Marketers’ traditional funnel-shaped operating model has been completely upended by the evolving and expanding world of ecommerce. Where customers used to move through an orderly progression of steps before making a purchase in stores, they now jump in and out of various stages of “awareness” and “consideration,” seemingly at random, throughout their digital day.
“The pandemic really accelerated all of these numerous platforms where people can create and share content, [so that now] a consumer can come in at any point in time and easily buy in that second,” said Kaisy O’Reilly, Chief Marketing Officer at Stuart Weitzman during the IAB Connected Commerce Summit. This change has encouraged O’Reilly to adopt a new metaphor for the shopper journey: “Instead of a funnel, I like to imagine it as a brand world, almost this interactive web with people going in and out. Our job as marketers is how to keep them in it, and they will choose when to buy.”
Not only has the traditional funnel disappeared, but increased competition online means that marketers’ historical focus on the top and middle of the funnel — capturing consumers’ attention and inspiring them to research and browse across channels — is no longer performing like it used to. Instead, many brands are getting lost in a sea of sameness.
But whether consumers are traveling on a path, down a funnel or simply weaving in and out of some amorphous digital web, if all goes well they still end up in the same place — checkout (or as it’s called in the traditional funnel model, conversion). These changes highlight an emerging opportunity for brands to use bottom-funnel engagements as a way to differentiate.
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Here’s how Macy’s, Jacadi and Amazon are leveraging innovative cart, payment, checkout and post-purchase experiences to drive conversions and even repeat purchases.
How Macy’s is Making Checkout ‘One of the Happiest Moments Online’
As Macy’s retail media network evolves, the retailer is increasingly focused on capturing non-endemic ad dollars — that is, advertising from brands not typically associated with the department store chain such as travel partners or subscription and streaming services.
“We look at the whole customer, not just what they might be looking for and shopping for at Macy’s or Bloomingdale’s, but what are their other interests, what are they doing outside of that active shopping experience that we offer?” said Michael Krans, VP of Retail Media at Macy’s at the IAB summit. “I think there’s a lot of complementary services they might be interested in.”
This thinking led to Macy’s partnership with Rokt, which serves customers post-purchase offers during the checkout and transaction moment.
“A lot of media networks are focused on how they drive consumers to put something in a cart,” said Doug Rozen, Chief Marketing Officer at Rokt at the IAB event. “At Rokt we’re looking at what happens when something’s in a cart. How do you optimize that experience for the customer, but at the same time unlock value? How can you give third-party offers that reward the customer for their purchase, but at the same time create a monetization opportunity for the media network to expand beyond its core focus?”
To identify the right post-purchase offers for each customer, Rokt analyzes a range of data, including the customer’s purchase history with Macy’s as well as their purchase history with other companies in the Rokt network (which range from Uber and Ticketmaster to a whole host of other retailers). Every Rokt interaction pulls from more than 30 different data points in real time to build personalized ad units that ensure the best offers for each customer. “And in some cases, we don’t put an offer at all because we know [from the data] that it’s actually going to degrade the customer experience,” said Rozen. “Or we’ll prioritize a house offer like a loyalty program or private label credit card.”
The results are strong, which is why Rokt has been steadily showing up in more and more places (if you do any shopping online you’ve probably encountered it). According to Rozen, Rokt offers typically have a 3% to 6% clickthrough rate, which is stellar when compared with digital advertising standards.
“One of the key things when working with Macy’s, or any retailer, is we have to win over the site merchants as well, because you’re talking about putting other experiences in front of their customer,” said Rozen. “So when we started the test, it was actually led by Macy’s analytics team so that we could demonstrate to the merchants that this is a bona fide test. We looked at holdouts and control and all of that, and there were very specific KPIs around ensuring that repeat purchase wasn’t impacted and that average order value actually increased. That was a key thing that we had to demonstrate, that by having Rokt on Macys.com we were actually driving more transactions.”
Which they apparently did, evidenced by the fact that Rokt is now live on the Macy’s site. “Our job is to make checkouts worth checking out and ensure that the end consumer wants to be in that checkout state,” said Rozen. “If you think about it, checkout should be one of the happiest moments in the online world.”
How a Shipping Price Limit is Actually Helping Jacadi Increase AOV
Not every brand has the scale or logistical infrastructure to offer fast, free shipping on every purchase, and more and more consumers don’t necessarily expect them to. Even so, high-end French childrenswear brand Jacadi has a $200 minimum for free shipping, much higher than most consumers find palatable these days. But rather than turning customers off, Jacadi has found a way to leverage this high shipping minimum to actually increase average order value.
Using AB Tasty’s Emotions AI solution, Jacadi has added a free-shipping progress bar in a confirmation that pops up when a shopper adds something to their cart. The pop-up also features personalized product recommendations. Not only does the pairing give shoppers a regular status of how close they are to attaining the shipping threshold, but that reminder is placed, conveniently, next to items they might actually like to help them reach it.
“As a user I like to achieve those free shipping bars, or maybe it’s free gift with purchase, but by the time I see it I’m already into the checkout flow,” said Mary Kate Cash, Head of Growth Marketing at experience optimization solution AB Tasty on a recent CommerceNext webinar. “Then I have to go back out and find something that I might be interested in to make it worth it for me to achieve [free shipping]. By placing that progress bar [in the recommendations carousel], we’re saying, ‘Here’s how much you have to go, and we’ve handpicked these products for you that we think you will love.’”
These personalized recommendations, paired with the free shipping progress bar, led to a 10% increase in revenue and 1.7X higher average order value for the segment of customers shown the experience (pro tip: it was only shown to customers that were deemed, based on data, to want more information viewable as they are evaluating products). And of course, “it also increased their conversion rate, because they’re seeing how much it takes to reach their [shipping] threshold and going through with the process,” said Cash.
How SMBs Are Offering Amazon-Level Checkout Ease
Amazon’s innovations in the payment and checkout stage of the shopping journey have revolutionized ecommerce and shifted consumer expectations — the (in)famous Amazon Effect. The ability to shop with the knowledge that shipping will be free and returns will be easy, to buy in one click and to easily set up recurring purchases — all of these are reasons that approximately 75% of U.S. shoppers are now Amazon Prime members and regularly shop on the ecommerce platform.
In fact, even though the convenience and ease that comes with being a Prime member is one of Amazon’s biggest differentiators, now Amazon is letting other brands that sell on its platform in on the action with Buy With Prime, which lets Amazon sellers offer all the benefits of Prime membership on their own DTC websites.
One of the early adopters of Buy with Prime was The Woobles, a startup run by Adrian Zhang and his wife Justine that sells kits that teach beginners how to crochet. For a small company like The Woobles, Buy with Prime offers a number of benefits, including the ability to offer expedited shipping, shipping time estimates and one-click checkout — all things that are too complicated or expensive for it to build into its standard checkout process.
“It used to be really difficult for us to support something like Prime Day, where you have two days of a lot more sales but before and after is just business as usual,” said Zhang in an interview with Retail TouchPoints. “That’s very different than something like Black Friday, where you can really staff up because you expect to sell a lot on Black Friday but also in Q4 in general. What’s unique about Buy with Prime is that it draws from the same pool of inventory as our Amazon inventory, and so we actually don’t need to be completely spot-on with our Prime Day demand forecasting. Even if we’re off, we can still use that same inventory [set aside for] Amazon sales — it gives us a lot more flexibility.”
Event better, within months of integrating Buy with Prime, the company was already seeing an “uplift in conversion,” said Zhang.
