By Kevin O’Farrell, Associate Vice President at Analytic Partners
As consumers emerge from lockdown – some blinking and tentative and others in a mad dash – marketers need to remember it won’t be like it was BC (Before Covid). Yes, some long-loved but recently redundant channels, cinema, OOH, DOOH will be back in the marketing mix, but many consumption patterns may have shifted for good: children are watching less TV and more on-demand, the paradigm shift towards e-commerce and the importance of digital activities across the funnel.
Social distancing measures still exist and there may be hesitation about sitting inside cinemas or just the sheer distraction of being able to be with friends – in an actual pub. The great TV spot deals and flexibility on offer at the start of the pandemic will be a thing of the past, but with some TV advertisers pulling out of TV, opening up more inventory, ROIs will shift and marketers must account for this in their analysis. The only way marketers can move forward with any certainty is to adapt a watertight scenario planning strategy to prepare for each twist and turn.
Scenario planning allows marketers to consider what-if? scenarios and to adapt marketing spend and channel mix accordingly. Being able to focus on both short-term wins and long-term gains using a powerful combination of historic data and future scenario planning is a concrete way for business leaders to future-proof their marketing strategies – and in a fast-changing environment, potentially uncover new opportunities for future sustained growth.
In Analytic Partners’ ROI Genome Report more than 20 years’ worth of data has been collected and we can see how brands that adopt measurement programs and scenario planning for decision making achieve a 25-70% increase in ROI which translates into $50-$100M in growth each year. This growth is sustained over time and the use of technology and analytics help drive that growth through the continuous practice of data-driven decision making.
Using their historical knowledge and expertise as a base point from which to flex and adjust, retailers need to be sure about how to incorporate the latest data and insights from their network of experts to help identify what’s likely to change and what can be influenced. Four steps can make all the difference when implementing a measurement program and scenario planning:
Aim for cross-functional buy-in
Not only should credible, data-driven insights reflect industry-leading scenario planning but they should also be collaborative, incorporate cross-functional input and assumptions and evolve with the marketplace and business changes.
Identify and understand the key performance drivers
If we begin to identify the key drivers of performance, including sales channels, operations, competition, and other non-controllable influences, scenario planning can help retailers understand historical sensitivities and apply data and reason to create an accurate vision of the future.
Simulate future outcomes
COVID meant many retailers had to shut their doors for over a year and for them, scenario planning remains vital. Using forecasting simulations, brands can explore the range of factors such as how the number of stores able to open within their portfolio impacts on sales volumes and allows them to plan strategically better and adapt to the constantly changing environment.
Continually analyse and optimise
By additionally leveraging tools such as Live Modelling, retail brands can get insights within 7-10 days of data receipt. This combined approach helps them plan their ad hoc media investment, or short-term heavy-up, which supports the reopening of their brick & mortar locations post lockdown.
Brands are now able to quickly identify any external or macro trends that might affect the business with consistent updates, this also includes evaluate marketing, messages and channel mix and quantify the impact of both controllable and non-controllable factors on the business. They will also be able to refine their data and prepare for a more data-driven future.
Looking ahead and preparing for the future is what makes leading brands stand out from the rest of the crowd and with the lockdown finish line in sight, retailers must learn from the data they have and plan for the future if they want to reclaim what they once were.