Amid all the gloom and doom about a potential “retail apocalypse” and threats from digital-savvy challengers, it’s clear that to survive, traditional brands desperately need to fix their leaky marketing funnels. The problem of a disconnected discover-to-buy consumer pathway is especially prevalent in the mid-to-high-end fashion category, where vulnerable old-school contenders are being outsmarted by young guns with social media chops.
Traditional brands have invested a ton of money on awareness and brand building, only to realize that they’re not positioned for how people discover brands and buy products today. Companies make basic errors with their social media strategy, like not adding shoppable links to their posts or learning from the example of a lot of the challenger, indie, direct-to-consumer brands. The upstarts are often “shoppable-first,” with brand discovery and purchase leading everything they do in marketing. A lot of traditional brands -- especially in mid-range and luxury categories -- are way behind in thinking about how millennial consumers actually want to interact with and purchase from brands.
Most upscale brands invest heavily in paid search, which leads to unintended consequences when they end up not sending traffic to their sites but rather to resale or discount sites, outbid on AdWords and out-priced on Google Shopping. In a lot of cases, high-end brands don’t actually “own” their keywords across every channel they need to be in. Search for any luxury brand and you’re going to find dozens of places to buy it.
According to a recent report from L2, 38% of brands don’t own their search terms. For one luxury brand, 40% of the paid search traffic went to resellers and the brand’s website only got 18% of the traffic.
High-end brands have traditionally been less sophisticated visualizers of the entire consumer marketing funnel. They put millions of dollars toward brand awareness programs, with less investment in mid-to-bottom of the funnel activities. The legacy of this strategy is that brands may be good at driving discovery, but things then get out of hand. Consumers are becoming conditioned to learn about a product online, and then buy at a discount rather than directly from the brand. It is critical for brands to get ahead of this, go direct to consumers, or focus on the upscale, exclusive market and eliminate all distribution channels.
The right way forward is for brands to focus on building a top-to-bottom consumer funnel. This doesn’t mean moving away from driving discovery, but rather, enabling folks to use that discovery to purchase products on the website or a non-discounting retailer with a relationship to the brand.
We know that brands do a pretty good job of plugging the gaps if they focus on better metadata around their products -- and better control over their branded keywords -- within social media.
Challenger brands, many of which sell directly to consumers, are much more nimble and less hidebound than traditional luxury retailers. They incorporate a constant feedback loop of insights directly into every facet of their business, all parts of the marketing funnel. They spot trends as they happen and send data to their product development teams, turning around products that are distributed just in time to consumers they engage on social media. And, the old-school fancy brands have left this opening for the indie kids to challenge them.
The upstart brands (think of Everlane, Outside Voices or M.Gemi), are not constrained by history and are less reliant on traditional marketing channels like paid media. While still laser focused on brand building, they find more efficient ways to accomplish it. They have a built in tilt toward using data-driven insights on how a younger, more plugged-in audience navigates the discover-to-buy process, what type of content they’re motivated by and what type of influencers they respond to. At ShareIQ, we see that most of these brands are highly engaged in leveraging the power of earned media through smart marketing programs on platforms that can be critical purchase drivers, like Pinterest and Instagram.
The discover-to-buy consumer pathway has many twists and turns that can seem forbidding to those with a traditional marketing mindset, but with a few patches to that leaky marketing funnel, you can find your way through the retail apocalypse.