Retailers obsess over their figures. From their online traffic to the number of new customers acquired, the Monday morning meeting is all about the stats. And rightly so; if you don’t measure your performance, you can’t improve it.
But while your numbers are important, your competitors’ are too.
Marketing’s a tough job. From the entry-level exec right up to the CMO, marketing teams need to be both inward and outward-looking, offsetting the here-and-now priorities of the brand with a deeper knowledge of the industry and all its twists and turns.
Benchmarking your performance against industry standards shows where you’re outperforming the pack – and where you need to improve. That said, it’s difficult to get an accurate view of what’s happening at any one time, especially when you’re brand-side and in the thick of it. That’s why more2 have crunched the numbers to help you see how you stack up against the rest.
Read on for the most important points you need to know on returns, direct performance and store performance – and how to supercharge your marketing.
The Achilles’ heel of the retail world. At the start of lockdown, most fashion brands experienced lower returns rates as customers stayed at home. Overall, returns fell from 29% to 28% between March and July but the drop was even more significant in online-only businesses, falling from 32% in 2019 to 24% in 2020.
And the picture was different again for multichannel retailers, whose returns rate increased from 28% to 31% from April.
With new, long-term restrictions now in place in the UK – and winter on the way – the situation is fluid. However, as any returns will affect your order economics and your allowable cost to acquire, it’s important that you understand what your returns rate is telling you right now, particularly with peak on the horizon.
Customer sentiment indicates that consumers are planning to spend during the Black Friday period amid fears of not being able to visit loved ones during Christmas. Given that this Christmas will be very different to any we’ve had before, it would be wise to take stock of your returns rate, look at your gifting proposition and revisit your allowable cost per acquisition to future-proof your campaigns.
Direct revenues continue to perform strongly, currently running at +32% YOY. The rise is led by beauty brands (surging ahead at +148%) as the channel switch to online continues and ever more customers become true omni-channel shoppers.
Revenue from new customers is spearheading the boost in direct performance: new customers currently account for +32% of growth, compared to +11% from existing customers. What’s more, customers are more open than ever to discovering new brands and tend to remain extremely loyal to those they’ve discovered during lockdown. This highlights the importance of getting your online acquisition strategies in tip-top shape before peak which is expected to start ramping up from late September.
Clothing retailers in particular should take note: AOVs are rising as customers buy more full-price new season products (buoyed by an uptick in sales of lingerie and accessories) so now is the time to double down on acquiring new customers online, even if it means adapting your budgets.
Easier said than done!
Delivering good performance marketing hinges on the effectiveness of your online recruitment through Facebook, Instagram and Google and adopting good test and learn strategies to help you scale effectively.
From bidding in the auctions to building effective audience feeds (and joining the dots between online and offline sales), you need to be confident that your teams are working in harmony with Facebook’s AI, not against it. As ever, that relationship depends on the health of your Facebook pixel – if it’s firing correctly, you can track your customer’s journey from the product page through to add to basket and checkout. Without it, you can’t retarget effectively and those valuable customers could be lost.
We’re co-hosting a workshop with Facebook this Thursday 24th September where we’ll drill down into the most important learnings and actionable insights – you can sign up here!
Brands who have retained their store footprint have found that the share of direct revenue from retail-dominant customers has edged up +4% on 2019, indicating that customers have adapted to the now ubiquitous hand sanitiser stations and accepted masks as the must-have fashion item of 2020 (see Burberry’s signature check mask if you’re looking for some luxury inspiration).
While London and the South East are still trailing behind the rest of the UK in terms of footfall, homeware and interior brands (usually found in out-of-town outlets on the skirts of towns and cities) continue to post very positive performance, up +57% and rising as customers continue their home improvement campaigns.
To encourage your customers into your stores, everyone in your business needs to row in. From the store assistant to the paid social team and right up to the CFO, you need to make sure that everyone places the customer at the centre of the business. Whether it be by keeping the store visibly (but not obtrusively) clean or importing offline audience data into your social feeds so you can target your in-store customers with relevant, local offers, it’s the customer-centric business who will succeed.
The retail industry has changed and will continue to do so. These are just some of the trends we’re helping our brands to address but if you’d like to hear how more2 can help you, drop us a line at email@example.com – we love to share our learnings and ideas!