New General Market: Mastering the digital landscape
Consumers relate to brands on a fundamentally different level than they did before, and to win their hearts and dollars, brands must keep pace with how consumers want to interact with them. That’s according to Evan Neufeld, L2 vice president of intelligence, who presented at the New General Market Purpose-Driven Summit.
“I think it’s safe to say at this point we’re at a crossroads in terms of how consumers relate with brands,” Neufeld said. “There are a lot of things that are actually disrupting the way that consumers interact with brands. Everything from the way they’re consuming media to the way that they’re actually buying products online.”
In 2018, he said, the consumer loyalty equation has changed. A 2016 YouGov and Time poll found that the percentage of affluent households that can identify a favorite retail brand fell to 28% from 47% in 2007 and 2008.
Neufeld noted that with roughly 50% of consumers starting their shopping journeys online, it’s particularly important for brands to have a strategy that is aligned to build equity among consumers. These efforts fall into four categories — mobile, personalization, social and bringing digital into the brick-and-mortar space.
The key thing brands need to remember, Neufeld said, is that mobile traffic is digital traffic. Based on L2’s analysis, though, many brands aren’t acknowledging that with their ad dollars. Despite two-thirds of brand-site traffic coming from mobile, an L2 analysis found that mobile only made up 13% share in terms of brand investments in ad spend. Additionally, he said L2 found that roughly 30% of brands don’t optimize their email for mobile, despite 90% of emails now being read on a mobile phone.
When it comes to personalization, Neufeld noted that 85% of consumers in a recent Social Times poll said it plays a role in their purchases decisions, and 48% would purchase more if marketers leveraged their interests and behavior. Marketers are largely lagging. Neufeld said only 13% of brands personalize their home pages. He noted that marketers said the main challenge around personalization has to do with ROI and balancing cost and quality. Yet it can be integral to building equity.
“If you think a brand equity, it used to be like a mutual fund where you put money in and eventually it would kind of grow and grow and grow,” he said. “It’s transactional now. Every interaction with consumers is as much a chance for you to move that brand relationship forward as it is for that relationship to go backwards, and that is why personalization is so important and so challenging and so frustrating.”
Regarding social media, Neufeld highlighted the trend of using influencers to spread the word about a brand, noting that $2.4 billion will be spent on influencer marketing in 2019. As that number grows, brands need to choose their partners wisely and understand that there isn’t a general rule when it comes to influencers, but it is important to vet them.
As for bringing digital into the physical store, Neufeld said that, as the retail model changes, the key is to think “less about the elimination of physical retail and more about the right sizing of physical assets and how you integrate digital into the store.” He highlighted Sam’s Club, which recently converted several stores into fulfillment hubs for e-commerce, among other retailers.
Despite the challenges brands face in keeping pace with consumers online is that they have an opportunity to build mutually beneficial relationships with consumers.
“I would say we all have a chance to be part of the solution,” he said.
This story is part of a Special Report on the New General Market Purpose-Driven Summit — to read more insights, click here.
“I think it’s safe to say at this point we’re at a crossroads in terms of how consumers relate with brands,” Neufeld said. “There are a lot of things that are actually disrupting the way that consumers interact with brands. Everything from the way they’re consuming media to the way that they’re actually buying products online.”
In 2018, he said, the consumer loyalty equation has changed. A 2016 YouGov and Time poll found that the percentage of affluent households that can identify a favorite retail brand fell to 28% from 47% in 2007 and 2008.
Neufeld noted that with roughly 50% of consumers starting their shopping journeys online, it’s particularly important for brands to have a strategy that is aligned to build equity among consumers. These efforts fall into four categories — mobile, personalization, social and bringing digital into the brick-and-mortar space.
The key thing brands need to remember, Neufeld said, is that mobile traffic is digital traffic. Based on L2’s analysis, though, many brands aren’t acknowledging that with their ad dollars. Despite two-thirds of brand-site traffic coming from mobile, an L2 analysis found that mobile only made up 13% share in terms of brand investments in ad spend. Additionally, he said L2 found that roughly 30% of brands don’t optimize their email for mobile, despite 90% of emails now being read on a mobile phone.
When it comes to personalization, Neufeld noted that 85% of consumers in a recent Social Times poll said it plays a role in their purchases decisions, and 48% would purchase more if marketers leveraged their interests and behavior. Marketers are largely lagging. Neufeld said only 13% of brands personalize their home pages. He noted that marketers said the main challenge around personalization has to do with ROI and balancing cost and quality. Yet it can be integral to building equity.
“If you think a brand equity, it used to be like a mutual fund where you put money in and eventually it would kind of grow and grow and grow,” he said. “It’s transactional now. Every interaction with consumers is as much a chance for you to move that brand relationship forward as it is for that relationship to go backwards, and that is why personalization is so important and so challenging and so frustrating.”
Regarding social media, Neufeld highlighted the trend of using influencers to spread the word about a brand, noting that $2.4 billion will be spent on influencer marketing in 2019. As that number grows, brands need to choose their partners wisely and understand that there isn’t a general rule when it comes to influencers, but it is important to vet them.
As for bringing digital into the physical store, Neufeld said that, as the retail model changes, the key is to think “less about the elimination of physical retail and more about the right sizing of physical assets and how you integrate digital into the store.” He highlighted Sam’s Club, which recently converted several stores into fulfillment hubs for e-commerce, among other retailers.
Despite the challenges brands face in keeping pace with consumers online is that they have an opportunity to build mutually beneficial relationships with consumers.
“I would say we all have a chance to be part of the solution,” he said.
This story is part of a Special Report on the New General Market Purpose-Driven Summit — to read more insights, click here.