From Clicks To Bricks: The Top 5 Reasons To Measure Digital Campaigns' Impacts On In-Store Sales

04/11/2019

From Clicks to Bricks

Despite the fact that the retail landscape is undergoing a massive wave of disruption, there are many things that still haven’t changed—like the fact that people continue to go to physical stores to shop. While most retailers’ e-commerce sales continue to grow faster than in-store sales, the physical portion of their businesses still command the largest share of their revenues by a very large margin.

 

Yet, for many digital marketing teams, the focus (and decision benchmarks, ratios, targets and goals) is still 100% centered on e-commerce sales impact. Why is that? Almost all retailers have some form of web analytics that measure campaign impacts on e-commerce sales, and these tools have become relatively easy to deploy and manage. But, these same approaches cannot be used when moving to the in-store side of the measurement equation. Furthermore, the most common methods to measure a digital campaign’s contribution to physical store sales are very difficult, inaccurate and carry significant risks. But, getting this answer right is becoming mission-critical as the stakes are higher and the sophistication of retail disrupters grows.  From OptiMine’s vantage point, working with many retail clients, here are the top 5 reasons for retailers to dial in their digital to in-store measurement capability:

 

1. Most of the revenue: e-commerce is growing fast, but for most retailers, 80-90% of their revenue still comes from physical stores. (Note: recent news shows that non-store retailers’ e-commerce sales surpassed their brick & mortar brethren for the first time) It seems obvious that this would be the place to start from a measurement standpoint, but most of the digital technologies in the market- including analytics- were built to measure digital and e-commerce outcomes and behaviors. If you are responsible for digital marketing campaigns, why wouldn’t you want to know how your efforts are impacting the largest share of the business? The bottom line: digital campaign measurements need to account for their in-store impacts.

 

2. Digital isn’t just for e-commerce: today’s successful retailers are engaging their customers in whichever touchpoints and mediums the customers prefer.  The most successful retailers are not only meeting their customers on the customers’ terms, they are also measuring the complete cross-channel contributions across ALL touchpoints.

 

3. There is a lot of money to be made, or lost: getting this digital-to-store measurement right is worth millions of dollars and getting it wrong costs retailers even more because the impacts are far longer lasting. Strong marketers continually assess their efforts, constantly testing and tuning to achieve the best results and stay ahead of the market. Investment decisions that get it wrong cost the retailer an immediate economic opportunity but also create long-term problems around competitor losses and the need for customer win-backs. The costs compound.

 

4. Many campaigns and investments hang in the balance: OptiMine frequently sees that digital campaigns may not appear to be profitable until their in-store impacts are accounted for. In an environment of budgetary pressures, retailers without the capability to measure digital-on-store impacts will wrongly cut these digital campaigns and harm their performance in the process. But not all campaigns drive in-store sales, so it isn’t safe to assume that all digital efforts cascade into store sales. 

 

5. Digital mastery is essential for survival and for future success: consumer behavior has changed in fundamental ways with the advent of digital and mobile. A component to long term success is to have the right measurement capabilities in place to truly understand the total impact of digital channels. Emerging DTC retailers are digital-first and have the mastery and skills to compete in very disruptive ways. Many retailers speak about their advantages of having physical locations as the key to thwart these upstart ankle-biters but those advantages are only beneficial if leveraged properly.

Despite the clear importance of digital-on-store measurement, the most common measurements approaches are accompanied by business risk, unintended consequences, and downside considerations. Exploring the most common approaches used for offline in-store measurement highlights the risks, as well as the manyfold unintended consequences and downside considerations of these mechanisms. Our next blog post (read here) will explore this topic in more detail and will include actual examples of in-store halo effects of some of the most common digital channels utilized. Stay tuned for more.