Sportmaster’s data-driven understanding of consumers fuels an omnichannel approach

Goals
Redesign organisation around consumers’ omnichannel behaviour
Understand impact of online ads in driving offline sales across the funnel
Optimise investment and communication based on omnichannel signals
Approach
Changed organisational roles and incentives towards omnichannel
Ran testing on mobile, location adjustments, and YouTube campaigns by using store visits as the main offline performance KPI
Improved communication with users through local inventory ads, offline-driven creatives and personalisation
Results
Named leading omnichannel retailer in Denmark by Detail Forum (2018)
Achieved 20% year-on-year growth in omnichannel revenue in a highly competitive market
Found that omnichannel users are 42% more valuable than single channel users
Discovered that mobile return on investment is 3x higher than previously thought

Having been acquired by Nordic Capital Fund VII in 2012, Sportmaster aims to be the first choice for Danish consumers looking to buy sportswear and equipment both in-store and online.

Omnichannel on the agenda

“No doubt the pace of change is accelerating, and opportunities explode every quarter”, explains Sportmaster CEO Jens Høgsted. “Regularly you need to ask yourself whether the current limiting factor is technology, skills, manpower or change management in a broader sense.”

Sportmaster began to embrace an omnichannel culture in 2015, embarking on a journey to minimise silos and reorganise roles and incentives with consumers as the heart. From the start, the goal was to shift to an omnichannel mindset across the entire organisation, from the board to sales reps in stores.

Several consumer-centric features and technologies were added in support of the strategy. For example, product screens were implemented across selected stores to enable online browsing and returns, while local inventory availability was introduced on product pages on the website. A new click-and-collect initiative meant that online purchases collected in-store were integrated into stores’ profit and loss targets. This incentive alone stimulated the click-and-collect behaviour that now accounts for 40% of all online sales.1

Following successes such as these, in 2017 Sportmaster entered a new phase of their strategy, internally called data-driven omnichannel. This work makes use of data collected through the Sportmaster loyalty program, which shows that the brand’s omnichannel users are 42% more valuable than single-channel users.1 Leveraging loyalty data helps Sportmaster to provide a better understanding of users – such as customer lifetime value – to deliver more efficient, personalised communication.

Online messaging drives in-store footfall

While Sportmaster’s online marketing team previously focused heavily on ecommerce goals and online return on ad spend, the new strategy gives them shared responsibility for increasing footfall to and sales in stores. They also now report to a head of omnichannel and customer insights responsible for the customer experience and traffic across all channels. 

“Through analysing customer data, channels and purchases, we learned that customers who buy both online and in store are more valuable than a customer buying through a single channel”, explains Stefan Kirkedal, Head of Omnichannel and Customer Insights “This learning has been used to change the incentive structure between physical stores and ecommerce, unifying otherwise competing departments in the interest of the business. This cultural shift is a major step in our omnichannel approach and gives us a common understanding for optimising our marketing mix and data-driven omnichannel setup.”

In the media mix, both lower-funnel campaigns (such as search, shopping and local inventory ads) as well as upper-funnel (display and YouTube) are utilised. Communicating with users across the whole funnel in this way has proven an efficient way to drive further footfall to stores.

With the mentality shift towards omnichannel and the restructure of KPIs and incentives, Sportmaster’s online campaigns now actively aim to drive offline sales to stores, especially during promotions. They’ve shifted their ad messaging from a “Buy online!” focus towards a more omnichannel approach – “Buy online or in a store near you”. In this context, developing a quick implementation of the recently launched format local inventory ads was key part of the strategy. Changes such as these have contributed to a 20% year-on-year  growth in omnichannel revenue in highly competitive market.1

Measuring the offline effect of online ads

To understand the effect of online ads in driving offline sales, Sportmaster’s online marketing team has embraced Google’s store visits reporting as their main offline measurement solution. The team has become comfortable with the data thanks to the high statistical confidence of the methodology, as well as the high correlation between Google’s insights and Sportmaster’s own footfall insights.

“By combining insights from store visits reporting with constant experimentation through geo-testing, we’re now able to make more accurate decisions and better optimise our campaigns in an omnichannel perspective.”

 

- Morten G. Lindgren, Strategic Data Manager, Sportmaster

Store visits reporting has been integrated into the team’s performance KPIs through a return on ad spend metric. By layering offline figures on top of store visits – offline conversion rate and average order value – Sportmaster has been able to translate footfall into offline return on ad spend and optimise its search, display, and YouTube campaigns against omnichannel targets.

Through tests utilising offline-driven creatives on YouTube campaigns, Sportmaster learned from store visits data that, when adding offline revenue into account, its return on ad spend is eight times higher than initially attributed. Significant uplifts were also spotted on offline sales data through geographical experiments. Based on these insights and results, Sportmaster is rethinking the YouTube strategy towards a more always-on approach.

Search performance has also doubled since store visits were added into account, with 10% of the clicks resulting in visits to stores.2 Within search, Sportmaster has seen two main levers driving great offline performance – mobile and location.

Based on the data, mobile was responsible for driving 55% of store visits.2 With a return on ad spend that was approximately three times higher than with online only, Sportmaster divided the country into two regions to prove the incremental influence of mobile on driving store visits. After positive results for both online and offline, Sportmaster has shifted its mobile bid adjustments from negative values to positive, ensuring high visibility on mobile devices.

Meanwhile, users close to stores have shown higher responsiveness and performance than those located at farther distances. By increasing the visibility around stores through radius bid adjustments, Sportmaster has ensured the most valuable users would visit.

Going forward, Sportmaster has plans to make use of every chance to understand consumers better and make smarter marketing decisions. “I believe that we have moved fast because we not only look at technology, but also how we apply technology at a pace where we gain insight and use learnings to improve performance and fuel change management in 100 stores”, Jens observes. “Overall, our experience is that successful omnichannel is much more about change management than technology – as always, the soft part is the hard part.”

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