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Taking a portfolio approach to omnichannel growth

Omnichannel is omnipresent in conversations throughout our industry. I heard the term — and the angst, confusion, tests and even some initial successes around it — again and again at NRF’s 2014 BIG Show. In many cases, delivering on omnichannel is a tall order, requiring significant soul-searching for retailers in terms of what it means to them and their customers, often followed by equally significant investments in fundamental areas such as inventory management and customer relationship management systems. Couple all that with organizational and cultural changes needed to support the company’s omnichannel mandate, and the task can feel positively overwhelming.  

One important area retailers should tackle in their omnichannel journey: rethinking marketing strategies and tactics, and how that can cohesively grow sales for the company as a whole rather than channel by channel. As the Shop.org Think Tank group recently concluded, retailers today need to take a portfolio approach to their marketing strategies and tactics to grow sales across the entire enterprise. Online marketing vehicles by no means only drive online sales — they can drive customers to the store just as traditional vehicles such as catalogs can drive customers to the website. It no longer makes sense for retailers to keep separate traditional and digital marketing strategies, tactics and budgets as if each supported separate objectives, addressed separate customers and drove sales in entirely separate venues.   

Furthermore, the Think Tank concluded, retailers who don’t look at their marketing strategies and objectives holistically may be under-investing in online marketing because they don’t understand the very real connection between digital tools such as search or email and traffic and sales that happen in the store or by phone. We know from Forrester Research that almost half of total U.S. retail sales are already influenced by the Web in some way — no shock to the legions of retailers who have, for instance, seen customers come into their stores with coupons on their smartphones or in email printouts. But unless retailers harness and invest in each marketing vehicle, they’re leaving significant money on the table.  

How should retailers start on the path of an omnichannel marketing approach? Lots of testing, including areas such as:  

  • Email marketing. Retailers can create a model of how email impacts store sales using segment tests or a CRM analysis of whether store shoppers who have subscribed to the email list spend more than in-store shoppers who haven’t.  
  • Search marketing. By market testing of paid search spending, retailers can start to get a sense of how online marketing impacts store traffic and sales.  

The bottom line is this: If companies continue to follow the marketing approach they always have, their total marketing efforts and investments ultimately will be only partially effective. That can leave traffic, sales and long-term customer relationships ripe for the picking by savvier online and multichannel competitors. The Think Tank article, “Balancing Your Marketing Portfolio in an Omnichannel World to Grow Sales Across the Enterprise,” on which this column is based offers more detail and additional ideas. It can be accessed by clicking here.


Vicki Cantrell is executive director of Shop.org, the digital division of the National Retail Federation.

 

 

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