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Target's O2O strategy delivers

News, 06 April 2016

MELBOURNE: Australian retail brand Target can attribute a significant part of its sales turnaround to an innovative online-to-offline digital strategy, a former executive has said.

Mat Medcalf, the former head of digital at the retailer, outlined the approach at the recent eTail Asia conference in Singapore.

He reported that a creative segmentation of its customers had generated $10m in additional sales, 90% of that in-store, and delivered around half of Target's total business growth in the last year. (For more, including how 'lookalikes' can boost reach, read Warc's report: Target's turn-around: boosting sales with creative segmentation in Australia.)

Declining sales and Australia's heavily competitive retail market were impacting Target's bottom line and it was increasingly clear that the company's marketing strategy – based on catalogues, print, press, and TV – was not only stuck in the past but expensive and its effectiveness difficult to measure.

Despite the necessity of a transition to digital-led marketing, the change did not come easily for the retail giant.

A pilot digital project alongside Facebook and FlyBuys aimed not only to build Target's online presence, but also present a measureable business case for the further digitisation of the company's marketing offerings.

With data from Target, Facebook and FlyBuys (a points-based loyalty programme), consumers were targeted by type and location with targeted ads via Facebook and Instagram, with the aim of linking Facebook engagement to in-store purchases.

Medcalf revealed that there was an 82% correlation between consumers who viewed Target ads multiple times on Facebook, and the people who bought these items from Target's store.

"Facebook is the modern catalogue, it is where customers are checking their interests," he said.

Data sourced from Warc