Analytics are important when it comes to generating sales conversions, but retailers can’t discount how emotions – especially during the pandemic – have impacted buying patterns and advertising campaign efficacy. Anand Rao, SVP marketing and e-commerce at AutoNation, shares his insights on how to go about it.
Supply and demand impact advertising just like everything else. Right now, digital impressions are soaring as the world hunkers down. Yet, most companies have paused advertising campaigns or drastically scaled back media spend in response to COVID-19-related business impacts. Platforms such as Facebook, Instagram, and Google are now more accessible and cost-effective for the advertisers that remain active.
Cost per impression (CPM) is down, which is great for companies or products that predominantly use digital marketing for brand building. But if you’re a retailer looking to convert impressions into website traffic and ultimately a sale, it’s a different story.
More eyeballs for ads and more traffic to websites at a lower cost per click (CPC) are excellent. But traffic isn’t converting to sales at the same rate it did previously. COVID-19 has had a big impact on customer shopping behavior. Particularly for big-ticket items – cars, furniture, appliances, etc. – purchase decisions have elongated. Formerly successful, data-driven tactics must be retooled to account for customers’ new, pandemic-colored emotions.
Learn More: Understanding Shifts in U.S. Consumer Sentiment During COVID-19Opens a new window
When Intent Doesn’t Match Interest
It’s a very interesting time to be in auto retail, for instance, because this data vs. emotion effect is even more acute. Fortunately, automakers have put some aggressive offers and incentives forward to entice new car shoppers, so retailers are starting to convert interest into intent.
Other retailers – apparel, footwear, furniture, etc. – are likely having a much harder time. At a time of unprecedented uncertainty, when every household has naturally cut back expenditures on non-essential purchases, pricing incentives and offers alone will not bring in retail customers.
The pre-COVID-19 customer segmentation and audience models no longer work the same way, and the same campaigns aren’t converting like they used to because a chunk of customers has left the marketplace for the foreseeable future. The in-market shoppers are truly shopping online for the best price and quickest delivery. But a large portion of people are simply window shopping and possibly waiting for the return of normalcy.
To change that interest to intent, the easiest thing to do is dial up advertising volume. For the same level of media spend, retailers can now get more impressions and clicks since CPMs are lower. The problem is the traffic is unqualified, or high interest, low intent. So, increasing the size of the funnel is an inefficient way to net new customers.
Ultimately when e-commerce leaders look at analytics reports, the average cost per sale has gone up simply because more traffic was funneled to the website that did not convert/buy. Logically then, the goal is to weed out this kind of traffic, and only attract shoppers who have a higher likelihood of purchasing.
Learn More: Evolving Consumer Behavior and How Brands Can Respond to COVID-19Opens a new window
Prompt Customers to Buy, Not Just Browse
How do you hone in on customers who are ready to purchase now? Well, one word of caution – avoid overreacting and drastically changing your advertising campaigns. Instead, run small test experiments to learn from, and then scale.
Here are three practical things retailers can do rapidly to promote purchasing behavior:
1. Understand customers intent
Marketers that focus on knowing their customers rather than simply assigning outcomes to segments or audience profiles will glean tremendous insight into who to target, suppress, and remarket to. But especially at times like this, it is important to treat customers as humans with emotions, not as data in a model. Therefore, just knowing the customer is not enough.
Marketers need to understand their emotions and contextualize their online behavior – who is feeling what, when, and where in order to make inferences on their buying intent. Almost everyone is feeling uncertain today. Many small business owners and employees are feeling desperate. Denizens in locked-down towns are anxious. These sentiments make modeling consumer intent more complex.
In many cases, customers are leaving behind traces of their feelings. Customers who are anxious about delivery timelines or sanitization practices for packaging are either searching for that content on websites or engaging via chat to get questions answered.
Oftentimes marketers miss these signals. It is our job as marketers to amplify them, and connect the dots to address the customer’s need, and then convert them. Then we must marry all of this information to create new purchase intent analytics models that: provide insights on product needs, appropriate message, and tone for digital marketing and online portals, and offers or advertisements that need to be personalized by customer or audience type, time of day, and location.
2. Personalize the shopping experience
Today’s customers want to know if a retailer carries the merchandise they’re looking for, if they’re open and available now, are goods offered at a reasonable price, are there any discounts, and does the retailer prioritize safety during packaging, pick up, and delivery?
Personalization is knowing which of these questions is more important to the online visitor based on their intent. Then retailers must present the appropriate combination of message, product, and offer.
Target stores have helpful boards at the entrance with checkmarks or crosses against high-demand products such as toilet paper, hand sanitizers, or cleaning supplies. Target.com, however, does not provide the same information. In an ideal world, the experience that reduces the anxiety for an in-store customer and an online customer would be the same.
Personalization and A/B testing platforms can help. They have matured greatly over the past few years allowing retailers to set up audience profiles, campaigns for web, email, and SMS, test criteria, copy, product catalogs, and offers. These platforms are a worthy investment for any digital marketing department as they enable retailers to execute personalized customer strategies with absolutely no IT involvement.
3. Simplify transactions
It’s always a fine balance to maximize sales/profits and providing customers with an exceptional experience. At times like this, when Wall Street has given a hall pass to corporations’ growth and profits, it behooves retail outlets to be at their most helpful for customers.
For instance, Blue Cross and Blue Shield expanded coverage for telehealth, and where possible AutoNation dealers offer free pick-up and delivery for vehicle servicing. On the other hand, Verizon makes it incredibly hard to ratchet down your unlimited family mobile plan, and Amazon will indicate that no Whole Foods delivery windows are available only at checkout – after customers go through the full online grocery shopping experience. These are mistakes at a time when customers want to save money and seek a worry-free and sanitary delivery experience.
Evaluating policies that impact customers at the store, online, and via call-center, and making customer-centric changes that don’t impact the bottom-line, will improve the customer experience tremendously and increase the likelihood that customers will make a purchase.
Now that a large portion of commerce has gone digital, considering both customer data and customer emotions will not only improve the customer experience, but it will also allow retailers to make hay while the sun shines.