This article was originally published on Total Retail.
There’s a lot of hype in the retail world around sales shifting from brick-and-mortar stores to online. However, the two don’t have to be mutually exclusive. Rather, smart retailers need to understand the relationship between those spaces and make the shopping experience as customer friendly as possible.
The Rise of Showrooming
Worldwide in-store and online retail sales are projected to reach nearly $23.93 trillion in 2015. And of 219.4 million U.S. internet users over age 14, 201.7 million, or 90.2 percent, were expected to shop online last year. And 169.1 million, or 75.6 percent, will go on to make digital purchases.
Although e-commerce sales accounted for just 7.2 percent of total U.S. retail sales by the third quarter of 2015, the channel’s impact is much bigger. Showrooming — i.e., buying digitally for less after seeing a product in-store — is increasing in popularity, and most consumers tend to do shopping research online.
The Importance of a Seamless Experience
Consumers love the convenience of online shopping, but they also want to move effortlessly between online and offline. And, of course, they want a good deal.
Using affiliates to drive in-store promotions not only meets these desires, but also results in increased average order value, better conversions and higher revenue. The vast majority of today’s consumers go online to comparison shop, conduct product reviews and find the best deals long before they ever step foot in a physical store. More often than not, they visit affiliate sites to get this information.
With many of your customers visiting your affiliate partners first, it’s important that you follow these best practices to ensure your marketing program flows seamlessly across virtual and physical storefronts:
1. Pick your affiliates wisely. Select a small group of high-performing affiliates, and give them the chance to promote your in-store offer. Most publishers understand the potential of online-to-offline marketing campaigns, so they’ll likely be enthusiastic about distributing the offer. Starting with a small group lets you keep costs in check and ensures an effective rollout.
To determine the best affiliates for your initial offline promotion, it’s essential to evaluate their site content, promotional methods and distribution channels. (Usually, the larger the distribution, the better.)
Once the effort has proved successful, you can open it up to more affiliates. This also helps protect your customer service and in-store sales associate team from being overwhelmed by shoppers wanting to use coupons or promo deals they found online.
2. Set up a compelling (yet reasonable) commission structure. Typically, affiliates aren’t paid on online-to-offline promotions. By giving affiliates commissions on an in-store-only sale (albeit less than their online commissions), they’ll be much more motivated to promote it within their distribution channels.
Providing a small commission for an offline/in-store-only sale allows you to test the campaign while keeping costs in check. It also strengthens your relationship with the affiliate, gives them a reason to promote the in-store offer and creates data that help you evaluate online-to-offline sales.
3. Incentivize online shoppers to shop offline. This one may be obvious, but it’s a critical point. Promotions need to be attractive enough that the customer feels it’s worth her while to go to the store to make the purchase. Dollar amounts or percentages off the retail price are typically attractive to customers. Consider this online-to-offline promotion from Reebok. For all purchases over $75 made at a Reebok Outlet Store, shoppers received $15 off.
Finally, think of your promo as an acquisition channel. By requiring shoppers to provide their email addresses in order to receive the special in-store offer, you can promote future offers to them.
4. Establish a data-gathering system. Most online-to-offline promotions use either a promo code or barcode. To determine whether an initiative is effective and worth continuing, make sure the information gathered via these tracking methods is recorded and segmented.
Time is also a factor. If possible, have a nightly file sent to your affiliate network that lists all the sales that were produced offline from the online source. For example, this record might show what affiliate referred which shopper, what the sale amount was, and what commission amount to send to the affiliate. This benefits both parties. The affiliate can quickly see the impact of their efforts, which could encourage more distribution, and you get valuable customer data and faster results on the campaign’s return on investment.
5. Make mobile part of the experience. Mobile is the go-to technology to bridge the gap between online and offline. Shoppers like to browse online but prefer to buy in-store, and the reverse is also true. Retailers are leveraging real-time and location-based data to target shoppers in-store with personalized product offers, deals and recommendations. For example, a consumer may receive an email coupon to save 15 percent and take his phone to checkout to redeem the offer. As mobile tracking technology evolves, retailers will be better able to track conversions back to the proper affiliate.
Brick-and-mortar retailers have historically lagged behind consumers when it comes to blending the offline and online shopping experiences, but the winds are shifting. Don’t miss prime opportunities to connect with shoppers by investing in only-online advertisers to drive online sales and offline advertising to drive offline sales. By strategically leveraging the influence of affiliate marketers online, you’ll foster a seamless customer experience that will boost business in both spaces.