The home improvement giant Lowe’s undertook a massive effort to bring more of its marketing stack in-house because otherwise it would have needed to rebuild if it ever changed agencies, said digital media manager Katie Morrissey.
Lowe’s infrastructure needs are complex. Morrissey wants to be able to design personalized marketing and figure out how online media drives in-store traffic. And she wants tech that’s both flexible and predictive.
“We’re designing our road map to be flexible and to change over the course of 2017,” Morrissey said. “As we start to organize around a customer, you have to be able to change all the time.”
The need to overhaul a marketing apparatus often stems from a deeper business transformation. Nordstrom, for instance, decided it wanted to be a growth business and set a goal of becoming a $20 billion retailer by 2020. Until recently, Nordstrom had focused on its existing customers, but it wouldn’t have hit its goal unless it started acquiring new ones.
Under CMO Scott Meden, appointed to the role last summer, Nordstrom did a hard reset with its measurement objectives.
“Up until last year, we were measuring on the basis of seven-day and last-day attribution, so we’d end up going after our existing customers,” Gowans said. “Eighty percent of our [advertising] spend went to existing customers.”
Nordstrom’s goals now center around customer acquisitions, cost of acquisition and loyalty penetration, none of which Nordstrom previously considered. That meant a reorg of the marketing group, which used to be organized around channel but is now split between customer acquisition and retention. While there’s overlap, customer retention focuses on more traditional programs, such as loyalty and direct mail, whereas acquisition is more focused on digital.
Lowe’s also moved from a channel-based strategy. Cowie used to perform tests and controls for individual digital channels, but those tests were expensive, slow and hard to replicate since customers moved around and digital environments changed a lot. “We needed to identify the right moment – it’s not about the channel or creative,” she said.
But reorgs are hard – even when they lead to business success.
Morrissey, for instance, enlisted numerous departments across Lowe’s to help design a “cool product” to connect online media with offline point-of-sale purchases. But it wasn’t celebrated.
“I started to become a little feared,” she said. “When we’re trying new products and innovation, we have to interrupt everyone else’s day jobs to get that done. And that’s hard for a big company with limited resources.”