Fulfillment Drives Competition in Local Markets
There is no doubt that local delivery apps have helped the growth of e-commerce in South Africa and we’ve seen a rapid rise in popularity of our homegrown apps like Checkers Sixty60, Pick ‘n Pay asap and Woolworths Dash. But their success has also caught the eye of international companies who have very established and efficient fulfillment models. The introduction of brands, like Airlift Express, which are coming in with big targets and big budgets is likely to inject additional competition into the market and will help drive digital commerce more mainstream. This is good news for the consumer and good news for smaller local retailers looking to compete with the big players when it comes to express delivery.
Still Struggling to Connect Online & Offline?
As it stands, one of the biggest challenges facing local retailers is connecting offline to online to gain a holistic view of the customer. Brands have huge CRM databases but they’re not always able to link these to all their online resources to gain a true single view of the customer. Unless you have a proper single view you are simply not able to leverage the real power of Business Intelligence. And without that you won’t be able to put context to your data through measures like Customer Lifetime Value (CLV).
It’s also becoming all the more urgent for companies to connect their online and offline data, given the imminent deprecation of the third party cookie. Offline data (such as purchase data, survey and research data, as well as loyalty card data), represents extremely valuable information that marketers can use to build more robust audience profiles for digital campaigns. By integrating their offline, non-contested, first party data, retailers will be in a stronger position when third party cookies make their exit.
A Test & Learn Culture will Set you Apart
Agile brands who’ve been bold enough to adopt a test and learn culture are the ones which are ideally placed when it comes to serving their customers. A great example of this is Google Ads Performance Max, which allows retailers to support and grow their online and offline sales by accessing all of Google’s ad inventory from a single campaign with a product feed.
We found that companies who were open to testing betas, like Performance Max, are now extremely well placed to take advantage of the news that from April they can upgrade their Smart Shopping and Local campaigns to Performance Max. Google says this will allow them to access additional inventory and formats across Discover, Search text ads and YouTube, and Google claims that early tests have shown advertisers that have upgraded to Performance Max are seeing a spike of 12% in conversion value at the same or better return on ad spend (ROAS).
Unrealistic Expectations Could Spell Disaster
Gartner research shows around 36% of digital marketing leaders now hold the title of Chief Marketing Officer (CMO) and a further 49% hold the title of Vice President or higher. While this is good news for digital specialists and the agencies they work with, in South Africa there is still a fairly big disconnect in terms of what digital can deliver and how it should be supported.
In order to support digital efforts, there must be organizational buy-in about what digital can and cannot achieve. While digital can do a lot of a company’s heavy lifting, and company results are showing stellar growth from digital channels, you simply cannot set all your revenue targets based on digital delivery. Targets must be divided according to your different marketing channels and in a realistic fashion. And, most importantly, with the budgetary support required to deliver on those expectations.
Finally, local CMOs who want to optimize their digital marketing efforts need to partner with agencies who care about their business. Too often agencies are keen to access budgets to do what they are interested in, rather than what is actually best for the business of the brand. When it comes to digital efforts, too many decision makers are finding partners who aren’t digital specialists and realizing too late that their hopes of a digital miracle were doomed from the start.