Digital Merchandise Exam 1

Digital

"the convergence of multiple technology innovations enabled by connectivity"

Promotion

"any communication used to inform, persuade, and/or remind people about an organization's or individual's goods, services, image, ideas, community involvement, or impact on society"

Merchandising

the activity of promoting the sale of goods, especially by their presentation in retail outlets

Traditional Media-- Media Buying

The simple act of the transaction between media owners and companies

•Ex: Newspapers

Mass Media -- The stage of planning

The practice of determining how, when, and where to deliver a message to an audience

•Ex: Radio & Television

Passive Media consumption

Customers absorbed the given messages

Push Media

Where people passively consume content

•Newspaper, magazines, TV, direct emails

•ads/promotional offers/emails filling inboxes with content

Pull media

Where people actively engage with content

•Web surfing, streaming videos, product search, connecting on social media

•Content that people feel is specifically targeted for them.

•People find themselves "pulled" to a brand's website and products.

Customer dialogue

•Businesses have to learn how to have a meaningful conversation with their customers, through diverse (digital) media

Role of digital merchandiser

•to initiate the conversations

•to figure when and where the conversations are taking place and become a part of it.

Digital Merchandising

All about driving customer conversion and satisfaction across all digital touchpoints

The layers of business challenges

Societal (pre vs post pandemic)

Economic

Technological (Ex: GenAI)

Political (ex: tariffs)

Digital disruption

the effects of digital technologies and business models on a company's current value proposition and its resulting market position

Digital Transformation

1. Rise of Innovation---> Rise of innovative digital technology

2. Digital disruption --> Turbulences caused by emerging digital tech and business models

3. Digital Transformation--> A process where people and tech collaborate to transform existing processes/services or create new ones

“You don’t need a digital strategy. You need ........

a better strategy, enabled by digital ”

Media entertainment as a digital disruptor and its transformation

The creation of a subscription business model to stream shows, movies, etc

Digital Vortex

The inevitable movement of industries toward a "digital center" in which business models, offerings, and value chains are digitized to the maximum extent possible.

-Close to the center: significant impact by digital transformation + Data intensive

Farther out: Slower change + asset-intensive

Digitalization

•Standardizing business processes

•An operational necessity

Digital!

•A host of powerful and accessible technologies (social, mobile, cloud, analytics, IoT, cognitive computing, etc.)

- not advanced digitalization

"becoming digital"

Transformation of a company - rethinking a company's value proposition

Digital Intelligence

•The set of key capabilities needed to succeed in a world driven by technology and changing at breakneck speeds

•Think of digital intelligence as a way of working, not just as knowledge of any one technology

Digital Mindset

the ability to see and make the most of the opportunities that digital change offers.

•An excitement to continuously learn

•A desire to make decisions and adopt technology based on data about customer needs

•A habit of staying knowledgeable about emerging technologies

Metcalfes Law

•A measure of network effects

- The value of a communication network is proportional to the square of the number of its users

Participation "Tipping Point"

•After a certain number of people get on to a platform, it starts to become more attractive

•"Network effects" lead to participation "tipping points"

Milgram's Small World Hypothesis

"We’re all connected by just “six degrees”

•People in their personal relationships were tightly enmeshed in networks.

•Ideas, messages, brands and value can be transmitted very quickly through very densely meshed networks

Power Law Distribution/90-9-1 Rule

•“90% of people are observers who read or observe only, 9% of members are contributors who edit or respond, and 1% of people actively create new content.”

Customer network strategies

Access--> Seeking immediate, simple and fast access to data

Engage--> Seeking engaging content that is relevant

Customize--> Seeking varied, customized experiences that are relevant

connect--> Seeking digital experiences that allow communication and expression

collaborate--> Seeking to work together towards a shared goal

Survey

systematic gathering of information from respondents for the purpose of understanding some aspects of the behavior of the population of interest

•Through survey, we want to ...

•Understand who the consumer is

•Know what their behavior is

•Gather numerical/quantifiable data for insights to make better decisions

Net Promoter Score (NPS)

A market research metric that takes the form of a single survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague

NPS Formula

Promoters - detractors = NPS % (EX: 2/13- 1/13)= 7.69%

13 -- total number of participants

-- > 2 + 1 à the number for each Detractors and promoters

•Questionnaire

a research instrument containing questions and other types of measurement items designed to solicit information appropriate to data analysis

Analyze questionnaire data to..

•Develop products

•Improve retail environment

•Assist customers with ease of access

•Innovate customers' experience

Questionnaire design process

1. Determine research objectives

2. Identify research questions

3. Determine a data collection method

4.Determine question types

5.Check question writing techniques

6. Establish questionnaire flow and layout

7. Evaluate the questionnaire

Pre-Test

testing a questionnaire (or any research component) with a small number of people before conducting the main survey to test reliability and validity of the questionnaire

•Pilot study

examining the entire survey process with a small set of a study sample that you will include in the main study.

•Small-scale version or trial-run of the research

What is analytics?

•Using mathematical models and algorithms that simplify a company's view of its customer base and the behavior of individual customers

•Analytics vs. Analysis

•Number-oriented vs. not

digital analytics

the process of collecting, measuring, and analyzing data from digital sources such as websites or mobile apps

Analytics -- an accurate description of customers

•Classification

•Estimation

•Clustering

•Prediction

Predictive Analytics

Making predictions about future outcomes.

•Forward-looking

•uses historical data combined with statistical modeling, data mining techniques, and machine learning.

4 types of predictive analytics

1.Product-Affinity Model

2.Segment-Migration Model

3.Response Model

4.Attrition Model

Product-Affinity Model

"What are customers purchasing in one basket?

Segment-Migration Model

"who will be more likely to behave in a certain way?"

Market segmentation

The process of dividing a broad consumer market consisting of existing and potential customers into sub-groups of consumers based on shared characteristics.

Response Model

"who will respond to our promotional campaign?"

Attrition Model

who wants to leave our company

Value of Retail Analytics

improve sales productivity; reduce marketing costs

Conversion

When a consumer completes a desired goal, such as making a purchase, filling a form, signing up, ... .

Conversion rate

the % of total visitors that convert

Blurred Boundaries (Lee and Cho) (2020)

"... The rapid change in the media landscape brought about by digital transformation has blurred the boundaries between and domains of diverse advertising media ... a holistic view of business strategy and new ways of thinking to transform businesses to upgrade the strategic mindset

..."

Customer Journey

: The path of interactions a customer has with a brand, product and/or services

Customer Journey Map

A visual storyline of every experience a customer has with a service, brand, or product across various mediums.

Components in Customer Journey Map

Touchpoints

Customer actions

pain points

opportunities

Touchpoints

A contact point or interaction between a customer and a brand

•Customer actions

Actions a customer takes to achieve objective

•Pain points

: Issues/problems that a customer faces in interacting with a brand

Opportunities

: Ways for the brand to improve overall experience

2 types of customer journey maps

Retrospective maps

Prospective maps

Retrospective maps

where you map out how customers currently do stuff (typically based on research findings)

•Prospective Maps

where you map how you expect users to behave with a new product idea or future events

phases of the customer journey

What is the customer's need/awareness (objective)?

What product research has been done?

What did or does the customer take into consideration?

What is the purchase decision?

What is the support for renewal/future purchase?

First Moment of Truth (FMOT)

when consumers stand in front of store shelf and decide whether to buy a P&G brand, or a competing product"

(Shelf)

Second Moment of Truth (SMOT)

"when consumers use a product and it delivers a delightful & memorable experience - or not and then decides whether to buy it again"

(Experience)

Zero Moment of Truth (ZMOT)

the moment in the consumer's decision-making process when a consumer researches a product and all options prior to purchase

Moment of Truth

When a customer interacts with a process and forms an opinion (positive, negative, or indifferent) about that process.

McKinsey's Consumer Decision Journey

Digital Advertising

promotional messages delivered to consumers through online media outlets

Key Channels for Digital Advertising

Email

Display

Video (+ Audio)

Social Media

Search

Email marketing

-> 4 billion global email users

->Top lead generation tool (the best ROI)

->Shoppers who purchase from emails received spend more

-> Emails can create brand ambassadors (4x more likely to share content on SM)

Bounce Rate

the % of emails that your business has sent and failed to reach the recipient's inbox

Email Marketing Challenges

42%--> promotional emails from brands were useful at least sometimes

33%--> never found brand marketing emails useful

Email Essential 1: Triggers

•Personalization

•Welcome

•Customer actions

•Lack of action

•Abandon Cart

•Time passed

•Deadlines

•Calendar

Anniversary

Win back

Discount

Order Confirmation

What matters most (Emails)

Relevancy

Personal benefits

Opportunity to take some action

what customers want from emails

Deals and discounts (64%)

Requests for product reviews (33%)

Tips and tricks (31%)

Upcoming product news (23%)

Other product suggestions (20%)

Inspirational stories (9%)

Email Essential 2: Mobile First Design Step

Optimizing emails for mobile

- 48% of emails are opened on mobile devices

-Only 11% of email templates are well optimized for mobile

key benefits of email marketing

•Allows you to reach your core audience

•Is highly measurable

•Open rate, click rate, click-to-open rate, bounce rate, unsubscribe rate, ...

•Trustworthy

•Cost-effective

•Is versatile with a number of other digital advertising uses

Display Advertising

advertising that incorporates text, logos, and pictures or images position on a website or search engine

site placement ads

When a company chooses the site they would like to advertise on

Native Ads

Advertising appears on a website with similar content

Remarketing Ads

Advertising changes based on the user's activity on a given websites

•Past visitors see ads while they are browsing the web

•Can keep brand top-of-mind

•Entice visitors to come back

key features of display advertising

-Various standardized sizes and shapes

-Pay per impression

-Price depends on the publisher

-Used for branding, as well as direct response

Interstitial ads

: ads that run full-screen and cover the interface of the app the user is using

expandable ads

ads that launch as banner ads but invite the user to interact to learn more

Banner ads

Advertisements on web pages designed to encourage users to click to reach an advertiser's site

Skyscraper and leaderboard

Rich Media

digital ads with features like video, audio, or other elements that encourage viewers to interact and engage with the content

Key metrics for display ads

Impressions

reach

engagement rate

CTR

site placement ads

•When a company chooses the site they would like to advertise on

•Banner ads

Native Ad*

* "any paid advertising that takes the specific form and appearance of editorial content from the publisher itself"

Look, feel, function (Native ads)

Entertain

inform

inspire

Type of native advertising

•In-feed social ads

•Promoted/Sponsored content

•Recommended content

Why native ads?

Attention ↑

Avoidance ↓

Click Through Rates (CTR) ↑

Google Display Network (GDN)

A collection of over 200 million sites, apps, and videos where Google ads can appear.

•Utilizing cookies, mobile ad identifier (MAID), identifier for advertisers (IDFA)

-Remarketing ads

The VIdeo Matrix

•Numerous pipes & access points

Devices

content producers

distribution network

•Devices (video matrix)

: the options available based on what device viewers are using to view the content

content producers (video matrix)

: the options available based on who owns the content

Distribution network in video matrix

the options available based on who is distributing the content

Linear TV

•The device used when content is delivered over broadcast or cable signals

•Watch linear TV on a television set

Connected TV (CTV)

•The internet-connected device used when content is streamed to a television set

•Watch digital video through an internet-enabled device

•“The device”

•How the content is being delivered

over-the-top (OTT)

: content that is streamed over broadband channels

•“The content”

•Whether it is steamed or delivered live