Affiliates used to serve as the primary partners in the ecommerce space, today the category is much more diverse and automation is becoming increasingly important to retailers.

Retailers are working with a growing array of partner types—including influencers, publishers and apps—to build brand awareness and drive sales. While affiliates had previously served as the primary partners in the ecommerce space, today the category is much more diverse—and automation is becoming increasingly important to retailers’ bottom lines.

To discuss the importance of partnerships in retailers’ growth goals, Internet Retailer spoke with Mike Head, general manager, partnership cloud at Impact, a partnership automation company.

Mike Head, general manager, partnership cloud, Impact

IR: What do you mean by partnership automation?

MH: When we refer to “partnerships,” we’re referring to the full spectrum of business relationships and alliances, including influencers, app-to-app, premium publishers, native software integrations and B2B partners. Those companies can help potential customers discover retailers’ products. Partnership automation refers to tools and processes that reduce manual work and allow retailers to discover, recruit and engage with potential partners as efficiently as possible.

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IR: How does it benefit retailers?

MH: Retailers have traditionally handled communications with partners in a non-scalable, manual way such as phone or email. That’s a lot to manage, which limited the number of partners a retailer could work with. By leveraging partnership automation technology, merchants can now manage thousands of relationships using personalized messaging that is automation driven. We’ve seen our clients outpace their competition in overall revenue growth as a result of leveraging this technology.

IR: Why are these relationships important to retailers’ success?

MH: Trust is a huge factor. A recent Ipsos study found that 69% of people don’t trust brand advertising and 82% don’t trust retail salespeople. The situation is even worse among millennials, 84% of whom don’t trust traditional advertising. People trust preexisting relationships or other consumers, which is why it’s important for retailers to leverage partnerships.

IR: How does the Impact Partnership Cloud work?

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MH: It’s a comprehensive platform that spans all aspects of the partner lifecycle from partner discovery to optimization. The first part helps retailers find the right fit for their business. Our tool gives retailers access to 7 million partners across the globe, as well as all the data we gather on those partners. Retailers can build lists, understand regions and construct competitive benchmarks to build targeted partner groups. And the tool manages these relationships with automation.

IR: What challenges do retailers face when considering a partnership strategy?

MH: There are a host of issues, including organizational inefficiencies. It’s not uncommon to encounter a retailer that has an affiliate team separate from its business development team, and a mobile growth team separate from its public relations team. They may be using different tools operating under different key performance indicators. Some merchants are failing to set goals for new partner acquisition or don’t look at conversion rates of new partners and generally aren’t looking at partner acquisition like business development or sales.

IR: Is partnership marketing bigger than paid search?

MH: According to Wolfgang Digital’s 2019 KPI report, the average retailer generates about 20% of its revenue from paid search. Lenovo drives 25% of revenue through the partnership channel and that channel is growing 50% year over year. This is very typical of the top retailers utilizing our Partnership Cloud. We have other clients that index even higher than that. Many retailers find that it’s their highest driver of new customers and has the lowest customer acquisition costs.

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