Direct Response, Unbound
Nikki Baird, Retail Systems Research
As more B2C brands build direct connections with consumers, how will this affect direct response strategies?
Omnichannel changes everything, doesn't it? Historically, direct response strategies have occupied an interesting, but small niche. Not so any longer.
The key to this question isn't so much about what B2C brands are doing to connect with consumers as it is the many new ways that consumers can connect to brands thanks to technology innovations, on the part of the brand and, most especially, on the part of the consumer.
Here are a couple of examples: Practically everyone in North America is familiar with Bed Bath & Beyond's 20% off coupons. You probably have one sitting in your mailbox right now. It's not a direct response tactic, per se—there's no specific item that they want you to apply your discount to, and the call to action isn't necessarily “right now” even though there is a time limit. But Bed Bath & Beyond has started moving that 20% off discount to an SMS-based interaction, where the potential response is far more direct.
The text can arrive with a link to the website—to its latest seasonal collection or to its most popular items. What once was direct marketing is now direct response.
How about magazine ads? Pick up any shopping or fashion magazine and count the number of ads that offer a QR code or a text-to-buy code that leads directly to commerce.
Magazines are increasingly filled with such tools. And when that magazine is delivered digitally via tablet, the possibilities only compound themselves. What once was an “awareness” campaign is now direct response.
Enabling the buy button
At RSR, we've been talking to the industry about the “5 C's” of customer engagement in an omnichannel age: content, community, commerce, context, and customer insight. Direct response these days is all about that third C: commerce. Any brand or retailer wants to be there and ready when a consumer decides to buy. Some brands get there by trying to help the consumer arrive at the purchase decision moment, so they can be the one to capitalize on that moment. Others try to entice that purchase decision with offers and promotions.
Either way, “commerce” in customer engagement is about making sure that you have a “buy button” in front of consumers when they decide they want to buy—specifically, your buy button (or your retail partner's) that leads to a purchase from your brand.
In the past that buy button has been difficult to get to. A shopper had to go to a store or call a contact center. Each approach has had its challenges, and the potential for a lot of things to go awry. But as e-commerce has grown, the buy button has gone digital. You don't necessarily need the contact center, and increasingly you don't need the store to capture a shopper's purchase intent. And even if your brand hasn't moved into direct to consumer fulfillment, you still don't need your retail partner's store—their site can be your buy button just as easily.
With consumer technologies like smartphones and tablets, that digital buy button can now go anywhere, and can connect back to your brand almost any way you desire. Tesco's Korean brand Home Goods demonstrated the power of enabling a buy button anywhere with its subway billboards, made to look like a store shelf, on which each item had a QR code. Consumers waiting for their train could order food for home delivery using their smartphones and the billboard, and have their orders delivered to their house not long after they got home themselves. Another “awareness” medium converted to direct response.
Keeping it in context
The biggest challenge to liberating the buy button is making sure that it's available in the right context. If a consumer is not ready to make a purchase, the buy button is irrelevant to them, and no offer in the world may be good enough to get them to move. So brands wanting to make use of the buy button—omnichannel enabled direct response—to activate consumers need to be respectful when the consumer says, “I'm not ready to buy.”
There are a lot of steps in a purchase decision that happen well before the transaction and well after, and the beauty of the powerful combination of smartphones and digital commerce is that they can be used for any of those steps—if you know enough context about individual shoppers to help them on their journey.
Nikki Baird, Retail Systems Research
As managing partner at Retail Systems Research, an industry market intelligence firm specializing in the impact of technology on the extended retail industry, Nikki Baird focuses on trends impacting the consumer-retailer relationship, along with their supply chain and marketing implications. She has written research and articles on topics ranging from omnichannel strategies to in-store marketing and technology, to retailer-manufacturer collaboration, and has been quoted numerous times as a subject matter expert in The Economist and The New York Times, and on NPR. Baird also writes about technology in her spare time, as well as work on a sci-fi novel. Her passion for sci-fi began in seventh grade, when an English teacher gave her Dragonquest by Anne McCaffrey. She counts Hugh Howey and Neal Stephenson among her favorite sci-fi writers.
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