Shoppers aren’t shopping simple anymore, as most retailers now know. Instead, consumers buy not only through brick-and-mortar stores, but also online, through apps, and even through social media. Further, a shopper may browse online and then purchase in-person. Marketing to a shopper’s roundabout way of buying requires a holistic approach to marketing and data gathering, which will require:
- Staying customer-centric and channel-agnostic
- Integrating technologies
- Leveraging data and partnerships in the organizations
Evolving your marketing strategy to an omnichannel approach using first-party data is not only cost-efficient, but it will drive customer loyalty and increase lifetime value of the brand.
Content Summary
Survey highlights omnichannel challenges
More omnichannel shopping spurs need for new omnichannel marketing strategies
Changing the structure and mindset of a segmented marketing approach
Additional marketing challenges require a unified approach
Putting the data to work
Anticipating the next change
Developing an omnichannel strategy
COVID-19 certainly accelerated online shopping, but that wasn’t the only area that saw significant growth. The pandemic fueled a 50% increase in omnichannel shopping across the U.S. in 2020.
Successful retailers invested in their online channels and adapted the store model to make it easy for customers to pick up orders quickly and safely instead of waiting for shipping. As consumers spent more time working, learning, entertaining, and buying at home, their journey to discover and purchase products and services increasingly crossed many devices and channels. Additionally, to fulfill their need for traditional and new essentials – consumers used both online and in-store buying options depending on availability and convenience.
Although marketers are aware that consumer shopping journeys are increasingly omnichannel, they still aren’t adequately set up to meet these realities. Most admit they lack the technology, speed, agility, and organizational structure to execute omnichannel campaigns.
To thrive as businesses of the future, all retailers need to think and act as omnichannel retailers to meet the omnichannel mindsets of their shoppers.
The pandemic fueled a 50% increase in omnichannel shopping across the U.S. in 2020.
Survey highlights omnichannel challenges
Although retailers realize its importance, they still have difficulty implementing an effective omnichannel strategy.
A recent Criteo/Retail Dive survey highlights some of the stumbling blocks retailers encounter in this area.
Most retailers are in the beginning stages of this endeavor, and nearly two-thirds say they’re still working on getting their omnichannel strategy to fully operational.
- Only 14% of retailers said they had an omnichannel strategy that was fully operational
- 40% said their strategies functioned but needed more work
- 23% said they were just starting to develop strategies
Retailers with an omnichannel approach still faced hurdles; technology and speed or agility top the list, but they aren’t the only concerns. Organizational alignment and siloed customer data and journeys still prevent retailers from realizing a full omnichannel approach.
- Implementing new technology 45%
- Speed and agility to execute marketing programs 45%
- Tracking the customer journey across channels 39%
- Siloed teams within the organization 37%
- Access to customer data 33%
- Inability to measure campaign success 30%
- Clarifying larger leadership or company vision 27%
- Coordinated marketing leadership 22%
- Access to sales/transaction data 21%
More omnichannel shopping spurs need for new omnichannel marketing strategies
Even though most marketers know that their customers shop across multiple channels — in person, on ecommerce sites, in apps, and now even on social media — they often view each of these channels separately and each customer’s behavior across each of the channels independently.
In other words, they’re marketing strategy prioritizes a channel-centric strategy over a customer-centric strategy. The Criteo/Retail Dive survey found that only 40% of retailers said audience targeting was a crucial part of their digital marketing strategy, compared with much higher proportions active in social, content and display channels.
The shopper’s journey is much more complex. Consumers may start on one device and finish on another. They may browse an ad on their social media stream and purchase in-store. They may be in a store and buy online.
A recent McKinsey report, “Omnichannel: The path to value,” says that since the pandemic began, more than one-third of Americans have made omnichannel features part of their regular shopping routine. “Offering a compelling omnichannel experience used to be the bleeding edge of retail. Now it’s a requirement for survival.” The report said that Gen Z consumers don’t think about traditional channel boundaries, but just expect a seamless experience.
But our survey found that marketers view their customers as either ecommerce or in-store consumers and approach these consumers differently, relying more heavily on search advertising, social media advertising, content marketing and online video advertising for ecommerce shoppers but utilize a different mix for in-store shoppers.
“Offering a compelling omnichannel experience used to be the bleeding edge of retail. Now it’s a requirement for survival.” – MCKINSEY & COMPANY, “Omnichannel: The Path to Value”
The chart below shows the disparity in marketers’ approaches.
Chart from Criteo/Retail Dive Survey: The use of digital advertising to create omnichannel results, May 2021.
Consumers engage with multiple channels within the same shopping journey to make their final purchase decision. Rather than taking a siloed channel approach, retailers can focus on the audience to optimize the customer journey and drive loyalty and lifetime value, regardless of whether the shopping occurs in-store or online.
Only twenty percent were confident they could track customers across channels
Changing the structure and mindset of a segmented marketing approach
The problem of siloes isn’t just within the marketing channels. It also relates to marketing teams, many of which are siloed as well, said Tim Rogers, senior vice president, global GM, Omnichannel and CRM at Criteo.
The company may have a digital team focused only on creating sales online and a separate unit for increasing business in the physical stores, both with the mandate to develop their channels, said Rogers. But this approach is limiting because consumers think about a retailer as one entity rather than an e-commerce company, store, catalog, call center and app. “To best address the consumer and create personalized experiences, retailers need to unify the experience and take into account each interaction, regardless of channel, and use it to better inform how to engage a consumer.”
Unifying the experience also means unifying data. When departments and teams are siloed, it’s difficult for marketers to access the information they need. In the Criteo survey, only a third of survey respondents said they had recently consolidated teams or increased collaboration with teams responsible for other channels. Only twenty percent were confident they could track customers across channels, and very few had direct access to customer and transaction data.
In the CMS Wire article, “How Silos are Killing Your Omnichannel Strategy,” Kimberly Sutherland, Vice President of Fraud & Identity at LexisNexis Risk Solutions said that silos do not align with a customer’s desire for a “seamless, secure, convenient and complete experience.” Instead, they can impact a company’s potential to generate revenue or capture feedback that would create a better customer experience, she said.
Rogers recommended that all omnichannel retailers develop a holistic audience strategy, which incorporates intent and purchase behaviors from all channels and uses that data to drive all channel outcomes. “To that end, retailers should challenge their technology partners to incorporate all channel outcomes into their user valuation, decision-making, optimization and personalization engines to maximize ROI,” he said.
Going even further, Rogers suggested that omnichannel retailers consider how they can leverage their own e-commerce site as a media channel to better compete with e-commerce giants by creating incremental value for their brand partners while also surprising and delighting their consumers.
This omnichannel mindset eliminates silos and channel-centric motivations within a business, Rogers said. “A retailer shouldn’t have its stores competing with its e-commerce entity because that yields a disjointed customer experience. From a marketing perspective, it also creates waste and hidden vulnerabilities in your investment strategy and personalization.”
An omnichannel strategy takes a customer-centric approach and aligns the retailer’s digital and physical entities to deliver the services customers demand, Rogers said. “And that differentiates their experience with you from that of the competition.”
Creating that differentiation and loyalty is also critical because omnichannel shoppers are also inherently more valuable. Criteo data shows that over a three month period, omnichannel shoppers make 3.8 transactions on average, vs. 2.2 transactions for in-store only shoppers. Investing in an omnichannel strategy creates long-term gain.
Consumers spend 66% of their time on the open internet and 73% of their time shopping online with open internet retailers
Additional marketing challenges require a unified approach
Marketers face yet another challenge in connecting with customers effectively. With the death of the third-party cookie, retailers will lose access to a wealth of customer data. Instead, retailers will need to rely on more first-party data sources than they do today, to better understand a user’s journey. A retailer’s CRM, including information about customers, what they bought, the product prices and order values, frequency of purchases, and more, is a great example of first-party data marketers can use to engage users across their journey.
Leveraging first-party data will be imperative for retailers to future-proof their addressable, 1-to-1 advertising strategy, Rogers said. “Retailers are in a unique position to capitalize on this opportunity based upon the commerce data that they source in their interactions with consumers.”
To do that, retailers must build trust with customers and create a value exchange for customers to consent to share their data, which marketers can then utilize to create personalized experiences.
“While walled gardens will continue to be able to activate first-party data in their ecosystem, consumers spend 66% of their time on the open internet and 73% of their time shopping online with open internet retailers. Being able to activate your first-party data on the open internet is imperative to reaching consumers and driving outcomes.”
Retailers will need to look for partners that can help secure their customers’ data in addition to connecting their first-party data to drive value on the open internet, Rogers added. Partners, such as Criteo, can meet marketer, media owner and consumer needs by protecting consumer data while also connecting the first-party data captured from marketers and media owners to drive value across DSP and SSP solutions.
First-party data will continue to be the most powerful dataset because it is deterministic and persistent and will enable long-standing user identification, Rogers said. Additional datasets, including interest and intent data, can enhance first-party information.
Putting the data to work
By understanding where the consumer is in their purchase journey, marketers can better understand interest and intent and create more personalized experiences.
For example, BOPIS became a massive trend in 2020, with orders growing 107% in 2020 and projected to grow an additional 15% in 2021 and 21% in 2022 — signs that consumers will now expect this option long term.
“To that end, it is often more cost-efficient for the retailer to service the consumer in-store. Therefore, if a technology provider can merge digital interest and intent with a consumer’s general location, a retailer can execute a BOPIS activation and delight their consumer with a great experience while also saving money,” Rogers said. In this example, the location data enables localized or regionalized messaging for higher-quality personalization.
Note: Includes products or services ordered using the internet (regardless or payment method) for pickup in a store or a locker in a retail or pickup hub location; excludes travel and event tickets, payments such as bill pay, taxes or money transfers, food services and drinking place sales, gambling and other vice good sales. Source: eMarketer, Jan 2021
For example, BOPIS became a massive trend in 2020, with orders growing 107% in 2020 and projected to grow an additional 15% in 2021 and 21% in 2022 — signs that consumers will now expect this option long term.
Anticipating the next change
Marketers must also be ready for what comes next. And retail media is one of the more recent massive trends in the category, Rogers said. “Enabling a retail media framework will create new growth opportunities for a business as a media owner. Retail media will also create new value exchanges with their merchants and enable those merchants to engage the retailer’s customer base and drive revenue growth.”
To respond quickly to changes and opportunities like retail media, retailers need to build the necessary MarTech and AdTech architecture. “You need a customer-first framework that enables you to create value with the consumer in exchange for their first-party data. Creating a value exchange will enable retailers to capitalize on the opportunities present as a media owner and drive value for the organization through better targeting, measurement and personalization,” he said.
Developing an omnichannel strategy
As marketers adjust to the evolving shopping world, they must change their mindsets to focus on audience strategies — looking at consumers, regardless of where they shop. Marketers must make the most of first-party data and sales data, and not just web or mobile data. They must break down silos and create alliances within the marketing department and other teams in the organization. This will help marketers have better access to data and be more agile.
Changes will continue, but staying customer-centric and channel-agnostic, integrating technologies, and leveraging data and partnerships in the organizations to become omnichannel will prepare retailers for whatever comes next.