Why digital promotions are more important than ever
Shifting landscapes can make it difficult to focus on the exciting opportunities that result from major market changes. The constant evolution of the digital space fueled by rapidly advancing technology and elusive consumer preferences may leave retailers feeling weary about digital promotions. Frustration over this seemingly unending race causes many to long for the days and simplicity of traditional print promotions. However, digital promotions are here to stay, and they are an increasingly important part of the personalized marketing mix – especially in the omnichannel retail environment.
Fortunately, digital promotions have the potential to provide far more opportunities than headaches. The following are a number of emerging trends in the digital promotions space, which have tremendous implications for retailers in both the near and distant future.
Digital as an omnichannel tool
In the past, retailers predominantly viewed digital promotions as a tool for driving online sales. Smart phones and consumer demand for a consistent omnichannel experience have changed this dynamic, however retailers have still been slow to think about digital promotions as an effective tool for driving (and tracking) in-store sales. Currently, about 90 percent of the top 100 retailers participate in digital promotions and marketing, but probably less than 10 percent are using these promotions to drive in-store sales.
Moving forward, the adoption of iBeacon technologies and growth of wearables will continue to break down existing perceptions and internal structures that relegate digital promotions to online sales. In the future, these technologies will allow retailers to distribute targeted digital promotions and offers to shoppers based on their in-store location and proximity to certain products. Wearables such as the Apple Watch will mean consumers can easily see and view this highly relevant content while carrying a basket or pushing a cart.
It’s all about action
Data and analytics are by far the most important advancement in the promotions space to date, but no one wants spreadsheets of data. Marketers want actionable insights. This means understanding what’s working, what’s not working and being able to adjust before the campaign is over. Today, many retailers still send the same offer to consumers three to five times in one week. Expect to see less of this in the coming years as retailers integrate CRM data into their promotions campaigns and move toward real-time offer testing.
Beyond promotions, analytics provides opportunities to improve the consumer’s in-store experience as well. Analysis of a consumer’s shopping history and heat mapping will allow retailers to map out individual customers’ paths through the store. Features like this will optimize shopper flows, reduce long lines at checkout, and allow for better in-aisle promotions.
Mobile and automobiles
RevTrax proprietary client data from 2014 showed that nearly half (45 percent) of retail offer traffic came from mobile devices. This is up more than 20 percent from the 2013 data. Impressive year-over-year growth combined with the permeation of smart phones in the consumer market indicates that more traffic and redemptions will continue to originate from mobile devices.
One factor that stands to stunt mobile coupon growth is the slower adoption of point-of-sale technologies that support mobile offers. As retailers struggle to invest in the operational technologies to support this trend, many may look to their store apps as an immediate solution. Mobile apps that allow customers to redeem offers and check-out on their mobile device while in the physical store may become increasingly popular.
Similarly, once adopted more widely, mobile point of sale technologies will mean specific customer behaviors can be shared with employees to make more informed decisions on inventory levels, product placement or more useful in-aisle recommendations on products. These technologies also would encourage employees to share promotions and check out customers from anywhere in the store.
Another mobile device that has future implications for retailers’ digital promotions is the automobile. As newer vehicles incorporate more consumer technologies, such as Bluetooth, wireless internet, GPS and voice recognition, there are a number of opportunities to use machine-to-machine technologies to proactively push promotions to consumers based on their vehicle location. This could even mean stores communicating with the in-car computer to welcome customers and offer better parking and other perks based on their shopping history.
A social affair
Similar to mobile, social offer traffic is increasing at a phenomenal rate. RevTrax customer data showed that in 2014, more offer traffic originated from social media (40 percent) than email (26 percent). This is particularly impressive when one considers that email is the most popular form of digital promotion.
This social shift in the promotions space will result in more campaigns that encourage consumers to share offers and interact with content in these channels. A warning: While social media is an effective way to expand the scope of offers, it opens marketers up to increased customer scrutiny. The offers shared in this channel will have to extend real value to customers and limit exclusions to avoid backlash on social media.
On the flip side, retailers will have to commit to controlled offer management to prevent particularly high-value offers from going viral and blowing out their promotion budgets. Social media could be integrated into the in-store shopping experience in the future as well. This would mean using social contacts to alert consumers if friends have purchased or reviewed products they’re buying or standing near in the store.
Digital promotions and coupons would likely be used to track these activities and incentivize consumers to opt-in to such efforts.
Change is certain
Of course – the only thing certain is change. The introduction of a new retail or consumer technology could completely change the landscape in a few short years. Marketers don’t have to adopt every new thing they read or hear about in order to keep up, but they shouldn’t let fear of change dictate their digital outlook.
Jonathan Treiber is CEO and co-founder of RevTrax, which uses personalized offers to measure and improve digital marketing’s impact on in-store sales. Treiber has been with RevTrax since its inception in 2006, and leads the execution of new product development and strategic sales and marketing initiatives.