The 2017 data-driven marketing report. Retail Summary Report

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1 The 2017 data-driven marketing report Summary Report

2 Data-driven marketing survey Introduction Top three retail data-driven priorities Most retailers recognise the importance of data to their current and future marketing success, yet they have only just scratched the surface of what s possible. A steady shift to data-driven marketing will revolutionise every aspect of retail marketing, providing brands with opportunities to provide personalised and seamless people-based marketing to stand out from the competition. 1. Improving customer retention strategies 58% 56% Jaywing commissioned a study to evaluate marketing s maturity in datadriven marketing by capturing the views of over 250 Managerial to C-level marketers, within medium to large-sized businesses. This report is a summary of the results for the retail sector. marketers follow the growing trend of becoming customer obsessed, with 58% ranking improving customer retention strategies as the top priority for data-driven marketing. Interestingly, retail was the only sector to flag retaining and acquiring more high value customers above improving the customer contact strategy. This is perhaps due to the intense competition in this sector today. The retail industry is changing rapidly and those that have adapted to making decisions using modern data science techniques already have a competitive advantage. Data science techniques help retailers to understand their customers intent, behaviour and full path to purchase. 2. Acquiring more high value customers 53% 43% 3. Improving the customer contact strategy 43% 62%

3 Nearly 6 in 10 retailers say improving customer retention strategies is their top data-driven marketing priority. risk.jaywing.com

4 Data-driven marketing survey The retail sector s data-driven marketing maturity How advanced are retailers at measuring attribution? How does the retail sector compare? As is the case for other sectors in the study, a half (50%) of retail marketers think they are about the same as their competitors and peers in the use of data-driven marketing. The maturity of personalisation Despite this, it would appear that retailers are lagging behind with the adoption of personalisation. Only 8% of retailers use full cross-channel personalisation, indicating a significant lack of adoption. The majority of retail marketers (74%) are only using basic personalisation techniques across some of their channels and not at an individual level. is the most commonly personalised channel for retail marketers with nearly all (95%) retail marketers personalising their programmes. This lack of personalisation in the retail sector offers a great opportunity for those who want to steal a march on the competition. The maturity of measuring ROI and attribution In line with the overall average, the majority of retail marketers (72%) agree that accurately attributing value across channels is vitally important to their organisation. Yet a significant number of retail marketers are still using basic methods to calculate attribution and only 15% are using advanced attribution techniques. Yet surprisingly, we found that the majority of retail marketers (60%) believed they were using the right approach to attribution. This may show a lack of knowledge of the latest data science techniques. Using advanced attribution techniques 15% 18% First interaction 19% 31% Last interaction 30% 26% Channel most engaged with before purchase 36% 25%

5 Only 1 in 10 retailers are using advanced attribution techniques. Yet 6 in 10 think they are using the best approach. risk.jaywing.com

6 Data-driven marketing survey Key data challenges for retailers Top three data challenges The importance of data management is well known, with 96% of retailers saying data management is a priority for their marketing function this year. But there are still obstacles to its collection, understanding and management. A skills gap is impeding data management improvements 1. Lack of data skills/capability 50% 47% 2. Availability of the right tools Accessing, defining and using customer data is one of the most difficult challenges faced by retailers today, as retail marketers struggle with a skills gap. 30% 36% Half of retailers say a lack of skills and capability is the biggest obstacle to improving data management in their organisation. This is followed by a lack of availability of the right tools to help them analyse and manage data. 3. Data infrastructure 35% 32%

7 Half of retailers (50%) say a lack of skills and capability is their main obstacle to improving data management. risk.jaywing.com

8 Data-driven marketing survey Summary Empowered consumers and the digital era is demanding significant change, particularly for retailers competing with retail giants such as Amazon. In order to generate a meaningful relationship with customers, retailers need to improve the maturity of their data-driven marketing from personalising messages across the channel mix, to accurately measuring ROI and attribution across online and offline channels. Yet retail marketers have some major hurdles to overcome, from a data science and analytics skills gap through to old infrastructures and siloed data. In order for retail marketers to achieve the ultimate customer experience, they must refocus their priorities on eight key areas: 1. Start with best practice data management 2. Ensure your strategy is informed by data and insight 3. Get the right technology and tools to collect intelligent data 4. Combine online and offline data 5. Personalise your entire customer contact strategy 6. Achieve the right blend of creativity and data 7. Adopt advanced attribution techniques 8. Find the right experts to fill your data skills gap To read the full research report and benchmark your organisation, visit jaywing.com

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10 Data-driven marketing survey Eight tips to transform data into value 1. Adopt best practice data management The importance of data management is well known, with 96% of retail marketers saying it is a priority for their organisation. If customer insight is key to competitive advantage in the digital age, then data will be the fuel to provide this insight. But you will only gain the right insights if you have the right data infrastructures and processes in place that capture individual interactions as they happen. 2. Ensure your retention and acquisition strategy is informed by insight The competitive nature of the retail industry today, means firms need to place equal focus on acquiring and retaining customers. Data can inform the whole marketing mix by personalising communications across every channel, at an individual-level. By ensuring your strategy is based on data and insight you are already steps ahead of the competition. 3. Get the right technology in place Advancing with data-driven marketing can become complicated without access to the right tools and analysis. Emerging marketing intelligence platforms are now bringing tools and analysis together, integrating rich and disparate customer and market data into a single datadriven model. 4. Connect online and offline channels Most retailers today operate an omnichannel model with both online shopping and offline stores, yet they struggle to understand their customers behaviours across channels. In addition, given the rise in customers hopping between channels and devices to purchase goods, improving crosschannel marketing and measuring its effectiveness is harder to achieve. By joining the dots between online and offline customer journeys you can create a single customer view, improve the customer experience and improve ROI at the same time. 5. Personalisation that goes beyond Hello [first name] The majority of retail marketers (95%) personalise campaigns. But personalising customer communications doesn t have to stop at campaigns. Providing customers with a personalised experience across all channels means you can offer a consistent journey that satisfies their individual needs to the letter. 6. Achieve the right blend of data and creativity The competitive and crowded nature of the retail market means that it is difficult for retailers to set themselves apart. Yet we now live in an era of data-driven creativity, where data is being harnessed to shape and realise the value of a brand, to shape personal relationships and drive more effective communications. Savvy marketers have already jumped on this opportunity to stand out amongst competitors. 7. Model advanced attribution across channels at an individual-level While 72% of retail marketers agree that accurately attributing value across channels is vitally important to their organisation, only 15% are using advanced attribution models. This means that marketers are still struggling to understand the return from their investments, and are unable to attribute revenue across all channels. A great place to start is by joining together online and offline data and channels at an individual-level and then to build advanced models to attribute spend accurately. 8. Partner with the data experts A skills shortage is often the biggest barrier to marketing programmes, with 50% of retail marketers citing this as their top challenge. With the lack of skilled data scientists, organisations are increasingly turning to external experts to help them to understand, manage and manipulate data. Expert data scientists will not only discover new insights, but they have the ability to make it actionable and meaningful for your specific strategy or campaign.

11 risk.jaywing.com Competing with data science About Jaywing In order to consistently make the most informed decisions, retailers need to take advantage of data science. However it s clear there are a variety of challenges hindering retail marketers ability to make the transition from data-driven marketing immaturity to enjoying a competitive advantage over their rivals. For now though, too many retailers are hindered by a skills gap and organisational siloes. In order to use data as a way to grow the business, marketers need to capture, consolidate and combine online and offline data to develop a true single customer view. The focus on using data to create value for customers before trying to extract value from them, is the key to winning the data-driven marketing race. Jaywing has a long-standing heritage in data. From developing and delivering data-driven solutions across both marketing and credit risk functions, everything we do is grounded in data. Over the past 17 years, we have worked extensively across a variety of industry sectors, including retail, financial services, travel and leisure, and telecoms and utilities to transform data into value. With our heritage in data science, we deliver exceptional results, creating briliant work that s impossible to ignore. We have a solid reputation for developing complex analytical and modelling approaches that underpin major investment decisions across many industry sectors, where accuracy and rigour are critical to success. Jaywing has a team of over 70 data, analysis and modelling experts. Many of these people have held senior positions in client organisations, and our focus is very much on the commercial application of analysis and data-driven decisions.

12 Data-driven marketing survey Best practice case study High Street er Connecting online and offline customer journeys enabled a leading retailer to save thousands of pounds each month With an already strong brand and e-commerce presence, this leading retailer aimed to ensure its customers had a consistently good experience across online and offline channels, and it had a hunch that it could better optimise its marketing spend by uncovering some insight into its customers journeys. Using Jaywing s customer intelligence tool, Almanac, it discovered some interesting insight that enabled it to better tailor communications and address causes for basket abandonment, while also highlighting where marketing spend can be better optimised. It also provided the retailer with new insight to re-focus targeting on genuine prospects and improve PPC strategies.

13 risk.jaywing.com Best practice case study High Street er How a deeper understanding of the combined effectiveness of offline and online spend can optimise in-store footfall As a retailer with 100 stores across the UK selling big-ticket items and being very dependent on the supply of consumer finance, this brand had a difficult time during the economic downturn. Under new ownership, a lot of emphasis has been placed on their online shopping experience, contributing significantly to its turnaround. During recent years, we have supported the brand with its digital marketing and in the last 12 months we have taken it to the next level by providing deep insight in to how offline and online spend can optimise in-store footfall. One of the first things we did was bring together display advertising, offline/abovethe-line and store visit tracking into a single data view so that we could analyse the impact of scaled advertising online and offline. We found that display and offline/above the Line (ATL) work well together, with display having an immediate positive effect on footfall, while offline/atl activity performed better at inspiring future store visits We also found that spikes in offline/atl marketing spend resulted in an increase in store visitors on the following week, whereas a moderate/consistent level of offline/atl marketing spend didn t seem to maintain a strong level of footfall. We therefore concluded that cutthrough was vital, and that the offline/atl promotion of sales/ offers should start early to drive awareness.

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