The changing face of retail
Macro industry factors are driving rapid and unrelenting change in the retail industry. This is highlighted weekly with reports of high-profile brands such as Build a Bear and Shoes of Prey shutting up shop. This shift is having an impact on both bricks-and-mortar and online retailers.
As businesses dive into the story their data is telling, one thing is clear – the digital customer journey is anything but simple. It is increasingly complex and challenging. With countless data points to analyse, it has become nearly impossible for ‘humans’ to keep up, as the algorithms of major advertising platforms belonging to the likes of Facebook and Google are constantchanging.
“As soon as you think you have worked it out, they change again,” says Luke Calavassy, Head of Innovation at Cellarmasters.
“Whilst data is paramount, so is staying close to the customer. As a brand I believe it is our responsibility to stay directly connected to our customers; this is not something we want to outsource to an agency. I know our success as a brand is directly associated with our ability to stay close to our customers.”
Customer behaviour and expectations are constantly evolving and shifting – brands cannot read the minds of their customers. What a customer wants, how they prefer to shop, and their expectations of personalisation and frictionless transactions are changing the traditional retail landscape as we know it.
This whitepaper on the changing landscape of the
The million-dollar question that brands and retailers want an answer to is “What do we do, and how do we do it?”. How do they continue to understand the complexity of their customers’ needs and cater to them on an individual, personal level; to deliver the right message at the right time without being overly invasive? It is a difficult balancing act, and like many business challenges, technology can be a powerful facilitator.
I recently sat down with Luke Calavassy from Cellarmasters to understand the commercial business decision-making process behind the implementation of AI to their digital marketing program. He said they chose Albert’s marketing AI technology to drive better customer experience and commercial outcomes.
“We had to find a way to serve the right customer the right message on the right platform at the right time – and no human being can do this at speed and scale. The human element is really important when it comes to product, campaign, design and creative – but finding audiences (for less) is better left to Albert,” he said.
Introducing AI technology to their brand: The Cellarmasters story
Cellarmasters is one of Australia’s largest direct retailers of boutique wines. For them, digital marketing has always shown to be the most effective way to find customers for their brand, and the pressure to continue to grow their customer base shows no sign of slowing down.
With marketing activities managed in-house, Cellarmasters owns its data – but the cost of finding and acquiring new customers (and the pressure on budgets) meant they needed an alternative solution. Legacy data systems had created limitations for the brand to integrate with many of the latest platforms and applications, leaving them limited in terms of data (having enough – or the right data), to allow them to execute fast and effective marketing campaigns.
Albert provided a marketing AI technology solution that could integrate with Cellarmaster’s digital advertising accounts seamlessly, and would scale its marketing and product offer decision making at pace; reacting to real time customer behaviour. Albert’s ability to execute autonomously and at speed also freed up their team to focus on ideation and strategy, and to explore new opportunities and realise efficiencies across their total digital marketing and distribution channels.
“Since implementing Albert the return on advertising spend has significantly increased to a level we could not achieve previously. Albert has also freed up time to allow our digital team to focus more on strategy, product and creative and less on execution,” Luke said.
- Google Search cost per acquisition (CPA) has reduced by 54% Year-on-Year
- Google Search return on ad spend (ROAS) has increased 149% Year-on-Year
- Google Search generic ads impression share has increased 34% Year-on-Year
Albert provided timely and effective feedback and direction on creative assets, so the marketing team could adjust and optimise messaging and deliver the best possible customer experience. The team have also observed more effective product planning thanks to the availability of big data sets and results on hand, whenever they need them.
“It takes courage and trust to do something differently,” Luke said.
“But what I knew without a doubt was that continuing to do it the ‘old way’ was never going to deliver new results and allow us to continue to scale.
“The speed of change and the quantity of digital data needs a state-of-the-art solution that will continually learn and evolve as the digital marketing landscape changes, moment by moment. At some point we just had to bite the bullet and take the plunge – and I am so glad that we did it when we did… every day counts now in this world.
“I think also to the outages of Facebook, Instagram and Google recently. I know that Albert dealt with all of that on our behalf, so our team could maintain focus… Albert does all the hard work on these ‘blips’.”
Read the full Cellarmasters story.
This is a powerful story. It took real courage on the part of Cellarmasters to try something so innovative. Retail is not going to get any easier – and the days of ‘small town charm’ are not coming back. Taking action is the only way to make a difference to the bottom line.
The two most compelling takeaways for me were:
1. In the real world: You must get close to your customer
You can’t learn enough about your brand if you’re removed from the day-to-day insights and execution of your marketing activity. A business must always own the customer relationship – this cannot be outsourced. By handing over control of your first party data to externals you are effectively handing over your customer relationships. Externals give you bandwidth in other ways, such as creative, but to be able to act on the insights and recommendations made by Albert a brand MUST own its own channels – and these are important leadership conversations to have in business.
2. Problem solving: Retail is not getting any easier
If you think retail is tough now, just think what it will be like in two or three years’ time. Business and marketers must get set up now for what is coming, or they will be left behind. There are so many ‘solutions’ and it can appear overwhelming – the challenge is how to start and how to know what’s right for your business. Integration is a key stumbling block for many businesses operating on legacy tech stacks – and this is a key advantage of a solution like Albert, as it connects directly to social and search accounts without the need to touch existing technology in the business. And this is also why it’s paramount to own your own brand data and the sources, and to have those conversations now to set your business up for a successful future.
Change is here and those brands and retailers that do not future-proof their business now, face being left behind.
As Luke put it, “Albert AI is not for everyone – in fact I understand that unless the business meets certain criteria then he is not going to take them on. Albert knows how he works best, and he will only accept clients he knows he will be successful with. If nothing else I loved that integrity; not something you get from a lot of ‘vendors’ or agencies. We see a long and fruitful relationship ahead with Albert”.
What is Artificial Intelligence?
Artificial Intelligence (AI), is a term first coined by John McCarthy in 1956 when he invited a group of researchers to the Dartmouth Summer Research Project workshop to discuss what would ultimately become the field of AI. The researchers came together to clarify and develop the concepts around “thinking machines”. According to The Encyclopedia Britannica, “Artificial Intelligence (AI) today is the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings”. Intelligent beings are those that can adapt to changing circumstances.
Find out more about Albert’s marketing AI technology in Australia and New Zealand.
Naomi Simson entrepreneur co-founded The Big Red Group in 2017 which includes brands such as RedBalloon, Adrenaline and Redii.com. She has been blogging for a decade at NaomiSimson.com, is a professional speaker, author of Live What You Love & Ready To Soar, and a “Shark” on business reality show Shark Tank Australia. Naomi works on a number of philanthropic and educational boards.
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Also published on Medium.
