Taking Control of Your Digital Shelf Space, Part 2

In part one of this series, I discussed digital shopper marketing in the rapidly changing retail environment and what it means for marketers. Today in part two, I discuss the digital path to purchase and how to take control of your digital shelf space.

Retailer websites are the first place consumers start researching or shopping, which makes digital shelf space on the retail site valuable real estate for brands that want to be seen where it matters most. The path to the digital point of purchase is longer than just the checkout screen at the end of a customer's transaction. The opportunities for brands and retailers to reach consumers along that path, while the consumer is in “buying mode,” are almost endless.

The Digital Path to Purchase
The steps along the digital path to purchase can be categorized simply by exploration, decision and reflection.

Exploration is when shoppers start researching a product or service. In the digital realm, this isn't a new phase by any means when compared to the in-store path to purchase. But it does present new opportunities for retailers and brands alike in the digital environment. In the modern economy, there are many ways for prospects to gain awareness, including email marketing, social networking, mobile ads, online coupons, in-store promotions and QR codes, to name just a few.

As a result, businesses in the e-commerce era need to invest a significant amount of time and resources on this critical phase, or consumers will never advance to the actual purchase of a product. It's an absolute necessary point for brands and retailers to ensure that products get noticed.

However, retailers and their consumer brand partners often fall short in executing effective merchandising presence and product placement strategies online. With the growing number of shoppers buying online, and the fact that more than half of consumers also research products online before going to an actual store, digital shelf space is where it all begins.

The decision stage is when the shopper amasses all the knowledge and research they’ve gained in the first phase and ultimately makes a purchase. Some interesting things to note about this phase are that most consumers choose what to click on from the first set of results on the first search page. Consumers often make the decision to purchase (or not purchase) a product within a matter of seconds. The decision phase is essentially the checkout aisle, where every brand naturally wants its products to be featured. Digital shopper marketing plays a key role in this phase.

Reflection occurs after the consumer has purchased a product and left your site. The reflection phase has quickly become a very important stage on the path to purchase in terms of building customer loyalty, word-of-mouth advertising and encouraging repeat purchases. Considerations include how easy was it to find what they were looking for; were they bombarded with advertisements along the way for irrelevant products; and how was the customer service.

While the path to the digital point of purchase shares many similarities to those in a brick-and-mortar setting, there’s quite a bit that's exclusive to the digital channel. An effective digital shopper marketing strategy incorporates optimal digital shelf space considerations while providing a relevant and easy-to-use experience for consumers, helping both retailers and brands take advantage of the unique opportunities that exist within the e-commerce environment.

Taking Control of Digital Shelf Space
Digital shopper marketing techniques and technologies can help retailers take control of their digital shelf space. As shopper marketing practices move online and mobile devices further increase consumer exposure, having a targeted, effective e-commerce media strategy in place becomes increasingly important for brands and retailers alike.

An effective e-commerce strategy can't be accomplished by simply placing and serving up banner ads on a retail site. A recent comScore study reported that 84 percent of all online users never click on banner ads. Of those who do, only 4 percent are responsible for 67 percent of the clicks. Furthermore, techniques such as search engine optimization, pay-per-click campaigns and social media targeting can’t accomplish it alone either. An estimated 95 percent to 97 percent of shoppers don’t convert.

The changes in both the shopping model and consumers have led to an astounding shift in the entire foundation of the traditional retail advertising model as well. Recent findings indicate that more people get their news today online than from a newspaper. Subsequently, the majority of ad dollars are moving online as brands naturally want to be where consumers are.

What does this mean for the ad circular, which retailers have been able to rely on for years to produce a steady revenue stream of co-op dollars from brands in exchange for prime product placements? Most estimates put retailers potential for co-op dollars between 2 percent and 5 percent of total revenue. To put this into perspective, a retailer with annual revenues of $50 million could make an additional $1 million to $2.5 million from co-op advertising programs alone. As many consumers stop reading newspapers, the profitability for brands in advertising in these circulars has naturally diminished.

Retailers and brands need to more effectively collaborate in order to create e-commerce sites that provide consumers with easy and relevant shopping experiences. Innovative retailers are monetizing the space that used to be filled with banner ads with paid product placements instead, while brands are more effectively spending ad budgets that were previously allocated to circular advertising. Taking control of digital shelf space provides a new source of high-margin revenue for retailers, increased awareness for brands and a better online shopping experience for consumers.

By taking control of digital shelf space through highly effective digital shopper marketing strategies, brand marketing dollars are more effectively connected with digital shelf space. As a result, retailers are provided a new source of revenue, brands have the opportunity to influence brand choice and rate of sale, and consumers are provided with an enhanced, still highly relevant online shopping experience.

Ji Kim is founder and CEO of DiJiPOP, a provider of on-demand digital shopper marketing technology solutions. Reach Ji at ji@dijipop.com.