Omnichannel

Omnichannel.

Let's go through,

👉 what is omnichannel,

👉 how it works

👉 and whether it makes sense to you.

My perspective on omnichannel was significantly influenced by the analyst Kevin Hillstrom and I draw from his blog part of the information for this newsletter. Read what he writes and make a picture yourself. The guy is very pragmatic and focused on numbers.

Let's start with what omnichannel is. Those definitions are different.

Set up marketing, business and customer support to support Seamless and consistent customer experience across all brand touchpoints. You're delivering the right content to people, through the right channels, at the right moment. Your main goal is a great customer experience (CX).

Sounds good to me. In fact, there is nothing to be opposed to! It doesn't matter if the customer comes to the store or to the website... they should always get what they need. And he should feel good.

The premise is as follows: “If we set up our distribution channels so that we are always within reach of the customer, and they have had a great shopping experience anywhere, they will buy more with us. “

I'll try to rephrase omnichannel into human... What matters to the customer is how they feel about the purchase. Great customer experience in the physical store as well as on the web. If we tweak it, we make more.

👉 From the point of view of the brand, this sounds logical. We do a good job today, so if people feel great with us, they will shop with us even more.

👉 From the point of view of suppliers, this sounds logical. When we sell this implementation project to personalize and connect everything to everything to the brand, we make a profit.

👉 From the point of view of large platforms, this sounds logical. When a brand spends on Google, Facebook, and TikTok, we make money.

Win. Win. Win!

Choosing an omnichannel approach is a strategic decision.

Does it mean that

➡️ the decision is challenging,

➡️ you can decide in different ways

➡️ and those ways make sense!

What can it look like?

1 ️ ⃣ We will focus on synchronization of warehouses, customer information in one place, maximum degree of personalization, unified visuals, a mass of content for each stage of the shopping cycle across all marketing and sales channels. We're going to involve all our partners in this. We all know that customer experience is crucial.

2 ️ ⃣ We will focus on R&D of the products we produce. It's about how we make them. We will increase the speed of new product development, the breadth of the offer, the quality of the offer,... We all know that the product is essential.

3 ️ ⃣ We will focus on communication and brand building. We will implement ongoing marketing campaigns that will push other competitors out of the minds and hearts of our customers. We all know that acquisition is essential.

4 ️ ⃣ We will focus on our own efficiency and earn on cost savings. We all know that margin is crucial.

Or we put that energy, and especially the money, somewhere else.

Now you think... that's not a choice! I have to put money into everything! What do you prefer? Do you split the money 30/30/30/10? Or 80/10/5/5? Or completely different? Because your competitors will also somehow do it and then together you spin the wheels of capitalism. 😈

And the customer decides.

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Different strategies, different results

Let's take a look at the world of US fast fashion. They have brick-and-mortar stores. They have e-shops. They spin a bunch of money in B2C. They have moved from the world of catalogs sent by mail to the world of e-commerce and thus omnichannel. And we can look back at what happened there. Let's take two contradictory examples.

👉 Both brands do customer research.

👉 Both sharpen brand and communication.

👉 Both work with data.

Each made different strategic decisions regarding the omnichannel approach.

Macy's

Macy's adopted an omnichannel strategy at the beginning of the last decade. They linked customer databases. They introduced a bunch of tools on emailing, retargeting, loyalty program. Personalized to the marrow. They literally say of themselves that they are America's Omnichannel Store. They started doing it around 2010. So did GAP and a bunch of other brands. Let's give people a great experience and they will come.

The firm's value is just over $4 billion. Read more about their strategy.

Zara

Zara has changed its approach to the production of products. A normal fast fashion retailer changes the offer 6-20x per year. Zara 40-100x per year. Twice a week new products. So customers began to come to their stores and to the site, because they find something new there every time. So did H&M, Forever 21 and others. Let's give people news and they will come.

Zara is a purely transactional business, no personalisation, no loyalty cards. You can only see the status of orders in the e-shop account. How's Zara doing? It is not separately listed on the stock exchange, according to available information it accounts for about 70% of the turnover of the Inditex holding. So he's worth a rough estimate of $100 billion. Saeed Al Hasan nicely commented their strategy.

The basic thesis of omnichannel is that Omnichannel customers buy much more than customers who use only one channel. This should be reflected in the numbers.

Macy's and Zara are variously large companies. On the Macy's side, we're seeing more of a stagnation for the last 15 years. On the Zara side, we see 15 years of rather growth. Oh, right. They are stocks. Oh, right. It can't be taken that way. Chmm.

Does that mean omnichannel never works? The No.

Does that mean it always works? The No.

Does that mean you should avoid it... hence its successor called Customer Experience (CX)? The No.

Does this mean that you should really understand the customer? Ah yes. That's what both brands do! Everyone decided to react differently.

Two catastrophes from the field of fast fashion do not show the reality of the market. Especially not your market. Even Kevin Hillstrom says that omnichannel sometimes works.

Do you know why it should work for you?

👉 Orient yourself in the situation through strategic frameworks.

👉 Do customer research.

👉 Verify your decisions.

When you see something working, stick to it. As long as it works.

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For thought

Apple doesn't deal much with social networking. It has a minimum of physical advertising. It is the most valuable company in the world.

Amazon doesn't have brick-and-mortar stores when we're not counting food. It crushes competitors all over the world.

The customer decides. Giant tech project is bad strategic move almost always. First, verify its relevance to customers.

Customers who shop more from you are likely to encounter more brand touchpoints. This is not the same that they encounter more brand touchpoints AND THEREFORE they buy more from you. Such a logical pun.

Copying the competition is no guarantee of success. If I were to copy anyone in fast fashion today, it would be Zara and not Macy's. Smart, right? You only see this in retrospect. A bunch of companies copied Macy's. Copying is a resignation to strategy.

“Amount of energy needed to refute bullcrap is an order of magnitude bigger than that needed to produce it.
‍— Brandolini's Law‍

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Reading for the weekend

The New Rules of Marketing Technology & Operations

Article from 2018. Still usable for me. Principles of using martech tools.