Retail marketing executives continually probe to better understand their competitive environment. Undoubtedly, in most client and prospect meetings I’m asked three questions:
- “What are the core challenges facing retail marketers today?”
- “What are my competitors doing?”
- “What should I be doing to stay ahead of my competitors?”
To provide insights to these questions Acxiom has built an assessment tool called the Marketing Maturity Model. This tool provides insights that help our clients define strategies, build roadmaps and achieve measured capabilities against stated business objectives, targets and key performance metrics. In addition, we’ve added two other elements specific to the retail industry, which are the focus of this blog. First, we aggregated the results of the individual assessments to construct a normative database of the retail specific marketing capabilities and benchmarks. Second, we sub-grouped the aggregated findings into two mutually exclusive groups: apparel and non-apparel retailers. The result of these two actions has enabled us to quantify and measure the insights of the state of the addressable retail marketing platform in its current and future state. Highlighted below is an overview of our findings.
Apparel Specialty/Department Stores versus Non-Apparel Retail Addressable Marketing
A comparison of the priorities and desired improvements of apparel and non-apparel retailers reveals three critical differences in the current state of their respective marketing priorities and desired improvements.
- 80% of the non-apparel retailers recognize their need to more effectively engage with their customers and prospects across channels and have a strong desire to improve this pain point.
- While approximately 58% of the apparel retailers also place a high priority on cross channel engagement, their current state of success and maturity is demonstratively further along than their non-apparel counterparts.
- About two thirds of apparel retailers place a high priority on driving consumer connections, when compared to the non-apparel retail companies.
This means the apparel retailers are focused on successfully connecting with their customers and prospects through personalization across all products, channels and interactions throughout the customer lifecycle. Optimizing the consumer connection process requires a high degree of efficiency in creating a single view of the customer, segmenting the customer file and optimizing the customer experience with relevant and timely messaging across the addressable ecosystem. So, why do apparel and non-apparel retailers have different addressable marketing priorities and desired differences in improving their current state today? There are three critical factors that cause these key differences in their respective marketing capabilities and priorities.
- Generally speaking, apparel specialty/department store marketers have more identifiable data that they can connect to POS and online sales transaction data. As a result, apparel retailers are able to create a single view of their customer using PII data. The result is better insights, better segmentation, better engagement processes.
- Because apparel specialty/department store marketers have been maintaining customer marketing databases longer than most of their non-apparel retail counterparts, there is a higher degree of organizational alignment necessary to make key decisions on priorities and budgetary allocation. As a result, we also evidence apparel specialty/department store senior management having a greater sense of clarity and direction of the value-add of addressable marketing and its incremental marketing ROI potential.
- Typically, the non-apparel retailers have been slower to adapt to addressable marketing platforms because their communication platforms relied more heavily on free standing inserts (FSIs) and other non-targeted mass marketing advertising. Their slower adaption has required them to play catch up, and as a result, they are now recognizing the need to reprioritize their addressable marketing strategies and infrastructure dependencies.
The findings are particularly fascinating when you look through the lens of the sub-segmentation process. What looked like an interesting set of findings when we compared the entire retail sector to the total aggregated normative database took on a totally different perspective when viewed through the lens of the apparel and non-apparel insights. Stay tuned for more, as we next look at retail addressable marketing organizational priorities and desired improvements by company revenues.