2018 E-Commerce Recap: Three Digital Tactics That Drove Double-Digit Sales Growth

02.12.2019 Articles
By Andrew Catapano, VP of Digital & CEO of wowbrands

With eCommerce software, customer acquisition, and logistics costs on the rise, it’s more important than ever to be innovative and efficient in your digital strategy, or risk losing substantial market share.

As we’re still enjoying the new car smell of 2019, let’s look back at the best digital marketing practices from 2018. In this first part of a five-part digital marketing series, we’ll cover three important tactics of how the top players won digital in 2018:

  1. Shopper Tailoring
  2. Social Media Differentiation
  3. Dynamic Ad Spend

For today, we’ll break things down using examples from four industry leaders: Lowe’s, Home Depot, Overstock, and Wayfair. Let’s jump right into it.

1. Shopper Tailoring

Like a perfectly tailored suit, modern shoppers expect to be served in a highly personalized fashion. The best digital marketers anticipate needs and wants of customers by customizing the online experience. They do this based on age, gender, race, location, income, search history, profession, marital status, parental status, favorite color, browsing habits, political views, and a nearly endless list of other variants at your disposal.

We’re living in a golden age of consumer data – if you’re not taking advantage of it, then your competitors will eat your lunch, and then beat you over the head with your lunchbox. You’ll quickly find yourself alongside Toys ‘R’ Us and Sears in marketing textbooks under the section about “Where It All Went Wrong.”

From email, display, social, and search, it’s paramount to leverage your information for your customer’s interests, needs, and location to fill their current desire and predict what they will want next – this is today’s benchmark.

Let’s take a deeper look at how Lowe’s is capitalizing on their consumer data. They rank 13th on Internet Retailer’s Best Digital Marketers so there is great insight to be gleaned from their strategy. Lowe’s allocates 45% of their marketing budget to digital ads, in contrast to 17% three years ago. With sales up 20.8% in the first three quarters of 2017, the budget shift seems to have paid off.

Lowe’s success is due in part to the precise tailoring developed from their consumer insights. As marketers, we must leverage this information because it’s now industry standard. For example, don’t send social media and display ads to people about toilet seats who just bought one. Here’s how that plays out:

Billy’s Story: A Toilet Seat Tale

Billy needs a new toilet seat because let’s face it, it’s gross and needs replaced so his girlfriend will spend more time at his 1-bath apartment. Billy searches on Google to compare price and proximity; he may have even put it in his cart at Lowes.com to search for a promo code. He learns Lowe’s is only ten minutes away and they have the perfect seat for his porcelain throne. And, he’d rather have it today so he doesn’t checkout online. Billy just used his online search to make a purchase in-store (side note: this is known as “reverse showrooming”). Now, Billy and his girlfriend spend more time together and their relationship is better than ever – thanks Lowe’s!

Here’s a common retailer pitfall. If Lowe’s didn’t tailor their digital tracking to what just happened, then they’ll waste money showing Billy toilet seat ads online because they didn’t follow his actions from online to in-store. But, because Lowe’s is smart to tailor their digital tactics, they have his credit card info linked to his email and tracked that he made a toilet seat purchase in-store. When Billy gets online again, he sees ads for shower curtains and bathroom rugs because Lowe’s is anticipating he’ll need additional bathroom improvements.

“It’s important to know our customers and anticipate their needs. That way we can respond with the right message at the right time.” – Shannon Versaggi, VP, Targeted Marketing at Lowe’s

2. Social Media Differentiation

Lowe’s understands the mindset of their customer. Over the past year, they have spent a lot of time learning the behavior of their shoppers. More specifically, understanding consumer habits and intentions on social media.

The best examples can be drawn between Facebook and Pinterest.

On Facebook, most people are there to see their sister’s new baby photos or their best friend’s dog video – not to shop. On the other hand, Pinterest users are seeking out a project, such as decorating a nursery or building out their home renovation mood board.

Pinterest users are actively engaged in a project, and Facebook users are passively engaged.

What do you do with that understanding? You must value your consumer’s attention. This is done by being helpful. Scrolling through a Facebook feed there are thousands of things competing for attention, and your ad needs to bring enough value to stop their thumb. Let’s say Lowe’s is predicting that a segment of customers will want to repaint their family room. They serve them an ad on Facebook that demonstrates how to paint 30% more efficiently. The DIY painters feel helped and now Lowe’s is top of mind for paint supplies even if they weren’t explicitly shown a product.

On the other hand, Pinterest is more direct since users are actively engaged with a category and driven to make a purchase. Lowe’s can serve specific ads for products and services (think paint, carpet, furniture, curtains, storage) regarding turning an office into a nursery for their “soon to be parent” cohort.

The result is a greater number of consumers clicking to Lowes.com from social. Lowe’s saw a 64.9% increase in web traffic from social because they were optimized in their ad spend, according to traffic measurement firm SimilarWeb.

When you understand how your shoppers behave and combine that with listening to what they want, then you have a potent formula for driving traffic, sales, and budget efficiency.

3. Dynamic Ad Spend

Lowe’s rival Home Depot ranks No. 2 on Internet Retailer’s “Most Effective Paid Search Marketer” list.

Home Depot has been able to use precise customer listening to keep their digital spend under control.

Their search ad spend only grew 2% from 2016 to 2017 because of efficiency. They combined weather triggers with geo-fencing and local inventory available on Google to target mobile shoppers with near surgical detail.

Home Depot also uses dynamic email marketing to serve their customers relevant and helpful content. It’s no good if your subscriber opens an email from two weeks ago to find a promotion that’s ended. Instead, a single Home Depot email contains adaptive content based on location, time, product availability, and active promotion.

You also have to turn a profit. With digital budgets growing larger every quarter, you can’t just throw money at this and expect to win. It takes a well-planned strategy. When Overstock.com saw a massive organic ranking drop in May 2017, it had to make up for the loss with increased ad spend. To make matters worse, one of their biggest competitors, Wayfair, was already spending more than four times more on digital. This meant Overstock had to expand their window on marketing spend ROI from six months to 12-18 months.

To stay competitive when they’re being outspent, Overstock has to be hyperfocused on conversion. That means every ad dollar must be targeted to people with intent to buy, and the website is optimized for those customers to find the product easily and checkout quickly.

“We have to ensure that when traffic comes in that we’re creating a better on-site experience for consumers.” – J.P. Knab, Senior VP of Marketing at Overstock.com, Inc.

One way Overstock does this is with an adaptive home page that changes based on a shopper’s needs and interests. For example, Overstock knows Suzie is remodeling her kitchen, so when she visits the site, she is served content relevant to her wants. It gets more granular from there too. Overstock will serve kitchen products based on Suzie’s favorite color, style, and budget. From search and social, to email and web, the goal is to make every touchpoint personal.

In Summary, Be the Best Coffee Shop

If you haven’t caught on by now, knowing your customer is critical to winning in commerce. Think of a coffee shop; if you regularly visit this coffee joint, whether it’s a big chain or local, you’re going to have a better experience when the barista greets you by name and remembers your order. Heck, a real pro will have your order waiting for you when you arrive. It’s as simple as that. Know your customer, what they want, when they want it, and make it incredibly easy to attain.

It’s up to you to optimize your digital budget to deliver a highly personalized experience for moving products. At BDSmktg, we understand the customer journey online and that the path to purchase is no longer linear. We know how channels complement each other and how to link ads with actionable behavior to drive sales, whether they happen at the register, behind a keyboard, or on a phone.

These methods and techniques aren’t reserved for just Fortune 500 companies. We can make it happen for your brand.

Get in touch here so you can start operating your digital strategy at a much higher level.

By Andrew Catapano, VP of Digital and CEO of wowbrands │  │