Entrepreneurs: How to make the next generation of marketing happen?
How to combine the strength of 1-to-1 Marketing with the need for Omni-channel strategies ? How to make Marketing 3.0 become a reality for retailers ?
As venture capitalists, we love industries that re-invent themselves. It creates opportunities for start-ups to challenge big players. Has 1:1 marketing already transformed the retailing industry ?
First transformation: from mass market to markets of size 1
The days where we were receiving by mail heavy printed catalogs featuring all the items sold by a retailer, or where our mailbox were stuffed with emails offering products that were of no interest for us, are gone. Great! I would call that mass marketing: 1to all.
Today, most of the time, we receive emails, SMS that are relevant to us. Thanks to CRM, tags put on website, fan page created on social networks, brands collect transactionnal and non-transactionnal datas on their customers and can then send personalized messages to targeted segments. I would call it ‘1to several’ marketing.
Then comes ‘1:1 marketing’ : with re-targeting solutions, we are being reminded of products that we have previously checked on other websites. In the adtech sector, the ‘1:1' approach is rapidly taking off with the development of programatic advertising. Using Data Management Platforms, brands can push personalized advertising messages, (display, video..) to one single profile in real time.
Second transformation : One-to-One marketing combined with Omni channel strategy
Then, for retailers combining online and offline stores, the big revolution is to apply 1to1 marketing globally through all their channels, the omni channel strategy. The use case would be: walking in a street, you pass by a store which happens to have a website that you have checked some times ago and therefore you receive a special discount on your mobile to purchase the product in the store, since you had published on one of your social network that you really liked this product. In the store, the sales guy calls you by your name and sells you the product and it automatically credits your loyalty program. Brands would know their cutomers so well that they would target one person and, following a deep and real-time analysis, would determine the unique offer that will make her/him buy.
Even though I have heard many start-ups pitching this use case, as far as I am concerned, I have never experienced the situation described above.
Are the retailers here yet ?
The current situation is still that brands do email marketing campaigns, most of the time without even using marketing automation tools or predictive analysis tools. They are fully aware that they should do data-driven marketing actions but are stopped by (1) exisiting IT legacy system built over time by silos (CRM, web, mobile, social network, email…), not communicating with each others and certainly not in real time …so creating headaches to build a customer graph, (2) not enough experience in the marketing teams to extract the value of the datas collected and to conceive personalized marketing scenarii like data scientists do and (3) not enough time to spend on it !
Some advices to start-ups willing to capture new business opportunities in the 1:1 marketing space
- brands need to be guided to develop relevant use cases. Software vendors will need to evangelize the markets. To convince customers, start-ups will most likely need to propose value-added consulting services and even offer specialized talent such as data scientists.
- financial returns have to be clearly demonstrated to have retailers to put that in their top priority instead of using their existing marketing solutions. Best would be that the returns can be shown during trial phase!
- new solutions will be integrated with existing IT system. So don’t ask brands to change their workflow. Provide tools with friendly user interface to limit as much as possible the need for specific developments and long trainings.
- and finally a personal comment….: build the use case with the privacy issue in mind. I am now used to re-targeting engine on my PC but I still think that I would feel very intrusive to have someone, I have never met before, welcoming me in a store by ‘Hi Claire, welcome. I have this pair of running shoes for you since I saw that you gained weight recently!’