Omnichannel: the indispensable superpower of post-COVID Retail

01 July 2021Reading time: 6 min.

This is the fourth and final in-depth analysis on post-COVID Retail by Gianluca Diegoli. Let’s clarify the role of omnichannel marketing for the sector’s future, plus the ways of using an integrated data-driven system and its benefits.

Are we all going to become retailers? 

This is the question that comes to mind when summing up the in-depth analyses and reflections from the previous posts (1). Every producer, wholesaler, or importer that had no contact (if nothing else — commercial) with the so-called “final consumers” before the pandemic is now wondering: are direct, online sales the key for surviving and securing my future? In the age of data, any direct channel brings, besides interesting margins, a better knowledge about your consumers. It also guides you toward more data-driven business strategies. 

The 3 digital channel barriers to success

By its very nature, online marketing has no barriers to entry. Economic theory, however, indicates that when there are no barriers to entry, the barriers to success are much harder to overcome. Today, these barriers consist mainly of the P of Place, in addition to the traditional P’s of Product and Price

The P of Place used to refer to the best possible distribution of a product or service according to the traditional theory. Today, it mainly spins around a perceived experience (the sum of friction, modality, and message). In this new scenario, the best product distribution is achieved when the user is offered a tailor-made experience. The “fitness” of this experience depends on its characteristics, but also on the specific timing and situation in which it occurs. Customers compare shopping experiences offered by sector competitors. However, nowadays they confront them even more with their own best shopping experience. Such a high benchmark makes the Place a very strict criterion and selection barrier.

Omnichannel as a tool to serve and support the customer

Omnichannel—as we’ve said in previous articles—belongs to those beautiful discoveries (and small superpowers) that the customer is no longer willing to give up. We often think of omnichannel marketing as a complex project: this isn’t always the case. 

Facilitating the life of our customers can range from small unstructured moments (a regular customer receives a newsletter/message listing the products of the week—a sort of ante litteram click and collect—and emails or texts the farmer: “Prepare a crate of strawberries. I’ll pass by in an hour”) to hyper-structured moments (“You can also return the item to the nearest store at Via Menotti, 323. Or you can make an appointment with our fashion designer for advice on a different size.”) These solutions pleasantly surprise the user. They arise from sophisticated tracking systems that are integrated into the entire company’s logistical system.

In any case, a customer-centered approach means making clients’ post-COVID life easier. Digital and physical spaces, free time, and work all interlock fluidly. This adds to intermittent work mobility and lowers the customer’s tolerance for inefficiency associated with the old “silo” models and unclear and irrelevant communications. We’ve gotten used to being “served” without wasting time.

Are advanced resources and systems required for omnichannel marketing? Debunking the myth

Of course, a more structured and complex organization with a more relevant customer base should shift from a DIY solution such as that of the farmer. It needs more scalable and manageable solutions without renouncing the two pillars of personalization and relevance. The goal is to facilitate every single step in the journey of a customer who is increasingly able (and enthusiastic) to manage communications and transactions remotely. Furthermore, more alternatives are available to the customer. This calls for creating new loyalty models. These may include profiled messaging, periodic offers, or even tailor-made subscription systems.

The individual customer’s (unique) data, shared between company departments, must be the pillar for the entire marketing and sales system. Today, those who own customer data can choose the distribution model. This must be invented, modeled, and customized according to the public’s preferences. To get back to the simple opening metaphor, the farmer’s counter is no longer the center of the model. If the farmer notices that many people prefer to collect their crate, then he/she could open a distribution point in the city or make home delivering, just to please everyone. However, this can only happen if the farmer knows his/her customers well—in fact, his/her customer base is limited. Now, even a company with tens of thousands of customers can adopt the same strategy if adequately supported by a marketing automation and profiling system. Data will provide preferences. Preferences will guide business and delivery models. Messaging will trigger transactions. 

How do you create an omnichannel environment?

4 different environments for a single system

The creation of an omnichannel environment requires systematizing four different environments:

  • social and digital acquisition campaigns in general;
  • behavior on the web and apps;
  • in-store behavior and geolocation, and
  • purchase preferences (from both the shopping history and email/SMS surveys).

Segmenting the circumstances and ways of shopping

In order to offer segmented and relevant solutions, we should also know the timing and ways of shopping that are most supportive for the customers:

  • traditional in-store purchase;
  • in-store collection;
  • home delivery;
  • delivery locker or pick-up point, and
  • periodic subscription—which may be predefined, changeable, algorithm-driven, etc.

Except for special, niche cases, no model fits all custumers—let alone at any time of the year or their life. Useful data availability and direct communication allow for offering the best solution to the majority of our target. 

Different dialogue channels for different touchpoints and needs

Last, we need to find the appropriate channel for reaching and initiating a conversation with the customer at every stage of the journey. Often, the “oldie” SMS can be the fastest solution (its delivery times are around 19 seconds according to MailUp SMS Observatory’s data). Concise and effective, the SMS reaches the user at the right time and with the right message (“Your crate is ready!” is simple yet effective, scalable, and potentially one-to-one). Also, people appreciate it a lot (91% of consumers were interested in receiving SMS brand communications in 2020). 

Indeed, an integrated system might also highlight that a channel may not be right for all circumstances. Therefore, let’s identify which tools are ideal for each moment: a product list is easier to read in an e-mail message, while an SMS is more useful for simple, real-time communications.

Furthermore, data-driven messaging and automation systems will allow for anticipating the customer journey based on the aforementioned behavioral data. Almost 50% of Italian companies plan to rely on a Marketing Automation platform to leap toward the omnichannel reality and achieve such a forecast.

Possibly, the farmer of the future (i.e., metaphors aside, the retailer) will suggest the ideal crate composition and its delivery based on my past behavior.

Coming full circle

An answer to the initial question about whether to sell directly or not could, therefore, be found inside another question: “Are we able (do we have data, the skills, and the platforms) to facilitate people’s lives (and make them buy our product) in different ways?” “And can we (by way of a direct and one-to-one message) steer them toward the best alternatives in choosing not just the product but also the mode of use?” 

Omnichannel efficiency will bring a significant competitive advantage. Italian companies are well aware of this: a good 80% of companies consider customized omnichannel strategies as the ultimate competition tool. In many cases, also referring to external platforms, marketplaces, and third-party services for designing an optimal journey may complete the puzzle of experience offers (as supermarkets without an online shop do by outsourcing their delivery service). In other instances, it’ll be a matter of completely rethinking the store’s function (e.g. turning the warehouse into an atelier).

In any case, the DNA of every major retailer’s business model (no doubt about this) will be the ability to know people’s tastes and behaviors, propose purchasing solutions, and communicate with current and potential customers in a relevant and direct way. As mentioned, those who own the customers can model products, distribution, promotion, and prices around them. On the contrary, those who focus on a single distribution model, whether online or offline, will have a limited view. The missing piece of data will cast a shadow on their insights and offer of experiences. All these gaps may fatally affect the future of every retailer.

The focus on post-COVID Retail ends with this last post. However, Gianluca will keep offering analyses every Friday through his [mini]marketing newsletter. Feel free to join! 

Don’t miss the next MailUp focuses, though! Subscribe to our monthly newsletter and stay up to date on digital, email, and SMS marketing news. 

Notes

  1. Digitalization, omnichannel strategy, and putting the customer at the center drive the post-COVID
  2. Tapping into a new audience and rebuilding the consumer journey: the future of Retail starts here
  3. The role of messaging in Retail strategies: the leitmotif of an increasingly customer-centric purchase path

This article was written by

Gianluca Diegoli

Gianluca Diegoli

Digital marketing consultant for 10 years, professor of marketing and multichannel strategy at the IULM University of Milan, and co-founder of Digital Update, Italy's first digital training school, Gianluca Diegoli is one of the best-known digital strategy experts in Italian marketing. He deals with strategic marketing consultancy, digital transformation, e-commerce, and omnichannel strategy.

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