The way we buy has most certainly changed. We’ve seen large brick and mortar stores such as Dick Smith move to online only. We’re all waiting in anticipation for Amazon to enter the Australian market this year. In a market where you can now order something online and have it arrive on the same day, the Australian retail industry is focusing more than ever on the end-to-end customer experience.
Yet the latest NAB Retail Report (Dec 2016) showed that Australians online retail spend accounts for only 7.1% of bricks and mortor spend. Comparatively, UK retailer John Lewis saw 40% of its 2016 Christmas sales come from online. With more and more UK retailers moving into the Australian market, with already established online customer strategies, the need for Australian retailers to offer a seamless offline-to-online experience has never been greater than it is now.
So how do brand partnerships fit into this offering and how do they differ based on different types of retail?
Multi-brand retailers tracking co-funded marketing campaigns
Firstly, let’s take a look at the multi-brand retailer such as liquor, grocery and department stores. These types of retailers manage multiple brands within store and online and often participate in co-funded marketing campaigns. Normally you would use the co-funding to run extra promotions and push the brand, yet there’s no way to measure what success, if any, even came from the campaign. If you run these co-funded campaigns through a partner platform you can track sales and ROI, instead of just brand exposure; therefore, showing results and growth to your brands.
Department stores promoting their own brands via loyalty
Although department stores are also multi-brand retailers, the difference is that they sell their own brands in addition to external brands. Working with brand partners such as reward sites and loyalty partners, department stores can better promote their own brands. For example, they could pay higher commissions on their own products with higher margins enabling them to drive more profitable growth at scale.
All retailers can benefit from shifting their focus to loyalty models
Finally, another key opportunity for retailers is to use brand partnerships to progress from an acquisition focused model to focusing on value and loyalty partnerships. For example, grocery brands are often very acquisition-led, but if a customer only shops with you once over a six month period, can you really call them a customer? By utilising brand and loyalty partnerships, retail brands can work to retain customers and ensure that they are acquiring more long-term customers.
It’s clear to see that for retailers, the Australian market is only going to see more and more change. By utilising available brand and loyalty partnerships that incorporate offline and online, such as click and collect, retailers can achieve more profitable, scalable partnerships that can change and adapt as the market does.
At Performance Horizon we already work with some of Australia’s leading retailers to drive innovative brand partnerships. Last year alone, retailers on our platform saw an average of a 14:1 ROI, all thanks to brand partnerships. If you’d like to know more, why not reach out to us today?