How National Tiles used digital personalisation to deliver 15 per cent of revenue online
- 25 September, 2019 07:03
A digital marketing and personalisation transformation has not only helped National Tiles lift online retail sales to 15 per cent of total revenue, it’s also seeing average online basket values soar.
National Tiles chief digital officer, Lynna Barrett, told CMO her remit coming into the Australian tiling wholesale and retail business two years ago was to grow the online channel to 10 per cent of revenue by 2020. The 40-year old company introduced transactional website capabilities in 2016 but had just 0.3 per cent of sales coming through this channel upon her appointment.
“The business had the belief it could be selling tiles online, and brought me in to deliver on the goal,” Barrett said. It was this conviction, along with significant executive support for technology digital investment and transformation, that provided the organisational and cultural momentum for change, she said.
“I was fortunate in that the executives said there would never be an objection from anyone above you. That was the springboard for the approach I took,” Barrett said. “I was able to get a lot of cut-through and buy-in across the organisation because of the board’s buy-in.”
A key first step was investing in the Emarsys marketing automation platform, which Barrett had previously used. She cited the technology vendor’s retail and ecommerce vertical focus, speed to value, feature roadmap and platform interface as major selling points. The platform also required limited IT work required post-implementation, which took in five months.
Barrett’s inaugural strategic step, meanwhile, was creating a customer blueprint. To do this, she spent time on direction, pulling data, and deciding on customer groups and types National Tiles could start using to personalise digital marketing and website content. Such segmentation had not previously been in place.
“Once I had groups and types, it was then about what kinds of journeys and messaging we would want, frequency of communications, and the balance of push versus what we’d do on Web channel and discovery,” she said.
Unlike what many of us might think, selling tiles isn’t all that different to other retail products Barrett previously worked on while at companies such as Cotton On, Billabong Group and Best & Less. What she did notice, however, was National Tiles had four times the Web traffic in a week online than it was getting in-store.
“Customers were using the website, and wanting to consume content pre, during and post-purchase, but that didn’t exist,” Barrett explained. “So personalisation for us came with reimagining the content and what customers would be looking for on our website. We had transactional capability, just no content to entice customers to buy tiles, sight unseen.”
Barrett said she took a “fun and creative” approach to the segments introduced across National Tiles’ retail sales mix.There are nine personas mapped out to reflect who customers are and how to personalise accordingly.
“But we knew that if we tried to speak to all these customers in different ways, our brand would be watered down and we had to strengthen our communication and targeting by deciding on one magnetic customer – the customer who is the most aspirational that she would attract all the others," she continued. "We made her as real as possible, and gave her a name, Jess. We knew what music she listened to, what she ate, where she lives, what car she drives. This allowed us to understand her and target her confidently and gave us a rudder for every campaign from desktop to television. “
Getting to this point meant looking at how data was captured in National Tiles’ ERP system, what customer classifications were in place, then translating these into something a customer would identify with.
“In the ERP you were just ‘retail cash sales’,” she said. “When we started to port all data into Emarsys to build up the platform, coupled with the designed programs, it all came to life.
“I knew we would get to 80 per cent on day one, then continue to optimise the program.”
According to Barrett, once a company has AI and machine learning in place, the emphasis becomes less about personas and more about the programs and interaction experiences created.
“Customers are getting content they’re consuming online, with all physical channels and accounts data is being fed in. So you don’t have to worry about the segmentation, you’re more worried about programs,” she commented. “Certain customer types also had different types of pricing, so we had to be vigilant with these classifications.”
Today, National Tiles’ personalisation approach is wide-ranging, reflecting where customers come from. If a customer coming to the homepage for instance, they will see CRM ads driving them to different pages and products based on their behaviours and preferences.
“The idea is to have product recommendations across every page of the site. That way we know with those but also having featured products and category pages, all feeding together to form a picture within that unified customer profile,” Barrett said.
“We’re using personalisation in all forms – it’s true one-to-one. No customers are seeing the same content across any digital channels, whether it’s CRM ads, the homepage or website. It’s all targeted and based on what data we have started to collect around their behaviour, whether it be website, or if they’ve come in-store and received a quote. That’s all being pass to our ecommerce platform then to Emarsys to pick up the conversation where we left off.”
One hurdle Barrett said National Tiles faced was organisational structure and processes.
“In order to operationalise personalisation and dynamic content curation, we had to first take people on the journey within teams,” she said. It was during this time the company’s social media manager, who knew the product and understood voice of the brand, began implementing the program designs Barrett created. It was this staff member who then briefed the creative team on dynamic content. This content is being pulled depending on where an individual is in their lifecycle and the products they’re interested in.
Barrett agreed it’s a very different way of working. Not even two years ago, Barrett cited lots of hindsight reporting with little insight achieved. Email and website were calendar-based, and driven by product launches, while campaign processes took up the majority of resources.
“If we had attempted personalisation, it would have taken hours using Excel and marrying up data, only to produce a very small segment that couldn’t scale. We might be able to get good results and it gave us hope, but it was hard to do at a mass level,” she said. “Today, we have insights in real time and they’re automated.
“Our teams do not plan the way we used to plan and we don’t spend the time doing the things we used to spend time doing. We can pursue more creative endeavours - more blog activities and product videos. We couldn’t have achieved it without automation. We haven’t had any additional headcount but been able to bolster efforts with more content. We’ve been able to get amazing descriptions, beauty imagery and lifestyle shots of our products too.
“By eliminating repetitive, admin tasks, we’re adding more value to the website and it’s reflected in the sales growth.”
Return on investment
Results include exceeding the 10 per cent target set for 2020 to 15 per cent in 2019.
“Also, having 30 per cent of revenue [retail sales] contributing from our email channel, which is only 5 per cent of total traffic contribution, is very impressive statistic,” Barrett said. “Not only did we become more efficient and drive sales, we have scaled costs to target new acquisition and be very calculated in how we do that, so ROI continues to increase. It was a factor of 2 when I started, but now in some weeks, campaigns are reaching in excess of 10 times.”
Even as personalisation dominates the digital plan, however, Barrett said there’s room for traditional merchandising techniques.
“If we want to have more customers know about a new product, we will feature that higher up on the category pages from a traditional merchandising standpoint, have it in our front homepage, and feature it in social media to a greater degree. So we use more traditional merchandising tactics for new products,” she said. “But then we’re using more personalised tactics for everything else.”
Next stage of growth
Barrett cited two main priorities moving forward. The first is bringing in augmented reality (AR). She noted the company is already armed with four sets of photographs of all tiling products, setting the foundation for 3D rendering.
A use case would be a customer standing in their ensuite, and via their mobile, laying tiles on the surfaces to visualise what they look like insitu. “This solves a big customer problem around seeing just one tile, versus what things will look like once completed,” she said.
The other thing on National Tiles’ roadmap is enhancing its loyalty program for trade club members, more frequent purchasers. The ambition is to keep them engaged beyond just offering the lowest prices in the market. Barrett noted this 10 per cent represent up to 70 per cent of company revenue.
Overall, Barrett said her biggest surprise was how much revenue can be made online in such a short space of time. Importantly, average order values are also much higher than expected.
For example, in a recent trial in advance of end-of-year sales, Barrett said she was looking at a $2500 threshold. Eight months ago, $1000 was the most National Tiles would have expected to be transacted online.
“We had 70 per cent of revenue in the past week coming from average sales of $2500 and above. It surprises me how much we do learn by trialling new things,” she said. “Now we have this customer group – a high-value customer – we can reach out to next time we’re running an email, high-spend sales campaign.
“You wouldn’t have thought a 40-year old company could do what we’ve done in a short space of time and get the results we are getting.”
Read more on how other brands are harnessing personalisation:
- How Contact Energy is addressing the three big challenges of personalisation
- Putting the personalisation journey into practice at Dexus
- Toyota, ACU, Telstra Super on the impact of personalisation
- Monash Uni: Why context is important for personalisation
- What digital and personalisation look like at Coles Group
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