Brand building is vital for online stores

Suvituuli Tuukkanen from Verkkokauppa.com and Matti Kojo from Arvo Partners explain why online stores should also invest in brand building.

 Building a brand is important for both short-term and long-term success.

"For short-term success, the goal should be to avoid having to buy all the traffic coming into the online store. The company or brand behind it should be so strong that it is appealing in itself," says Suvituuli Tuukkanen, Marketing and Communications Director at Verkkokauppa.com.

According to Tuukkanen, a well-established player in the market can succeed for a while by investing solely in tactical marketing and search engine optimisation, but over time the brand, along with the direct traffic to the website, will collapse if it is not properly taken care of. 

"This is one of the reasons it's important to do brand-building marketing. Another thing to note is that brand-building marketing can help to shape perceptions and communicate more strongly compared to purely tactical communications directing traffic to the online store," Tuukkanen points out.

According to her, brand-building marketing also has a strengthening effect on tactical marketing.

"The role of tactical and brand-building marketing depends on the situation and goals of the online store. How wide is the range, how long has it been in the  market and what is the structure of the customer base and traffic?" Tuukkanen says. 

According to her, metrics often follow a short trajectory, with tactical advertising dominating over brand marketing.

Verkkokauppa.com uses a wide range of metrics. Monitoring includes brand metrics such as preference, consideration and key image development, as well as tactical metrics related to campaign performance.

“In terms of hard metrics, we monitor direct sales and traffic, customer base development, conversions and a wide range of digital advertising metrics,” Tuukkanen explains.

The brand is the cornerstone of e-commerce

"Brand building is much more than a marketing activity, especially for online stores. It’s the entire shopping and customer experience, all its touchpoints," says Matti Kojo, CEO of Arvo Partners.

“In challenging times, the brand can be the deciding factor in getting the customer to stay or even choose your company.”

According to Kojo, the online store brand is built on several voices: the content, ratings and reviews created by customers; the content and channels created by the company; and the marketing efforts, customer communication and personalisation at different stages of the purchase process.

“It’s important to understand your target market and audience and to know what kind of value propositions work for them,” Kojo says.

"Especially in the early stages of the online store, it is important to acquire new customers and ensure the right kind of customer experience. When the tactical channels start to become saturated, it makes sense to shift the budget to branding."

According to Kojo, tactical and brand-building advertising should exist in harmony. 

"Brand building can be accelerated by taking care of sales and the customer experience. On the other hand, brand recognition has a beneficial effect on customer acquisition costs in tactical campaigns, and by strengthening the brand, we can also accelerate sales in the longer term."

According to Kojo, the challenge of brand marketing in e-commerce is that the tactical channels are often highly tuned and the profit angle is good. 

"The threshold for shifting the budget to branding increases because you are dealing with a long-term investment. However, the brand is one of the cornerstones that online stores need to build as well."

The right metrics at different stages

The right metrics must be used at the different stages of marketing.

"In addition to traditional brand surveys and brand research offered by advertising platforms, it's a good idea to measure how much you are reaching your desired audience, how they react to advertising, whether they come to your site and what happens on the site afterwards. Are they leaving immediately or are they the right target group?" Kojo says.

According to him, one metric to be monitored could be the growth of remarketing audiences. Kojo often hears the comment that the customer has heard nothing about or from the online store since the purchase.

"There is a problem with customer communication if the brand disappears along with the acute need. For example, in Sanoma's network you can reach out to customers who have already bought and start testing what you can achieve by scaling up your customer base," Kojo suggests.

Tips for brand building from Suvituulia Tuukkanen

1. Know who you are talking to.

• What is your key target group? Know them. How they think, what they need, what are the obstacles and drivers for buying and what motivates this group. 
  

2. Select a clear message.

• There is often a lot to say. The brighter and clearer the message, and the better it addresses the obstacles related to buying, the more likely it is to work. 

3. Be persistent and systematic.

• When building a brand, metrics tend to move slowly. Do not expect the change in consumers’ minds to happen quickly. It is a good idea to stay on the defined path, but also to constantly test new things and make the necessary corrections. 

4. Take care of the overall brand experience.

• Advertising and marketing paint a certain picture of what a brand is like. However, brand perception is formed through all touchpoints: online or in-store, selection and pricing, customer service, CRM messages, etc. Brand management must be comprehensive. 

5. Measure and understand cause and effect relationships.

• Keep your eye on the ball and make sure you have enough data points to know how your brand is developing. The brand could be developing in a positive direction, but the traffic might not increase or the sales could be lagging behind. This is not necessarily due to incorrect marketing activities, it might instead be due to the surrounding market or the actions of a competitor. Traffic could also be at a good level, but brand perception might not be developing in the desired direction, leaving the full potential untapped.

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