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Does the Concept of the Sales Funnel Still Apply to Modern Retailers?

Looking around in 2023, we need to ask whether the concept of the funnel still applies in the digital age. Although it is a neat analogy or system to classify or organize the traditional buying process, we see that rather than a linear ‘funnel,’ buyers exist in a ‘cloud.’ People start to interact and engage but, essentially, the momentum builds until they are willing to take a buying action.

Customers increasingly conduct their own research, on their own terms; experiencing a brand (and likely its competitors) on a number of platforms or channels of their choosing — so the phases that make up the traditional concept of the marketing funnel are overly simplistic in today’s world. Meanwhile, the process has the potential to be particularly scattershot in retail; an industry in which many brands traditionally experience short decision-making cycles.

The Problem with the ‘Sales Funnel’

Increasingly, there’s no one-size-fits-all. Terminology such as ‘the sales funnel’ tends to serve the purpose of making a complex process easy to explain — or blinding an audience with jargon, depending on your levels of cynicism. In today’s landscape, what’s critical is that we need to earn the right to interact with audiences.

The concept of the sales funnel goes back a long way. It is widely regarded as the first formal theory of marketing and, as an idea, it precedes the invention of TV, cinema, the internet and mobile phones — each of which has added to the range of options available to marketers and indeed to consumers today.

And while most versions of the funnel are built around three key phases — awareness, consideration and conversion — it’s been proven time and again that human decisions are primarily emotional, even irrational, and often ‘in the moment’ — so creativity and brand building needs to happen throughout the buying process rather than merely at the very beginning; the so-called ‘top’ of the funnel.

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Leverage Crucial Text Data in the Cookieless Future

What’s more, in all honesty, many ads are ignored and the path to purchase is rarely predictable, especially in the fast-paced online retail market. So with that in mind, and with consumers bombarded by brand messaging, the key is to influence and to engage. Just to make things even more difficult, marketers are likely soon to be losing access to third-party cookie data for audience building. This is no bad thing, however, as it has led many to lean more heavily on first-party data to build audiences for marketing effectiveness.

New technology can be used to streamline the marketing process, to reduce manual and time-consuming tasks and to help optimize and generate insights on your customers at all phases of the so-called journey.

For example, leveraging the vast amount of unstructured text data retailers tend to sit on can help — from call transcripts to survey open-ends, reviews and social data. Truly being able to access and efficiently use this critical data can help to benchmark a business against its competitor set, and to generate insights that can lead to more targeted messages which resonate.

The new cookieless reality is driving innovation around the use of first-party data — customer experience teams, for instance, have a wealth of valuable information at their fingertips, but haven’t always used it. In fact, most companies have vast amounts of text data that they aren’t taking advantage of — partly because it’s believed to be harder to organize and analyze than, say, quantitative data.

Yet this data has the potential to be the answer to the question ‘why?’, which is really the most important question when it comes to business intelligence. And so, alongside the demise of the third-party cookie, we hope to see retailers starting to wake up to the power of mining unstructured text data — and going far beyond rudimentary word cloud-type analysis.

Fortunately, AI and machine learning means that companies can analyze and digitalize any text data that they have to generate insights and value, at speed and at scale. Part of the power and the potential inherent in all of this is the ability to generate comparative analysis and to focus on the differences in the ways people talk — for instance, about competitor brands.

Up until now, most organizations have done very little, if anything at all, with text data, or only have text analysis as a basic feature within a more generic solution. If the demise of third-party cookies changes that, then it’s no bad thing. After all, necessity is the mother of invention, as many retailers and ecommerce businesses found during the pandemic.


James Cuthbertson is Chief Revenue Officer at Relative Insight, an innovator in text analysis that is used by organizations such as Sky, Nespresso and Formula 1 to understand the ‘why’ behind consumer behaviors by getting the full value from text-based data.

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