Recovering from COVID-19: A Fresh Look for the Personal Luxury Industry
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There has been no shortage of change in the marketing industry over the past decade and the complexity of the advertising ecosystem has increased, especially within e-commerce. With so much to consider, how can marketers still plan for future success and growth and not become last month’s fashion trend?
During the Festival of Marketing in October 2021, we sat down with Sergey Volchkov, Growth Director, Marketing at Farfetch, to look at the biggest challenges in marketing for their business and the ecommerce industry, and to identify the what steps every brand should take now to future-proof against whatever change awaits in the marketing ecosystem.
With new media emerging practically by the day, brands are constantly assessing new opportunities. Add a pandemic and the crumbling third-party cookies on top of that and you have an even greater changing marketing ecosystem with consumer behaviour shifting each day as well, drifting more and more to the digital but privacy-safe world.
As an e-commerce luxury retailer, Farfetch is at the epicentre of change. The share of online sales channels for luxury actors is expected to exceed 30% by 2025 (vs. 12% in 2019). In addition to selling merchandise, digital channels have joined TV and OOH as essential inspiration touchpoints in the early phase of the consumer journey.
They were experiencing higher frequency and a more multi-dimensional customer, and at the same time they were looking to capture the right data needed to future-proof their marketing efforts in a cookie-less world. The brand had also started to invest more into a variety of channels which attracted attention of stakeholders who wanted to understand how these activities were affecting the business growth, while the marketing team was trying to find their way through a mix of more and less mature channels, e.g. addressable and non-addressable media.
“We are living in a quite interesting and challenging time where probably someone would say there are too many challenges, and the industry will be transforming in a completely new way (…) But I would say the opportunities are around us! And it really depends on the angle: where someone sees the limitations, others would find opportunities within a new reality.”
Farfetch set out to find these opportunities within their new reality, a sustainable way to assess their marketing performance and proof its worth across all channels. With a data-driven approach, they wanted to gain a holistic understanding of their business drivers through Commercial Mix Measurement and overcome the pitfalls of deprecated or single-source solutions by connecting the data dots.
But with data deprecation, how can brands ensure their data strategy is future-proof? The privacy challenge was considered one of the most impactful ones because it will touch so many different aspects of the business – and it already has changed how many other businesses across the industry operate. For Farfetch, the key to overcoming the data deprecation challenge was investment in a robust data strategy to work around loss of some sources, find substitutes for others or get rid of unnecessary ones. First-party data and experiments with new, engaging ways to profoundly connect with the consumer will make all the difference.
“The baseline in successful customer-centric marketing is having
a robust and healthy first-party data set.”
Actively building out that first-party data set helps brands to act, not react to the privacy issue. It is part of understanding your customer needs, find meaningful segments and respect their privacy. Farfetch knows that brands will always need to understand their current and future target audience. And they are aware of their differences which need to be addressed differently as well – but they recognise it as a natural shift in the game that will occur with every generational wave, dictated by the new cookie-less rules.
How deep the change will have to go to create a solid data set to address the right person, at the right time with the right message depends on the expertise and maturity of your marketing, data and products – and your KPIs. Just like with any other marketing activity, marketers must establish balanced KPIs and set goals for their measurement journey.
Brands should take a step back from the quick fix solutions and find a way to leverage the right kind of data for sustainable business growth, asking: What do we want to achieve? Which solutions are available for that? What data do we have, will we have to find, or should we ultimately get rid of? And finally, marketers should focus on getting the full business behind them, which will not only help in measuring and communicating success, but will also help to push the limits and aim even higher when revisiting KPIs.
“Brand always plays a crucial role in e-commerce”
Many things in the digital world evolve around performance and constantly measuring outcomes. But brands can’t rely on short-term measurement for long-term brand building. Some of the set KPIs must evolve around long-term growth. Farfetch is aware that even – or especially – as an e-commerce player, they need to define an advanced, balanced strategy for brand and performance.
That strategy requires them to align across the business to find and constantly optimise a successful balance. Leveraging a holistic measurement solution, such as Commercial Mix Analytics, gives them a true competitive advantage because it guides them along this way. It is all about measuring the true impact that marketing campaigns and activities have on the whole business over the short and long term, which is more than attributing conversions to one or the other channel.
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