Decathlon Hong Kong de-bunks performance marketing

Matthew Lam is leading the brand & marketing innovation for Decathlon Hong Kong. In this exclusive interview, Matthew talks to us about the evolution of the customer journey and why “it’s the customer who decides” in today’s world. We discuss their “Your Trustful Partner In Sports” and “EXPLORE THE UNSEEN” campaigns. We dive into brand and performance marketing – the differences, pros and cons and why they mustn’t work in silos. Matthew discusses the importance of community building and how they create strong alliances and long-term loyalty by focusing on the health of consumers.

1. Speaking about the customer journey, how has the landscape changed?

The customer journey, once linear, has been replaced by a complex matrix of touchpoints with the customer at the center. Consumers’ ability to access brands in so many avenues and on so many devices has highlighted just how indirect and fractured these multiple journeys can be. The path to purchase is increasingly intermittent.

What that means is that while most companies have a preconceived hierarchy of touchpoints, they don’t apply anymore. In each instance, it is the customer who decides how to move forward.

2. How exactly do you maximise the brand and activation effects?

For many, the past 2 years have been a wake-up call. COVID-19 has affected the whole Hong Kong, for almost everyone, life had to fundamentally change. It’s also prompted many to think more seriously about their health for sure, and people have been surprised by how lockdown has allowed them to make sustained changes to their lives.

In an age of uncertainty, of big changes, people need sports more than ever before. We estimate around half of the HK population are sport users, so keeping them active, enjoy the pleasure of sports and understand how Decathlon can help them aside from just a piece of affordable product is our main strategy for campaigns. We have a quite healthy level of brand awareness, so now our campaigns are to focus on retaining these users, encouraging them to keep practicing sports, with us, as “Your Trustful Partner In Sports”, because we do not just have beginner products, we also have very technical, innovative and thoughtful offerings.

3. How does performance marketing strategies feed into retention strategies?

The majority of revenue comes from existing customers who are nearly 65% more likely to purchase products, and spend nearly 31% more than first time purchasers. So, we need to use a combination of traditional digital and performance-based marketing to nurture our existing customers. More importantly, with an average of 6-8 touch-points required across many channels before a conversion happens, we want to ensure we’re using the right platforms and channels to extend our performance marketing budget.

At Decathlon Hong Kong, we incorporate our ad retargeting strategies in all of our campaigns no matter tactical or brand activation campaigns. In our recent Fitness “STRIVE FOR THE FINEST” campaign, we use paid social ads to retarget lapsed fitness customers to encourage and trigger them to practice again but particularly to enhance their trust on our home gym fitness products.

4. How do you think some retailers have become over-reliant on performance marketing?   

Performance marketing can be a real growth booster in the early stages of business development. However, when brands need to scale, over-investment in this area alone often leads to diminishing returns. Customer acquisition cost (CAC) is growing. Return on ad spend (ROAS) is falling. And everything is becoming inefficient. The direct link between advertising and growth that existed before has weakened.

Brands are not always ready to move to a balanced “full-funnel” approach. Sometimes it requires a complete overhaul of the entire marketing strategy and the involvement of new teams. Nevertheless, the allocation of marketing spend had not been effectively prioritized or managed to ensure a return on investment. This left insufficient funds for long-term brand awareness.

5. When you look at your marketing strategy as a whole to begin to implement change, what type of things should you be looking at for a start?

First, we have to sustain a strong customer centric mindset and understand what our customers’ needs and expectations are. Then we look at our value proposition and see how we as a company can resonate thus cater these needs.

I truly believe that marketing is not a battle of products. It is a battle of perception. For brand recognition, it is often better to be first in a market than best, as the first is more easily remembered. Now if you cannot be the first, you will have to be the best. Now when there are millions of brands saying they are the best, building an authentic connection between your brand and your consumers becomes more and more important. Marketing is about companies building bridges with consumers not consumers building bridges with companies.

6. Brand and performance marketing should be intertwined – how? Can you share any use cases in Decathlon

Our content or communication strategy is essentially using a full funnel approach, utilizing our owned, gained and paid channels to help our consumers to complete their sport user journey from a practicing and purchasing point of view. From planning to happening to post-happening. Both physically and digitally, to touch more people, go where they are, we know on average people look at their phones 300 times a day, so ultimately they will select that route that best suits them.

We start with connecting our brand with users, then connecting our products with them. Take our performance marketing program as an example, now we define this project as “performance branding” because the essence is to ensure we do not let “branding” and “performance” run in silo because they are interdependent and we measure for both.

At Decathlon Hong Kong, we dedicate a certain portion of our performance marketing spend for brand building. The objective is to make marketing seen as a short & long term value driver and build a strong global sport brand in HK. The opportunity we have right now is to unlock the brand and make a more impactful brand launch in the market to reinforce our brand identity. For example, we launched a mountain sports “EXPLORE THE UNSEEN” campaign last year with a focus on providing “solutions” to our customers on how they could effectively practice the sport. Our targeted ads not only promote products but also our expert sport advice to influence and truly be part of our customers’ sport journey. This is WHO WE ARE as a trustful partner in sport.

7. What is the vision that you are working towards in 2023 and beyond?

Our Decathlon purpose is to Move People Through The Wonders of Sports. We want to build a community that will make sport “yours”: enabling everyone to participate, celebrating all emotions of sports, and changing your relationship with it.

1. We are a multispecialist, we offer physically and digitally the best sport products selection to every sport enthusiasts: beginners, regulars and experts

2. We create value towards our Community and our Planet by reducing Sedentarism and our impact on the environment

8. What are some of the key topics which you are keen to listen to during the eTail Asia?

Asia is in a state of perpetual change: Changing market, changing competition and changing customers. I would be keen to listen and learn from other brands on what the implications are for them and how they tackle to win the market.

9. And why must people not miss the eTail Asia this year?

After years of COVID impact, we finally have an opportunity to connect bright minds and share our learnings with each other. It is a great time of the year to reboot the business as well as reconnect with potential partners and customers.