Gemma Spence, CEO of OMG Transact: Omnicom’s specialist eCommerce practice, took part in WARC Talks 360: E-commerce and the future of effectiveness.
View her webinar on «Maximising your digital availability to grow your brand online» here.
From mental and physical to digital availability
There’s no denying that Covid-19 has changed everything and no where have we seen more radical changes than in shopping. In fact, some brands like P&G and L’Oréal have cited that they have made 10 years’ worth of progress within eCommerce in the past three months. Indeed, this has been driven by broad behavioural changes across all demographics in every country.
So, we face a major pivot point, we face the new normal. But what does that mean?
Shifts into the new normal
We’ve seen attitudinal changes to spending online like shifts into essential shopping, going back to basics, focusing on local, loyalty offers and a dramatic shift into a more sharing and caring economy. In turn, this has meant a huge sea change in buying types and uptake on new eCommerce modules such as subscribe and save, subscription models and buy now pay later.
In addition to behavioural changes, we are seeing more than ever a rise in eCommerce retailers. And whilst verticals have different degrees of suitability to eCommerce, even industries such as apparel, auto and entertainment, have seen a significant increase in eCommerce share and penetration during lockdown.
Search is the new shelf
Simultaneously, the search landscape is changing and being visible in Google is no longer enough. Retailers have become complex search engines using algorithms such as Polaris and A9 to rank products within the digital shelf; a ranking that is based on both commercial and customer relevance scores. A new approach that focuses on optimising to factors that drive disproportionate visibility is key across all eCommerce channels including grocery.com, delivery, marketplaces, aggregators and lifestyle pure players.
The infinite aisle
If that’s not enough, retailers and brands have now adopted the Amazon mantra of having the largest selection on the planet. Resellers online are fighting to have the best selection and assortment, with no read across. The challenge with having this endless selection available is how can brands stand out and maximise digital availability in a world where retail auctions are controlled by the retailers and decisioning favours Private Label?
So, how does a brand stand out and grow?
We all know the proven concept of traditional brand growth is an augmentation of making sure brands are top of mind through mental availability combined with physical availability through in-store and immersive experiences to improve sell through. However, we believe we need to shift this concept and focus on a combination of mental availability and digital distribution combining the entire value chain – pick, pack, ship as well as the unboxing experience.
By getting that right, brands can maximise their digital availability and make all elements of their distinctive assets work even harder. After all, you’ve got to be bold, to get sold.
So, how can this be achieved? At OMG Transact we believe in an 8-point game play for brand growth. Whilst each area is key, we recommend tackling them in the following order to get the biggest gains in digital availability.
Assess the opportunity
First identify the biggest opportunities and double down on these; focus on channel mix, product and service margins, point of difference and swings in behavioural changes to get ahead of the competition. Again, think about your value proposition and where can you get marginal gains across variation, store configuration, picking, packaging and shipping to improve your gross margin.
A simple exercise to do is to run a cost benefit analysis. This will help focus your strategy on the biggest growth drivers and strategic priorities, whether that is DTC to own the customer, data and customer experience or whether it’s more important to focus on distribution partners to drive volume and scale.
Across brands, eCommerce typically acts as the odd member of the family, not really fitting in anywhere but everyone having an opinion and view on how it should operate. With shared ownership across most media, marketing and commercial functions, we recommend gaining early alignment on objectives and possibly having shared objectives across customer development, trade, media, and brand communication teams to ensure everyone is aligned.
Align insights to audience
It’s critical to find your core and periphery audience and align their need state and trip mission to build your digital footprint across direct and indirect selling. Assess the shopper’s objective and make sure you have the right pack, price, point of difference and shipping to help alleviate the impulse or high consideration need of the shopper. A great example can be found within Amazon; by enriching audience insights, with click stream data you can align even the categories you focus on to drive CTR and CR.
We recommend running channel wide eCommerce and retail investment planning that looks at a bottom up category view to improve brand growth. We also suggest looking at portfolio, net sale value, gross margin, stock, shelf rank, media investment in co-funding as well as any pre agreed commercial joint business partnerships (JBP) in place.
This can model out your required investments and allocations to reach profitable sell through and core ratio of returns required for your brand. At Omnicom and within OMG Transact we built this through our precision marketing platform, OMNI, to keep us routed in brand growth.
Being distinctive isn’t new news to a marketer, what is new news, is how you can not only drive innovation and creativity in eCommerce, but also gain commercial advantage through well placed and positioned distinctive assets.
This might be through an exclusive variation such as YALDI IPA from Brewdog or by creating a new type of packaging that helps the brand stand out and own the end-to-end experience. For high end lux goods including D2C car sales such as Pivotal or Tesla, the opportunity to use their distinctive assets as part of the unboxing experience gives brands a reason to celebrate their points of difference and gain an edge.
Stand out on the shelf
At OMG Transact we have a shelf framework; this approach allows us to isolate and identify insights across all parts of the eCommerce value chain. We recommend taking this approach to ensure you apply all recommendations that will delivery marginal gains in short increments that improve digital availability.
There’s also loads you can do to improve your shelf ranking of your products within retailers but it’s important to remember that every retailer is a search engine, so you need to game it to stay relevant – through both commercial and relevancy factors.
Leverage shoppable media
It’s important to use biddable media to avoid any digital dead ends. Retail media is the new stomping ground for brands, and it comes in all shapes and sizes. As a result, rebalancing efficiency and effectiveness is key. Our top tip is to align key internal budgets across brand, trade and eCommerce to a new unified approach, to avoid cannibalisation of inflation of CPA, CPCs within retail media.
Improve Customer Lifetime Value (CLV)
Understanding CLV is the holy grail so we suggest that you work on building a single view of your customer through core and affinity audience segments then base this on actual purchase behavioural data.
By taking a target, measure and optimise approach with proxies built in to counterbalance O2O effects, you can improve frequency and basket value, overall retention as well as long category expansion, helping the retailers but also ensuring you get a greater share of the pie!
For further information on how we can help you grow you brand online, get in touch today: www.omgtransact.om