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Omnichannel: an opportunity and a challenge for retailers

  • 30 November 2012
  • Written by 
  • Published in Cornered!

Omnichannel is the new buzzword in retailing and it could present huge opportunities for traditional bricks and mortar retailers, but reaping the rewards won't be easy, or cheap.

Omnichannel marketing is a concept quite distinct from multichannel marketing from which it has evolved. Successful implementation of an omnichannel marketing strategy might just mean the difference between survival and failure for old world retailers in the online world.

So what's the difference between multichannel and omnichannel? As usual there are multiple views and interpretations but the consensus seems to be that multichannel simply means a company having a number of different means by which customers can discover and purchase its products and services: high street stores, social media, web and mobile apps for example, not necessarily with any integration between these. An omnichannel marketing strategy on the other hand embraces all available channels in an integrated fashion.

The subject of omnichannel marketing was explored at length by a panel of executives from a diverse range of companies serving the retail industry at a roundtable hosted by research and consultancy firm Frost & Sullivan.

David Tyc, sales and marketing manager, Australia for Island Pacific, a global provider of retail merchandising and store operations software, summed up omnichannel by saying: "We see omnichannel as a very customer centric model where retail channels are amalgamated into one consistent path to purchase for the consumer. That path could include web smartphones, tablet, PCs and social media. This allows the retailer to understand their customer a lot more and develop tighter and much more beneficial solutions.

"An omnichannel solution also promotes the brand as the focal point through the customer's entire path to purchase. The shopping experience for the consumer should be channel agnostic and driven by a seamless and easily accessible process."

He added: "The omnichannel path to purchase usually starts with a discovery phase and the recent Nielsen PayPal mobile study found that 95 percent of Australians use some sort of online media as part of their information gathering process. Social media is a massive influencer of customer shopping behaviour and must form part of a retailers omnichannel strategy."


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According to Tyc, "Five or ten years ago there was a distinct difference between online and physical retailers. Today, all the applications and technologies are starting to come together to produce a shopping environment that can be both virtual and traditional bricks and mortar."

Chair of the meeting, F&S senior research manager, Australia & New Zealand Phil Harpur, said that online shoppers were already making extensive use of social media and major retailers were starting to implement omnichannel marketing strategies in a bid to counter the move to online shopping.

"A recent survey we did of 1000 online shoppers showed that 29 percent now follow stores on Facebook...We are seeing retailers fight back with whole of life strategies aimed at maximising floor space, increasing margins and delivering an omnichannel customer experience."

He added: "It does not matter whether you have a physical store or exist on the Internet, customers want a seamless experience using their preferred means.

"In the past the retail sector has been pretty cautious towards technology investment but now more and more companies are seeing the need to implement more sophisticated systems.

"This is why we are seeing pure play virtual retailers like Amazon opening physical stores. It doesn't matter whether you exist on the Internet or in a physical shopping centre, customers expect a convenient, seamless retail experience using whatever their preferred channel or mix of channels might be."

This however is only omnichannel 101. True omnichannel marketing exploits the full the potential of technology to target customers based on their location and preferences.

Econsultancy.com is a 100,000 member community "where the world's digital marketing and ecommerce professionals meet to sharpen their strategy, source suppliers, get quick answers, compare notes, help each other out and discover how to do everything better online."


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Last week it posted on its web site a blog headed "What is omnichannel retailing and how can it improve the in-store experience?" It featured an interview with Adobe's VP of enterprise marketing Kevin Cochrane "to find out how his company is helping businesses define their omnichannel strategies."

Adobe has rebranded its digital marketing software 'Adobe Marketing Cloud'. According to Cochrane, "It allows you to manage consistent personalised experiences that span numerous channels, which is everything from store displays, to digital signage, to your website and Facebook presence."

The example he gave was illuminating. "One of our most exciting customers is a casino chain in Las Vegas that is using one system to manage a digital loyalty scheme across its 19 properties. It has outfitted its resorts with new Cisco Wi-Fi routers that can pinpoint a person's location to within a foot. And every billboard and menu has been replaced with digital signage powered by Mac Minis.

"The loyalty card sits within an app on your smartphone, which allows the casinos to broadcast personalised offers and rewards based on the customer's demographic profile.

"So for example, if Celine Dion's concert didn't sell out and there are five seats available, the casino will locate everyone who fits the target demographic profile and broadcast them a message on all the digital signs."

And true omnichannel works both ways: taking information from the customer base. Cochrane said: "There's an individual Photoshop user in Japan who influenced around $98,000 of sales for us. We know that guy; because he tweets about us and writes things on his Facebook page that have a direct correlation to software purchased on Adobe.com."

The upside of all this is that any move by Australian retailers to fully exploit omnichannel marketing will create significant demand for hardware, software, consultancy and systems integration expertise.

The downside is that a retail sector that is already struggling might be unwilling or unable to make the necessary investments and will fall further behind as online retailing continues to surge ahead.

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