Multichannel E-Commerce Roundtable
Alison Zemny-Stiefel, VP of Marketing, Saks Fifth Avenue
Paula Drum, Vice President, Digital Marketing, H&R Block
Leslie Darling, VP, Marketing Solutions, comScore
Dave Williams, Chief Strategist and Co-Founder, 360i (moderator)
Leslie from comScore kicked it off by noting that there are more buyers out there, they’re not shopping quite as much. Consider it the long tail of buyers coming online. Everything has a long tail.
comScore predicts online consumer sales will reach $170 billion in 2006 (including travel). That’s up from $143 billion in 2005 and $72 billion in 2002. It’s still growing at a healthy clip (in the 20% ballpark this year).
She also got into search’s role in the buying cycle. Across all categories comScore tracks, a March 2006 report found that searches conducted an average of 6.7 searches in a category. If they completed a purchase, it wound up amounting to 65.1 searches per buyer – far less for apparel (15.4 searches per buyer) and more for consumer electronics (88 searches per buyer).
She then delved into a case study on consumer electronics, sharing some details from their landmark study that found that 92% of conversion activity occurred offline, and most of the online conversion was latent.
Then the panel kicked off with Paula and Alison sharing their experiences. Both noted search’s crucial role in their marketing mixes. Alison noted Saks tailors its online merchandise to a somewhat younger customer, and that there isn’t a perfect match between online and offline.
A question from the audience asked how they demonstrate what they’re doing is successful. With H&R Block, Paula said it’s very difficult to gauge results from one campaign, especially due to the seasonality. Some sophisticated modeling can help attribute media impact. With Saks, Alison said they have the brand and national presence, see what the stores are doing, and see how online marketing and search marketing can play a role. For tracking, they pay attention to year over year increases (like Paula) and map those to changes in marketing programs. She’ll purchase keywords based on campaigns and seeing if other marketing channels drive more search activity.
Dave Williams noted a big challenge is the converse – figuring out how online drives in-store sales. He then asked the panelists to go deeper into Search Informed Marketing (perhaps you’re finding a theme for the day). “I think search is a great avenue because you get the answers so quickly,” said Paula. She uses search to drive a lot of their marketing decisions based on how people are searching for her brand and products. Alison looks at search behavior to gauge interest in new categories or brands, as well as what sites they’re visiting, and what keywords convert best online compared to how those related products convert offline. She also appreciated the turnkey nature of search – researching, testing, and making changes to gauge the impact quicker than you can say “Badgley Mishka” (note – sarcasm’s mine, not hers).
Dave asked about how search engine optimization (SEO) plays a role. Alison: “SEO’s all about making the website more relevant and more consumer friendly.” Paula: “SEO is very important to us,” and she got into the importance of having more than one listing on a search page, especially when there are multiple products. It gets into the search footprint discussion I talk about in today’s column, which I’ll post when it’s out.
Dave also wondered how they value customer acquisition versus retention. Paula: “We look more at lifetime value customers. We are almost always in customer acquisition mode.” About half of customers from any given year are re-acquired. Alison: “We’re tracking new customer acquisition by search” – including the quality of the customer, such as their habits with returning items.
What about new engine developments, targeting options, and emerging media? Alison says Saks gets into remarketing. Saks likes using visual ads for promoting fashion shows, trunk shows, and other events. Right now the tests have been small. As for H&R, Paula says H&R’s excited about local ads from the retail side. From the digital side, they’re really excited about video, but need to take care that it’s executed effectively. They ran some tests last year with media meshing that didn’t quite work as planned – namely, because the campaigns weren’t targeted to the channels they were running them in. The real challenge is “using the medium appropriately,” especially in reaching the younger demographic that is more responsive to video.
The session spanned a range of other topics, such as how they manage campaigns across different engines, how they leverage the long tail of search, and quite a few others. Kudos to Dave for deftly moderating a lively, far-reaching discussion.