I was happy to see our logo last week in P2PI’s Shopper Marketing Landscape shown below. It is a nice reminder of how fast the digital transformation of retail is now happending, at least when it comes to marketing technology. More importantly, P2PI’s infographic reflects a trend that I feel will grow stronger in the coming years, which is the verticalization of marketing solutions.
For the past 20 years, the holy grail of these technologies has been to predict and to capitalize on customers’ intent and preferences.
While this goal is now more achievable than ever, ask a retail marketer how they reveal a customer’s intent and a common response may be browsing history, search keywords, or social media activity. These types of metrics may very effective for some industries, but in others, they paint a very fuzzy picture.
The verticalization of marketing and advertisement technology
Without taking away from P2PI’s excellent summary, from a retailer’s perspective it makes sense to evaluate martech vendors, based not only on their technology, but also on their industry and vertical specialization.
Cross-industry solutions can’t be everything to everyone, and the result is that retailers may fail to maximize the performance and benefits of analyzing customer behavior. This will eventually lead many retailers down a path that focuses on the most appropriate data sources and technologies for their specific use case.
For example, in one-off purchases, such as travel and electronics, consumers’ information seeking behavior, such as searching destinations or reading product reviews can provide more than a hint as to their intent. However, for products and services purchased on a recurring basis, such as groceries or cosmetics, what the customer will buy next is strongly correlated with what they bought in the past.
As many high-frequency retailers race to grow their digital listening capabilities, they should remember the treasure trove of customer transaction data that they have. Applying new advanced data science and activation tools to the data retailers already have can enable retail marketers to more accurately predict and take action on customers’ purchase intent and preferences.
For example, an international drugstore chain is able predict when a customer is expected to top up on diapers and vitamins and even identify cross-sell opportunities for products that the customer never purchased, based on their consumption patterns, and responds accordingly with well-timed reminders and offers over the customer’s preferred channel.
Selecting a vertically specialized marketing solution
Revisiting the Shopper Marketing Landscape, we see that P2PI has provided a very respectable line-up of shopper marketing and ad-tech vendors. I’d like to suggest some vertical specific questions, which a retailer can ask themselves to identify which of these solution may be right for them.
- Is there a high-availability of identified customer transactions?
- Number and variation of items in a basket and durability (hard/soft goods Vs. perishable)?
- Are there multiple suppliers or is the retailer a single brand?
- What is the typical purchase frequency? (high=rich data, low=sparse data)
- What is the online vs offline purchase ratio?
What these factors have in common, is that they will impact the selection of technological components, including detection of consumer’s intent and preference, targeting methods and performance measurement.
The benefits of vertically segmenting marketing and advertising solutions is that when it comes time for a business to evaluate the technology, the vertical “filter” can dramatically reduce the confusion and “false positives” in its evaluation of seemingly competing solutions.
A final thought about the FMCG retail market
FMCG retailers, perhaps, stand to gain the most from the verticalization of marketing and advertising technologies. Their key advantage is that they have been gathering customers’ data for many years and that data is an invaluable resource for uncovering consumer intent and preference (with customer insight science and technology).
Furthermore, they have an opportunity to collaborate with manufacturers on targeted marketing campaigns over their own media channels and third-party providers, which leverage their customer knowledge to enhance the accuracy and profitability of those campaigns. By leveraging their customer data and smart targeting, FMCG retailers will be finally be able to deliver the holy grail of retail and brand marketing, which is to deliver predictive and personalized promotions and offers.