1 the challenges of multi channel retailing profitable multi channel marketing march 2010
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The Challenges of Multi-Channel Retailing
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The environment
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The environment
• Blurring, if not eradication, of historic divisions between retail, direct, e-commerce
• The vast majority of retailers are now ‘multichannel’– Supermarkets– Department Stores– Sportswear Chain– Furniture Warehouses
• Home Shopping has moved from a niche dominated by high volume low end businesses 20 years ago to the mainstream
• UK Online Sales 9.5% total retail (£41billion) – of which slightly over half is music and travel
• Home Shopping businesses have become mega brands– Amazon– E-bay
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The customer
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The customer
• Customers have become increasingly promiscuous• They are driven by a desire to get ‘the best deal’• Purchases made ‘in store’ are heavily researched on-
line• Eighty-four percent of occasional buyers, those who say they
have made an online purchase only once or less in the past six months, describe their usual use of the Internet for shopping as "I usually shop online and go offline to purchase."
• Brand loyalty has diminished with the growth of choice• Price (or at least ‘value’) is key
• UK shoppers have the lowest level of customer loyalty in Europe, just half that of those in Germany, with almost two thirds switching retailers in a bid to save money.(ncr 2009)
• AND this happened in a period of economic growth and general well being!
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Pressure
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Pressure
• The number of ways of marketing to and communicating with customers has exploded, and will continue to do so
• Pressure on price and margin is matched by the need to support a wider range of marketing activities – just to be in the game
• Whilst marketing through additional channels drives additional business this is diluted by cannibalisation
• It all adds up to …. more pressure on marketeers!
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Marketing channels
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Marketing channels
Paid Search
DisplayAds
Catalogue
Retail
Social Networking
Mobile Inserts
SEO
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Data management
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Data management 1
Housefile Mailings
Requester Mailings
Database
Purchases
Order Data
Catalogue Requests
Space Ads
Card Decks
Lists
OTPInserts
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Data management 2
Catalogue Requests
Housefile Mailings
Requester Mailings
Database
Purchases
Retail
Space Ads
- Walk Bys- PR- Recommended- Thin Air
Purchases
Order Data
Order Data
Lists
OTPInserts
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Data management 3
Catalogue Requests
Housefile Mailings
Requester Mailings
Database
Purchases
E-mail ProgrammeHome Shopping
Retail
Space Ads
- Walk Bys- PR- Recommended- Thin Air
Web
- Natural Search- Paid Search - Online Ads- Affiliates- Thin Air- PR
Orders
Purchases
Order Data
Order Data
Order Data
Lists
OTPInserts
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Lists
OTP
Inserts
Data management 4
Catalogue Requests
Housefile Mailings
Requester Mailings
Database
Purchases
E-mail ProgrammeHome Shopping
Retail
Space Ads
- Walk Bys- PR- Recommended- Thin Air
Web
- Search Engines- Online Ads- Affiliates- Thin Air- PR
Orders
Purchases
Retail Mailings
Order Data
E-mail ProgrammeRetail
- Natural Search- Paid Search - Online Ads- Affiliates- Thin Air- PR
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Marketing process
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The traditional marketing process
• The ‘well trodden’ route
Develop AmendEvaluateMeasure RetestTest
Develop AmendEvaluateMeasure RetestTest
Develop AmendEvaluateMeasure RetestTest
Develop AmendEvaluateMeasure RetestTest
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………………and now
• The ‘long and winding road’
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The issues
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The issues
• More things to spend your budget on• Marketing process no longer linear but organic• More difficult to measure ‘real’ ROI• But more opportunity for testing at low cost and
commitment• Constantly changing landscape• More resources needed to manage the range of
activities• More specialist / technical than ‘traditional’ marketing
techniques
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The day ahead
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The day ahead
• Developing a strategy• Customer acquisition choices• Developing and retaining customers• Collecting, analysing and interpreting data• Implementation and defining ‘success’
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The Challenges of Multi-Channel Retailing
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