New Research From the CMO Council Highlights How Leading Brands Are Learning From Big Digital Marketplaces and Adapting to a New 4P Model of Marketing That Is Based On Precision, Personalization, Persuasion and Perfection to Multiply Purchase
Leaders have followers, and nowhere is that more evident than the global eCommerce market, where giant digital shopping destinations like eBay, Amazon and Alibaba now account for more than 50 percent of the nearly $500 billion spent by North American consumers online.
Large, global eCommerce communities are disrupting the retail marketplace by bringing together vast numbers of buyers and sellers in frictionless transactional environments. Inspired by their success, brand marketers are rethinking go-to-market strategies to better integrate digital advertising with personalized shopper engagement and more effective conversion programs.
New research by the Chief Marketing Officer (CMO) Council — titled “Ingenuity in the Global eCommerce Community” — explores how the massive scale, data quality and customization capability of online marketplaces are bringing new levels of customer insight, enriched experiences and added value to brands. Digital commerce accounts for about 10 percent of the $5 trillion in total annual sales across all retail channels.
According to a CMO Council survey of nearly 200 brand marketers, well over 50 percent believe that large eCommerce communities are revolutionizing and reinventing the global retail marketplace. It was also forcing them to rethink every aspect of how they go to market. In a telling self-assessment, 60 percent report that they need to embrace a more cohesive, integrated, multi-channel digital retail strategy to improve their own eCommerce business.
The CMO Council study, conducted in collaboration with eBay, revealed the top five ways in which big eCommerce channels were impacting the go-to-market planning and strategies of major product marketers. According to the marketers surveyed, these included:
- Putting pressure on us to lower pricing
- Rethinking our monetization and customer revenue models
- Forcing us to seek greater brand differentiation
- Recalibrating and allocating our digital marketing spend
- Shifting us into an agile, real-time marketing mode
“The millennial-driven shift to digital retail shopping is prompting the evolution of the old 4P model of marketing—now, more notably, we need Precision, Personalization, Persuasion and Perfection of execution to multiply purchases,” notes Donovan Neale-May, Executive Director of the CMO Council. “Exemplifying this are innovations in customer attraction, convenience, conversion and consistency of experience that are behind the success of eBay, Amazon and other digital commerce communities.”
For its part, eBay is using advances in technology, such as augmented reality (AR), artificial intelligence (AI) and machine learning, to improve search relevancy and make buying and selling on eBay much more gratifying.
“eBay has made it even easier to shop and sell on the platform by leveraging new technology to redefine what online shopping means today,” notes Bridget Davies, eBay’s VP of Advertising and Marketing Activation. “We use AI and big data to learn how people move at a granular scale to better connect with consumers, brands and businesses.”
Davies points to eBay’s AI-powered, personalized homepage and over 1.1B listings using structured data. “Over 80 percent of eBay users are logged in when they access our platform, allowing us to deterministically identify users across channels, browsers, and devices rather than relying on cookie-based probability models,” she adds.
The CMO Council report notes that marketers today are challenged to evidence how they are using data and real-time insights to “gain greater satisfaction from every customer interaction” and determine whether they have the ability to “scale the way they track the digital buying trail.”
The CMO Council’s new thought leadership initiative gathered insights from nearly 200 global brands and their physical and digital retail partners. This included category leaders like Lenovo, LEGO, Puma, Casio, Serta, Bosch, Brooks, PERRIN PARIS and Fruit of the Loom/Spalding. The resulting best-practice report (available here) accents how brands are using proprietary data and insights to execute smarter customer acquisition campaigns that key off of seasonal, event-related, price-based and more personalized offers and promotions.
Areas of exploration covered by the CMO Council research included:
- How marketers view the disruptive and transformative nature of global eCommerce communities and online marketplaces like eBay, Alibaba, Amazon and others
- To what degree these always-open, price-driven shopping, trading and auctioning channels are impacting and influencing go-to-market strategies, transactional margins and traditional retail distribution models
- The percentage of manufacturer revenue that now comes from online commerce and how marketers expect this will shift in the year ahead in terms of resource allocation and business results
- The benefits that global eCommerce communities offer in terms of how a brand or channel partner can reach, engage, convert, support, satisfy and repeatedly sell to target customers
- What might worry brands about the enormous economic clout and market-making capacity of giant online retailers and large, aggregated communities of predisposed buyers and motivated sellers
- How well product advertisers are sourcing “shoppergraphic” insights, mass-customizing and localizing digital ad messages, and evaluating campaign effectiveness