Birgit Boing, retail performance specialist, and Lise Elbæk-Jespersen, client strategy lead, both work at Google, where they help retailers make the most of their omnichannel opportunities to drive business growth.
Like many retailers, the Danish chain of furniture stores, ILVA, has spent the last few years bringing their online and offline operations closer together. Their e-business department began as an independent operation, with little collaboration between marketing and digital teams. But rising consumer expectations around seamless shopping experiences made them rethink this approach.
As Director of Sales, Marketing, and E-commerce, René Fleming has been at the helm of the brand’s omnichannel strategy. We spoke with him to understand more about ILVA’s digital journey, the work they do to meet customer demands, and how media mix modelling was pivotal in understanding the customer journey.
Birgit Boing: How has ILVA’s omnichannel journey evolved over the years?
René Fleming: It started as a separate digital strategy. But as we became more aware of omnichannel behaviours in recent years, we started implementing solutions to offer customers a more seamless experience, such as easy returns, easy checkout, and the option to buy online and exchange in-store. Today, our overall strategy is digital-first, with the majority of our marketing budget going towards our online activities.
E-business is now an integrated part of the sales and marketing department, with shared objectives and KPIs. It wasn’t easy to achieve this, as it was challenging to get our physical store teams to understand that digital wasn’t a competitor to their business.
We faced the challenge of getting our stores to understand that our digital strategy isn't a competitor.
Many were sceptical and only wanted us to focus on driving footfall to the physical stores, so we had to reassure them and explain that being an omnichannel retail business means giving customers the freedom to buy wherever they want. When we showed them that digital marketing campaigns actually generated 60% of our footfall, they slowly started opening up to the possibilities.
Lise Elbæk-Jespersen: Why did you decide to conduct media mix modelling (MMM), and what role did it play in creating alignment between online and offline teams?
Fleming: We’ve worked with traditional sales modelling for several years with support from our media agency. However, traditional sales modelling only reports on media performance at a very high level. We wanted to understand the individual performance of digital channels, and specifically, their omnichannel impact. We knew how TV and radio were performing, but through omnichannel measurement, MMM gave us a better understanding of what worked and what didn't work in our digital marketing strategy.
For example, we discovered that we’d underestimated the value of physical stores in our digital marketing. Before digital marketing, success was only measured via online sales. After conducting MMM, we changed our value setting and KPIs to include both store, online, and product level values, like sofas or dining tables. We designed an omnichannel measurement “formula” that balances offline, online, and product level values.
As a result, we now have strong omnichannel KPIs. We are now able to optimise our digital advertising towards the total omnichannel performance and use different tactics like automated bidding and omnichannel ad solutions like Local Inventory Ads and Local Campaigns to drive more footfall.
Through our media mix modelling, we discovered that we’d underestimated the value of our stores.
We also learnt that our always-on campaigns performed much better than our weekend burst campaigns. We had always relied on those two campaign types, but the MMM showed that it didn’t make sense to put more money behind weekends, as consumers look for sofas any time or day of the week. So we reduced our weekend burst campaigns and will stop them altogether this summer.
Boing: As retail evolves, what does the future look like for your omnichannel strategy?
Fleming: We believe the online part of our business is only going to increase. For items like dining tables, for example, customers now know they don’t need to go to shops. They know ILVA’s quality and understand what our oak looks like. However, with an omnichannel approach, we do need some physical stores.
While the majority of customers are digital-first, they still want to see things like custom sofas in person to feel the quality and see the available colour options.
We need a strong digital strategy that offers customers the same experience they would get in a physical store. And we want them to be able to read about a product and speak with sales people – either through a bot, live chat, or over the phone.
Still, our main focus is on optimising our website to give online customers the same experience they would get in a physical store. As we’re currently unable to fulfil all of our inventory online, our offline stores still handle the majority of our total sales. But it’s our goal to level that out and make at least 90% of our assortment available online.
It’s these kinds of activities we want to expand on in order to get ahead of our customers no matter when or where they hop. Whether it’s Sunday evening or Wednesday morning, we should be ready.
