Tippy Tarlington remembers the moment when everything changed.
"We were sitting in a Black Friday promotional meeting, and two things struck me as odd. First, I was the only Macy's employee in the meeting - heck, I was the only human in the room - everybody else was a bot who worked for a vendor supporting our marketing efforts ... and second, I couldn't figure out how to make money replicating the 85% off promotion from Black Friday 2023." said Tarlington, the Vice President of Strategy at Macy's.
"And then it hit me ... we would give away our merchandise for free, and make money on sponsored content."
At first, Tarlington was daunted by the scale of effort required to pull off this herculean task.
"But then it came to me ... we needed to thoroughly integrate all channels. It all started with our hoverseat strategy - using self-driving cars that eject passengers at their destination via a hoverseat. Self-driving cars were programmed to stop at Macy's, transport the customer into the store via hoverseat ejection, and then it was our job to make in-store magic happen."
The magic, as one might surmise, came from sponsored content.
"We figured out that we could put a veritable plethora of holographic images, videos, and text-based content in front of the customer as the hoverseat transported the customer to a random stack of Dockers pants. A video from The Weather Channel about global warming, a response from the alt-right about a pending mini-ice-age, we simply did not care. Either piece of highly engaging, relevant, personalized content drives the customer to a portion of our assortment to satisfy weather-based needs. The content is highly relevant to the consumer, but is utterly irrelevant to Macy's as long as our invoices are paid."
Sponsored content coupled with a hoverchair strategy yielded conversion rates close to 45%, according to Tarlington.
"It's really fascinating. You can convert a lot of customers when you offer merchandise at 100% off, and content providers are more than happy to foot the bill if it means that engaged eyeballs are tracked and marketed to at all moments. Frankly, I was surprised conversion rates didn't hit 100%, but there's no pleasing consumers in today's highly competitive environment."
Tarlington closed the deal with skeptical content providers by freely giving away all customer data associated with the transaction. As we talked, Tarlington sat back in her chair, and with the enthusiasm of a highly paid executive, Tarlington said ... "We're giving away all of the merchandise, why not give away all of the data? As long as the invoices are paid, our profits won't fade. Hey, maybe we need to put that quote on the walls of all conference rooms at Macy's, amirite?"
Wall St. of course, is skeptical. In a quarter-to-quarter environment, Wall St. wonders what Macy's can do to increase sales in a 100% off environment? Tarlington was quick to respond to the critics.
"We believe we can run 120% off promotions for Black Friday 2025. What could be more tempting than offering the customer $10 cash to purchase a $50 item at 100% off? And as long as content providers are happy to pay for eyeballs, there should be no shortage of money to go around to support what is likely to become a negative interest retail environment."
When asked if a first-mover advantage could crumble should all retailers go down the same path, driving down prices paid by content providers, Tarlington's face turned pale.
"Are you telling me that we might condition the customer to expect free merchandise and then not be able to offer free merchandise because content providers won't pay us enough? Is that what you are suggesting? Because I am not playing chess here, I'm just following the money. I love earning bonuses for short-term sales gains, because you don't have to think five steps ahead. Should I be thinking five steps ahead? Geez. Talk about taking the fun out of marketing strategy."
"But then it came to me ... we needed to thoroughly integrate all channels. It all started with our hoverseat strategy - using self-driving cars that eject passengers at their destination via a hoverseat. Self-driving cars were programmed to stop at Macy's, transport the customer into the store via hoverseat ejection, and then it was our job to make in-store magic happen."
The magic, as one might surmise, came from sponsored content.
"We figured out that we could put a veritable plethora of holographic images, videos, and text-based content in front of the customer as the hoverseat transported the customer to a random stack of Dockers pants. A video from The Weather Channel about global warming, a response from the alt-right about a pending mini-ice-age, we simply did not care. Either piece of highly engaging, relevant, personalized content drives the customer to a portion of our assortment to satisfy weather-based needs. The content is highly relevant to the consumer, but is utterly irrelevant to Macy's as long as our invoices are paid."
Sponsored content coupled with a hoverchair strategy yielded conversion rates close to 45%, according to Tarlington.
"It's really fascinating. You can convert a lot of customers when you offer merchandise at 100% off, and content providers are more than happy to foot the bill if it means that engaged eyeballs are tracked and marketed to at all moments. Frankly, I was surprised conversion rates didn't hit 100%, but there's no pleasing consumers in today's highly competitive environment."
Tarlington closed the deal with skeptical content providers by freely giving away all customer data associated with the transaction. As we talked, Tarlington sat back in her chair, and with the enthusiasm of a highly paid executive, Tarlington said ... "We're giving away all of the merchandise, why not give away all of the data? As long as the invoices are paid, our profits won't fade. Hey, maybe we need to put that quote on the walls of all conference rooms at Macy's, amirite?"
Wall St. of course, is skeptical. In a quarter-to-quarter environment, Wall St. wonders what Macy's can do to increase sales in a 100% off environment? Tarlington was quick to respond to the critics.
"We believe we can run 120% off promotions for Black Friday 2025. What could be more tempting than offering the customer $10 cash to purchase a $50 item at 100% off? And as long as content providers are happy to pay for eyeballs, there should be no shortage of money to go around to support what is likely to become a negative interest retail environment."
When asked if a first-mover advantage could crumble should all retailers go down the same path, driving down prices paid by content providers, Tarlington's face turned pale.
"Are you telling me that we might condition the customer to expect free merchandise and then not be able to offer free merchandise because content providers won't pay us enough? Is that what you are suggesting? Because I am not playing chess here, I'm just following the money. I love earning bonuses for short-term sales gains, because you don't have to think five steps ahead. Should I be thinking five steps ahead? Geez. Talk about taking the fun out of marketing strategy."
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