Freezing in the Desert
On February 27th – March 2nd, 2023, Infinitive attended eTail West in Palm Springs, CA, where discussions about first party data and omnichannel marketing were front and center. The weather was unseasonably cold, but the conference was hot. In this blog we will cover some of the highlights from the conference.
Maximizing Marketing Spend
Many marketing-focused executives from retail companies discussed doing more with less because of the present economic conditions. Despite cuts to marketing budgets, the companies expect the same amount of revenue to be driven in 2023 as in 2022. A recurring theme in these discussions was around increasing the effectiveness of marketing by making better use of the retailers’ first party data. One interesting statistic – retailers estimate that, without using first party data, it would take a 25% increase in marketing spend in 2023 to equal the revenue from 2022. Given that many marketing budgets are being cut, effective use of first party data is becoming more critical.
Omnichannel marketing is a well understood term denoting how companies strive to integrate different methods of interaction available to current and potential customers. Examples of these interactions include online, mobile, social, and out of home or in the store. While the overall concept of omnichannel has been around for a while, a debate has recently emerged. Traditional omnichannel thinking revolved around a customer’s journey, from awareness to consideration to purchase and post-purchase support. A new philosophy centered on “signals” has emerged. Under this belief, marketing professionals should strive to detect signals from customers that may, or may not, fit into a typical customer buying journey. For example, a signal could be something as seemingly innocuous as liking a social media post or, better yet, sharing that post. Sophisticated data analytics, including the use of AI, was cited as crucial to detecting and acting on these customer signals.
The consensus from eTail West was that artificial intelligence was not just poised to change retail, it is actively changing the retail landscape. Chieh Huang, the CEO of Boxed, an American online and mobile membership-free wholesale retailer that offers direct delivery of bulk-sized packages, had an interesting case study to share. Huang described how Boxed used a combination of first party data and AI to drive real-time automated pricing. The result? A 116% increase in profitability! We can see that AI is making a significant impact on retail today. Jaysen Gillespie, head of analytics and data science at RTB House, expanded on the AI theme. RTB House is an AI company that helps its customers directly engage with online customers enabling increased sales through deep learning powered ad campaigns touching every stage of the sales funnel. Gillespie believes that stacking various AI approaches, such as machine learning and deep learning, provides capabilities that a single AI discipline cannot match. The complexity of capitalizing on signals-based omnichannel marketing is one example where “stacked AI” is being used.
There were many more interesting and important topics covered at eTail West 2023. Here is a sampling:
- Video Storytelling– Video storytelling is a marketing strategy that uses video format to share a narrative, which helps boost your brand awareness with viewers. Retailers are now increasing their use of video storytelling in the shopping and purchasing process by adding videos to their websites, apps, and in-store to help create a sense of community with their customers. The practice is relatively well established in retail, moving from “good to have” to mandatory.
- Headless eCommerce – Headless eCommerce decouples the customer-facing front-end from the back-end processing. This gives retailers the ability to update the different elements of their store without having to change the other. Headless eCommerce is seen as the “antidote” to highly vertically integrated CRM platforms that offer eCommerce capabilities.
- Retail Media – As retailers scramble to preserve profits in a challenging economic environment, high-margin sources of revenue are being explored. Retail media, sometimes called commerce media, is one such approach. According to Amazon, “Retail media refers to the actual advertising placed on a retailer’s media network.” Third-party businesses that look to reach relevant audiences will work with a retailer to create ad campaigns for those digital channels. Currently, retail media networks are gaining traction in the advertising world with higher profit margins for online advertising than for retail overall. This is a large and fast-growing opportunity for retailers. Retail media is expected to grow from $50B+ in 2023 to well over $100B+ by 2026. Walmart alone generated $2.7B in retail media revenue last year.
Infinitive has a well-developed retail media program that helps retail companies take advantage of new revenue opportunities by leveraging first party data and advertising solutions. Our professionals have expertise in cloud, data privacy and protection, and data analysis and monetization. Together we can “optimize your data, maximize your future.”
For more information about retail media, contact us today.