Skip to main content

Your Guide to Retail Marketing Optimization, Testing, Measurement and Analysis

Here’s how to create a cultural shift within your company — to win the resources you need and maximize the impact of your retail marketing testing and measurement strategies.

Retail Marketing Optimization

Article Highlights

  • Retail marketing optimization, testing and measurement can help you allocate resources, guide initiatives and ease decision-making
  • Gaining buy-in for a cultural shift to testing requires internal education, business justification, planning and advocacy
  • Leveraging quick wins can help build your case and support your long-term vision for retail marketing optimization

Retail marketing optimization is an ongoing effort — a fact drilled into us during the COVID-19 pandemic. As we all learned, what’s normal can change in a flash, and retailers need to be as ready as anyone to adapt their tactics. That means evaluating and adjusting not just how and where you sell, but also the messaging and offers you use to attract, engage, convert and keep customers. To make the best choices, you need to start with a solid foundation of knowledge. And that should be based on a test-measure-learn approach to your marketing.

Build a Foundation for Retail Marketing Optimization

Without accurate retail marketing testing insights, you can’t know the right percentage of your budget to appropriate to each marketing channel. You don’t know if you should participate in all of them or which ones will give you the biggest bang for your buck. And you can’t honestly compare the tried-and-true initiatives you’ve historically relied upon to the bold and bewildering new ones. Or have the confidence to make optimal moves at speed when an unexpected situation arises.

Retail marketing optimization comes through a corporate culture that strives to optimize each tactic with a data-driven strategy that can make decisions much easier by integrating data, testing and measurement into your everyday regimen. The goal is to automatically evaluate your marketing and advertising investments based on financial impact rather than falling back on year-over-year plans or falling prey to competitive pressures.

Yet many retail marketers face two major stumbling blocks in adopting a retail marketing testing methodology:

  • Lack of resources or budget to do it right
  • Lack of buy-in from business stakeholders who will need to contribute to the data, creative, execution and measurement tasks

To overcome these obstacles and move toward retail marketing optimization will take a cultural shift in the corporate mindset. A herculean task, yes, but it can be done.

Winning Buy-In for a Retail Marketing Testing Strategy

As with any change management process, a cultural shift will take time and will be an ongoing process. The good news is that there are some short-term steps you can take to start moving the dial while working on the more long-term cultural shift within your organization.

One approach is to start with a “big win” that culminates in a “victory tour” throughout the company to build support. But you can also take a more measured approach by leveraging short-term wins to support a sound financial business case for change, setting the stage for larger commitments. Success for this approach depends on your ability to work with business stakeholders and on the ability of these stakeholders to see positive impact on selected metrics.

This process can be broken down into four specific steps:

  1. Internal education
  2. Business justification
  3. Planning and process
  4. Advocacy

Step 1: Internal Education

Notice that we’re advocating for a cultural shift focusing on retail marketing testing and retail marketing optimization.

It’s important for you, as well as your business stakeholders, to understand the difference and ensure that both disciplines are supported. And, before you can build the process and planning for testing, you also need to understand the difference between testing and analysis. This will make or break your efforts.

Retail Marketing Testing

This is often time-series based, modeling on before and after scenarios. You make a change, and then you compare the results before that change to the results after the change. True testing (A/B testing), however, requires a control and variant in the same time period. This decreases the potential impact of other variables, such as weather or trends, that can skew your measurement.

Typically, testing can be instituted fairly easily and quickly.

Retail Marketing Optimization

This is the ongoing, data-driven process of continually identifying and quantifying the most effective methodologies, channels and processes to drive customer behavior. This not only requires the testing discipline outlined above, but also the organizational infrastructure to support it, such as defined processes, established timelines and even testing platforms.

Implementing optimization is generally a longer-term goal.

Retail Marketing Measurement and Analysis

Measuring and analyzing your data set lets you find opportunities to test. You then conduct the test and analyze the results to discover insights and identify future tests. You must have the resources in place and time allocated to ensure that the tests are effectively measured and analyzed, or you won’t deliver the results to support the next step.

This is an area where we see a lot of retailers fail because they don’t provide the insights or analysis from past results to justify ongoing testing.

Step 2: Business Justification

To push the cultural shift, you will need to rationalize why retail marketing testing and retail marketing optimization are critical to the financial success of your company. Essentially, you need to build an internal business case, which means identifying the impacted stakeholders, and determining the metrics and accountability related to their financial performance.

Typically, these stakeholders include IT (technology), Advertising (creative talent), Merchants (products), CRM/Marketing (data) and Finance (measurement). It’s also often a good idea to include Operations since they heavily influence the customer experience. Where possible, align or map your efforts to the business and financial metrics of the stakeholders to build their support.

The next step is to identify individual executives who are ready to commit to ongoing testing. Use your comprehensive list of metrics to select three to six that these stakeholders have in common and that you believe you can impact with your marketing and advertising efforts. Understand the current baseline and temper expectations by providing low- and high-range pro formas based on the testing scenarios.

Step 3: Planning and Process

Identification and mapping of existing processes, timelines and impacted resources can be conducted concurrently with building a business plan. But it’s best to have the business case fairly developed and your advocates in line before impacting other departments’ processes and planning.

For example, if Advertising is responsible for creative development, any retail advertising or marketing testing that involves creative assets requires that the creative team be on board. While one-offs may squeak through, in the long-term the timelines and associated processes of this part of the initiative must be documented and changes approved, which will likely require stakeholder support.

At the very least you can start with your own area. If your existing processes aren’t documented or the paperwork is outdated, create an internal team to update the flow and document each touchpoint. Develop a consistent methodology, such as swim lanes, that can be used as examples for other areas.

Step 4: Advocacy

You will never achieve a cultural change and retail marketing optimization without internal support. And the higher the support, the faster the vision will become reality. Look for a senior executive who can ensure that your retail marketing testing efforts — and the insights you gain — are reaching the C-suite.

Build an Environment of Trust

A core part of building advocacy is creating an environment of trust. Results must be believed. Ensure that the metrics and methodology have been reviewed by Finance. And share the failures in addition to the successes.

Failures in the testing methodology show why an infrastructure, including processes, is needed. Or, if the “results” failed, it helps reinforce why testing and making informed decisions is critical. The test should still be perceived as a success even if the results aren’t as expected.

Develop a Single Source of Truth

Create an accessible and visible roadmap or master plan. Keep all your retail marketing testing and retail marketing optimization data in a single source. This includes test plans, business justification and results. Make it easy to find and encourage your colleagues to interact with the plan.

Create testing templates, using the same metrics and a consistent methodology. Include the executive summary, test design, results, recommendations and next steps (always include next steps!) in every report.

Quick Wins for Retail Marketing Optimization

Leveraging small steps to build your case for a retail marketing testing culture requires discipline within your group, and you may need to call in some favors to get things flowing. But first, look for existing projects that have established benchmarks — both internal and external. Typically, email and social media are low-hanging fruit.

Then use the steps outlined below to build your short-term wins to support your long-term vision of retail marketing optimization:

  1. Use industry metrics and case studies to show where you may be lagging or only average compared to your competitors. Then outline the potential impact that retail advertising and marketing testing can have on your targeted metrics.
  2. Look for testing opportunities in the part of the marketing process that you own. For example, if you are responsible for selecting the target groups, look for new segmentation strategies. Or look at potential efficiencies by narrowing down your selections.
  3. Share retail marketing analysis and results with your colleagues.
  4. Always share the objective, methodology and results on both the actual test and a potential rollout of the strategy.
  5. Tie your retail marketing measurement results to upstream metrics to help the executive stakeholders see the impact on their goals (improved inventory turn, increased dollar per square foot, enhanced customer experience resulting in improved CSAT, etc.).
  6. Set up a calendar in advance and work back to when artwork/assets will be needed. Give realistic timelines to your colleagues in other departments who are impacted.

First Steps to Ongoing Success with Retail Marketing Optimization and Testing

By tackling the steps outlined above, you’ll be well on your way to instituting a cultural shift that embraces the retail marketing optimization and testing methodology. And that will put you on track to evolve your organization’s success long into the future.

How can CCG help you institute a retail marketing testing, measurement and optimization mindset in your company? From building your business case to developing testing strategies and analyzing results, review the capabilities and services that our retail marketing experts can leverage to build your company’s success. For a one-on-one discussion, schedule a consultation or call us at 303.986.3000.

Lane Ware

Author Lane Ware

Lane is CCG’s former senior vice president, consulting & account services, and currently sits on the CCG Board of Directors. She combines strategic expertise and experience in multiple industries with implementation and project-management skills. Her involvement in projects has ranged from building loyalty programs from the ground up to implementing long-range CRM initiatives to refining existing strategies.

More posts by Lane Ware