The entire retail industry can relate to Mark Twain’s reply after reading his own obituary in a newspaper, “The reports of my death are greatly exaggerated”. Forrester’s Online Retail Forecast, 2017 to 2022 has just been released and the results are surprisingly positive.
What has the press missed amid a slew of store closing and bankruptcy announcements this year? Retail is actually growing steadily and is in the midst of a massive transformation. And many of the store closings are a result of brands finally making the tough decisions to right size. Let’s face it, the retail industry has looked at store openings as a way to drive growth for years, but now we’re faced with an overabundance of underperforming assets. Recent research from commercial real estate firm Costar makes this clear:
- US retailers added an average of 160 million square feet of store space every year between 2000 and 2008.
- The US now has an average of 24 square feet of retail space per capita, compared with 16 square feet in Canada and 4.6 square feet in Great Britain.
- In the US, sales per square foot have declined from $350 in 2000 to $330 today.
Facebook has become one of the most effective advertising channels thanks to the amount of data it has on its users. This data allows for a wide array of targeting methods for advertisers. On one hand, the variety of options can be a blessing since it allows Facebook marketers to get more granular with targeting than they can anywhere else. For marketers who know exactly who they want to target, this is great.
On the other hand, the large number of options can also be a curse, since it’s very easy to waste ad spend testing various targeting combinations in an attempt to arrive at the best-performing audience segments.
At Custora we are big believers in the power of continuous testing and optimization. But we’ll let you in on a secret that we have found through our work with some of the largest and most sophisticated retailers in the world. Combining predictive customer lifetime value with Facebook Lookalike Audience targeting consistently delivers 5 to 10x improvements in Facebook advertising performance.
After spending many years as the VP of Marketing at one of the leading personalization technology providers, I have a pretty good understanding of the benefits and limitations of personalization. And while there are very clear advantages for retailers that adopt a well-designed personalization strategy, I worry about the personalization bubble that has been created. There is irrational exuberance in the marketplace today, an almost mystical belief in the impact that personalization technology will have on a business.
Messages from analysts and thought leaders are fueling this fire. Here are excerpts from an email I just received promoting an upcoming analyst webinar on personalization—sound familiar?
“Personalization is being redefined as individualization—structuring interaction, functionality, and content around the real time individual needs of customers.”
“Discover why individualization, not segmentation, is becoming the new standard for personalization.”
The implication is that with the right technology investments, brands won’t need to do any heavy lifting in marketing. They won’t need to dig deep to understand the differences across customer segments, they won’t need to develop personas, and they won’t need creative breakthroughs to propel their business. Just leave it to the algorithms to crunch the customer data and deliver the perfect message to each consumer at just the right moment. Sounds like magic, right?
As my mother always said, “if it sounds too good to be true, it usually is, unless it’s me.”
Last Tuesday was a snow day for most of us in the Northeast, and I used that time to finally get around to reading a marketing book that was recommended highly to me. The book is “Influence: The Psychology of Persuasion” by Robert Cialdini, published in 1984. This social psychology classic uncovers the secrets of getting people to take action and contains principles that can be used by retailers today to boost online sales.
Dr. Cialdini, a professor of psychology and marketing at Arizona State University, lays out six proven methods based on the science of persuasion that can get people to say yes to almost anything:
Just as the 1960s were called the age of distribution, and the 1990s labeled the age of information, the 2010s have been dubbed “the age of the customer.” In this age, companies are reinventing themselves to better understand and serve customers who are becoming increasingly powerful.
As a side effect of the age of the customer, companies have been gathering massive amounts of data. While this data can take many forms (e.g. social, behavioral, mobile, sensor) and can differ from company to company, most of this new data has at least one thing in common: it’s not being used.
We work with smart people at some of the best companies in the world every day to tackle this challenge, but we can never pass on an opportunity to open the conversation to others. In that vein, we invited customer insights expert, Brandon Purcell from Forrester, to be a guest presenter at our webinar on the use of analytics to better leverage customer data.
We covered a wide range of topics with Brandon from fancy french restaurants, to Star Wars, and even Google Glass, but the biggest takeaway was these three steps to start using your customer data more effectively. (you can watch the full conversation below)