Marketing Analytics
House of Fraser Lauren King
During the Christmas trading period it s important for fashion retailers to have clear objectives to enable them to create a successful marketing strategy gain market share over competitors and capitalise on consumers at a time when they are spending a large amount of money. Retailers can draw on marketing metrics and analytics from previous campaigns to help inform future campaigns. It is highly recommended by various academic authors that when measuring any data from campaigns or promotional material that the objectives should always be remembered (Blanchard, 2011; Boocock, 2011; Carter, 2012 and Miller, 2011). This report will assess past and present Christmas campaigns and marketing strategy in its entirety of UK department store House of Fraser. In particular looking at the role of the TV advert and how marketing analytics can provide essential insight for retailers.
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The consumer Department store consumers account for 35.7% of all UK shoppers, which has decreased from 49.0% that was the proportion recorded in 2009 and House of Fraser have 3.6% marketshare(Verdict,2014).Themainconsumerdemographic profile for House of Fraser is suggested to be Female, between the ages of 45-54 and of the AB social group so this is who the focus will be upon when directing promotions (Verdict, 2015). Other demographics are also catered for within a department store specifically during Christmas. This is because there is an opportunity for the focus to be on gifting for a variety of consumer types. It becomes about producing products that the target consumer would be likely to be purchasing as gifts for Christmas, for example for children and grandchildren.
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Marketers have the responsibility of attracting consumers and it is therefore essential that they understand the position of where the consumers are on the consumer journey. Mass media marketing such as TV adverts offers the tool of extensive reach and also captures the consumer at the awareness stage. Therefore direct marketing methods can then be used to follow up the TV advertisement and then persuade the consumer to purchase (Davis, 2013). This could be why House of Fraser has a Christmas TV campaign that is also followed up by online and instore promotions. All consumer analytics captured and translated into ‘big data’ to gain consumer information that can be used to the marketer’s advantage (Erevelles, Fukawa and Swayne, 2016).
(Mckinsey.com,2016) Marketers often consider the consumer purchasing funnel when making strategic decisions about targeting consumers. The model suggests that at first, consumers consider a variety of stores that they are aware of and methodically decipher which stores have the best value proposition and will finally make a decision to purchase (Mckinsey.com, 2016). However, some have suggested that this is no longer the consumer decision process and there are now four crucial stages in which a retailer can win or lose within this process: initial consideration, active evaluation/ the process of researching potential purchases, closure (when consumers buy brands) and post purchase (when consumers experience them) (Court et al., 2009). It has been indicated that marketers should now have specific and strategic promotional strategies that target each of the stages of the consumer buying process in order to have the best chance of consumer acquisition (Court et al., 2009; Google Analytics, 2015). Outbound marketing refers to more traditional forms of marketing that aim to target the mass market in the initial stage of the sales funnel (Halligan, 2016), whereas inbound marketing is the creation of content that is specially curated to your target consumer and focuses more on new technologies to do so (Hubspot, 2016). Throughout the Christmas campaign House of Fraser will have a mixture of both inbound and outbound marketing that are integrated to attract the consumer at all stages of the sales funnel. However at Christmas, the TV advert becomes an integral channel as it becomes a competitive environment.
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cO MPETITORS Market share is a key indicator of how a retailer is doing in comparison to competitors (Farris, 2014). The Department store sector is worth £17.5 million to the UK fashion Industry and their popularity could be due to the fact they are seen as a one stop shop for most ages and tastes (Verdict, 2014). This is particularly useful and attractive during the Christmas period as they produce special stock and it is convenient for consumers if they can purchase their Christmas gifts from one retailer. The department store market House of Fraser has gradually gained market share over the years against key competitors John Lewis, M&S and Debenhams (Mintel, 2015; Verdict 2014). M&S and Debenhams have both seen a market loss simultaneously (Mintel, 2015; Verdict 2014). Not only do House of Fraser come into competition with usual Key competitors such as those highlighted, there are added competitors who sell Christmas stock and have Christmas campaigns. This is highlighted in the Primary research that was conducted where participants where asked ‘what is your favourite Christmas campaign overall this Christmas?’ and many answered retailers who aren’t usual House of Fraser competitors such as Asda, Sainsbury’s and Boots.
Christmas Campaigns The 2014 House of Fraser TV campaign was the first one in over ten years and the focus was on the House of Fraser brand, which has been suggested to be the main reason why the advert was successful (Mintel, 2015). Previously, House of Fraser had focused on different promotional tools which didn’t measure up to the success of the TV advert. This could be due to the fact that major competitors are renowned for the Christmas TV advert, so they are capturing the consumer’s awareness. This is the first element of the consumer purchasing funnel; implying consumers are more l ikely to shop in stores that are in the forefront of their mind.
The advert labelled ‘Be you, no matter who, this Christmas’ focused on a group of models choosing their perfect gift for a family member from House of Fraser and their sentimental reasons behind it (The Drum, 2014). Christmas 2014 was extremely successful for House of Fraser with overall sales up 8% and online sales were up 31.2% and in store sales up 4.2% (Mintel, 2015). House of Fraser managed to outperform John Lewis (who has 5.7% larger market share) in regards to sales (Mintel, 2015). Due to the success of the 2014 Christmas TV advert, House of Fraser created a new TV advert for Christmas 2015 that had a strong focus on the House of Fraser brand and products. This will be due to the fact that marketing metric measures suggested that this was the successful element in the 2014 TV advert. This year, House of Fraser used the tag line ‘Your Christmas, Your Rules’ which encouraged customer engagement online, it could be suggested that this is due to the successful online sales of Christmas 2014 where online sales saw an increase of 31.2% (Mintel, 2015).
Black Friday Black Friday 2014, proved to be lucrative for House of Fraser with reports of online sales increasing 125% based on Black Friday sales 2013 (Glenday, 2015). This was also reflected across all the department stores where online sales saw a large increase (Glenday, 2015). It could be suggested that House of Fraser responded to the knowledge and understanding learned by marketing metrics and analytics of the 2014 promotional campaign and planned a black Friday strategy for 2015 that would appeal to the consumer who is increasingly becoming more interested in technology and the internet. It can be concluded that Black Friday is an extremely popular day amongst consumers as it increases the value proposition from House of Fraser and becomes more attractive by offering discounts from instore and online (Davis, 2013). For Black Friday 2015, House of Fraser used contemporary augmented reality technology to create ‘shoppable’ windows that enables customers to interact with promotions and offers via the House of Fraser mobile app (Perryman, 2015). This also brings together online and offline methods of promotion, and creates an omni-channel and seamless consumer journey which will ultimately position House of Fraser with a likely chance of a high conversion rate and will conclusively lead to profits. The use of the shoppable window also enables marketers to measure the interaction with the offline promotional tools that are usually difficult to measure. This is an example of House of Fraser attempting to have integrated marketing communications and a multichannel approach.
mEASURING THE PERFORMANCE OF A CHRISTMAS CAMPAIGN Business Analytics refers to the process in which data collected is turned into unique insights which will then enable a fashion retailer to create informed strategical decisions (Carter, 2012). Due to the emergence and popularity of online social media, it is now possible for marketers to tap into social analytics to gain further insights and this is also becoming increasingly possible with mobile apps also. Social analytics refers to measuring a brands level of engagement, influence, sentiment and share of voice across earned, paid and owned digital channels (see figure) (Carter, 2012). There are a number of tools that are easily accessible for businesses to become aware of social analytics.
The figure shows how House of Frasers objectives can be translated into a KPI and measured using a variety of tools. For example, the TV advert will be used to fulfil an objective of creating brand awareness and KPI’s for this objective could be brand/ media engagement, GRP’s or brand lift. These KPI’s can be measured through TV viewership numbers, consumer panels, web analytics and brand surveys.
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Figure 4 (Google Analytics,2015)
(carter, 2012) Key performances Indicators (KPI’s) illustrate the effectiveness of a campaign in terms of whether it has hit a specific goal that the company has set (Blanchard, 2011). It is essential for a company to have distinct goals and KPI’s to enable measurement of success of marketing campaigns. It also deciphers between data collected that is relevant to the company and information that is not particularly insightful in this instance (Blanchard, 2011). Social analytics can produce invaluable information for a fashion retailer as any digital marketing material has the ability to penetrate a large proportion of the population leading to diverse results. One key finding from the primary research questionnaire was that participants were unaware of the campaign tagline: ‘Your Christmas, Your Rules’. This was concluded after only three participants answered something that related to the tagline and 100% of participants said that have not used this on their social media. This could suggest that the online effectiveness of the Christmas advert may not have been as successful as anticipated by House of Fraser. Taking this into consideration with the fact that the tagline only had 11% reach over social media and that comments from consumers were fairly neutral if there was any at all suggests that this tagline was not as successful as it could have been (Social Listen, 2016). This is something that cannot be analysed without social metrics.
Google Analytics is a tool that retailers can use to access information such as entry pages, exit pages, bounce rate, journey throughout the website, and time on site, conversions, location and frequency of visit (Bookcock, 2011). This tool enables a retailer to set their goals and key words electronically and it will filter out the relevant information for them (Tyler and Ledford, 2006). Other tools are accessible such as Alexa.com and Similar Web. From these sites it is possible to gain information about House of Frasers Website and mobile app and further information that is in comparison to key competitors. Digital marketing has become favourable amongst marketers due to the fact that success can easily be measured via digital metric measuring tools (Järvinen and Karjaluoto, 2015; HennigThurau et al., 2010; Pickton, 2005 and Wilson, 2010). However, traditional offline marketing tools can still exist and be integrated with digital platforms. Integrated marketing communications is the term used to describe the method in which a promotional message is consistently communicated throughout a variety of media platforms (Davis, 2013). Integrated channels of promotion have become important since advances in technology have brought a more complex business environment for fashion marketers and in order to attract, acquire and retain consumers the brand handwriting must be consistent. Soft metrics such as brand awareness, GRP, Impressions, organic search rankings and reach are all important, however they must align to hard metrics such as profit and revenue (Miller, 2011).
Certainmetricscanbecalculatedsuchas:thecustomeracquisition cost, the lifetime value of the customer and marketing originated customer by a number of simple equations (Hubspot,2013). Return of Investment (ROI) is a way of considering profits In relation to investments in a business (Farris, 2014). Marketing effects the net profits and investments to it is important for fashion businesses to consider this when planning marketing campaigns (Farris, 2014). Return of Investment can be used as a key indicator of the success of a campaign in terms of whether it has been profitable for the business. Marketing ROI goals should include; how sales are generated, how much revenue each sales produce, the gross margin percentage and the total marketing and sales investment (Miller, 2011).
primary Research FIndings Primary research was conducted to gain more in depth knowledge behind the competitive department store Christmas TV adverts. Participants were asked to rank the 2015 Christmas TV adverts from the top four department stores, based on which (in their opinion) were their favourite and least favourite. The results show that 40% of participants rated John Lewis as their favourite Christmas TV advert of 2015. This was followed by Marks and Spencer who were selected as the favourite by 30% of participants, Debenhams at 20% and House of Fraser who only got 10% of the favourite vote. This information considered in isolation would suggest that House of Fraser was the least favourite of the department stores TV adverts; however this is not the case. House of Fraser scored highly on the 2nd rating (second favourite) and the other department stores scored highly on 3rd and 4th ratings. Participants were given the chance to qualitatively justify their reasons behind their choice and many suggested that John Lewis’s TV advert was their favourite due to emotional and sentimental reasons.
House of Fraser’s 2015 TV advert took a very different approach to John Lewis this Christmas, and did not have any sentimental value, so it could be suggested that this is something that a consumer responds to in a TV advert and is essential for appeal. Just because the TV advert is classed as someone’s ‘favourite’ doesn’t necessarily mean it is more successful in translating interest into sales and previously seen in 2014 when House of Fraser out performed John Lewis. The term ‘favourite’ is extremely subjective, however the point that is being made is that success is measured on whether the objectives have been met. House of Fraser may have had higher sales, but if their main focus was to gain customers then this may have been seen as an unsuccessful campaign. A successful factor of the advert proved to be the soundtrack. It featured in the top 10 of the music charts and 25% of participants asked in the questionnaire said the advert had influenced them to go and download the soundtrack. This is good for House of Fraser as every time the song comes on the radio, consumers will be reminded of the TV advert and therefore about House of Fraser. This soundtrack could also be used as a tool of measurement of engagement for House of Fraser, for example, if the soundtrack receives 10,000 downloads it could be suggested that the TV advert has received engagement from 10,000 consumers.
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(See Appendix)
To conclude, marketing metrics and analytics can be used as a tool to help provide useful insights for a fashion retailer. These unique insights can then be used when formulating future marketing strategies. Since the use of a TV campaign in 2014, it could be suggested that the use of marketing metrics has informed House of Fraser of the elements that were successful in accordance to their objectives and this could be why they chose to continue to create a Christmas TV advert. Findings from primary and secondary research indicated that consumers favoured a sentimental or emotional story line in TV adverts and favoured adverts produced by competitors, so this could be a metric that could be used to inform future campaigns.
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Appendices Appendix A- House of Fraser Marketing
Appendix B- successful marketing activity (Google analytics, 2015)
Appendix c- Types of Social MEtric Tools
Appendix D- Hoiuse of Fraser Web analytics (alexa, 2015)
Appendix E- Hoiuse of Fraser appanalytics (similar web, 2015)
Appendix f- Department store value proposition (MINTEL,2015)
Appendix G- social listening (sociallisten.com,2015)
Appendix h- Primary Research questionnaire
Appendix i- Primary Research findings