The Importance of Incrementality testing for Fashion Retailers

Fashion retail channels change almost as quickly as fashion trends. In-store, online, web, mobile, social… the number of ways to buy continues to grow. With traditional retailers like Nordstrom, Saks 5th Avenue, and The Bay fighting it out with ‘digital first’ fashion retailers like Fashion Nova, REVOLVE, and Shopbop, there is more competition for customers’ attention than ever before.

Amid this heightened competition, it’s absolutely essential to know – and to have full confidence in – how your online advertising providers are performing and to be sure that you’re:

a) Not leaving money on the table with underperforming ad campaigns.

b) Keeping your providers keen and competitive by (healthily) questioning the value they deliver.

Incrementality is the measure of the effectiveness of your advertising activities. The results of incrementality testing enable you to better understand how your online advertising partners, channels, and even formats, are performing and whether your efforts and decisions are really affecting customer behavior.

"Regardless of your business or budget size, you need to understand the concept of incrementality."

Avinash Kaushik, Digital Marketing Evangelist, Google

Source: Think with Google

The absence of incrementality in MarTech conversations

Incrementality should be an important topic for any company that buys or sells online advertising services and yet:

- ? Relatively few vendors can talk confidently and prove the incremental results they are able to deliver.???

- ? Many customers struggle to understand how their providers and ad campaigns are really performing relative to other solutions or compared to no solution at all.

It may sound shocking, but this isn’t completely surprising – incrementality is difficult to measure. It requires access to a lot of data, the right organizational mindset, difficult decisions about what to measure and how (channel, stack, portfolio), and then significant effort to generate findings that are meaningful and trustworthy.?

Still, if your vendor isn’t willing to explore incrementality with you, it might be a sign that you’re with the wrong vendor.

Incrementality as a challenge to AdTech solutions and strategies

Although it’s now a couple of years old, Nordstrom’s Jason Gowens’ article on incrementality, data, and measurement makes some great points about the potential pitfalls around measuring marketing effectiveness solely through last-click return on ad spend and how this can lead to the conclusion that only a tiny slice of credit can actually be deemed incremental.

At RTB House, we see such claims as healthy challenges.

We have pioneered a retargeting engine based on Deep Learning technology that is proven to deliver significant incremental value. Campaigns run using RTB House’s solution are up to 50% more effective than those run using conventional Machine Learning approaches. Fashion retailer Neiman Marcus worked with RTB House and enjoyed a net uplift in incremental sales revenue of 26%.

Incrementality will become even more important

The importance of understanding the incremental results of your advertising activities will grow in the near future. There are two reasons for this:

- ? Google’s phasing out of third-party cookies represents a ‘reset’ of sorts for the online advertising industry. What worked before might not be possible or so effective in the future.

- ? An anticipated economic downturn is, as always, likely to increase scrutiny on marketing budgets and ad spend. It’s important to know whether you’re getting value for money.?

It’ll be essential to understand which of your partners and tools are able to deliver most value in the face of technological and economic challenges. That’s where incrementality testing can help.??

At RTB House, we’re confident and open about incrementality

We’ve recently conducted a series of incrementality tests for 8 of our clients in the US across the fashion, apparel, and accessories segments, including Neiman Marcus.

The study revealed that, by using RTB House’s first-of-its-kind retargeting solution based on Deep Learning technology, our clients benefitted from:

- 17.5% average incremental uplift for orders

- 18.4% average incremental revenue uplift

- 13.2% minimum uplift recorded.

Hardly a tiny slice of value, I think you’ll agree.?

Talk to RTB House about incrementality

Reach out to us at RTB House to discuss the importance of measuring the incremental value of your online advertising activities and how you can enjoy enhanced results by using our proprietary, first-of-its-kind Deep Learning technology.