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Speakers:
- Cynthia: Host
- Joan Jenkins: Chief Marketing Officer, Blueshift
- Greg Mishkin: Vice President & Practice Leader, Escalent
Welcome and Introduction
Cynthia: Welcome everyone and thank you for joining today's webinar, "Expert Advice: Make Your Marketing Stand Out This Holiday Season," presented by Blueshift and Martech. Before we begin, if you have any audio issues, click the audio icon on your screen to enable your audio. If you have any viewing issues, you can use the Q&A section at any time to communicate with us. You can also send questions and comments directly to the speakers about their presentation at any time. So now let's introduce our presenters. Joining us today is Greg Mishkin, Vice President and Practice Leader at Escalent, and Joan Jenkins, Chief Marketing Officer of Blueshift. Thanks again for joining us. I will turn things over to you for a quick intro, and then Greg will go ahead and lead the presentation.
Greg Mishkin: Hi, thanks. My name is Greg Mishkin. I'm a Vice President at Escalent. Escalent is a human behavior analysis firm, and I'm very happy to be here and to share our thoughts with you guys. So Joan?
Joan Jenkins: Yeah. My name is Joan Jenkins, and I'm CMO at Blueshift. I'm happy to be here as well. Blueshift is an intelligent customer engagement platform. I'm super excited about the topic today around the holiday season. I know it's on our minds. So, over to you, Greg.
The State of the Consumer and Holiday Outlook
Greg Mishkin: Wonderful. Thank you. So I'm going to start off with sort of frustrating news: Consumer anxiety is higher than it's been in any time in the recent past. We've recently done a self-funded study looking at holiday shopping and holiday traveling and understanding the changes year over year. We do this each year.
What we found last year (2021) was that anxiety was starting to appear, and interest in the holidays was waning among the two ends of the age spectrum:
- Gen Zs and Baby Boomers were getting anxious.
- Baby Boomers, having experienced a lot, braced for what was coming.
- Gen Zers didn't have the resources to weather storms as well as others.
- The middle generations (Millennials and Gen Xers) were "happy as clams," feeling that global issues weren't a big deal and they would continue forward.
That's changed this year (2022). Millennials and Gen Xers have now joined that anxiety, uncertainty, and malaise. We've seen consumer confidence indexes decline steeply and continue to decline. The stock market has also been crashing, adding to a general anxiety. The APA's "Stress in America" survey shows almost half of adults have more stress now than before the pandemic.
People are feeling this weight of stress, driven by:
- Inflation
- Supply chain issues
- Global uncertainty
- Crashing markets
So how does all this impact retail sales during the holidays? In 2021, there was waning interest from Gen Xers, but things improved. In 2022, everyone joined the decline.
Expected Holiday Spending (2021 vs. 2022)
Take a look at this chart showing consumers' expected holiday spending:
Spending Outlook | 2021 | 2022 |
---|---|---|
Spending More | 17% | 17% |
Spending Same | 65% | 51% |
Spending Less | 19% | 32% |
The same number of people are spending more, but significantly more people (32%) are now saying they're going to spend less this year. There's a feeling of reduced ability and interest in spending.
Confidence in Achieving Holiday Plans
On top of that, consumers are losing confidence in their ability to achieve holiday plans (finding gifts, traveling, celebrations).
- 2021: Two-thirds (67%) were confident.
- 2022: This has dropped dramatically to 42% feeling confident. The majority (almost half) now feel uncertain, not sure if plans will go as expected.
Holiday Activity Planning (2021 vs. 2022)
When asked how they plan to celebrate, we measured various categories, and in every one, there's less interest and less planning:
- Shopping Online: Dropped from 75% (2021) down to 60% (2022).
- Holiday Greetings/Gatherings: Dropped from 60% (2021) all the way down to 40% (2022).
In general, people are not making plans because they're not confident these activities will go as desired, affecting both celebrations, shopping, and travel.
So the big question is, are retailers really looking at a gloomy holiday season? Not necessarily. It's not a foregone conclusion that this will be a terrible holiday season. There will be winners and there will be losers. With well-thought-out strategies and research, retailers can find positive ways to engage customers, get them excited, and drive business.
Get Back to Basics: Knowing Your Customer
The big key here is: You've got to get back to basics. What has happened is that through the pandemic, wars, climate issues, and massive emissions over the past several years, customers themselves have changed, and their priorities have changed.
Example: My wife never liked shopping at Walmart; she preferred Target. But with "buy online, pick up in store" and drive-up services, she's now much more likely to shop at Walmart. Walmart, however, isn't used to this demographic.
Understanding who your customers are really matters, and understanding how existing customers have changed over the past two years is critical. Brands that gain a deep understanding of their customers, especially their pain points and what's causing their anxiety, will be able to:
- Craft solutions that engage customers.
- Make customers want to shop and do business with them.
- Lead to a very hopeful and prosperous season for both consumers and brands.
Knowing your customer is more critical now than ever before. Major brands have spent decades trying to understand and segment their customers. With these recent changes, there's a profound need to relearn who your customers are. Those who invest the time now to gain this understanding will be the winners.
Retailer Recommendations to Alleviate Stress
One thing we're recommending is for brands and retailers to be part of the solution, not the problem. Shopping today is stressful and causes malaise. It's important for retailers to identify what causes this malaise and act to alleviate it, rather than feeding into it. Those who do will find customers happy to do business with them.
Here are some recommendations:
1. Know Your Customers' Pains and Address Them
Holidays are always stressful, but they will be even more so this year. Knowing what's stressing your customers and tailoring your offerings to remove those stresses is a major key.
Examples:
- Amazon's Virtual Try-On for Shoes: Online clothes shopping is stressful due to uncertainty about look and fit, leading to returns. Amazon launched an augmented reality (AR) virtual try-on feature for shoes, allowing customers to see how shoes look on them before buying, increasing confidence and reducing returns.
- Walmart's "Choose My Model": Walmart created virtual models of different body types. Customers can choose a model most similar to their body type to see how clothing will look, further decreasing the likelihood of dissatisfaction and hassle with returns.
2. Cater to Generational Differences
Generations react differently to stress and also seek information and inspiration in different places for holiday gifts and ideas.
- YouTube: Heavily favored by Gen Z and Millennials for inspiration. Gen Xers and Baby Boomers find less inspiration here.
- Store Ads: Hit much of the older generations, while younger generations barely notice them.
- Online Retail Suggestions: This is working pretty much across the board. Using Artificial Intelligence (AI) to create personalized recommendations is effective for all generations.
Knowing your target generations can guide your marketing efforts and spend towards the right customers.
3. Reinforce Your Inventory
Inventory is a big deal, especially with supply chain issues causing empty shelves. Reinforcing your inventory and ensuring products are in stock is crucial.
- Focus less on variety and more on a smaller product portfolio with deeper inventories to ensure availability.
- While holding too much inventory has costs, decreasing customer stress by guaranteeing availability is a surefire successful strategy.
Case Study: Staples' In-Stock Printer Ink Guarantee Staples guarantees printer ink is in stock. If it's not, they offer a credit for future purchases, alleviating customer stress and making them more competitive.
Case Study: Amazon's Partnership with Malls Amazon is partnering with brick-and-mortar malls. Customers can see virtual inventory (down to size and color) of mall stores via Amazon. Amazon then facilitates same-day purchase and delivery directly from those stores. This innovative approach combines online and physical retail, benefiting both Amazon and malls, and excites customers by ensuring they get what they want.
4. Innovate Offerings
Deeply understanding your customers allows for innovative solutions. Think outside the box, even looking at adjacent industries.
Case Study: T-Mobile's "Coverage Beyond" T-Mobile's "un-carrier" movements focus on innovative, customer-centric solutions. Knowing their customer base is highly focused on travel, they identified traveler pain points (gas prices, airline delays, difficulty getting online overseas) and created a free program:
- Expanded free Wi-Fi on planes (whole flight, including streaming).
- High-speed internet in foreign countries.
- Weekly gas discounts (e.g., 25 cents off at Shell in summer, 10 cents off in fall).
- Free AAA memberships.
- Partnerships with Priceline for exclusive T-Mobile savings.
These benefits strengthen T-Mobile's brand while making travel less stressful for customers, a win-win.
5. Ease Financial Stress
Customers expect the holiday season to be more expensive this year, leading many to plan on spending less. They are actively looking for ways to save money.
- Shrinkflation: This involves slightly decreasing product size while charging the same price, so the unit cost increases without a perceived price hike. While some may see it as deceptive, it prevents the stress of direct price increases.
- Example: Toblerone famously increased spacing between chocolate triangles, reducing chocolate per bar, to manage costs without raising the sticker price. This can help avoid adding to customer stress around rising prices.
6. Combat General Anxiety: Bring the Fun Back to Shopping
People need to have fun and smile; many are in a malaise due to global chaos (war, political division, climate change). Retailers and brands have the ability to lighten this mood.
Case Study: House of Vans Events Targeting young customers, House of Vans retail outlets offer spaces to shop and socialize, incorporating cafes, cinemas, live music, art galleries, and skate ramps. This provides an escape, reducing stress and encouraging participation.
Case Study: Dresden Optics Dresden makes glasses and offers an interactive, creative experience for custom-making glasses with colorful lenses and frames. Customers participate in creating unique, fun products. Additionally, all products upcycle plastic waste from Australian beaches (discarded fishing nets), addressing environmental concerns, cleaning beaches, and decreasing material costs. This aligns with customer values while offering a unique product.
Conclusion: An Opportunity for Brands to Shine
This is an opportunity for brands to really shine. Brands can:
- Win over customers from competitors who aren't innovating.
- Retain existing customers by fortifying their loyalty.
Three key takeaways for success:
- Alleviate Customer Stress and Anxiety: Brands can foster long-lasting loyalty and attract new customers by alleviating stress. This makes the shopping experience fun and unforgettable rather than a chore.
- Know Your Customer Deeply: Understand what makes your customers tick and how they view your brand. This allows you to craft messages that fit your brand, not your competition's.
- Align Brand Perceptions with Customer Needs: When you align your brand perceptions with customer needs, that's the recipe for success. It's about reducing stress, increasing excitement, and making the entire experience fun again.
Now, I'm going to pass it over to Joan, who will share some tangible actions for driving holiday successes.
Marketing Actions for Holiday Success
Joan Jenkins: Thank you. Like Greg said, to sum it up, it's really about being smarter with our marketing this holiday season. He covered statistics about the general feeling of those purchasing, so smarter marketing is essential. I'll take you through three key actions we can take for the holiday season.
First, Greg covered the macro view. As a marketer (and I know many of you are too), here's what we're seeing in terms of market pressure:
- Click-through rates are down.
- Customer experience is down.
- Conversion rates without personalization are down.
- ROI is down.
- The only numbers that are up are cart abandonment and customer acquisition costs.
It truly is about being smarter with our marketing. Over the last few years, this has become more important than ever as:
- Data is exploding.
- Available channels are exploding.
- Customer expectations are exploding.
After reading many analyst studies and from my own experience, what we're trying to do as marketers is create a connected customer experience. That's the bottom line: how to present your brand cohesively, taking customers to the next best action or experience.
However, there are new challenges:
- Data is hard to get right: Whether it's accessibility issues, needing to go to another team, or time delays, data barriers impact segmentation and much more.
- Message personalization is hard: Truly understanding and personalizing messages without being off-base is difficult, and poor execution can lead to lost revenue.
- Disconnected campaigns: We want cohesive, omnichannel campaigns, not disconnected messages across channels.
- Lack of automation: In some cases, there isn't sufficient automation to achieve this.
The secret to faster ROI and smarter marketing is creating "moments of wow" for your customer. This is a moment-by-moment process, especially in our "always-on" world with multiple devices. Messaging must be hyper-personalized, which can only be achieved with rich, unified customer data and AI to scale.
Shift from Channel-Centric to Customer-Centric Marketing
To take a step back, what has shifted in the market to create all this change? If you look on the left, even a few years ago (and I've been in marketing for 20 years across various companies), we were primarily marketing to the channel. You tried to drive customers to a specific channel, and that channel created the experience. The issue was that marketing was very disconnected from the customer. You drove people to one channel, they engaged, and then you tried to drive them to the next.
On the right is the current state: always-on, multiple channels, every journey is different, every customer's expectations are different. What you send will look different depending on the customer's journey and needs in that moment. It's a fundamental shift to customer-centric versus channel-centric.
The Marketing Flywheel: Data Capture and Customer Delight
Data capture is an opportunity:
- To find out more about the customer.
- To create more relevant experiences.
- To give the customer what they need.
This leads to customer delight and more customer engagement, creating a continuous flywheel effect. It's no longer about funnels or individual channels. It's about capturing data, learning about your customer, marketing intelligently, creating delight, and continuously learning about your customer.
I'll cover three things that create this flywheel effect:
- Unified and Accessible Customer Data: Data has historically lived elsewhere and been hard to access, often requiring dependence on other teams. Marketing and data are more aligned and reliant than ever.
- Death of the third-party cookie: I'm good with this, as it means less tracking and more focus on data living with trusted brands, delivering what customers need based on the data they provide. This builds trust and consistency.
- The struggle remains: Is your data working for you, or are you working for your data? How accessible is it? Is it an asset for customer centricity and the flywheel approach?
To put data to work for you, focus on three building blocks:
- Accessible Data: Marketers need quick access to data.
- Actionable Identity: Connect with customers quickly, one-on-one.
- Real-Time Automation: Create "wow moments" in real-time.
- Personalization and AI-Driven Storytelling: In the moment, marketers are storytellers, but how do you get those stories across customer journeys? To scale these "stories" (meaning being connected with your customer and understanding their immediate needs to deliver a relevant message), you need AI. AI is fundamental to unlocking the promise of cross-channel engagement and providing the next best experience and offer.
AI provides answers to the who, what, when, and where:
- Who: Who do you target? What's the best segmentation and profile?
- What: What to recommend? Is it content, an offer, or a product relevant to that customer today?
- When: When is the right time to send? This has evolved from a single "best time for everybody" to individually optimized timing based on customer engagement patterns.
- Where: What channel to engage them on? This depends on individual preference and current context (e.g., traveling vs. at home).
Bringing this home: our approach at Blueshift looks at the who, what, when, where by creating customer profiles. For example, for "Eric," we look at:
- Likelihood to purchase.
- What to recommend (e.g., earbuds).
- When to send.
- Where to engage.
All this intelligence helps create personalized campaigns. This is a continuous feedback loop: you learn more about customer preferences and engagement, which goes back into their profile for continuous improvement.
- Omnichannel Experience: Marketing and CX Alignment: This point has two parts:
- Omnichannel Marketing Channels: You can no longer rely solely on email or a couple of channels. The hot topic now is SMS and balancing its high engagement (much higher than email) with avoiding annoyance.
- Integrating CX Channels: Keep in mind all your Customer Experience (CX) channels (support, sales, etc.) are gathering data about your customer. You want to gather this first-party data and use it to provide what your customer needs, then market to those individual channels.
Blueshift's Approach to the Marketing Flywheel
I want to spend a few slides on how Blueshift supports this flywheel effect:
- AI-Powered Engagement: Blueshift is powered by AI, acting as an intelligent customer engagement platform. It automates customer engagement across the entire lifecycle to deliver relevant experiences.
- Flywheel Support: It unifies data (making it accessible), extracts actionable insights, and delivers predictive segmentation, recommendations, and optimal channel/timing.
- Aligning Marketing and CX: The hardest thing is aligning CX channels (left side: support, sales) with marketing channels (right side: email, SMS, web, paid media). Blueshift focuses on helping with this by unifying data, personalizing through AI, and activating campaigns across all channels.
- Core Capabilities: Our platform offers segmentation, profiles, recommendations, orchestration, and reporting.
- Campaign Examples: Common retail campaigns include cart abandonment, post-purchase, price drop, back-in-stock, and cross-sale. We provide recommendations for segmenting users and offering key recommendations.
Customer Success Examples
- Tuft & Needle:
- Goal: Create the first direct-to-consumer mattress and bedding brand, eliminating middlemen.
- Challenges: Limited historical data, heavy reliance on batch-and-blast campaigns, no native catalog hosting.
- Blueshift Solution: Provided recommendations, personalized experiences, and behavior-based trigger campaigns.
- Results: Significantly improved engagement and sales.
- CarParts.com:
- Goal: Leading online auto parts and accessories retailer with over 1 million SKUs.
- Challenges: Legacy marketing cloud limited to batch-and-blast, marketing heavily reliant on IT, limited resources, inability to leverage first-party data or recommendations.
- Blueshift Solution: Created a unified customer view, recommendations, segmentation, and extensive A/B testing.
- Results: Strong improvements in customer engagement and business outcomes.
Final Thoughts on Driving Success
To leave you with a final thought, the key to marketing success in general (applying to the holiday season and beyond) lies in three areas:
- Data Focus: How do you make unified, rich data accessible? This is key.
- Automation & AI: How do you use AI and recommendations to be smarter about marketing to your customers?
- Omnichannel Experience: Take data from CX channels and use it with data and AI to market your campaigns across all channels.
I will leave you with that. Now back over to Cynthia.
Cynthia: Thanks so much, Joan, and thanks, Greg. I will go ahead and start asking some questions from the Q&A.
Q&A Session
Cynthia: Our first question is from John: "Looking to the next six months, what changes do you see happening?"
Joan Jenkins: For me, it's all about agility. As we've seen in the last three years, change is constant. Greg and I discussed this while prepping. Four years ago, we said change is constant, but now it truly is. So, recognizing that agility is key, and we have to think smarter as marketers. Greg, anything to add to that?
Greg Mishkin: (Unmutes) Yeah, it happens. Sorry. I couldn't agree more, Joan. I'm brought back to the end of 2020 when we all said, "Thank goodness it's over, the worst year ever." Then 2021 happened. And at the end of 2021, we were scared for 2022 because it's so unpredictable. I think that's the big takeaway: it's not even just the change, it's the unpredictability. Things are happening now that you wouldn't have thought possible. There's a need to be constantly updating your understanding of your customer.
Brands used to be able to rest on their laurels, assuming they knew their customers. But these changes are transforming people to their core – who they are and what they care about. There will be a continuous need to learn about your customer. What you learn today will be different next year. It's not "learn today and run with that knowledge forever"; it's "learn today and find out tomorrow how that's changed," constantly adjusting, because the changes are never-ending. It's nuts right now.
Cynthia: Thanks, Greg. Our next question: "You both mentioned the economy and the state of things. What is the one thing we should do to drive ROI?"
Greg Mishkin: I'll let you go first, Joan. (Then he clarifies that he will go first) Yeah. I mean, what I was just saying before, knowing your customer right now. Segmentation is probably it. If you don't know which customers you're going after, you're marketing to everybody. Joan's whole presentation is about marketing to the individual. But there are still customer segments, some with a high likelihood of success and others not. Understanding those segments is so critical. If I had one recommendation, it would be that: use that segment knowledge for everything else you do. You use it for AI, for additional research, for messaging. It becomes the lens through which you view your customer. And yeah, that's the key right now, and most people's lenses are a bit cloudy.
Joan Jenkins: Yeah. I couldn't agree more with what Greg said: knowing your customer and understanding that segmentation. And then, to add to that, of course, you knew I was going to say AI. It's hard to scale unless you have that ability to use AI to really engage with your customer. But it always comes back to, no matter what, the customer is the center of everything that you do. If you keep that in mind and build around that, then you can't go wrong from ROI. ROI is key. Being a smarter marketer in these times, as I mentioned, is key, and AI helps you get there.
Cynthia: Thanks, Joan. I think we have time for one more question. "Given the economy, should companies wait to purchase new products and initiate new initiatives?"
Joan Jenkins: I'll just quickly say, I don't think we can afford to. Again, with smarter marketing, your competitors are going to be choosing products that help them drive the biggest ROI. So, looking across your products, looking across new products, making sure you have the right products and initiatives to drive that ROI, to ensure you're successful, is key. If you're stagnant, your competitors will get ahead. So I would say, you can't afford not to purchase what you need.
Greg Mishkin: I'll jump onto that with an anecdotal story. One of my favorite clients, a rapidly growing organization, tracks brand equity and other metrics yearly. As the world became chaotic with industry recalls and supply chain issues, they felt they should sit back and wait for things to settle to measure the "new normal." I met with them and said, "The challenge is that in times of instability, leaders take action to impact where things land. Followers will take the crumbs of what's left." When there's chaos, instability, and uncertainty, your competition is actively working to direct things in their favor. That's how you gain customers, and those who don't act lose them. As Rahm Emanuel once said (I'm paraphrasing), "Never let a good crisis go to waste." This current global crisis brings huge opportunity. Instead of wallowing, step up and use this to your advantage to make your brand stronger by taking action now and not putting it off.
Cynthia: All right. Now with that, it's time to conclude our webinar. Thanks again, Greg and Joan, for your engaging presentations. If we didn't get to your question or comment, we will be sure to pass it along to Blueshift. Thanks everyone for attending today's webinar. We hope you join us again soon. Take care.
Greg Mishkin: Thank you.
Joan Jenkins: Take care.