We hosted a great webinar yesterday with our guest Ron Offir, CEO of Offir Consulting. The topic – Driving Omnichannel Growth with a Digital Flagship. Below is a summary of the presentation and an audio file of the Q&A.
Ron is the CEO and founder of Offir Consulting and has over 20 years of experience leading marketing and e-commerce initiatives at Michael Kors, The Jones Group, Coach, Gap Inc, and Deloitte Consulting. Ron chatted with Kevin Young, CMO of Custora, who has held senior marketing positions at Monetate, SAP North America, and Microsoft.
Top line growth is at the top of every CEO’s agenda, and it’s no surprise. In the digital age, consumers are always shopping around. New technologies and greater choice are changing how they are thinking and acting.
Couple this with the fact that the cost to acquire new customers continues to grow as the expected return from each new customer shrinks. An alarming number of customers are drifting away after their first purchase. We call this the shark graph, and it represents a scary situation for the retail industry.
As a marketer, the things you have always done to drive growth aren’t working so well anymore. More customers are signing up for your loyalty program, but fewer are actually active participants. You can’t get more money to advertise— you need to find a way to hit aggressive growth targets with the budget you have. You can’t add any more emails to the calendar, you’re already on the borderline of spamming your customers. You can’t add any more promotions to the calendar, customers are already suffering from promotion fatigue. So how do you drive growth in today’s difficult environment?
The secret to growing revenue without increasing your marketing budget lies within your customer base. If you could acquire customers that are more prone to become loyal to your brand…if you could consistently improve first time buyer repurchase rates and expand the purchase frequency and average order value (AOV) of your repeat customers… if you could identify when customers start to drift from your brand – especially your most valuable customers…you would be able to drive growth without spending more, sending more emails, or adding to your promotional budget.
For most retailers, the secret to profitable growth is finding systematic ways to improve the lifetime value of their customer base.
Meet Jim and Sonya. Both clicked on Facebook ads promoting a new line of yoga tops, came to your website, and purchased shirts. The cost to acquire Jim and Sonya was equal, and the amount they spent was about the same. This means that the ROI on the investment made to attract Jim and Sonya is equal, correct?
What if Sonya returns over the next six months and makes 5 additional purchases, and Jim is a one-time buyer? A one-and-done. A one-buy stand. A buy-bye-Benny. Clearly the money spent to acquire Sonya yielded a much greater return.
So how do you grow customer loyalty?
There are many ways to grow customer loyalty. You can find customers that look like Sonya (lookalike targeting) and focus your acquisition efforts on the people most likely to embrace your brand. You can identify high value customers early in their engagement with your brand and really make them feel special from the start. You can delight them with relevant messages and convenient services that match their unique needs. These are all marketing initiatives that Custora powers every day with our customers.
We then chatted with Ron about the ways to wow your customers with amazing experiences that bring the brand to life, and to ensure that the right experiences are being delivered to the right audience at the ideal point in their life stage with the brand.
Ron joined Coach in 2002 to run their e-commerce business.
When pushed to evaluate the investment being made in their digital site, he realized Coach was getting more traffic to their website than they were getting to all of their full-price stores combined —but customers weren’t all buying on the site.
Ron invested the time and energy to survey customers that shopped in their stores and discovered – long before this was an accepted fact – that over 40% of the in-store buyers had done pre-shopping on their website.
A retailer’s website is a digital flagship store. It’s the place where retailers can bring the brand experience to life, the place where they can provide a world-class shopping experience.
There are two pillars to any digital flagship store – content and commerce. Think about your ideal customer. Invest the time and research to uncover the key characteristics of your best customers – not just demographic variables – but the behaviors and attitudes of your Sonyas.
Then think about how best to bring that brand experience to life for that key audience segment. Create an experience so engaging that she keeps coming back for more. Help her stay current in her passions.
But don’t forget commerce. Driving revenue is the cost of entry. E-commerce leaders that can quickly drive revenue can free up money to invest in content.
What makes a great content driven experience? Make the brand an integral part of your customer’s lifestyle. For a fashion lover, help her understand the inspiration behind the colors and fabric. Let her have early access to special events. Bring her behind the scenes, letting her experience the thrill of fashion week or the design process. Create the right mood in your stores, including the music, atmosphere, and lighting that are part of the physical store experience.
When it comes to commerce, the shopping experience itself must be outstanding. Finding products and going through check-out has to be super easy. The assortment needs to be wide and deep. In fact, Gap used the website as a place to sell discontinued items that no longer fit in their physical stores but still had a loyal following. Convenience is key – order anywhere, pick up anywhere, check inventory before making a trip to a store – eliminate pain and friction.
One of the most powerful commerce tools recently is the “design your own” exclusive products. There are great examples from Nike and Ralph Lauren that are having a big impact on their businesses.
Michael Kors’ content hub is one of the best in the fashion industry.
Getting the content and commerce equation right pays off. A recent study by Deloitte showed that 80% of in-store purchases are influenced by online experiences. There is example after example of brands driving conversions, order size, and loyalty with a world-class digital flagship store.