To provide their customers with a seamless experience both on and offline, retailer Matalan are reorganising their marketing to focus on customers before channels.
How does a thirty-year-old brick-and-mortar retailer adapt to the mobile age? What kind of organisational change is required to meet the needs of modern consumers? Matalan have always been committed to understanding and building strong relationships with their customers. Over three decades, the business has witnessed many trends and transformations in the marketplace, but arguably none have changed consumer behaviour as profoundly as the growth of mobile. Throughout most of this time, Matalan operated with a traditional approach to marketing, with different team functions siloed into individual ‘channels’. Unfortunately, this meant that even where the brand had significant advantages – such as in their long-standing reward scheme – they found it difficult to capitalise on the data they collected.
“Today’s customer will research on the website and buy in-store, or they’ll research in the store and buy online,” says Andrew Banks, Head of e-Commerce at Matalan. “They don’t care about channels, they care about convenience.” In early 2016, Matalan decided to adopt an ‘omnichannel’ strategy that better reflected changes in customer behaviour, and Andy’s background in data-driven e-commerce made him the ideal candidate to drive the business change necessary to address this new reality.
Watch their journey here:
In addition to unifying the brand’s e-commerce and omnichannel approaches under Andy’s leadership, Matalan also created an innovation role focused solely on speeding their adoption of new technologies. The new position involves a detailed understanding of both day to day marketing tactics, such as bid adjustments and dynamic ad formats, as well as the strategic and financial implications of the various elements in Matalan’s ongoing marketing transformation. Without this critical contribution, which has already enabled Andy and his team to make quick, accurate decisions around installing in-store Beacons and other advanced tools, Matalan would struggle to keep pace with the rate of change demanded by their customers.
Building on their investment in Google Analytics 360, the brand began looking for additional data sources to boost their understanding and help them reshape their organisation. The search soon led them to Google’s Store Visitsreports, which use geo data from mobile devices and machine learning to give brick-and-mortar retailers an insight into the number of users who view an online ad and then visit one of their physical locations. The Store Visits reports quickly revealed that a significant uplift in in-store revenue was being driven by online advertising views, and that mobile was the single biggest driver of this footfall. Product lines that had previously appeared to perform poorly online, such as luggage and school uniforms, were shown to drive a significant number of in store visits and sales, drastically altering their return on investment. Using this data, Andy and his team were immediately able to demonstrate the value of an omnichannel approach, boosting confidence in the strategy throughout the business.
The importance of mobile also opened up proximity-based bidding, with Matalan conducting trials to assess the value of upweighting bids for users within a defined radius of a physical store. “We found that users in close proximity to a store were much more likely to visit after clicking on an ad,” says Andy. The potential of geo-targeting also encouraged Matalan to experiment with new ad formats on Google Maps, ensuring that shoppers on the move found it easy to locate a nearby branch. “Having the right KPIs and metrics in place means we can run experiments like these and really understand what it means to our bottom line.”
“Every £1 spent returned a total of £46 in sales”
Perhaps the most important insight from the early phase of Matalan’s omnichannel journey was the realisation that for every online transaction driven by digital advertising, a further six customers visited a physical store. Analysis of the return on investment of Google mobile ads in mid-2016 also showed that every £1 spent returned a total of £46 in sales, £31 of which came in-store. Buoyed by these results, Andy has already scheduled new experiments looking at incrementality and customer movement for 2017, alongside increased ad budgets.
But as beneficial as these results have been to Matalan’s bottom line, Andy believes that they have been just as important in giving confidence to a business in the process of reinventing itself. Today’s consumers move fast and value convenience above all else; organisations that want to stay relevant need to embrace change as avidly as their customers, and be prepared to rethink existing structures and strategies to keep pace with the digital age. “Reorganising a thirty year old business for the mobile age is never going to be easy, but having powerful data like Google Store Visits, alongside our existing sales data, makes the case for building more local tactics into our online strategy. We’re just beginning our journey.”