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The Power of Paid Search in Retail

2018 was a difficult period for the retail sector in Northern Ireland with a terrible fire destroying Primark’s flagship store in November, and safety concerns meaning neighbouring retailers remained closed for many months afterwards.

But even before that, retail industry news in 2018 often made for difficult reading, with reports such as a record-setting decline in retail sales (1) and those hard-to-avoid store closure threats and announcements (2). Retail businesses are challenged by the change they’re surrounded in.

Thankfully, not all the news is bad. In May 2018 a 1.3% month-on-month growth in UK sales was reported (3). Sitting behind this is a statistic pointing at one of the biggest industry disruptors: online spending, which increased anywhere between 5% and 17% (for food and clothing respectively) over the course of that one month (3). Digital transformation has and continues to make an impact on the retail industry. Consumers’ adoption of digital is undeniable: approximately 87% of UK consumers bought at least one product online in 2016 (4) and spent more per household online in 2017 than consumers in any other country (5).

Retailers must leverage digital channels and online marketplaces to market their brands, or risk being left on the shelf themselves. But utilising e-commerce on either an owned website or through third-party websites such as Amazon can be a challenge that many aren’t embracing. Nor are they making their products visible and attractive enough to consumers within multi-step customer journeys, both online and offline.

Marketing departments shouldn’t be daunted – research has boiled down customer journeys to five key stages: Initiation, Research, Comparison, Transaction and Experience (6). These broadly map how a customer progresses from initiating research to eventual transaction and follow-through experience.

We look to one of the largest online channels – Search – to see how this increasingly popular channel provides opportunity to maximise each of these stages, and see real return on marketing investment.

Paid Search presents a way of capitalising on the behaviour illustrated above, impacting every stage of the user journey, from those searching for ideas to those ready to purchase. Digging a little further into the search behaviour of consumers provides strategic insight, as it indicates where paid promotion can be targeted in a relevant way and in the most impactful format.

To put it simply, people search for different things at different points in their journey and this has wide implications for strategy.

Let’s break it down: say your young niece’s birthday is coming up. You want to buy her a gift. You might know exactly the brand and product you want and search for “Lego Fire Truck Toy”. Or perhaps you know the type of product she likes but don’t have a brand in mind and search for “Fire Truck Toy”. Then again there’s also a fair chance you don’t have an idea in mind and just search for “Children’s Toy Ideas”. Each of these types of search term can in turn be categorised (plus grouped with similar terms) as “Brand”, “(Non-Brand) Product” and “(Non-Brand) Generic” and have key differences. A Bing Brand Impact Study (9) found that 72% of Brand ad clicks had a Non-Brand keyword that preceded the Brand click – in other words, quite often you’ll research Generic ideas, then follow up with the specific Brand you wish to purchase. Even more interestingly, this study found those who saw an advert on a Generic query are 30% more likely to do a Branded search and on average have a 15% higher conversion rate than consumers who are not exposed to a Brand ad.

Therefore, Paid Search is an important consideration at each stage of the user journey. Search behaviour – or the terms people search for – offer different opportunities to speak to potential customers. Additionally, there are even different ad formats for different stages of the user journey – for example, Google has developed Shopping Ads for product promotion and ease of purchase. These are working very well as the majority of ad clicks for retailers on Google are now on this format (10) – see the example below.

Despite the challenges that it brings, change can be a good thing as embracing digital opportunities such as Paid Search offers so much opportunity.