As the cost of digital ads increases, online apparel retailer Natural Life is paying more for fewer clicked ads, says Carolyn Grana, director of digital. Rather than allocate most of its ad spending on Facebook ads, Grana says the demise of third-party cookies has forced the retailer to reassess its digital marketing strategy.
“It was easier to put a lot of eggs into the Facebook ads basket,” Grana says. “But it’s not reliable anymore.”
Natural Life is an online women’s apparel brand offering bohemian-inspired clothing and home décor. The retailer’s average order value is approximately $90, with a conversion rate of about 3.5%. Most of its customers are women ages 25 to 54 years old.
“AOV has grown substantially since making apparel a more sizable portion of our collection,” Grana says of the last two years.
Despite pandemic-related lockdowns in 2020, overall web sales jumped 150% compared with 2019. The retailer maintained its momentum with more than 60% web sales growth in 2021 year over year, compared with 2020.
Growth has slowed in 2022, Grana says. This year, sales are up 30% year over year compared with 2021. But Grana thinks that number can be higher.
“We’re definitely seeing growth slowing,” she says. “Customer acquisition is getting more challenging, and we’re still dealing with major industry-wide economic disruptions.”
Email is a driving source of revenue for Natural Life. Grana did not disclose how much of the retailer’s sales come from email traffic. But she said sales from email and SMS have grown in the last year.
Email and targeted search
Email remains a stalwart source for retailers, according to a Digital Commerce 360 digital marketing survey of 73 respondents in April/May 2022. Seven in 10 retailers cited email, search engine and content marketing, and Facebook, as top digital marketing tools to reach customers. Email topped the range with 86% citing it, followed by search engine ads at 85% and content marketing at 78%.
While looking to diversify, targeted ads are still an important overall part of Natural Life’s digital marketing strategy, Grana says.
“We’ve definitely been affected by the rising CPMs,” she says, adding that the retailer keeps track weekly. “Impression totals are down year over year.” Cost per impression (CPM), is an advertising option in which companies pay a price for every 1,000 impressions/views an ad receives.
“We have been proactive in trying to at least maintain impression counts and getting in front of some of our target audiences,” she continues. “But that is also by expanding through other social platforms and being a little more independent rather [than relying heavily] on big tech partners.”
Grana says she believes that the industry overall will be looking at ways to diversify how they approach their digital marketing strategies without relying on a handful of players like Meta’s Facebook and Instagram.
“We’re looking to see how we can collaborate and bring in some brand partnerships,” she says.
Natural Life is also vetting other options, like DISCO
“The DISCO app we’re testing has led to very inexpensive CPA [cost per action],” Grana says. “It’s not driving a ton of volume, but we are seeing positive lift at least.” Lift refers to an increase in sales in response to advertising or promotions.
DISCO uses an algorithm to recommend products from brands the customer is likely to engage with. Retailers only pay if a shopper clicks on an ad resulting in a lead (potential customer) or a sale.
Retailers are allocating more of their budgets to pay for ads. According to digital marketing company Merkle’s “The Performance Media Report: Right-now marketing trends for Q3 ,” 57% of advertisers indicated that paid search spending increased year over year, with similar trends across Google Shopping and Google text ads.
43% of respondents said targeting users effectively in the face of new privacy regulations and tracking changes is a top-two priority. An encouraging sign, says Melissa Reilly, associate director, strategic content at Merkle.
“It tells me that brands recognize the importance of crafting personalized advertising experiences for consumers in order to really drive performance and create lasting relationships,” Reilly says. The report was conducted by Ugam, a Merkle company, in May 2022 of 250 marketing decision makers based in the U.S. representing companies with over $100 million in annual revenue. 46% represented B2C companies, 7% DTC and 47% B2B.
Natural Life’s retention and customer growth trial-and-error approach
The retailer is on the hunt for options that go beyond ads. Increasing its collaborations with influencers is one strategy. Natural Life has more than 629,000 followers on Instagram. It has more than 68,000 followers on Pinterest and nearly 50,000 on TikTok. It also collaborates with other brands to offer customers combined assortments or giveaways. Grana says currently, except for Facebook and Instagram ads, it spends more of its marketing budget on print direct mail ads than anywhere else.
The retailer runs its ecommerce site using Shopify. Grana says it’s in a trial-and-error mode. It’s currently in the process of testing out various technologies to see what works and what doesn’t. One such trial included TapCart, which allows Shopify stores to create a mobile app, “no coding required.”
Grana did not elaborate on how the trial went, but as of June 2022, the retailer does not have a mobile app available for download. Nearly 80% of Natural Life’s mobile traffic is from mobile shoppers.
Other digital marketing tactics
SMS texting is another way to attract and interact with customers, she says. The retailer launched an SMS program in November 2020 and has used the channel to supplement its email revenue. Grana declined to disclose the percentage of customer communication through SMS messaging. But said the growth percentage has been “in the triple digits.”
“I think the retail industry as a whole is looking at being more independent instead of relying on big tech vendors,” Grana says. “And we’re looking for where we can collaborate with other brands to draw traffic to us.”
Meanwhile, testing continues. Grana says the company has tested two other technologies in April but the impact to traffic hasn’t been significant, Grana says.
“We won’t be testing into those channels going forward [TapCart],” Grana says, adding that the retailer has a few more planned but it’s too early to reference specifics.
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