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Merging Online & Offline to Deliver Omni-Channel Experiences, Performics & Kohl's (Medill Retail Analytics Council June 2015)
This document discusses the journey of retailers like Kohl's to deliver omnichannel experiences to customers. It highlights the challenges of measuring performance across online and offline channels as consumer behavior changes. Retailers must align internal teams, improve measurement and analytics capabilities, and effectively manage campaigns at the speed required in retail to master the omnichannel experience. Kohl's approach involves setting aligned priorities across teams, soliciting feedback, and willingness to change processes rapidly as the consumer landscape evolves.
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Merging Online & Offline to Deliver Omni-Channel Experiences, Performics & Kohl's (Medill Retail Analytics Council June 2015)
- 1. Merging Online &Offline to Deliver Omni-channel Experiences: A Journey from Measurement to Merchandising to Management
- 2. Michael Kahn CEO Performics Chris Duncan VicePresident, Strategic Marketing Kohl’s
- 3. Performics A performance marketing agencynetwork focused on the relentless pursuit of results
- 4. Kohl’s A leading specialty departmentstore focused on inspiring and empowering families to lead fulfilled lives
- 5. The digital ofeverything is driving this retail journey Executive Summary The evolution and revolution required to master this journey is evergreen and relentless Mastery will be built on data, measurement, platforms and technology…strategic infrastructure to drive strategic management and engagement across channels, screens and platforms
- 6.
- 7. Performics Journey 1998 Performics launches network todrive online sales for catalogers 2001 Performics adds paid search as distribution channel 2003 Performics adds organic search as distribution channel 2009 Performics adds social & display as distribution channels 2011 Analytics practice evolves to address cross channel needs (search to display and social) Biddable Media Scale & Efficiency Technology & Platform Integration Data-Driven Content & Optimization 2015 Attribution Media Mix DMP Performics Omni-Channel Evolution 2012 - 13 Mobile reaches critical mass: strategy, optimization and measurement focus on cross channel and online – offline dimensions 2005 Performics initiates analytics build out focused on clicksteam PROJECT * Extra Resources Involved * Digital Personas 1 3 4 1 0% * Performance Content & Site Audit 1 1.5 2 1 0% * Media Channel Audit 1 1.5 2 1 0% * Consumer Digital Journey (CDJ) 4 3 7 1 0% * Tech Stack Recommendation 1 1 2 1 0% * Advanced KPI Development 7 1 8 1 0% * Attribution - Recommendation 9 2 10 1 0% * Opportunity Assessment 11 1 12 1 0% * Partner Governance Strategy 11 1 12 1 0% * B.I. Strategy 11 1 12 1 0% Elevation Roadmap START DURATION REVIEW START REVIEW DURATION PERCE COMPL
- 8. How Do WeAvoid Data Paralysis? How Do We Create Fully Connected Experiences? Questions Our Clients Are Asking How Do We Better Understand Consumers?
- 9. NON-BUYERS BUYERS acquisition ofretention of enjoy aware buy unaware consider Ultimately, How Do We Win in the Decision Point Battleground?
- 10. Changing Consumer Behavior DrivingOmni- Channel Demands
- 11. More Touch-points, Channels& Devices than Ever Before . . . Stimulus Awareness TV, OOH, Display Zero Moment of Truth (ZMOT) Decision before Store Search, Social, CSE First Moment of Truth (FMOT) In-Store Product Placement, Packaging, Signage Source: Google/Shopper Sciences, Zero Moment of Truth Macro Study (N=5,003)
- 12. 72% said physical stores areimportant in shopping Compared with 67% who rated the Internet similarly 73% people research online, then buy in-store PwC, Total Retail 2014 Survey Physical & Virtual Shopping have Merged . . .
- 13. With Mobile atthe Center . . . Source: Google/IPSOS (May 2014)
- 14. Marketers Working ToKeep Pace
- 15. Marketers Agree: Omnichannelis Key • As consumers bounce from device to device, brands are trying to figure out how to track them • 67% of marketers state that integrating all marketing activities across channels is a main goal Econsultancy Cross-Channel Marketing Report 2014
- 16. But this Doesn’tMean Marketers are Delivering It Econsultancy Cross-Channel Marketing Report 2014
- 17. Major barriers toimplementing an omni-channel approach include: Lack of appropriate tools/tech Available media options not optimized Lack of addressable data sources Substantive Obstacles To Be Solved For
- 18. Elevating Our Practicefor Omni-Channel Success
- 19. Uncovering Intent Planning fora Digitally-Bridged Store Future Digital Maturity Mapping
- 20. Focusing on thedata that matters Searches for store increase by 33% Average online sale $45 Find her where she’s active Fall campaign ads drive 9 million impressions Women aged 19-29 value price over brand 1,209 active SKUs on display Recent searches Coupon website Leather jacket customer review Top fall trends for 2014
- 21. Data that uncoversconsumer intent The largest marketing variable. It shapes queries, dictates paths-to-purchase & mediates meaningful inter-actions with brands regardless of channel, media or content type.
- 22. Our Work ToUncover Intent The process of identifying intent & applying that insight toward improving brand engagement to drive measureable performance
- 23. • Primary research •Brandwatch • SocialTools • Benchtools • eMarketer • Forrester Research Initial Intent Hypothesis Planning & Insights Refined Intent Hypothesis Analytics + Planning & Insights Testing, Learning, Scaling Analytics PlanAlytics Outputs Sourcesof Data • Glance • Google Analytics • CRM Data • YouTube Analytics • Bluekai • Axiom • Client Brief • Draft KPIs • Tech & Data Audit • Content Audit • Digital Maturity Plan • CX Loop • Audience Segmentation • Learning Agenda • Organizing Idea • Brand Experience Map • Performance Strategy, Activation & Optimization Process
- 24. Digital Maturity Mapping:Four Strategic, Data Infused Areas Business Intelligence Fully Attributed Media Audience-centric Advertising Predictive Analytics Deep integration with CRM and DMP systems creates hyper-relevant customer experiences Maximize return & scale through performance budget allocation based on optimal spending scenarios Aligning with seasonality, new arrivals & promotional events maximizes investment Unified reporting provides omni-channel single point of view of customers
- 25. Digital Maturity Mapping:Elevational Roadmap Fully Attributed Assets Business Intelligence Multi-Channel Reporting Attribution & Budget Planning Flighting Strategy Based on Attribution Findings & Forecasts CRM Enabled Search Multi-Touch Attribution Audience-centric Media Predictive Analytics Mobile Search Geo-Specific & On-Site User Experience GDN Call Metrics Tracking New Customer Attribution Site Design and Conversion Optimization Integrate SEM + SEO Reporting Local PLA Extension YouTube TrueView Shared Media Plans Report Automation Channel Specific Regression Models Dynamic Media & Content Delivery Customer Decision Engines Basics Competitive Standard Market Leading Personalized Experiences at Scale All Channel Valuation Media Mix Driven Activation
- 26. Business Intelligence Automated omni- channelreporting provides +50% reduction in reports generation Predictive Analytics Predicating demand based on seasonality drives +15% margin, -8% spend in paid search Fully Attributed Media Cross-channel budget allocation finds that Search + display together drive 80% more conversions Audience-centric Advertising Using CRM to create hyper-relevant experiences wins 2X conversion increase Digital Maturity Mapping in Action Tech Retail Tech Tech
- 27. • Mobile drovesignificant traffic to stores • 3.1X lift in-store visits over control audience (unexposed group) • 2.3X lift of the exposed audience vs. the general population (consumers who may shop at retailer) Planning for a Digitally-Bridged Store Future We tracked store visitations as a control vs. exposed context to prove out a campaign’s true ROICapture device surrounding store More and more shoppers doing both
- 28. Entrance Checkout Endcaps Category Walmart:Physical Gets Digital In-store Shopping App
- 29. Allow for in-personpickups Centers in close customer proximity Amazon: Digital Gets Physical In Q1 2015, opened a pickup and drop-off location on the campus of Purdue University Students could order everything from textbooks to mac and cheese to pickup
- 30. A Retailer Perspective: OurOmni-Channel Journey
- 31. 1999 Kohls.com founded 2012 Launch of first mobileapps 2012 Launch in-store WiFi 2013 Re-platform of Kohls.com 2014 Launch Ship from Store 2014 Launch BOPUS test 2014 New mobile experiences – t.com & mobile apps 2015 Full chain roll out of BOPUS 2015 Launch multi-touch attribution Kohl’s Omni-Channel Evolution Omni- channel planning
- 32. Omni-Channel Measurement Consumers, devices and thechanging media landscape have added complexity Internal Alignment Building consensus and proving what we think to be true Merchandising Marketing Marketing’s success and overall efforts Omnichannel Management Combining measurement, alignment, and execution to become great Today, Our Key Challenges Are . . .
- 33. Challenge #1: Measurementis More Complicated than Ever Channel (both marketing & shopping) performance is measured separately, causing gaps in visibility and limiting optimization The changing technology landscape makes ongoing scrutiny and internal education necessary to stay ahead Media is managed by diverse partners without a completely neutral source to measure success and develop strategy MEASUREMENT GAPS A cross-channel organization requires more resources and a different type of experience that may not be available MEDIA SILOS LIMITED RESOURCES RAPID TECH ADVANCEMENT
- 34. Marketers Agree: MarketingAnalytics are Contributing Less • Contribution from marketing analytics has stayed relatively flat over the last 3 years • This year, CMOs say analytics are actually helping them less now than they were in 2012 • Technology and data should provide ways for us to solve this
- 35. More Mobile, MoreProblems Cross-Device Location Accuracy Offline & Online Attribution Mobile Targeting Privacy
- 36. Mobile Is StillNot Integrated Econsultancy Cross-Channel Marketing Report 2014
- 37. Measurement Approach A:Customer Matched Analysis • Customers who engage with us digitally that we can track vs. similar customers that don't Positive Simple to execute & measure Negative Not a complete picture; hard to make media decisions. Limited by what we can actually track. Summary Helps us directionally understand what digital is doing for our offline business
- 38. Measurement Approach B:Market Test v. Control • Increase spend in digital channels in distinct DMAs & measure vs. similar DMAs where we didn’t increase spend Positive Helps understand how high is high, and how much impact we can truly have on our store business Negative Doesn’t help us understand customer behavior or media impacts Summary Simple view but it satisfies the most important stakeholders (CFO, CMO)
- 39. Measurement Approach C:Multi-Touch Attribution • Accounting for ALL media touch-points & ALL customer sales (where we’re headed) Positive Best picture of how customers engage with media & accurately gives credit to all channels. Enables quick decisions on specific KPIs. Negative Very hard to setup & track. Process has been 18 months+ in the making. Reliant on tracking of customers Summary Go-forward best practice for most omni-channel brands
- 40. Challenge #2: InternalAlignment & Merchandising • Market ourselves • Showcase results • Build trust BUILD TRUST INTERNAL EDUCATION • Explain to teams • Overcome skeptics • Prove what people already know is true REALLOCATE BUDGETS • Take from print • Explain why this is better
- 41. Major barriers omni-channel successinclude: Managing offers across campaigns Resources & coordination across departments/brands Adequate staff, IT, data support Marketers Agree: Omni-Channel is Difficult • However, it is worthless if we don’t put it to good use by: – Scaling it – Effectively managing at the speed of retail • What we’re building, and the analytics & data that we manage will make us great
- 42. Importance of Omni-ChannelManagement +80% of Online Purchases are multi-touch conversions (Either same marketing channel or multiple channels) of Online Purchases are multi-channel conversions (Result of customer interacting with multiple channels, i.e. search/affiliate/social) +70%
- 43. How Kohl’s isApproaching Omnichannel Management Aligned Priorities • All parties must have the same goals: • e.g. managing spend to maximize sales/margin is different than maximizing to drive new customers The speed at which consumers change & interact with media happens so fast. What took place last month may change this month. Willingness to Change • Soliciting feedback from partners, customers & associates • They can help you understand & get ahead of the changes Strong Feedback
- 44.
- 45. The digital ofeverything is driving this retail journey Executive Summary The evolution and revolution required to master this journey is evergreen and relentless Mastery will be built on data, measurement, platforms and technology…strategic infrastructure to drive strategic management and engagement across channels, screens and platforms
- 46.
- 47. Thank You! Michael Kahn GlobalCEO, Performics Michael.Kahn@Performics.com Chris Duncan VP, Strategic Marketing, Kohl’s Christopher.Duncan@Kohls.com
Editor's Notes
- #8 Timeline showing what we have delivered/been asked to deliver since we started in 1998. Evolution of what PFX has been asked to solve, across channels & devices
- #9 By working with all these advertisers, there have been some clear challenge patterns that arise: Brands often sit on too much or tool little data that is often not integrated into one place. This makes it difficult to establish FACTS and focus on the data that matters. Lack of FACTS leads to an incomplete or inaccurate UNDERSTANDING of the customer’s intent Without having accurate FACTS + UNDERSTANDING determined, it is impossible to put together an ACTION plan. This results in experiences that are not customized or connected.
- #10 The impact of these challenges gets magnified when taking into consideration the decision point journey that customers go through each day It is complex and each decision point is a battleground between us and our competing brands The key to wining each of these battles is to address these big challenges in order to match the customer’s intent at each decision point
- #21 We start by integrating your data and focusing on what matters to determine FACTS
- #22 This allows us to establish an UNDERSTANDING of the consumer’s intent
- #24 Enter: the concept of Planalytics, a proprietary framework we use at Performics. Often, planning teams and analytics teams work separately through a linear planning process, managing individual aspects of a plan. But in Planalytics, you have an integrated planning and analytics process from discovery (e.g. insight review, data collection), through insights creation, to measurement strategy, activation, measurement and optimization. Data is strategically applied to the planning process at the right time and place. You can see the Planalytics process. First, establish your initial intent expectations/hypotheses by understanding your audience (e.g. their customer journey, intent, motivators, barriers, triggers, buying cycles, views of your brand), your competition, the media landscape and other factors (e.g. seasonality). The Planning Team creates strategic frameworks and audience and customer segments using primary qualitative and quantitative research, brand assessments and existing audience segments, like competitive social/search insights and third-party research like eMarketer and comScore, as shown on the slide. Second, the Analytics Team takes center stage, leading the data collection and analytics processes to refine these intent expectations/hypotheses, using inputs like Google Analytics, CRM, etc. as illustrated on the slide. The team leverages expertise in data visualization, business intelligence, forecasting and attribution to uncover places where the initial expectations/hypotheses can be informed by data. Third is testing; the Analytics Team validates (or does not validate) these expectations with the right data points from the right sources. A new hypotheses may be formed based on (1) pre- and post-data analysis and (2) human understanding. You’re ready to use this data and human understanding to create a plan across paid, owned and earned media, including target audiences, content distribution and media buying strategy.
- #25 Most clients have plenty of data, but very little time and patience to sift through it looking for meaning and wisdom to make better decisions. Done right, though, data can be the most important partner to have at the planning table. It lays the foundation for ego-free strategy and participant-focused collaboration. As a performance driven agency, your account team develops data driven strategies to identify opportunities for revenue growth and efficiency on an ongoing basis. They leverage a combination of frameworks and tools such as our S.A.T application to develop and analyze landing page tests. In addition, we have an advanced analytics team that integrates with the account team, driving incremental growth. Services include KPI development, Omni-Channel reporting & measurement, attribution, predictive modeling, data integration & personalization, and advanced testing.
- #26 Align business goals with measureable KPI's. We know you need to build your brand, drive intent, move consumers across devices, and create purchases in store and online. Analytics can help power the select of improved KPIs online, while technology solutions connect CRM & online data to improve attribution of measureable profit at a customer level. Real insights come from good data, and good data comes from a well designed technology stack. Build one that allows you to report & optimize an approach to marketing that is increasingly segmented & personalized. Just as important – continue to monitor this technology stack to ensure data integrity, and stay on the cutting edge of the industry. Turn data into insight through intelligent reporting with GLANCE®. We combine human intelligence with automated decisioning to make marketing faster & more personalized.
- #27 Business Intelligence: BI solutions align business goals with measureable KPI's, while technology connects CRM & online data to improve attribution of profit at a customer level. This case study: creating one single report for a tech client (all channels, online and offline) gives us a better view of the customer, and also reduces the time taken to provide multiple reports on different channels, which are less valuable. Predictive Analytics: Analytics-powered budget planning provides solutions that lead to better marketing decisions for optimal budget allocation and business results. Case study: if we can predict demand accurately for a retailer, we can better allocate spend. In this case, we predicated demand would drop based on seasonality. This allowed us to ease back (spend less) which drove better margins. Fully-Attributed Assets: Integrated data across online/offline touch points provide a holistic view of media pathways, KPIs, reporting and ultimately planning and optimization. Case study (for tech client, Microsoft- channels play off each other in the purchase path. We found that running search and display together boosts conversions greatly, rather than running them separately in isolation. All about creating consistent experiences that aid the consumer to the eventual purchase. Audience-centric Media: Reaching the right audience with the right message results in significant increases in engagement and conversion throughout the participant journey. Case study (for tech client Microsoft). Remarketing Lists: We created user pools. These pools included visitors that had previously clicked through to a product page, but did not initiate a trial of the product. Custom Messaging: Used copy that recognized that pool had already visited the site and were familiar with the product (e.g. “you learned about the product, try a download.” This was more relevant and led to more conversions.
- #28 MK- maybe ask Matt how he presented this, as it is complicated. This was done with the help of NinthDecimal. NinthDecimal’s Location Conversion Index measures actual increase from mobile to in-store visits to help marketers understand how their mobile ad spend influences in-store traffic. ZO has a partnership. Complicated, but simply way it works is: NinthDecimal has a panel of users which they track from device IDs (not cookies, as cookies drop when people move between devices) Kohl’s monitors its in-store traffic NinthDecimal, in its panel, has an exposed group (people who have seen Kohl’s ad on mobile) and a control group (which has like demographics and behaviors as the exposed group, but not exposed to Kohl’s mobile ad) Then measure the lift in in-store visits of control vs. exposed
- #29 Trend 1: The physical shopping experience is becoming digital. Welcome and encourages guests to grow basket or divert them to high Shorten perceived wait by entertaining shoppers Demonstrations that inspire purchase Influence impulse buys Cross category sell/ load basket Goal: Via Walmart Mobile App, help customers find items they need & make shopping easier & faster
- #30 Trend 2: the digital shopping experience is becoming physical. Amazon’s Achilles heel likely to lead its downfall: shipping costs Amazon received $3.1 billion in shipping fees & spent $6.6 billion on fulfillment in 2014 With consumers expecting products delivered to their store steps faster & cheaper than ever before, those margins are further squeezed That is why Amazon is going physical Amazon also has a 17-year lease on a 470,0000 square-foot building in Midtown Manhattan
- #32 Timeline showing Kohl’s journey
- #34 Measuring the effectiveness of marketing has always been a challenge Now, even more complicated with the number of marketing channels amplified by the number of devices The difficult part is trying to put all of that together and really understanding the relationships within channels (Intra channel) and across channels (inter channels). We’re headed down the path to measuring a few different ways. From simplest to more advanced……
- #41 As marketers we some times need to be our own marketers. And ironically its one of the things we’re the worst at. Now that we’ve developed these different methodologies, we must showcase the results - but more importantly show the capability to do this effectively and build trust by those that are impacted. We’ve spent hours working with our teams explaining how we’re doing this, to get alignment. There will always be skeptics but showing the vision, and acknowledging the faults can help build confidence. Most people know this shift is happening they just want to feel confident that what they believe to be true, actually is true. Additionally – we are now a brand that is spending a sizable portion of our marketing on digital. That's a huge responsibility (and privilege) – an enormous one – and our marketing spend isn’t increasing. That money has to come from somewhere. In our company its coming our of things like print (TAB and Direct Mail). This of course impacts people – people like Merchants/Buyers – who now lose space and in many ways control – over marketing their product. This is undoubtedly the biggest challenge we have as marketers. We’re taking away something that has always worked, and always been a part of a buyers toolkit. We now owe it to them to explain what we’re doing and why its better for them.
- #42 What we’re building, and the analytics and data that we manage will make us great. Its one of the big differentiators for our company. However, none of that is any good unless we do something with it and put it to good use. And none of the measurement means anything unless we can scale it and effectively manage it at the speed of retail.
- #44 To effectively manage this we’re focused on a few key areas: Aligned Priorities – this sounds so cliché, but this is so important. If all parties aren’t working towards the same priorities this can be detrimental to our business. Managing our spend to maximize sales or margin is different than managing our spend to maximize new customers. Those will drive two very different results and take two different approaches. Willingness to change – the speed at which consumers change and interact with media happens so fast. What took place last month may change this month. Strong Feedback – soliciting feedback from partners, customers, and associates is so important. They can help you understand and get ahead of the changes so your organization is more prepared. One area we love to tap into is the store associate – they can be a wealth of knowledge in understanding what people are doing with technology and media. How they are interacting, how they shop differently, and how they interact socially.
- #45 To effectively manage this we’re focused on a few key areas: Aligned Priorities – this sounds so cliché, but this is so important. If all parties aren’t working towards the same priorities this can be detrimental to our business. Managing our spend to maximize sales or margin is different than managing our spend to maximize new customers. Those will drive two very different results and take two different approaches. Willingness to change – the speed at which consumers change and interact with media happens so fast. What took place last month may change this month. Strong Feedback – soliciting feedback from partners, customers, and associates is so important. They can help you understand and get ahead of the changes so your organization is more prepared. One area we love to tap into is the store associate – they can be a wealth of knowledge in understanding what people are doing with technology and media. How they are interacting, how they shop differently, and how they interact socially.