Markacy joined many brands and eCommerce technology partners at eTail East 2022 in Boston, the eCommerce & Omnichannel Conference.
Markacy Co-Founders Chris Jones and Tucker Matheson hosted a 3 hour workshop at the event on Digital Marketing, Branding and Content and got some insight into what is evolving in the online marketplace. Below are the top eCommerce trends we heard the most about at eTail.
“We always love attending eTail because you get a chance to talk to different CMO’s, eCommerce and Marketing Directors that you are not directly working with, and learn about what their top priorities are. Many times they directly align to what we are seeing and what our clients are dealing with, which is validating. And many times you get a new POV or tactic to think about.”Chris Jones, Managing Partner, Markacy
The Top 5 CMO Priorities To Note
1. Finance Based Marketing
Up until 2021, revenue growth dominated investors, boards and brand leadership discussions.
Since Fall 2021, the economic landscape in terms of U.S. monetary policy, global supply chain issues coming out of the pandemic and the Russia and Ukraine conflict have caused brands to tighten their financial belts and focus on the bottom line in lieu of rising costs.
Profitability is now the #1 priority for CMO’s, Marketing Directors and eCommerce Directors, and they need clear financial models on how this will be obtained across initial acquisition and customer LTV.
This is causing investors to be selective, and brands are forgoing additional fundraising series until the economic outlook improves.
In many cases, brands are also sacrificing growth for profitability which is causing them to rationalize the scalability of existing marketing channels. Many brands are cutting marginal or unprofitable media investments and trying to reinvest into new expansion channels to efficiently get in front of new customers.
Markacy presented its Finance Based Marketing solution at eTail East and outlined a few tactics that brands can use now to improve their bottom line.
- Optimizing Marketing Infrastructure & Investments:
- Brands need to develop their infrastructure stack to be lean and scalable. Shopify for instance has built a strong reputation in eCommerce because it operates cloud–based. That means online merchants don’t have to worry about server structures, performance, or the protection of their online shop.
- Shopify also has a best in class eCommerce app stack that allows brands to tap into leading practice tools like Klaviyo for email/SMS, Yotpo for reviews and loyalty and Recharge for subscription models and customized user portals. Minimizing the complexity of your technology infrastructure and minimizing app usage to maintain site speed are two high level applications of this principle.
- Creating a Profitable Customer Acquisition Funnel:
- Markacy has published its Media Efficiency Rate (MER) Calculator that helps brands understand delivered product margin based on their average order value. This calculation helps brands understand how efficient they need to be with overall advertising spend for direct to consumer, as well as how to think about managing customer acquisition cost (CAC) within marketing platforms to retain first purchase profitability.
- Measuring and Improving ROI of Content Investments: To ensure the ROI of content investments, brands need to focus on these two core principles:
- Pre-Production Planning: To ensure the best ROI on content investments it is best to have creative teams work closely with media, web and CRM teams to understand specific content needs, and where the most media dollars are being spent that require content. The more brands can align content production to marketing execution and prior data, teams can ensure higher ROI on investments.
- Defining Clear KPIs: Brands should be measuring content for performance marketing, differently from brand awareness, and need to define clear KPIs for each. Performance marketing content should look at total spend, click-through-rate, conversion rate and return on ad spend. Brand awareness investments tend to look more at impressions, site visits and user engagement.
- Expanding Customer Lifetime Value:
- Brands need a clear understanding of their customer lifetime value and average repeat purchase rate to design programs that incentivize customers to purchase more over time. This could be strategic cross-sell email programs based on what customers bought, or loyalty programs that reward repeat purchases. All these marketing programs should be tied back to a financial model and automated processes that can be measured.
2. Brand Awareness vs Performance Marketing
During eTail East, Markacy interviewed several CMOs about the difference between brand awareness and performance marketing content including:
- Elizabeth Drori, CMO of Sperry
- Melissa Crowe, VP, Brand Marketing and Content Strategy, ButcherBox
- Maggie Lee, CMO, Fresh Clean Tees
- Thomas Fitzpatrick, Head of D2C Sales & Online Retail, Goodr
The top takeaways from the conference were that brands are measuring brand and performance creative performance differently, and segmenting budgets accordingly.
CMOs are now defining different KPIs for branded and performance creative, and even going so far as to separate those functions into different teams to drive focus.
There has also been a trend around brands producing branded content such as docu-series as well as event activations, pop-ups and takeovers, etc. Companies are continuing to prioritize authentic storytelling to differentiate their products and services from competitors and are finding ways to weave in purpose-driven initiatives into these efforts.
For instance, Elizabeth Drori, CMO of Sperry highlighted the brand’s recent investment in their Water For All 3‑part docuseries to educate and inspire a more equitable environment in the water space. They are focusing their efforts on racial and ethnic representation and LBGQT+ inclusion and affirmation as an extension of the brand.
Many brands mentioned that because direct response and performance marketing is so measurable, making the first leap into brand awareness investments was a big step for leadership, but a necessary one for their brand growth long-term.
3. Insourcing vs Outsourcing
Markacy hosted a panel at eTail with several CMO’s focused on organizational structure as it relates to internal and external resources.
Based on the panel, leaders highlighted the following best practices:
- Keep Strategy In-House:
- CMO’s noted that brands should be owning their own strategy at all stages of growth. This included business strategy as well as foundational creative such as brand identity and brand guidelines.
- Stage Of Growth Matters:
- Marketing leaders interviewed by Markacy noted that stage of growth within direct-to-consumer brands directly influenced how much they outsource to agency partners. It was noted that the earlier the stage of company growth, the more they will need to rely on outsourcing.
- Over time, companies tend to insource strategic functions like media buying, email marketing and design, and tend to still outsource for more specific expertise like SEO, web infrastructure, or expansion channel advertising.
- How To Work Best With Agencies:
- CMO’s that Markacy interviewed noted that treating agency partners like part of their teams drove great accountability and strategic alignment on core KPIs. They also noted that agencies are great at implementation and specific expertise, but that brands need to own the strategy and brand direction and provide clear guidance to their agencies on brand campaigns, sales themes, promotions, creative direction, etc.
- While most CMO’s agreed that creative, like strategy, should eventually reside internally, many also mentioned still having external agency partners on creative production to keep a competitive environment in place that pushed their internal team.
- Other CMO’s mentioned separating internal brand and performance driven creative teams within their own organization and setting different KPIs to keep these two functions.
The importance of genuine connection to your customers is becoming a greater emphasis as digital competition increases. Utilizing first-party data and AI to drive these personalization efforts across the customer experience and build long-term brand loyalty is how companies will maximize customer lifetime value.
At eTail there were many personalization and AI driven technologies aimed at improving the customer journey and making it feel like a 1-on-1 relationship while shopping.
Markacy interviewed Michael Aheam, VP, Strategy & Customer Development at Sinch which is a cloud mobile messaging platform that sends personalized campaigns and enables customers to interact with a brand by texting back, versus typical push model SMS marketing, which is typically just a one-way communication.
This is just one example of how technology partners are trying to support marketers in optimizing marketing tactics and personalization with customers.
5. Customer Data
CMOs are getting ahead of iOS impacts and the upcoming loss of third party cookies in 2023 by investing in different email acquisition tactics, gaining zero-party data for advanced targeting and investing in customer data platforms like Segment to map customer actions across the funnel.
Advertising platforms use third party cookies to track and learn about web visitor’s overall online behaviors, such as websites they frequently visit, purchases, and interests that they’ve shown on various websites. This helps various ad tech platforms today target different audiences.
With this data going away, brands need to rely much more on a strategy to build their own database and develop a 1-on-1 communication with their customer base.
Below are a few of the top tactics discussed.
- Email Capture:
- There are several different methods brands can use to capture email addresses, including:
- on-site email or SMS capture tactics,
- pop-up A/B testing,
- lead generation advertising campaigns,
- email sign-up giveaways,
- co-branding initiatives aimed at email entry,
- referral programs,
- direct mail offers for email sign-up,
- and more.
- There are several different methods brands can use to capture email addresses, including:
- Zero-Party Data Gathering:
- Many brands are starting to use on-site quizzes or consultation forms to gain an initial user profile upfront. Others are sending short surveys as email campaigns to learn more about existing customers over time.
- The goal is to have a CRM platform and strategy where these data variables can be appended to the customer profile for email or media targeting down the line as the company builds its database.
How To Take Action Post eTail
eTail is always a great conference for industry experts to come together to share strategic insight, network and learn about new technologies and tactics.
As you reflect on Markacy’s top 5 takeaways, think about how they apply to your organization and have a conversation with your teams about how your brand is addressing each one.
Contact Tucker Matheson or Chris Jones, or visit our contact page here if you need any agency support or expertise around these industry themes or others affecting your business and growth.