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Holiday Sales Demonstrated Necessity of Omnichannel Strategies

February 23, 2018


Amid all the talk of a retail apocalypse, some retailers demonstrated they still have life. Khadeeja Safdar (@khadeeja_safdar) and Imani Moise (@MoiseNoise) report, “Retailers had their best holiday sales since 2011, according to Mastercard SpendingPulse, which tracks payments in stores and online.”[1] One of the primary reasons retailers are doing better is improved omnichannel operations. Safdar and Moise report Target is a good example of how omnichannel operations have strengthened their bottom line. They explain:

“Sales at [Target] stores open at least a year rose 3.4% during November and December, compared with a 1.3% decline in the same period last year when the chain struggled to attract shoppers to its stores and compete with Amazon.com Inc. … Like other big-box chains, Target has been struggling to compete with Amazon, which is benefiting from the movement of consumer shopping online. After a weak holiday performance last year, the Minneapolis-based company embarked on a multibillion-dollar spending plan to improve its stores and digital capabilities. … Chief Executive Brian Cornell said physical stores played an important part of fulfilling digital orders during the holiday season.”

“Many bricks and mortar retailers had a torrid 2017,” writes Steve Halford, Group Managing Director of Crystal, “as the disruptive effects of online technology are creating new channels and new ways to buy that are turning traditional trading on its head.”[2] He adds, “This isn’t a simple battle between online and bricks and mortar. The challenge is combining the two into a seamless, slick, omnichannel experience that matches how people are getting used to buying and how they like to buy. The first, crucially important part of the customer journey takes place mostly online, before formal contact is made. The challenge is in coping seamlessly with buying anytime, from anywhere, with any device. And in managing customers’ different information needs.”


Omnichannel strategies begin with mobile


As Halford notes, a good omnichannel strategy means your customers can access your products anytime, from anywhere, with any device. However, the most important device for today’s consumers is the smartphone. Jason Spero, Vice President for Global Performance Solutions at Google, reports, “People today have 2X more interactions with brands on mobile than anywhere else — that includes TV, in-store, you name it. These mobile moments matter. Every time a consumer has an awesome experience with a brand, it raises the bar for what she expects from everyone else. But when that bar isn’t met, it can have serious effects on your brand.”[3] Matt Lawson, Director of Marketing, Performance Ads at Google, reports, “Eighty-two percent of shoppers say they consult their phones on purchases they’re about to make in a store.”[4] Google analysts also conclude, “Not having a mobile optimized website is like closing your store one day a week.”[5] UPS analysts suggest 9 ways customer channel preferences are changing.[6] They are:


1. Most avid online shoppers buy online, even when they research elsewhere.
2. Shopping on international online sites is growing.
3. Avid online buyers also research online.
4. The growth in mobile purchasing continues.
5. There is a widening satisfaction gap between online and brick-and-mortar.
6. Millennials are more likely to use mobile for in-store pickup.
7. Millennials are more likely to research and buy on social networks.
8. Mobile phone use in-store improves the customer experience.
9. Supply chain partners can help you adapt.


Concerning the last point, they write, “Your partners can help you identify opportunities to improve your online and mobile experiences and can help you adapt to your customers’ fast-evolving shopping behaviors. Experienced partners, such as logistics providers with strong retail expertise, have the know-how and means to guide you through enhancing your customers’ online and in-store experience by upgrading your e-commerce and omnichannel capabilities.” If you’re still not convinced about the importance of having an omnichannel strategy, Lawson observes, “According to MasterCard, customers who shop both online and off with a specific retailer buy 250% more on average. Macy’s discovered that its omnichannel shoppers are 8X more valuable than those who shop in a single channel.”


Improving omnichannel operations


UPS analysts suggest four ways you can improve your omnichannel strategy. [7] They are:


1. Optimize Mobile Experiences. “Mobile is the connective tissue between online shopping and physical stores. Shoppers want to easily access data about what’s in stock, for example, or what promotions a nearby store is running.”


2. Experiment with New Technology. “With so many retail innovations coming down the pike, it’s a great time to turn your stores into living laboratories where you can test out new technology and figure out what works best. It’s a plus for customers, too.”


3. Adopt a Ship-to-Store Policy. “One increasingly popular option is the ability for online shoppers to ship a purchase to a nearby brick-and-mortar location. … Businesses stand to benefit from this offering. Two in five shoppers have made an additional purchase during an in-store pickup.”


4. Provide Full Inventory Visibility. “Omnichannel is all about access. According to a UPS white paper on omnichannel retail trends, 35 percent of shoppers said the ability to access inventory across every retail channel was ‘always’ a factor that caused them to make a purchase.”


Ronald van Loon (@Ronald_vanLoon), a business consultant, asserts a good omnichannel strategy begins with data and omnichannel retailers are data-driven enterprises.[9] He explains, “From the evolution of ecommerce to the increasing use of social media and smartphones, the retail environment has gone through a multitude of changes over the past few years. This has led retailers to adopt an omni-channel approach that can enable customers to interact with and buy a product from a retailer at any time via any platform. However, in order to leverage the profit maximization potential of omni-channel strategy, businesses must utilize the data available to them in the right manner.” As President/CEO of a cognitive computing firm, you won’t be surprised when I suggest leveraging cognitive technologies to get the most out of your data.


It’s not too late to get started


f you still find yourself at the omnichannel starting gate, you’re not alone. Zaius analysts report, “86% of e-commerce marketers have not executed a full omnichannel marketing strategy for their brand. … That’s shocking, since so many e-commerce leaders are constantly talking about the importance of coordinating marketing across channels to engage buyers. It seems everyone is talking about it, but no one is really doing it.”[8] The facts make it pretty clear that omnichannel operations are the way of the future. Greg Maloney (@greg_maloney), President and CEO of JLL’s Americas Retail business, believes omnichannel is becoming so dominant in the future we will no longer differentiate between retailing and omnichannel retailing.[9] He explains, “There are plenty of retailers that are connecting the dots to build a seamless supply chain. But even the best have not fully integrated across their distribution, e-commerce, and store networks. … So, are we ready to finally retire the ‘omnichannel’ crutch-phrase? Unfortunately, not quite yet as solutions are still being worked through and retailers are finally spending on upgrading their physical infrastructures once again. But I can see it, it’s not that far off I promise — the day when we can back to just talking about ‘retailing’ again.” If you haven’t developed an omnichannel strategy, you should start now. The retail apocalypse will only victimize retailers failing to adapt.


[1] Khadeeja Safdar and Imani Moise, “Target Posts Strong Holiday Sales Gains,” The Wall Street Journal, 9 January 2018.
[2] Steve Halford, “2018: The Year of Omnichannel,” Builders’ Merchants News, 19 January 2018.
[3] Jason Spero, “How to make every mobile moment a brand-builder,” Think with Google, September 2017.
[4] Matt Lawson, “5 Ways Consumers Connect to Stores With Mobile Shopping,” Think with Google, February 2016.
[5] “50 Must-Know Mobile Commerce Statistics and Facts,” Mobify.
[6] UPS, “9 Ways Retail Channel Preferences Are Changing—and How to Adapt,” The Wall Street Journal, 7 September 2017.
[7] UPS, “4 Tips for Creating a Valuable Omnichannel Customer Experience,” The Wall Street Journal, 20 April 2017.
[8] Zaius, “Omnichannel Study: Now’s Your Chance to Get Ahead of the Competition for the Holidays,” MarketingProfs, 24 October 2017.
[9] Ronald van Loon, “How to Become an Omni-Channel Data-Driven Retailer,” Datafloq, 18 April 2017.
[10] Greg Maloney, “Can We Stop Saying Omnichannel And Just Say Retailing?Forbes, 28 August 2017.

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