Retail is changing and so are the formats through which to influence purchase. On Device Research’s Alistair Hill talks through some of his firm’s findings in this area.
Mergers, acquisitions, and continued structural changes to the retail landscape driven by ecommerce: the last twelve months have introduced a heady concoction of new competitive pressures to UK retailers. The rise of discounter supermarkets on one hand and direct to consumer models on the other hand, should both be viewed against a looming backdrop of Amazon’s ever-expanding footprint in the consumer path to purchase. Sainsbury’s and Asda took action by announcing a merger in April of this year, while rumours swirl of an Amazon Morrison’s acquisition.
Never has there been a greater role for marketers in applying the power of digital to retail brand building, and as a result, the measurement of marketing effectiveness has never been more important. Digital has had a rough ride over the past few years with justifiable accusations that much effectiveness data sits behind walled gardens. At the same time the industry keeps talking about the value of long term brand building online, while still getting caught up using basic short term behavioural metrics such as click through rates. However, the digital opportunity for retailers is far greater than that measured by a simple click: it can build brands and drive store footfall.
Mental availability and measuring brand impact
To understand the value of digital advertising for retailers it’s important to understand the shifting nature of UK media consumption habits. As revealed in On Device Research’s UK Guide to Retail Marketing Effectiveness report, mobile dominates consumer attention. 88% of our sample of UK consumers use the mobile internet daily, 87% use mobile apps and 72% watch online video. In comparison, linear TV lags behind with just 68% viewing it daily.
With mobile commanding consumer attention, it is the ideal platform for growing mental availability by influencing brand consideration. Brand metrics tell us more about long term ad impact than clicks ever will and an analysis of On Device Research’s ad impact database reveals that digital retail ads can have impact throughout the funnel. Across 60 retail ads tested, and average uplift of +9.1% percentage points in Unaided Brand Awareness is seen following ad exposure, while further down the purchase funnel we can see an average uplift in Purchase Intent of +1.9%.
We also know that for those wanting to shift the dial on Purchase Intent for offline and online brands, driving a positive emotional response from consumers is vital. The emotion vs Purchase intent dynamic is one that entertainment, tech and consumer electronics brands have taken advantage of to great effect, but it’s an area in which retail brands need to work a lot harder.
Physical availability and measuring store footfall
Mobile doesn’t just dominate our media consumption habits, but also plays an increasing role in our shopping habits. 29% of UK consumers claim to have bought groceries on their mobile phone in the last three months, but even when a purchase isn’t fulfilled on a mobile device, mobile still plays a crucial role in the path to purchase. 55% use their mobile to check prices and 30% read product reviews when in store.
However, with the ONS reporting that 82% of retail sales still happen offline, it is important to acknowledge that digital is a channel not only for retailers to build brands, but for driving store footfall too. On Device Research and Location Science have combined mobile geo-location data and passive ad tracking technology to provide a clear picture of lower funnel impact, revealing an average 14.2% uplift in store footfall following digital ad exposure.
Different retailers face different challenges
Ultimately the disruption that digital brings to both mental and physical availability will vary by retailer, with each one presented with its own unique set of challenges. Our research reveals that not only are Marks and Spencer food shoppers the least likely to be watching TV on a daily basis, but they are also the most likely to be shopping directly on a brand’s own website, bringing to light the potential impact that direct-to-consumer brands could start to have on the high street (23% of consumers claim to shop directly on brand’s websites). Lidl shoppers on the other hand claim that they are most likely to skip online video ads. With Lidl shoppers also claiming that they trust product recommendations from social media influencers more than any other supermarket shopper, clearly the ever-growing influence of online personalities in the path top purchase cannot be ignored either.
Ultimately, digital disruption creates huge digital ad opportunities for retailers. Measuring the end-to-end impact of digital in a framework that translates impact into actionable, optimisable learnings is vital, and this is a framework that we call Return on Brand impact. Digital should not only be measured in isolation however. Ad recognition software allows to passively measure TV ad exposure, while geo-location data allows us to determine exposure to out of home ads. The building blocks are now well and truly in place to paint a true picture of marketing effectiveness for retail brands.