Roar to Eras Tour: why retailers should demand more in pursuit of incremental performance

By Angus Quinn

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November 28, 2024 | 5 min read

Retailers should focus on incremental performance by optimizing marketing channels, enhancing ROI, and working closely with partners. According to Angus Quinn (Connexity’s marketing director of EMEA and APAC), this involves understanding the shopping funnel, balancing rewards, and refining strategies and KPIs for sustained growth.

Incremental performance can make all the difference.

Rewind 10 years ago. Consider two of the lead popstars of the day: Katy Perry and Taylor Swift.

Perry had the second biggest song of the year in “Dark Horse” and Swift found herself in awkward limbo between the country star she was, and the popstar she was yet to become.

If you’d asked someone to place a bet on who would be taking over the world a decade later, more than likely you’d have plumped for Perry. She was everywhere and everything. Swift had her fans, but also felt like a one-dimensional country star.

Fast forward a decade, one of the two is on a world-conquering stadium tour, while the other has seen less success on the current Billboard charts.

The difference between the two lies in their focus on incremental performance. Swift continually reviews, optimizes, and evolves her approach. Meanwhile, Perry has faced challenges in finding a path back to mainstream success.

Retailers seeking success in 2024 should follow Swift’s example. Finding incremental performance is about a focus on optimization and also on efficiency, ideally over time being able to do more with less. It is all the more vital as advertising costs increase despite overall click volumes declining.

From incremental opportunity to incremental performance

True efficiency comes with understanding what channels are working, optimizing your budget against them and, over time, working to steadily enhance ROI.

Growth is the first way to think about incremental performance: Are you getting sales you wouldn’t have otherwise? And are they increasing?

On top of that, you might think of incremental growth in terms of taking marketing share from competitors and, in addition, bringing in brand new shoppers in greater numbers than peers in your sector.

After growth, we can consider incremental performance in terms of optimization. Are you winning this growth at a better cost-of-sale? And continuing to see better returns on investment? Are your performance channels helping you to beat KPIs? This is a cornerstone of eBay’s performance marketing strategy, setting an incremental revenue KPI against each partner and optimizing budget spend based on which channels drive best ROI.

The burden here is not on retailers alone to identify incremental performance either. Technology partners, delivering key parts of the performance marketing strategy, should be holding themselves to higher standards, showing their delivery to retailers and helping them to focus on this.

The path to optimization

The best way to think about optimizing your incremental performance is to consider the shopping funnel.

Last-click may be the most common measure, but if you aren’t keeping an eye higher up in the funnel you risk losing your conversions before they get down to the last-click.

One path might be to map first touch percentage. Understand which channels are bringing potential customers into your funnel and you can help balance the rewards you offer to your marketing partners. It can also help mitigate influential channels losing out on attributed sales when they’re sniped lower down the funnel by interlopers, who take credit for sales, often using voucher codes to capture conversions.

Understanding both indirect and direct influence can help to deliver incremental performance retailers are looking for. Marks & Spencer make key use of this in their affiliate strategy, incentivising for both traffic and revenue with relevant publisher partners.

Expect more from your partners

Marketing and agency partners should also meet retailers halfway about pushing the throttle on initiatives. Their focus should be optimizing your cost-of-sale, driving a mutually beneficial outcome over time, monitoring for trends that allow adjustments.

There should also be focus on metrics delivering higher AOV than previously, your earning-per-click and monitoring where for example as a retailer you should want to elevate pace of sale, and where you might want to lower demand and traffic flow.

Partners pushing retailers towards agility and helping them refine their KPIs stand to be the most helpful for those looking to enhance incremental performance.

Conclusion

Incrementality is the challenge of the day for retailers. As marketplaces entrench their position, retailers need new opportunities and critically new performance to find a path to sustainability. Working across the open web, to target each stage of the funnel, retailers can generate growth in their performance marketing strategies and also find ways to optimize their approach for continued success in the future.

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