A learning accelerator… such is the role that the Covid-19 crisis has played for the retail market. Why an accelerator? Because brands had to change their game plan extremely quickly… and learn just as fast. “The lockdown caused many brands to scale down their objectives and investments. They set their sights on online buyers, believing that they could quickly convert this particular audience,” explains Thomas Beurton, an omnichannel product expert at Criteo. “This tactic was understandable in light of the prospect of low footfall in the stores, so the simpler approach appeared to involve reaching out to the online community.”
Such tactics were reasonable, but based on assumptions that proved to be partly wrong. “The situation can be summarised as follows,” adds Thomas Beurton: “customers coming into stores are more faithful to an actual experience than a brand. That explains why switching over from an offline activity to an online activity is anything but a walk in the park. The aim is not to convert in-store customers into online customers, but customers who draw inspiration from the website before heading to the store at a convenient time.”
Analytical cohort studies carried out by Criteo between November 2019 and March 2020 confirm this trend, i.e. the repeat purchase rate for in-store customers who visited the brand’s website was 51% higher than customers whose experience was physical only. By the time lockdown restrictions had been eased mid-June, a study among the same group of advertisers revealed an 86% repeat purchase rate for this customer segment. The bottom line is that these customers have got into the habit of checking whether products are in stock before heading off to the store.
A comparison of customer behaviour before and after the lockdown yielded another invaluable piece of information: the repeat purchase rate for in-store customers who also visited the website was the least affected by the crisis. Three times less than web customers, in-store customers and multichannel customers… Also worth noting is that multichannel customers feature a repeat purchase rate that is 3.8 times higher than web-only customers.
What key points should we take home from the data? Concentrating time and resources on web customers does not appear to be an effective strategy, and that is especially true for brands that restrict their efforts to urging customers to make repeat purchases online. Secondly, although multichannel customers offer greater value, pushing in-store customers to purchase online will fall short of expectations. A better approach would be to encourage in-store customers to draw inspiration from the website and web customers to visit the stores at an appropriate time, such as via location-based retargeting.
So what is the moral of the story? Activating an omnichannel strategy does not involve forcing a given channel on a customer segment. “On the contrary,” stresses Thomas Beurton, “the idea is to implement a truly user-centric approach and improve the ability to predict the next purchase over the appropriate channel.” Criteo advocates a strategy that combines the impact of its display inventory, its predictive algorithms (the product that will interest the customer, the channel to be utilised or the user’s value according to the advertiser’s performance objectives) and the first-party data of the customers’ CDPs (Customer Data Platforms).
Pairing Criteo with a CDP is the key to fine-grained segmentation. “Our CDP captures all the first-party data, which allows us to import the data from the CRM,” advises Michael Froment, CEO of Commanders Act. “But its scope of action goes much further than that, since the CDP also absorbs online acquisition and conversion data. Then we can reconcile those data and segment the audiences more effectively before sending the information to Criteo for activation.” Segmentation is all the more fine-grained when it incorporates such business dimensions as CLV (Customer Lifetime Value) for even greater interaction with Criteo’s algorithm.
The value of owned or first-party data had already been established and recognised before the health crisis. Now they represent a must-have tool for segmenting and activating audiences as part of an omnichannel strategy. To safeguard the brand’s image as audiences are activated while adapting to the different paths to purchase (and not forcing any particular channel), CDP platforms are increasingly shaping up to be the pole star for retail professionals.