The role of messaging in Retail strategies: the leitmotif of an increasingly customer-centric purchase path

After having given an initial overview on the changes in post-Covid Retail and on new consumers, it is time to get to the heart of the matter and focus on the role of messaging (email, SMS, messaging apps) in this new scenario.

In this third episode of Gianluca Diegoli’s in-depth analysis we will review the communication strategies of the sector to understand how and by which tools the entire customer journey needs to be redesigned.

It is the historical moment in which markets, both globally and in terms of individual strategies, are dominated by uncertainty concerning possible future scenarios. Where will the balance between digital and physical touchpoints land? Which business models will be definitive and which destined to be a parenthesis? These are the main doubts lingering in the minds of CMOs and CEOs.

In this underlying uncertainty, however, it is quite clear that the fulcrum of business strategy will have to further shift from control of production or sourcing or physical distribution to one of knowledge – I would say almost intimacy – towards the customer, regardless of the way in which it will bring about the conversion.

Whoever is in direct relationship with the client is in fact the favorite in this competition for attention, which is the playing field in which we necessarily face now. In the prospecting phase, digital advertising becomes increasingly linked to algorithmic logic (“give me first-party data and I will create the best possible ROAS”), and in the increase in contact costs. In the conversion phase, the effectiveness of ads is increasingly threatened by privacy-focused macrotrends that limit the ability to recontact users directly at the bottom of the funnel.

Having a direct relationship with the customer therefore means:

• not depending on the third-party algorithms (whether ads or organic, little changes) in terms of communication strategy.
• being able to internally manage the relationship between reach and relevance of one’s messages. 

In this noisy, less precise and more expensive media environment, the role of messaging – in all its forms (email, bot, SMS) – becomes even more critical and decisive for maintaining the sustainability of one’s marketing ecosystem.

The forced lockdown experiment gave a result, sanctioned by data, that was not taken for granted. The emergency phase put in a strong position those who counted on already well-established deliverability best practices and those who could converse directly with their customers and prospects, that is, those who had structured integrated delivery, contact and segmentation systems in time.. And this was appreciated by consumers: among the MailUp customer base, last year there was an increase in openings of 11%, while click and interaction rates recorded positive variations of 13.2% and 2%. Conversely, companies with little experience, which had to go online out of necessity, attempted to send their communications to dormant, untested and poorly constructed databases, resulting in increased risks of cyber scams during the first wave of the pandemic.

Frequency of email contact is not an issue, when relevance and message are right. Opening and engagement data wipe out the alleged problem of message frequency, shifting the focus to target and content. This has been noted above all with communications related to the health emergency: despite a significant increase in sending volumes (in March alone, there were 103 million Covid-themed emails out of about a billion total sendings) and a redundancy of updates and news on the subject, users were interested and responsive, keeping open rates above 20% from February to April.

Segment the audience to build personalized and relevant content

Retail, on the other hand, had not always given adequate weight to this aspect and in many cases email was used as a mere container for a digitized paper flyer: messages often broadcast, without a well-defined target (only customers? prospect? former customers?) and without personalized content, with lackluster performance especially in promotional mailings (as also suggested by the data history of MailUp’s Statistical Observatory)

Also in 2020, the sector mailings did not signal a particular turnaround, with interaction rates that always remained below 15%, both for newsletters and promotional emails, with more positive results only in the B2B sector. These data speak for themselves: a more intelligent and strategic use of dataand segmentation and profiling of users in specific clusters is necessary, to be followed by the creation of personalized campaigns to increase the relevance of messages and lay the foundations of a more intimate and direct relationship with the customer.

Retrieve blocking experiences across all channels of the customer journey

In the customer journey, redesigned after the great digital acceleration of 2020, it would be a mortal sin to miss the opportunity to give clear discontinuity to the efficiency of one’s direct contact channels.

The concept of cart recovery – perhaps the first automation created in e-commerce – must be broadened and “omnichanneled” to the recovery of “blocking” experiences of all kinds. This means asking: “How much do companies ‘leave on the plate’ during unsuccessful physical store visits?” “How much do they leave on the plate for potential online purchases that are not converted, but possible with an ad hoc drive to store or vice versa?” “How many prospects and undecided are abandoned in the middle of the purchase journey, without giving the opportunity for multi-channel contact?” It is necessary, in other words to:

• thoroughly analyze each touchpoint of the customer journey
• identify the elements that hinder the finalization of a conversion
• implement strategies and technologies that make the shopping experience more fluid and up to the consumer’s needs

Leverage data to base the purchase path on customer choices

The “intelligent database” within the marketing stack becomes essential to accompany and help the user throughout the purchase process, online and offline, not only when a transaction is not concluded. And it turns out to be the fundamental tool, even in the phases preceding the customer experience, through which you can build a personalized journey upstream tailored for the user, based on expectations and preferences.

My personal opinion is that it is necessary to dedicate as much mental space and human resources as currently allocated to “timed” newsletters in scheduled editorial plans and to focus much more on personalized messaging as the fil rouge of the entire customer journey, not only for B2B companies (as was the case until now) but also for Retail companies. After all, the countless direct-to-consumer projects of brands and e-commerce enhancement by retailers suggest that the digital environment can only become even more competitive and sophisticated in post-Covid. In regards to company objectives and KPIs, turnover growth must go hand in hand with the growth in the number of “known” and well-profiled users who accept to be contacted in an informed way. Creating relevant actions for upsell and cross-sell to maintain the value of the customer lifetime value will be fundamental to obtain the maximum return on investment, and in these processes direct contact is the main protagonist.

In a future where revenues will depend directly on the KPIs of these messages, database growth objectives, relevance, ability to reach everyone (deliverability) will necessarily go in parallel. 

Omnichannel will no longer be a competitive advantage in itself, but the ability to be relevant in an omnichannel way will make the difference. The fil rouge of messaging must intersect drive to store, e-commerce, click and collect and put user choices at the center, not in company silos. I will talk about this in more detail in the next article. To not miss the release, follow the [mini] marketing Friday newsletter and sign up for the monthly episode with latest articles from the MailUp blog.