How do you win the retail battle when the rules of the game keep changing? We chat to Citrus CEO and co-founder Brad Moran to find out.
As e-commerce continues to grow, consumer behaviour changes and the retail landscape has to move with it. Yet the very technology driving this change also highlights the gaps that exist between the bricks and mortar experience and the current state of e-commerce. This is where Citrus comes in. The Aussie tech company provides online retailers with a digital sponsored product and banner ad platform, which it says is capable of taking on Amazon in their attempt to disrupt the $120bn online advertising industry. Citrus monetises digital shelf space for retailers, while retaining a personalised customer shopping experience.
Founders Brad Moran, Nick Paech and Mohammad Alinia spent 6 years developing and commercialising an e-commerce start-up prior to founding Citrus in 2017, so they had plenty of experience in the retail e-commerce area and the challenges that bricks and mortar retailers face when going online.
“There was a fair amount of resistance by retailers back then to establish an e-commerce presence since the cost of running an online operation was so expensive,” Moran tells Power Retail. “We understood that retailers subsidised a lot of their revenues from advertising by selling shelf space, catalogues and print media, which they were very good at. However, there was a large gap when it came to online advertising and monetisation; and so began the vision of Citrus.”
“We saw a huge gap in the market for an automated ad engine that could just plug into retailer websites and provide large amounts of passive revenue, whilst simultaneously giving suppliers what they wanted: more control, more visibility and more measurement of their ad spend,” Moran explains. “Mastering the art of making it beneficial for both retailer, supplier and the customer is ultimately our secret sauce as monetisation is pointless at the cost of ruining the user experience.”
It’s consumer expectations, rather than simply consumer behaviour, that have lead to this need for retailers to ensure the user experience is optimal and central to strategy. “Applications and devices that we interact with most each day are shaping the way in which customers expect things to work. People have become accustomed to the user experience provided to them by companies like Facebook, Instagram, Uber and Apple’s OS in general, while at the same time, Google has set an unachievably high bar when it comes to search engine capability and intelligence,” Moran tells us. “Google’s ability to find what you are looking for from almost any text string you type into it is astonishing. Sadly for consumers, they don’t receive the same level of quality when they go to a retailer’s website and use their search engine. This new level of expectation has seen the rise in Google Shopping and of course the rise of Amazon since they are reliable in providing a quality experience when conducting a product search.”
“In order to keep up with customer expectations, retailers should be investing a lot more money into the quality of their search engines because a successful product lookup is possibly the easiest way to convert either an in-store or online customer,” Moran explains.
This is why personalisation and how consumer data is used needs to adapt. “Personalisation for the most part is calculated on a first party basis (e.g. You buy brand x, so we will show you brand x products). Real personalisation is looking at why a customer bought that product and looking at a much deeper level of data made up from third party attributes. Then of course, there is making those recommendations at the correct time,” adds Moran.
This is where Citrus hits its stride. It looks through a customer’s purchase history and picks out patterns in their purchasing intent, then shows them ads that it thinks they would like.
Moran tells us that on average they are seeing around an 800-900 percent return on ad spend and in the last few months and the average sponsored product has seen an average month-on-month growth of over 90 percent. “For brands, Citrus is instantly familiar in its construct providing the same features and functions as the likes Google and Facebook ads, with the difference being that the ads are now placed within the retailer’s website,” Moran says. “This allows them to measure ad spend directly against product sales, essentially closing the advertising loop.”
So, looking at the shift in consumer expectation and the retail shake-up, where are we headed? “The US has been totally dominated by Amazon, with retailers far too slow to react to online shopping. The UK was far more progressive and whilst Amazon is still a major player there, many bricks and mortar retailers have been able to hold their own,” Moran tells us. “Australia is behind these markets only in the sense that it hasn’t been overhauled by Amazon yet. Australian retailers have a good online footprint already and can remain competitive to new retail threats providing innovation and diversity are part of their core DNA moving forward. In my opinion, the biggest advantages a company like Amazon has over traditional retailers are that they are not afraid to fail and they are incredibly fast at making decisions and implementing strategies. If retailers adopt this type of mentality, they will win the retail battle, because they have a massive head start when it comes to physical footprint and customer loyalty base.”