City Beach explains how a new marketing automation platform and AI is reviving its retail fortunes
Fashion retailer, City Beach, was having a dream trading run until the late 1990s.
With consumer behaviour changing thanks to the revolution of online shopping, the bricks-and-mortar retailer wasn’t sure how to navigate through a tumultuous period and come out the other end strong and relevant.
After surviving the first hurdle into digital and embracing email as a marketing tool, City Beach hit a problem with its legacy automated marketing platform.
Faced with hiring more staff to deal with the technology, which wasn’t an option, City Beach made the switch to Emarsys’ automation platform.
Now the retailer, which has more than 60 retail destinations across Australia, is enjoying a trading resurgence, thanks to embracing a digital and AI-driven marketing renaissance.
Personalisation was never City Beach’s problem. In fact, it was a core value from the beginning.
City Beach opened in Brisbane in 1985. Success came from stocking some of the world’s biggest brands including a mix of surf, skate, street, moto, active and fashion styles. Its offering also grew to include in-store entertainment and celebrity appearances.
“When the guys opened their first store, they had a physical book and they’d write down a customer’s name and number and call them, or even grab them off the street, if something came in they thought that customer would like. It was personalisation before it was even a thing,” City Beach head of marketing, Michael Doyle, told CMO.
“This worked really well until Australia hit that period of struggle in retail.
“Like all traditional retailers, City Beach went from being novel, to finding customers wanted something different from a store. I call it Australia’s awkward adolescence.
“We were doing the same thing and seeing a decline on the return invested in these channels. Something needed a radical change.”
Change didn’t come without its challenges. City Beach on-boarded a digital marketing platform and spent two years trying to integrate it before realising it didn’t suffice.
“We hadn’t achieved much more than batch and blast email, which you don’t need a platform for; it’s like using a hammer to kill a flea, it’s very inefficient cost-wise,” Doyle said. “I have one-and-half-people to deal with email and the database we’re trying to service, so I couldn’t justify bringing in 10 people to deal with a platform that couldn’t do what we wanted anyway.
“City Beach’s email channel has always been an essential component of our retention and engagement strategy. Our vision for what can be achieved has continued to evolve, but everything seemed to come to a head roughly 24 months ago when our desires hit our tech stack and got knocked back.
“We made the bold choice [to switch tech platforms]. Next, we plotted out our desires to move beyond email, and continue our customer interactions via social and on our site.
“Unfortunately, our idea was on ice until we introduced Emarsys because, despite a very expensive ESP and CRM set-up, it simply couldn’t facilitate any of these requirements without eye-watering costs and extensive development work. The channel suffered and the business missed out on key programs until we transitioned to Emarsys.”
The new platform has triggered an AI-driven marketing renaissance. “We have tens of thousands of products, millions of customer records, and we’re lucky because customers are very willing to give us their details. This suggests they want something more from us,” Doyle explained.
“Now, we can leverage the data that flows back through the new platform to the point where the technology fades into the background and we can start having those one-on-one conversations again.”
It took just 60 days to get to what the team had been doing with the previous platform. Integration needed to be hashed out, both with data, which was collected from all over the place and wasn’t coherent, and the tech platform, Doyle continued. These efforts have led to surfacing data that never would have been available before.
“For example, we didn’t have a lifetime value for our customers, at all, before now. We were ‘flyer drop’ style marketers, just jumping in and dumping things into the market, and hoping money came back from it,” Doyle explained.
“We can now demonstrate to the decision makers that when we interact with someone in a meaningful way, even though it costs us extra to on-board them, over 18-24 months this is the kind of money they’ll return to the business. The ROI is more demonstrable.”
Looking at today versus pre-Emarsys, the key metrics are compelling, Doyle said. “City Beach is more than 105 per cent up in revenue year-on-year from the email channel. We have 38 per cent more active customers compared to last year. Customer retention has improved by 30 per cent, and their lifetime spend has increased by $243.”
City Beach’s customer acquisition efforts are focused on channels it can measure and scale – more specifically around paid social and significant investments in programmatic video. Emarsys then provides the foundation piece facilitating a range of AI-driven communications across email, social and website that are more personalised and relevant than ever before.
For the first time, City Beach is also able to personalise its website, surfacing promo codes for customers and showing bespoke or personalised content.
While Doyle reports less than 2 per cent of email sends are automated now, this is responsible for a whopping 25 per cent of total revenue.
“All of the increase has been driven by automation. In our batch and blast, we’re able to do gender split, and surface different levels of personalisation, and this has been a real game changer for us,” he explained.
“Up until now, we treated an unsubscribed member as a no-go zone. But now, we are able to leverage social and Web pieces to communicate with active customers on our database, as well as those who have unsubscribed, in a new way.
“We can also tell if someone’s looking like defecting, and try to capture them back by having a different kind of conversation with them.”
City Beach started with 3.4 million contacts in the database. “We can use those now to expand out, and as new platforms become available for advertising, we’ll be able to expand into those and use them to our full advantage,” Doyle said.
“I’m really keen to see what happens in the platform space. Instagram is mainstream now, but there’s no end of new platforms that will be coming out where we’ll want to dabble in future. Personalised content is a key focus, and building out the visual story, because fashion is very visual.”
Looking to the future, Doyle saw both challenges and opportunities ahead for City Beach and retailers as AI becomes more advanced and human-like.
“It’s getting to a point in the near future where we’re going to have some kind of personal AI that guards our attention. We are bombarded with messages all day every day and it makes sense we will want to have a gatekeeper for that,” he said. “All the AI driving current push notifications will likely end up being a bot or something that sits in your pocket and protects you from unwanted messaging.
“We need to understand how we can leverage data to personalise our communication, so it cuts through that guarding AI, because people only have so many hours in the day. But it’s not that hard to imagine building a journey around it.”
What this technology allows City Beach to do is better surface the right information at the right time.
“You don’t preach anymore, you prove your worth – the data tells the story. I love that we can leverage technology to have more structured conversations with a personal edge,” Doyle added.
- This article originally appeared in CMO's print magazine, Issue 2, 2018. To purchase your subscription, contact: cmo_subscriptions@idg.com.au
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