Each new sales channel needs its own angle on data

By July 17, 2015

Sales departments should prioritise data on consumers’ demographic profiles when they launch new online channels but draw on very local data when they add bricks-and-mortar outlets.

The importance of increasing the number of customer touchpoints has been emphasised on many occasions.  Consequently, nowadays many marketing and sales departments champion a multichannel and even omni-channel approach, especially when it comes to m-commerce, but all too often they are still unsure what strategy to adopt. Their dilemma is understandable. How can you communicate effectively when launching a brand new sales channel, and how can you attract customers to it? This issue is clearly highlighted in the Journal of Retailing*. A team comprising a PhD student and two Marketing professors from New York City-based Columbia University, plus a Marketing professor from Dartmouth's Tuck School, analysed some eight years’ worth of data gathered from a well-established US catalogue retailer between 1997 and 2004, a period which saw the brand launch an online channel and also add a bricks-and-mortar store.

L'influence de ses pairs en matière d'adoption de canaux marketing

De l'influence de ses pairs en matière d'adoption de nouveaux canaux marketing 

The first observation of the report’s authors is that data on users’ demographic profiles is crucially important whenever a retailer is looking to push the launch of a new channel. ‟When it comes to adopting a new sales channel, consumers behave like others who are in physical or socio-economic proximity. This is not just a matter of logic, the data proves it,” stresses Tolga Bilgicer, one of the report’s co-authors. The report highlights a concept which the authors call ‘social contagion’, i.e. the idea that members of a socioeconomic peer group influence each other. It therefore makes perfect sense to target the members of a particular group on the social networks or consumers who show similar purchasing habits. Nowadays this kind of targeting is actually feasible because of the huge amounts of data available.

A brand should do its best to attract new customers because they are highly susceptible to influences. This is even more advisable if the marketing budgets are being cut 

Second observation: When a company adds a new physical outlet, the traditional ‘bricks and mortar store’, the researchers recommend that it focus its marketing efforts on a precise geographical area, i.e. work at a very local level, rather than spreading its efforts over a wider area. ‟Word of mouth in the area will then pick up on the marketing effort.”

These recommendations are particularly pertinent when it comes to new customer acquisition. The research shows that long-standing customers are in any case more likely to try out a new channel and they are less likely to be influenced in their choices by others so that nowadays it is no longer worth investing time and money trying to reach out to this group of customers. ‟A brand should do its best to attract new customers because they are highly susceptible to influences. This is even more advisable if the marketing budgets are being cut,” stresses Tolga Bilgicer.

*Report entitled Social Contagion and Customer Adoption of New Sales Channels, co-authored by Tolga Bilgicer, Kamel Jedidi, Donald Lehmann, Scott Nelsin, from the Columbia University School of Business and Dartmouth's Tuck School, published in the June issue of the Journal of Retailing.

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