<\/p>\n\n\n
There\u2019s an assumption that purchasing is now permanently online, having migrated during the pandemic. Data from the ONS supports this \u2013 while online purchasing accounted for 19% of sales in 2019, it shot up to levels of 30-40% during lockdowns, then fell back to 25% by 2022[i<\/a>].<\/p>\n\n\n\n <\/a><\/p>\n\n\n\n But these statistics are not the whole story. Our work with Lakeland revealed a cohort of customers who were \u2018store lovers\u2019 and wouldn\u2019t shop online \u2013 even those that had opted into marketing emails. The CRM strategy proved critical to enticing these customers back in-store after lockdown; they received compelling and timely direct mail which enticed them back at the earliest opportunity.<\/p>\n\n\n\n Another retailer decided to remove discounts for existing customers and only use them to tempt new customers. Some lower value incentives were retained for current customers, but product discounts were almost all turned off. The quarterly results showed an upturn in revenues.<\/p>\n\n\n\n However, the analytics revealed that this uptick was coming from net new customers, plus a post-lockdown surge in-store. Meanwhile, margin contribution from existing customers had almost halved. Average transaction values from existing customers were up but repeat purchases and purchase frequency were down. The strategy was flawed.<\/p>\n\n\n\n Considering this, management reversed the policy. Customer discounts were reinstated and behaviours started to swing back \u2013 although any long-term damage is yet to be seen.<\/p>\n\n\n\n Analytics should be tracked across the channel mix. While direct mail has an advanced measurement process, other techniques are not subject to the same rigour: we don\u2019t often measure incremental growth on PPC or social. A marketing budget must add value, so it\u2019s essential to measure performance through incremental<\/em> spend. Generally, online campaigns only measure gross results, which is ironic when online advertising claims to be fully measurable.<\/p>\n\n\n\n Control groups to understand how much spending is genuinely<\/em> attributable to marketing could mitigate this. Those who opt for this approach will understand each customer holistically \u2013 whichever channel they\u2019re using.<\/p>\n\n\n\n In turn, they can divert the presentation of PPC, for instance, away from customers who already spend with the advertiser \u2013 thus not \u2018wasting\u2019 budget on clicks from established customers. Rather than reducing<\/em> PPC spend, retailers are reassured it\u2019s being properly spent.<\/em><\/p>\n\n\n\n Incentives and discounts remain essential tools of the trade; rewarding spending, whilst simultaneously encouraging more, is an art. However, there\u2019s a desirable new layer to loyalty rewards, accelerated by the pandemic: exclusivity. We\u2019ve worked closely with Lakeland on their exclusivity schemes, which demonstrate \u2018extra mile\u2019 behaviour, allowing loyal customers to feel like they are part of the club.<\/p>\n\n\n\n Lakeland also facilitates fund-raising events for charities, even maintaining local appeal by varying the beneficiary by region. Consciences are heightened post-Covid, so \u2018softer\u2019 elements are likely to be imbued in more loyalty programmes as retailers clock up \u2018emotional credit\u2019. Ultimately, an exclusive offer will make a consumer feel more connected to and understood by a brand and may consequently drive loyalty.<\/p>\n\n\n\n Change is afoot but<\/p>\n\n\n no-one<\/u><\/p>\n\n\n really knows how it will turn out. There may be a permanent rebalancing between online and offline \u2013 but physical retail is still important to customers. Why else would online companies still be opening physical stores?<\/p>\n\n\n\n Agility is the name of the game, plus avoiding assumptions about customer behaviour. That\u2019s why data is so important:\u00ad businesses that use their data can differentiate themselves from competitors and optimise their results.<\/p>\n\n\n\n Lakeland\u2019s Pandemic Journey<\/strong><\/p>\n\n\n\n Scott Jefferson, CCO<\/em><\/p>\n\n\n\n During lockdown, we maintained communications with customers \u2013 including those who weren\u2019t buying online. We moved away from traditional sales messaging to \u2018content\u2019 that would entertain customers during a stressful time, like \u2018how to\u2019 articles on cooking and baking.<\/p>\n\n\n\n We aimed to help our customers manage their lives and keep the brand in mind, rather than directly sell product. In fact, it did both. Click-through rates increased from 6% to 25% and we have since hard-wired these communications into our strategy.<\/p>\n\n\n\n We were concerned that discounting might be affecting margins, so we endeavoured to find out. Targeted discounts were introduced for higher value groups. It transpired that those customers who used discounts from their offer packs were three times more valuable (revenue and<\/em> margin) than those who had not.<\/p>\n\n\n\n Finally, we are seeking to delight customers with unique experiences, along with charitable support. We block booked tickets to a well-known hospitality exhibition, then arranged for celebrities to attend Lakeland-only sessions. Loyalty scheme members were offered tickets at a minimal cost, offering a truly unique experience. We have also donated \u00a3200,000 to charitable causes.<\/p>\n\n\n\n Ultimately, getting to know our customers and maintaining that relationship has paid dividends with regards to what we\u2019re able to offer them post-pandemic. We\u2019re not just able to offer generic rewards for loyalty but to demonstrate that we understand our core customer set and what they actually want.[i<\/a>]<\/a><\/p>\n\n\n\n https:\/\/www.ons.gov.uk\/businessindustryandtrade\/retailindustry\/timeseries\/j4mc\/drsi<\/p>\n","protected":false},"excerpt":{"rendered":" Retailers are experiencing a realisation post-pandemic. While stores were closed, those with loyalty programmes were able to keep in touch with customers.<\/p>\n","protected":false},"author":7,"featured_media":3401,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","editor_notices":[],"footnotes":""},"categories":[1],"tags":[3],"topics":[2],"class_list":["post-3400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-brands-marketers","topics-editorial"],"acf":[],"yoast_head":"\nDiscounting \u2013 the Devil\u2019s in the Detail<\/h2>\n\n\n\n
Measuring Online and Offline Spend<\/h2>\n\n\n\n
The Changing Face of Rewards<\/h2>\n\n\n\n
Conclusions<\/strong><\/h2>\n\n\n\n
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