The ecommerce and retail marketing landscape has undergone a seismic shift in recent years. This shift has been propelled by the rocket fuel of social media-generated buying habits, inflation-driven price sensitivity, and the aftershocks of global conflicts. This has created a kaleidoscope of evolving customer behaviors and shifting trends, forcing retailers to adapt and innovate constantly. Gone are the days of placid seas; today, retail navigates a turbulent ocean of change, demanding agility and resilience to survive.
At Netcore, we’ve developed a comprehensive piece that assesses the retail landscape in North America. This content explores the evolution of customer interests and leaders’ expectations – the challenges faced within the CMO’s office, the varied methods employed for customer segmentation, and the current and anticipated technologies for enhancing marketing programs. Additionally, it identifies the most active customer cohorts per sub-vertical, among other insightful aspects.
The report unveils several significant findings that could have a lasting impact on the retail industry. Before delving into the details, we encourage you to explore the executive report available here. Additionally, review one of our supplementary pieces for further insights.
Trend 1 – Strangled by Acquisition Costs: Marketers Long for Innovation, But Can’t Afford It
80% of industry leaders prioritize investments in enhancing the shopping experience, a stark departure from the traditional focus on customer acquisition. This strategic move reflects a crucial recognition: loyal, satisfied customers are the lifeblood of any business. Companies must aim to cultivate long-term relationships and drive sustainable growth by fostering positive and memorable interactions across their owned channels instead of employing paid media to acquire customers.
However, this journey has its challenges. Nearly 70% of these leaders anticipate budget constraints due to economic difficulties. This financial hurdle requires innovative, cost-effective solutions to bridge the gap between strategic intent and reality. The question remains: can companies deliver exceptional experiences while navigating economic limitations?
Trend 2 – Paid Media Grabs a Growing Share of the Marketing Pie
Imagine a tidal wave, not of water, but of advertisements. That’s what’s happening to marketing programs, with a staggering one in three dollars now funneled into the relentless pursuit of paid customer acquisition. Delve deeper, and the numbers become even more eye-opening. Marketing leaders, on average, are handing over 35% of their budgets to paid ads. But brace yourself; the story doesn’t end there. An alarming one in four predicts a further escalation, pledging over half their budget to ads in the near future. It’s a resource allocation revolution, and the implications are anything but subtle.
But amidst the booming ad industry, a shadow of concern creeps in. 80% of marketers foresee a looming reality: soaring customer acquisition costs (CAC). This chilling premonition paints a picture of budgets stretched thin and marketers struggling to optimize spending in an ever-shifting landscape.
Trend 3 – The Truth Will Surprise You: Owned Marketing Channels Crush Paid Ads
In the preceding sections of this blog, we’ve extensively discussed the growing prevalence of paid ads in the strategies employed by marketing leaders. However, an essential realization among industry experts is that while paid ads have their place, there’s a consensus that owned channels wield substantial influence, often yielding a higher bang for the buck.
Our survey of industry experts highlights the prominence of owned channels, such as email, SMS, web messages, and even WhatsApp, which are perceived to generate more value than paid advertisements. This paradigm shift underscores the strategic importance of leveraging owned channels, each with unique strengths, as marketing leaders seek to optimize their outreach and maximize the impact of their campaigns.
Trend 4 – Email – A Revenue-Generating Channel You Can’t Ignore
Email might be old school, but it’s not that old school. It’s projected to account for 30% of all marketing revenue in North America, solidifying its status as an enduring digital powerhouse. Why? Its strength lies in laser-sharp targeting and segmentation. We’re not talking generic blasts—imagine crafting personalized messages that resonate with diverse audiences, delivering tailored content, promotions, and recommendations that speak directly to their needs and desires. That’s the magic of email, and it’s a magic that translates into actionable results. Think increased engagement, boost conversions, and ultimately, surging revenue.
Have you heard? Now, you have the ability to incorporate in-app and web functionality directly into your emails. Imagine having a search bar within an email, the capability to manipulate your cart, catalog-based triggers, and many more exciting features. Explore our email lifecycle marketing guide today to better understand how we’re making this innovative integration possible.
Trend 5 – Traditional Data Sets are Choking Brands
Brands commonly prioritize demographics and transactional data, yet they often need to pay more attention to the potential insights offered by zero-party and predictive data, missing valuable information about shopper intent.
- Zero-Party Data: While giants like Amazon meticulously organize customer data, they also leverage zero-party data. This information, willingly shared by customers, includes preferences, feedback, and survey responses, providing explicit insights into their interests and needs.
- Cross-Device and Offline Data: A comprehensive understanding of behavior across multiple devices and offline interactions is vital for a holistic view of the customer journey.
- Predictive Data: Predictive data facilitates forecasting trends, behaviors, and market changes, enabling proactive decision-making.
- Product Context Data: Understanding how consumers interact with products, including usage patterns and preferences, is invaluable for refining product development and enhancing user experiences.
Trend 6 -Retailers Are Missing Out on AI
Approximately 13% of US marketing leaders are not harnessing the power of AI, missing out on opportunities to cultivate customer loyalty and drive sales. Brands can strategically leverage AI in the following ways:
- Tailored Product Suggestions AI analyzes past habits, providing personalized product recommendations to streamline the shopping experience.
- Enhanced Content: AI elevates content quality, making searches more relevant and engaging, effectively guiding customers to their ideal purchases.
- Organized Product Displays: AI organizes products for easy browsing, allowing users to filter items by various attributes for a seamless shopping journey.
- Optimized Email Timing: AI identifies the opportune moment to send emails based on browsing behavior and clicks, ensuring timely and relevant communication.
- Personalized Communication Channels: AI determines the best communication channel for individual customers, guaranteeing personalized outreach that resonates with their preferences.
Retail Marketing: Turbulent Waters, Bright Spots, and Hidden Potential
Retail marketing is choppy, fueled by social media tides, economic storms, and global undercurrents. To navigate these challenges, retailers need to be quick on their feet and think outside the box.
Netcore’s deep dive into North American retail sheds light on key trends:
- CMOs face pressure: Balancing budgets, adapting to changing markets, and segmenting customers wisely.
- Shifting focus: From acquiring new customers to creating amazing shopping experiences.
- Tight budgets, innovative solutions: Finding creative ways to do more with less.
- Paid media reigns, but worries grow: High acquisition costs threaten sustainability.
- Owned channels rise: Email, SMS, and web messages become personalized engagement powerhouses.
- The email oldie but goodie: Still generating significant revenue, even with in-app and web upgrades.
- Data deep dive: Look beyond demographics to zero-party and predictive insights.
- AI’s untapped potential: Many haven’t yet discovered its power for personalization and sales growth.
This blog gives you a taste, but there’s much more to explore. Download the full report for deeper insights and actionable tips to stay ahead of the curve in this ever-changing world.
