I feel like June is always a great time to take a look back at the forecasts and predictions made at the end of the previous year to figure out what’s living up to the hype and what has yet to catch on. Many internet retail trends have yet to meet expectations - virtual world advertising (i.e. Second Life) and YouTube marketing are still in their infancy while other marketing areas like personalization and one-on-one marketing are just starting to gain mainstream buy-in. One trend that we believed in at the end of last year that is now being implementing at major retailers across the country is the integration of online and offline marketing campaigns to maximize the effectiveness of cross-channel sales.
Of course, the question is always how best to judge the effectiveness of a campaign that generates sales in multiple channels. Unfortunately, this is not just difficult, it’s becoming harder as many customers are increasingly using one channel to research information about a product while purchasing the product in a different channel. As an example, the number of customers that receive a product catalog and then choose to purchase via the phone or mail has dropped significantly over the past five years. While it may seem like this would make the case for discontinuing expensive catalog mailers, the truth is that catalogs still drive a substantial amount of purchases - customers are using catalogs to inform their decisions about web purchases.
Back in February, eMarketer came out with a great report that showed the inverse is also true. In his “Multi-Channel Retailing” article, Jeffrey Grau writes about how buyers are increasingly using the web to research a product that they intend to purchase in a retail store. In fact, the article estimates that for every $1 that is generated from online sales, nearly $4 is generated from in-store purchases that are driven by online research. Additionally, over 90% of consumers that purchase online with some frequency have used the internet to inform themselves about items they later bought in-store.
So why is this important? Well, first, if you’re selling across more than one channel, it’s important to recognize that even simple marketing decisions may have a greater effect on your customers than you anticipate. One less catalog a year may seem like a good idea to someone with floundering mail order sales, but unless you can determine which of your customers is using the catalog to purchase online, you may be effecting more than just your mail order business. Second, no matter how your organization is structured - whether your online sales site is run as a separate division or if all marketing is a centralized in one department - the only way to truly judge the effectiveness of your marketing campaigns is to carefully track and, more importantly, analyze the data from all marketing related activities in one place (that means using everything from Google analytics to catalog match-backs). Last, while many internet retail trends that were forecast to happen in 2008 may have several years before becoming mainstream, the recent rise in postage and supply costs means we’ll be seeing more and more retailers looking to get the most out of their multi-channel marketing dollar in the coming year.