In 2005, the retail sector only accounted for 2.7% of all online advertising expenditure. The customer journey has changed dramatically. Before the internet, the route to purchase was relatively simple, yet also less convenient for the consumer. Today they have a myriad of resources at their fingertips, and are able access both formal and informal information before they make their product or service choice. If a customer can‟t use a website, they won‟t. It‘s essential to understand the consumer in order to deliver what they need from an online store. The internet is the most measurable medium available, so it makes sense to exploit this in assessing the customer experience you provide. Don‟t use the internet in isolation. Online should be integrated with all other media activity and not an add-on to the rest of a campaign. Search is the fastest growing online advertising format, and can be used not only as an effective direct response tool but to also build your retail brand. Recognising that search is often the first step in the purchasing process is key in ensuring the consumer continues their journey to your website. Display advertising and branding can strengthen your online presence. The proliferation of broadband means that there are more opportunities than ever to deliver engaging and interactive rich media ads that will persuade the customer to purchase. More UK businesses are now putting the internet at the heart of their communications and sales strategies. This is no mean feat; however taking that all-important first step in restructuring your organisation to accommodate online is excellent progress in itself.
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The IAB would like to thank the following companies for contributing to this document: