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In today’s competitive ecommerce environment, brands must be more data-driven and technology-enabled than ever before to engage consumers and grow their market share.
They need to employ omnichannel retail strategies and new growth models such as voice, social, and visual commerce — fueled by the explosion of artificial intelligence (AI) — to synchronize their content and media across the entire value chain and drive conversions.
According to Gemma Spence, chief digital officer of the global advertising agency and consultancy VML, this is the best way to optimize brand growth.
Spence shared these insights during her recent keynote at the 2024 Digital Shelf Summit: “How Brands Grow Today: Beyond Mental and Physical to ‘Digital Availability.” Hosted by the Digital Shelf Institute (DSI), the Digital Shelf Summit convened ecommerce and IT leaders nationwide to share actionable execution strategies and essential systems that can drive profitable, digital-first omnichannel success.
For brands searching for a go-forward action plan in 2024, Spence’s Digital Summit talk offers a guide for accelerating ecommerce transformation.
Here are some highlights from Spence’s keynote.
Ecommerce has undergone several paradigm shifts in recent years. The pandemic was a big one, but AI likely will usher in massive change.
“AI is all about experimentation. It's about unlocking efficiencies, and scale, and effectiveness, and reach across the entire organization, whether it's around organizational structure, all the way to kind of demand generation,” Spence says. “To get that right, you've got to have amazing data.”
Leveraging AI has become crucial for brands in a time when they must contend with several forces of change, Spence adds. People now have an average attention span of eight seconds. Consumers are battling what researchers call “infobesity,” or information overload.
“Fifteen years ago, in 2007, the average consumer saw about 5,000 ads every single day, today. Guess what? That's doubled. That's between 10,000 and 12,000 ads every single day. In 12 to 18 months, that's expected to double again,” Spence says.
Consumers also experience choice paralysis. The “endless aisle” is compelling them to make more considered purchases, even in impulse categories.
“This has a significant financial impact on a lot of brands because of slowing down the sell-through of many of the items,” Spence says. “This is having a direct impact on top- and bottom-line growth.”
Spence says that no human can optimize at this rapid rate of change. This is why brands must invest in AI to improve their ecommerce execution and prepare for a new era of digital availability.
In his seminal book, “How Brands Grow,” marketing expert Byron Sharp argues two important factors contribute to brand growth:
Today’s competitive omnichannel environment requires brands to optimize a new avenue for growth: digital availability.
“We believe that it's time for the next iteration. And we believe that is digital availability,” Spence says. “We're not disregarding mental and physical availability — we're augmenting it and powering it around AI.”
A recent VML survey found that 98% of retailers are investing in AI-based technologies. Brands who want to remain competitive must do the same. Spence says in this new AI-driven era, brands can play to win in three critical ways.
Brands need to rebalance their testing mindset to fuel digital availability. Though some brands have adopted various structures to drive growth, such as centers of excellence, it’s time for them to rethink these approaches.
“We need to move from these traditional marketing or sales-led organizations into a highly agile and diversified team, especially in high-fidelity and commodity-driven brand areas,” Spence says.
VML research indicates companies that create a safe environment for their teams to experiment and who make an innovation mindset an integral part of their culture grew 150 times faster than their peers. Brands that want to achieve similar results need to build a testing mindset into the fabric of their DNA, Spence says.
To drive growth, brands also need to build their “digital spine.” This means they need to assess both their commerce technology stack and their retail partners’ technology and then evaluate the gaps in their digital shelf.
Spence says brands need to level up product experience management by focusing on effective AI and data governance, process optimization, and understanding the unique requirements of each engagement channel. From there, they can align their technology stack and partners in ways that improve their digital shelf experience and drive growth.
Once brands have established a culture of testing and innovation and a solid technological foundation, they can accelerate their growth path by harnessing the real-time insights generated through cleanroom technology. These technologies aggregate shopper data to drive better collaboration between brands and their retail partners.
“Brands truly need to harness the real-time insights that cleanrooms create for personalized moments and build the teams and resilience within the organization around cultural moments you can see and you can understand within these cleanroom environments, and then quickly galvanize around it,” Spence says.
Mars, a VML client, has successfully used this approach with activations that tie into cultural moments to drive digital availability. As a result, the brand has boosted new customer growth by 80% over the last year.
Given the significant headwinds brands face, they need to leverage AI to increase their efficiency and marketing effectiveness. AI offers transformative potential for their business — one that can help them drive personalization at scale, new innovations that unlock growth and profitability, and win in this new era of digital availability.
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