The advantages of an omnichannel sales and marketing strategy

Physical retail: no longer just a means to an end.

When the pandemic brought high streets around the world to a standstill, many predicted the demise of retail. But the true picture is however more nuanced. What we are seeing at the moment is that brands are slowly but surely changing the role of their sales retail channel within their overall strategy. Meanwhile, previously online-only brands are finding more and more creative strategies to lure shoppers into their recently opened stores.

The driving force behind this shift is the pressure of inflation. The current economic climate triggers that consumers are reducing their spending on non-essential items, but also that buyers expect more from the overall shopping experience. According to EY research, the modern consumer is looking for a shopping experience that offers a little sense of escapism.[1] The brands that can deliver on this are expected to win big with their audiences.

Let’s take a step back , before we get into the details, and examine the origin of this shift in consumer expectations. Prior to the internet, brands’ marketing funnels had only one main goal: To get customers through the doors of their stores. It didn’t matter what methods were used – whether it was coupons or TV advertising – they knew that they needed to do to get people in favor of their product because once shoppers were in their stores, a whole new level of engagement would kick in. People could test and experience the product in a comfortable environment and in case of any questions, a trained salesperson could help and work on cross or upselling.

Today, the picture is very different. With the explosive rise of e-commerce – without a doubt spurred on by the impact of the pandemic – more and more brands started questioning the added value of stores. This led to ‘online-only’ becoming an increasingly large portion of the retail landscape, with 64% of consumers regularly buying products directly from brands in 2022.[2] with that in mind: What role should physical retail still play in a brand’s channel mix? The truth is that the role of stores has changed considerably. Instead of being the endpoint of the sales funnel, their role has shifted to that of an important touchpoint. It is therefore of the highest importance to understand how brands can optimally use this knowledge to their advantage

^{[1] Rogers, K. (2022) Future consumer index: Moving out of brands’ reach, EY. Available at: https://www.ey.com/en_nl/consumer-products-retail/future-consumer-index-moving-out-of-brands-reach
[2] Yltävä, L. (2023) D2C e-commerce, Statista. Available at: https://www.statista.com/topic... (Accessed: 09 November 2023).}

The truth is that the role of stores has changed considerably. Instead of being the endpoint of the sales funnel, their role has shifted to that of an important touchpoint. It is therefore of the highest importance to understand how brands can optimally use this knowledge to their advantage.

What is a touchpoint?

In marketing terms, a touchpoint is any situation where the customer has an interaction with your brand. It can be an online video, an advert at a bus stop or an exclusive branded event. The function of each touchpoint is to increase brand affinity by promoting or reinforcing a positive impression of your brand. So, what makes a touchpoint effective? The simple answer is that it must convey your brand’s personality or ‘world’ in a way that makes customers want to know more. This can be the promise of better value for the right price, a unique experience or less of a burden for the consumer.. Ideally, each touchpoint fits seamlessly into an overall ‘brand narrative’.

The ultimate goal, of course, is to encourage potential customers from product awareness to a purchase. These days it takes a lot more than just an eye-catching advertising campaign to get customers interested. In fact, according to research carried out by JCDecaux and Clear Channel, consumer distrust of brands is at an all-time high.[1] That means it’s more important than ever to make the right impression at every touchpoint. Therefore an online only strategy may not be the right approach.

^{[1] Glenday, J. (2021) Just over a third of Consumers Trust brands, say Clear Channel and JCDecaux, The Drum. Available at: https://www.thedrum.com/news/2021/03/24/just-over-third-consumers-trust-brands-say-clear-channel-and-jcdecaux}

Digital touchpoints: Personalised or invasive?

Online advertising has certainly come a long way since the days of constant and annoying pop-up ads. Thanks to the growing sophistication of tracking technology, advertisers can now target their campaigns to highly specific audience groups based on a wide number of factors. These include key elements like location, interests and purchase history. It’s also possible to create so-called addressable content, which personalises the advertising experience to make it even more engaging. This range of tools is great for all but specifically emerging brands, allowing them to significantly expand their reach.

However, the backlash against online advertising is real. Consumers’ main concern is that they feel like their privacy is being invaded by advertisers. Nearly half of those surveyed in a Merkle report believe that brands now know too much about them.[1] Meanwhile, 70% of fashion shoppers surveyed by retail software provider Bazaarvoice prefer a hybrid shopping experience that combines the physical and the digital.[2] Meanwhile, the cost of online advertising has skyrocketed[3] and is increasingly eating into brands’ profit margins.

^{[1] 2022 consumer experience sentiment report (2022) Merkle. Available at: https://www.merkle.com/en/merkle-now/ebooks/2022-consumer-experience-sentiment-report.html
[2] Halliday, S. (2022) Online meets in-store as 70% of consumers prefer omnichannel shopping - report, FashionNetwork.com. Available at: https://ww.fashionnetwork.com/news/Online-meets-in-store-as-70-of-consumers-prefer-omnichannel-shopping-report,1445554.html
[3] Global search ads CPC 2022 (2023) Statista. Available at: https://www.statista.com/statistics/873639/search-advertising-cpc/}

The benefits of a physical footprint

This highlights one of the key limitations of a digital-only strategy. While digital touchpoints offer exceptional flexibility and an often frictionless user interface, this ease of use comes at a significant cost: the customer’s buying and product experience. Browsing on a laptop or smartphone can never replace the experience of trying on clothes in person or taking a well-earned break in an in-store café.

Taking the US direct-to-consumer eyewear brand Warby Parker as an example. Founded as a digital-native direct-to-consumer company, the brand has now made physical stores a key part of its growth strategy. The company notes that its stores “provide fun, quirky and stylized environments in which to shop alongside style and fit experts”. It says that adopting an omnichannel approach has “deepened customer relationships and strengthened brand loyalty”. [1] That’s because stores enable a much more personal customer experience.

^{[1] Warby Parker Annual Report 2022 (2023) Warby Parker. Available at: https://investors.warbyparker.com/financials/annual-reports/default.aspx}

Investing in long-term customer relationships

In-store shopping may be declining in the face of e-commerce’s continued popularity, but that doesn’t mean fashion and lifestyle brands should ignore the benefits of an omnichannel strategy. Few investments offer as many benefits in terms of brand building and customer loyalty as a well-designed physical location does. However, it’s important to remember that getting shoppers through the doors of a physical store is no longer the ultimate goal. As we’ve seen, stores are just one – however crucial – touchpoint in the overall customer journey. So, however you choose to develop your channel strategy, remember to keep the customer at the very heart of it.

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