Digital-first retailers are emerging far stronger from Covid compared to those who have recently entered the online shopping market as they are not bogged down in legacy systems and have greater experience of making their customer data “actionable”.
So says a new survey of retail marketing chiefs by CommerceNext, sponsored by Yotpo, which claims that retailers who started in stores or even mail order are expected to struggle, even as consumers begin to resume their pre-pandemic ways of life.
Despite the digital transformation gains made by nearly every retailer in the past year, the research found that digital-first retailers are much more focused on driving customer retention, acquisition and delivering superior site experience.
CommerceNext co-founder Scott Silverman said: “Not all ecommerce marketing is equal. This report illuminates the divergent strategies that have evolved post-pandemic between digitally native retailers and incumbents.
“While both are focused on customer retention, the digital natives let consumer behaviours and preferences dictate their strategy. Incumbents struggle to make data actionable because of legacy marketing systems. As we continue to become a more ecommerce-driven world, these differences will have a profound impact on retailers’ bottom lines.”
Interestingly, there is a decisive split between digital-first retailers and incumbent retailers on 2021 strategies and tactics. The former is looking to the future of first-party data and the latter to omnichannel but over two-thirds (69%) of all retailers are focusing on retention, overcoming the industry’s historical obsession with acquisition.
Given the residual effects of new privacy laws on advertising costs, 43% of digital-first marketers say acquisition performance came in below expectations, leading them to focus more spend on retention.
While 86% of all retailers are satisfied with their privacy compliance efforts (GDPR, etc), more digital-first retailers are committed to solving the major big tech privacy changes by diversifying their marketing budgets away from the likes of Facebook and Google.
Incumbent retailers are still investing in customer data platforms, testing new channels and relying on omnichannel approaches, including email and loyalty programmes, to accumulate first-party data.
Yotpo vice -president of product marketing Rosa Hu commented: “Regulations around consumer privacy continue to tighten. As a result, acquisition without retention becomes a losing cycle of churn and decreasing profits.
“In this data, we’re excited to see more retailers getting creative with loyalty, segmentation, SMS, UGC and other tactics. This will deepen organic brand to customer relationships, ultimately creating much better value for the customer and long-term retention.”
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