To do a job well, you need the right tools. With better technology, we can evolve and build a better world around us. And with personalized retargeting, any home improvement organization can evolve at pace.
In this article you will learn about:
- Trends and customer behavior
- The value of retargeting—increasing ROI/ROAS
- Navigating the customer journey
- Growing your customer base
- Building loyalty with omni-channel
- How to best use retargeting
Trends and customer behavior
The pandemic catalyzed widespread digital acceleration across industries with many companies shifting their focus to online and mobile. Home and Garden was no exception, as worldwide online sales increased by 20% in the last two years. Companies rushed to bolster their digital capabilities to enable omni-channel business models and serve customers, who, staying around the home more, turned to home improvement, redecoration, and the garden, and jumped online.
The reigning international heavyweight champ of home improvement Home Depot, for example, invested in its omni-channel platform to see its online sales almost double from 2019-2021, despite nearly half of those sales requiring pick up from the store. Another home improvement giant, Lowe’s, took a similar path in building its omni-channel capabilities, resulting in 18.4% growth for Lowe’s.com for the fiscal year ending on Jan 28, 2022.
The question now for home improvement organizations is what digital tools to use to maintain this uplift in operating momentum, now that the restrictions have been lifted.
The value of retargeting—increasing ROI
For all organizations, the cost of acquiring new customers is high. According to Salesforce, the average user goes through 6-8 touch points before becoming a customer, with 80% of website visitors leaving without making a purchase. Retargeting’s main value is that, when done right, it allows you to stay “top of mind” for people who have already shown an interest in your products by visiting your site. It allows you to find and reach highly valuable customers who have become inactive and re-engage them, and then increase the likelihood of nudging these lapsed users over the line to convert.
Retargeting is a precise and flexible tool, and its efficiency and effectiveness can be measured through ROI metrics. It allows you to calibrate campaigns to achieve your business goals, whether it’s product groups, specific groups of users, or channels that you want to leverage.
Navigating the customer journey
With its huge product ranges available online—Home Depot has 1M online products and Lowe’s has almost 2M—the Home and Garden industry can massively benefit from the value that retargeting brings. In our case, our proprietary Deep Learning-powered recommendation engine increases conversion rates by showing the most relevant offers to users. It more persuasively navigates their customer journey towards the purchase of a product, or products, that they really want.
Retargeting allows you to simultaneously prioritize and promote product groups and focus on specific inventories like seasonal or promotional products. Imagine being season-relevant and user-relevant at the same time. This can be achieved with the use of sub-campaigns that can significantly boost results, as it allows for more granular retargeting.
It’s clear that a priority of Home and Garden organizations is to increase AOV, so naturally, they are looking to sell complementary products or services. With the use of retargeting with Deep Learning-powered recommendations, you can go beyond the obvious connections to reach more pro-service clients, and lift other customers into this bracket by cross-selling.
Growing your loyal customer base
The home improvement giants have worked hard to gain ubiquitous brand visibility and become household names, and they’ve earned it. But to stay in the ascendency, they need to continue to build loyalty. Of course, the only real demonstration of loyalty is for customers to increase their frequency over time. Although loyal shoppers make up just 20% of a brand’s audience, they account for up to 80% of the revenue. They spend up to a staggering 67% more than new buyers and they are 5 times easier to keep than acquire new ones. With personalization underpinned by leading-edge technology, it becomes much easier to hold on to such high-value clients online and to grow a base of loyal customers, with an extra focus on the pro-buyers customer group.
Building loyalty with omni-channel
Fulfilling the very different needs of spontaneous, diligent, or heavy buyers, and amping up your online customer journey and ROPO (Research Online, Purchase Offline) sales, you need supercharged retargeting capabilities. Only then can you precisely define and reach a person and provide in-store level recommendations to customers online.
You also need to communicate through the channel most relevant to your customers at the given time. It’s a business environment in which all platforms are important and this demands consistency across all channels. Online and app campaigns, for instance, may have different goals, but the same marketing message, brand feel, and user experience have to permeate seamlessly across all devices and forms of communication. With the right retargeting campaign you can achieve this.
The sharp increase in online activity during the pandemic—when over 65% of customers engaged in new shopping behavior—resulted in a veritable sea of user data. The right retargeting partner can help you sift through priceless insights from this data to gain better visibility of all the nuances of your entire funnel. It can help you better reach registered users who are yet to make a purchase, re-engage customers at a high risk of churning, and reactivate high-value customers who have stalled into inactivity.
It’s important to note that, with the cookieless world on the horizon, all this can be performed by using 1st party data (that is provided willingly and deliberately by users).
How to best use retargeting:
- Omni-channel capabilities—ensure the same marketing message, brand feel, and user experience unfolds seamlessly across all channels.
- Flexibility—seek the ability to run several campaigns and sub-campaigns at once with different goals.
- Use the best technology available—there’s an old saying: Measure twice, cut once. Imagine measuring not just twice but millions of times. That is what Deep Learning brings to ad campaigns. Capable of 2500 times more calculations than Machine Learning, it allows you to measure user behavior and intent on unprecedented levels, in order to display ads with greater accuracy.
- Consider a multiple retargeting strategy—put simply: more retargeters = greater reach. Reach more customers by using more than one retargeter (albeit applying different algorithms) with little audience overlap.
- Test the field—with the home improvement market expected to reach a value of 621.3B dollars in the U.S by 2025, it’s time to get testing and find your perfect retargeting partner.
- Get ready for cookieless—3rd party data from cookies will soon be a thing of the past. Seek a retargeter positioned to best leverage 1st party data.
- Focus on high lifetime value customers— gain the ability to get to know and then target loyal pro buyers with a high degree of personalization.
To learn how RTB House can help your organization achieve its retargeting goals contact Bernard Quinn our expert on home and garden online advertising.