As I wrote Monday, I am attending the NRF’s Retail Innovation and Marketing Conference in San Francisco this week. The first morning of the conference is off to a wonderful start with two outstanding keynotes from Patrick Connolly, CMO for Williams-Sonoma, and Jeffrey Rayport, Founder and Chairman of Marketspace. Both keynotes were so good that communicating everything valuable would greatly stretch the limits of one article. So, I’ll start with Connolly.Patrick Connolly spoke at length this morning about the importance of what he called a “focused digital strategy” and how that contributes to the success of Williams-Sonoma, and has contributed to completely rewriting the definition of “multi-channel” retailer. Williams-Sonoma, in the last several years, has completely transformed itself from a company where the vast majority of its sales originated from the catalog channel with only a slim representation from the eCommerce channel. Now 30 percent of the company’s revenue comes from eCommerce alone. Interestingly, Connolly highlighted that only a slight shift in spend – growing the marketing budget from five percent in digital channels to 20 percent in digital channels – fueled the transition.
This remarkable transformation was guided by Connolly on some core principles that permeated every decision.
Principle number one is the importance of marketing precision, and Connolly spoke about how the digital channels are exclusive in their ability to target content and measure results. This sounds like a simple principle, but the application of it internally within the company is a bit more challenging. For example, the company completely changed its internal alignment from direct marketers and brand marketers to align based around product where each product’s brand manager’s heritage is in direct response marketing.
For Connolly, he made eCommerce and the Internet the company’s number one focus. That means the reversal of emphasis on the catalog channel – which is where 90 percent of the company’s resources were focused – to the Web channel. For Connolly, his desire to really understand what was driving the business was essential, and digital marketing communications with direct marketing thinking informing the strategy, was exactly what he needed. In short, direct digital marketing.
The other important principle for Connolly was that the professionals in charge of the marketing understand database marketing and the importance of the role the database plays in marketing success. Putting database and direct marketing professionals in key positions changed the marketing culture from an aesthetic culture to a data culture. Not only does Williams-Sonoma now actually understand who buys and what is being bought, they better understand how to effectively communicate with their customers to improve their revenue, but also deepen customer engagement.
Connolly claimed a “maniacal focus” on Web analytics and content testing and optimization. This is extremely important, but likely not without some internal political collateral damage as the company transformed. Connolly claimed that Williams-Sonoma was immune to inter-channel politics. I have some doubts about that. Corporate culture shift will always have its champions and its enemies. What is important to remember is that the focus should remain on the customer, since they are in control. Connolly proves out the notion that direct digital marketing principles are essential for becoming successful in lifting sales and engaging consumers.
