While native direct-to-consumer retailers are entering and navigating the new retail landscape with ease, traditional retailers have had to disrupt their own thinking--from an operations standpoint and a marketing one--to keep up in a digital and consumer-driven market. Here are three key questions facing brand marketers.

Fayez Mohamood, CEO, Bluecore

Fayez Mohamood, CEO, Bluecore

When Blockbuster began announcing closures of its more than 4,500 U.S. stores (and 9,094 stores globally) more than a decade ago, the market didn’t announce a movie apocalypse. It looked to innovations by Netflix, Redbox and on-demand video services to paint a picture of evolution driven by changing consumer preferences and technology.

The retail industry has admittedly seen far more casualties than the movie business, but the explanation for the retail apocalypseis the same.

While native d2c retailers are entering and navigating the new retail landscape with ease, traditional retailers have had to disrupt their own thinking–from an operations standpoint and a marketing one–to keep up in a digital and consumer-driven market.

Data will only continue creating more granular opportunities for engagement and precision audience targeting.

Here are three pressing questions retail marketers are tackling along the way.

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1. Should we prioritize customer acquisition or retention?

Put another way: Should we focus on the customer we have or the consumer we don’t (or both simultaneously)? There’s no one right answer to this question, of course. The best approach is the one that supports a retailer’s business goals, reflects its business model and can be executed within the available budget.

For instance, if a company’s business goals are intimately tied to having large quantities of customers—as might be the case for subscription services or luxury brands, who don’t expect high-frequency recurring purchases—an acquisition-focused model might be more important.

Retailers who follow a flywheel model, on the other hand, depend on loyal customers to drive new audiences to their site, and therefore must prioritize customer retention and loyalty in order to maximize revenue and make their model work.

For retailers making the move from a traditional wholesale model to direct-to-consumer ecommerce, their first and foremost priority will be to create direct relationships with customers they previously only interacted with via the retail stores who sold their goods.

While acquisition and retention are important to all retailers, budgets don’t always allow doing both aggressively–especially considering there are two entirely different strategies for marketing to existing customers vs. consumers at large. Creating loyalty requires demonstrating that you understand customers on an intimate level and incentivizing them to engage in tangible and intangible ways. Acquisition strategies, on the other hand, are heavily rooted in creating broad awareness through brand story, lifestyle and casting a wider net. Both are about communicating value.

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2. Should we rely on first-party or third-party data?

A shopper’s email address is a valuable currency that can unlock information about their engagement with a retailer’s promotions and interactions with specific products. These insights are critical to deepening relationships with shoppers, and offering more relevant and personalized experiences, whether or not the shopper has purchased in the past.

According to a recent Wall Street Journal articleby Christopher Mimms,  “Email has become a way to fight back against the algorithms that try to dictate what people see. Unlike on Facebook, readers receive everything they signed up to receive, in neat chronological order, alongside missives from friends, family and their various communities.”

While most retailers aren’t necessarily using email or other owned channels as alternatives to non-owned channels like Facebook—or as a way to “fight back” —there are certainly financial and experiential limitations to having a middleman stand between a retailer and its shoppers.

Nevertheless, first-party data can be used to create better audience experiences in-house and on third-party channels too, since retailers can use what they know about their most valuable shoppers to better refine their targeting and campaigns with lookalike modeling.

3. Should CMOs be driving the digital marketing agenda or should someone else do it?

When brands began discovering the troves of big data they were sitting on about a decade ago,  the marketing industry started entertaining the idea that CMOs [chief markering officers] should begin thinking like CIOs [chief information officers]. Or even more, that the role of CMO should evolve into that of CMTO (Chief Marketing Technology Officer) or CMIO (Chief Marketing Information Officer).

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What these conversations reveal is the necessarily expanding role of the CMO in a highly technical, data-driven marketing landscape.

While CMOs will continue to be the gatekeepers of brand, storytelling efforts and customer experience initiatives, they must expand their knowledge of digital channels, tactics and technologies. It’s critical that they understand how and where to communicate with consumers, and at what cadence their messages should be shared with audiences, down to the individual level.  They should not, however, be personally responsible for diving deep into the data minutiae.

Data will only continue creating more granular opportunities for engagement and precision audience targeting.  The good news is that there are now numerous technologies that can analyze and surface insights that will guide CMOs’ data-driven efforts, satisfying the agendas of both the CMO and CIO simultaneously. There are even a growing number of autonomous technologies that can act on their own insights on marketers’ behalf, leaving marketers to focus on creating increasingly personalized experiences for shoppers.

As for new roles, some companies are introducing CDOs (Chief Digital Officers) to complement, rather than replace, the work of CMOs.

These are just a few of the many questions that a new breed of direct-to-consumer retailers have as they seek to walk the fine line between giving consumers optimal experiences and exponentially increasing efforts designed to attract and sell to them.

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The common denominator among them is that they reveal customer experience has officially evolved beyond a nice-to-have marketing function into a serious business consideration with widespread brand implications.

Bluecore is a provider of email marketing technology and services.

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