Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
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Not surprisingly, social networking sites are still grappling with how to present ad content in a manner that seems non-intrusive, which is why the channel is considered to be an emerging opportunity. Retailers launching these types of campaigns should be careful to produce ads that have relevance to the target audience and do not come as a surprise. “The right message to the right people at the right time should always be the guiding principle,” Wu says.
While comparison shopping networks are not new, their popularity with consumers has skyrocketed over the past year. The marketing opportunity for retailers is to make their product catalog visible on more sites while delivering the same brand experience found on their web site.
“Comparison sites are places where consumers can evaluate products side-by-side, but each site has its own marketing best practices and retailers must figure out how to make use of them to compete for that sale,” says Mercent’s Best.
The most effective way is to make the comparison shopping site an extension of the web store. Mercent combines direct links to a retailer’s web site and warehouse management applications, which enables retailers to deliver real-time inventory and pricing data from the retailer’s site to comparison shopping sites. The platform also provides analytics to coordinate promotional campaigns between the web store and the comparison shopping site.
Reducing the costs to link
The latter is important, because retailers do not want to promote offers on comparison sites not available on their web store or other sales channels. This type of continuity is part of creating a consistent marketing message.
“Information, products and promotions may be specific to a comparison site, but they must be as accurate as what can be found on the retailer’s site,” Best says. “There must be consistency between the web store and other sales channels.”
Mercent’s platform supports product syndication, merchandising optimization, retail analytics, and transactional order processing. Retailers can connect to 50 online marketing channels, including nearly 40 comparison shopping sites through the Mercent Shopping network. Sites include Amazon.com, MSN Shopping and Yahoo! Shopping.
By linking to the Mercent Shopping network retailers are spared the cost and integration issues of connecting individually to comparison sites. “After a retailer connects individually to the leading sites, it gets cost prohibitive to connect to the rest,” says Best. “We can also track the performance of every ad on every channel so retailers can figure the cost versus profit and manage their marketing campaigns more effectively.”
Mercent’s retail platform is based on the concept of distributive e-commerce, which is about adding value to the shopping experience through whatever channel the retailer touches customers. The platform supports product syndication, merchandising optimization, retail analytics and transactional order processing.
No matter how far retailers broaden their marketing reach, analytics still play a key role in mapping out their strategies. “Analytics rule the world of e-retailing,” says DoubleClick’s Kahn. “If retailers can’t track customer behavior they can’t manage the site experience. It is important for retailers to know what changes are taking place in the user experience that impact cart abandonment, and make the necessary fixes to their marketing strategy and site.”
Identifying problems requires tracking customer behavior and conversion rates for each marketing campaign to identify which campaigns work and which don’t. Other times it requires more digging.
For example, a retailer that suffers a high drop in visitors after they reach the home page may actually have high conversion rates on pages deeper in the site. Setting up paid and organic search campaigns that land shoppers on pages deeper in the site where they are more likely to convert is one solution. “Optimization of search marketing campaigns is a never-ending process,” Kahn says.
Analytics are also being applied to remarketing campaigns to help retailers figure out their true ROI and where overlap with other marketing vehicles, such as paid search, occurs. “Because of the view-based tracking many of the advertising networks use to track shoppers from the remarketing campaign, retailers have to have the knowledge to be able to apply credit to the proper source for the conversion,” says PM Digital’s Sandberg. “Knowing the true source of the conversion helps retailers properly budget for their marketing campaigns. Identifying the overlap in orders from remarketing and paid search campaigns is done by matching order IDs from both programs to information contained in the advertiser’s site analytics application.”
Mercent takes a similar approach by helping retailers calculate the ROI for specific products marketed through comparison shopping sites. Retailers can track the actual cost of the ad to promote an individual product and compare it against metrics for sales velocity. This capability makes it possible for retailers to manage their campaigns on a more granular level to keep profit margins in line with marketing costs for individual products.
“If the retailer’s goal is not to have marketing costs exceed profit margins for every product, it can be done,” says Best. “This is information that goes beyond marketing metrics, such as conversions, and provides retailers more control over campaign performance.”
As intriguing as the new marketing opportunities are, retailers still need to effectively manage traditional marketing channels, such as e-mail, site search and paid search. E-mail campaigns remain frontline communications tools that retailers can use to support their marketing efforts in other channels.
“E-mail is in the center of the storm when it comes to customer retention because retailers can use it to deliver a steady stream of communications in support of other marketing campaigns,” Kahn says. “It remains a great marketing tool that produces solid results.”
Site search also remains a proven marketing tool. With consumers increasingly using site search to navigate a retailer’s site, retailers must make certain that site search not only delivers the most relevant results possible to the search query, but also reflects available inventory and retailers’ marketing and merchandising goals.
Nor can retailers afford to stand pat with paid search campaigns. “Building out keyword lists and optimizing copy for paid search ads should be ongoing,” Kahn says. “Retailers may always be looking to tap new marketing channels, but paid search is a core marketing strategy.”