Square Guide

Omnichannel Marketing: The Ultimate Guide for Retailers

An omnichannel marketing strategy is one that provides a fluid, connected experience across all the touchpoints a customer has with your company.

Table of contents

Multichannel Marketing vs. Omnichannel: Is There a Difference?
Omnichannel Retail Growth
What Channels Are Included in Omnichannel?
How to Create Your Omnichannel Marketing Strategy
Examples of Omnichannel User Experience

Intro

Retailers that do omnichannel marketing well create a seamless brand ecosystem that leverages in-store, mobile, and desktop channels to further engage customers and nurture them along their buying journey.

man working on computer

Deep Dive

Multichannel marketing vs. omnichannel: Is there a difference?

Many people use multichannel marketing and omnichannel marketing interchangeably. But they’re actually quite different.

At its most basic level, multichannel marketing is a company’s distribution strategy — it describes the various avenues used to push messages out to customers. One way to think of multichannel marketing is as avenues moving from the inside outward to reach customers. For example, a brand markets its holiday campaign to the world via TV ads, social media posts, email newsletters, direct mail, and in-store promotions, all in parallel.

Omnichannel marketing is all about connecting the dots between the channels. Think of it as something more like a web — bringing everything together — as opposed to pushing everything outward. It keeps customers moving around within the brand ecosystem, with each channel working in harmony to nurture more sales and engagement.

An omnichannel marketing strategy may include things like cross-channel loyalty programs, in-store pickup, smartphone apps to compare prices or download coupons, interactive in-store digital lookbooks, or price checkers on tablets throughout the store.

Omnichannel retail is growing

Consumers are increasingly connected — and they expect convenience.

They channel-hop from online stores to physical stores and social media; they use smartphones and tablets, apps, and other avenues. They look up product reviews on their mobile devices while they’re in the store or on their desktops at home. They extensively compare prices amongst your competitors. They check social media channels to see if there are any discounts, or to see what others are saying about your brand. They want shipping flexibility — the option to choose whether they can get something delivered or pick it up at your store that same day.

And most important, they want the experience to be delightful, seamless, and personalized to their preferences.

BigCommerce, an e-commerce platform (that also integrates with Square), noted in its 2018 report on omnichannel buying that demographics may play a role in your customers’ expectations. For example, digital native users (essentially those 37 and younger) seek out omnichannel retailing more than other age groups. However, they ultimately concluded that it doesn’t matter: “Though respondents vary by age, income and region, one thing is for certain: omnichannel retail, or the process of selling across multiple physical and digital channels, is the new reality retailers must face. Merchants need to take advantage of that growing opportunity or risk being left behind.”

Savvy businesses are taking note and starting to invest heavily in omnichannel retail, especially in digital integrations. A JDA study found that 57 percent of CEOs ranked creating new customer experiences as their top spending initiative to improve business operations.

The good news is that investing in omnichannel retail pays off big time. Through data and insights about consumer behavior across channels, companies can paint a comprehensive picture of their customers’ buying patterns. Businesses can gain a better, real-time understanding of their customers, which allows them to target promotional content and engagement campaigns toward the immediate, specific needs of each channel.

As a result, the return on investment (ROI) in sales is significant. A study by the Harvard Business Review found that omnichannel customers spend an average of four percent more every time they shop in the store and ten percent more online than single-channel customers.

What’s more, with each additional sales channel they used (mobile, apps, desktop browsing), they spent more money. Customers who used more than four sales channels spent nine percent more in the store than customers who used just one sales channel.

Channels included in omnichannel

The term “omni” essentially means all – as in all potential and actual points of contact (channels) that consumers can use to interact with your business and products. The channels are constantly changing as technology and the way we use it changes. Overlap is also fairly common and by design (hence, the whole “seamless” thing). Here’s a quick breakdown of what the main channels currently look like in the omnichannel experience:

  • Social Media
    Social media has been a game changer in communication and commerce in a lot of ways, but particularly for independent businesses. Social provides two-way communication, along with a grip of tools to help promote goods and services – including the recent advent of direct purchasing. Instagram recently launched “Shoppable Posts” that allow customers to purchase an item directly from a post. This space will continue to evolve quickly and is worth keeping an eye on.

  • Websites
    The old school root of omnichannel selling, websites are a necessity in today’s business world. Whether someone visits your website to see if you carry a product line, to find your hours, to learn about something, or to order directly from you, it’s an essential part of the equation.

  • Apps
    Apps, or applications, are usually software downloaded to a mobile device that help you perform a specific function. Apps can provide access to a brand or a marketplace of sellers (think Groupon). Some apps are more content-based but still have the omnichannel experience in mind. For example, apps such as Shopular, that let a consumer virtually “try on” clothing and then find it at the lowest price within 20 miles of their current location offer a valuable intersection of utility and commerce.

  • Marketplaces
    Say, have you heard of Amazon? It’s this place where… just kidding. Everyone knows Amazon. Amazon is a retailer, of course, but is also a marketplace where other retailers can sell or become affiliates. Amazon recently reported that small and medium business sales through the Marketplace make up 50 percent of its sales worldwide. Other marketplaces include Ali Baba and eBay, and Facebook Marketplace is quickly growing as well.

  • Brick-and-Mortar Stores
    Shopping in real life, what a concept! Businesses with a physical presence may seem to be lagging behind our increasingly digital world and the headlines about the death of traditional retail can be frightening, but research supports that having an actual storefront can be an advantage over virtual-only companies. Some retailers that started out as online-only have embraced the opening of physical locations.

  • Immersive and Interactive Media
    While much of the immersive and interactive media is still rudimentary in comparison to where it is expected to go, it shouldn’t be dismissed. Immersive media includes things like augmented and virtual reality. Interactive media is upon us. If you’ve asked Siri, Alexa or Google for answers or recommendations, then you’ve experienced voice-interactive, artificial intelligence. As the interfaces become more refined, these technologies could be the next big disrupters. While not necessarily separate channels, it’s also helpful to be aware of the potential of geo-location-based services, predictive analytics based on big data, and curated experiences through concierge AIs.

woman working on computer

How to create your omnichannel marketing strategy

1. Gather research.

To move into omnichannel retail, you need to get a baseline understanding of how your customers interact with your business. Your first stop? Your data.

Analyze the data in your e-commerce platform to determine where people are engaging with your brand, and where they might need a little nurturing. You should look at item sales, of course, but don’t forget about other digital metrics. These include traffic numbers (as well as how it’s broken up between desktop and mobile), traffic sources, page views, bounce rate, and where the most people drop off from your checkout flow.

Also look at your in-store data. Your Square POS has robust metrics on everything from your busiest time of day to how many repeat versus one-time customers you have and even how your Facebook ads and digital loyalty program are driving in-store sales.

Qualitative research is just as important. Talk to your customers about what they like most and least about their experience with your business. What are their pain points? Would they buy more if they could pick up items in the store? How about if they could shop in the store but order online for it to be delivered? Would they be more apt to shop with you if you had a rewards program? What type? Customer surveys can help tremendously with gathering this data.

Once you have all your numbers and feedback, you’ll have a 360-degree view of your customer’s shopping behavior and preferences. You’ll know on which channels they’re engaging with your brand the most, and which they would use more if you beefed up the experience.

This is the foundation on which to build your omnichannel retail strategy. It allows you to find ways to connect the dots by inserting strategic reengagement tactics along all the touchpoints that a consumer has with your brand. This sort of data deep dive can also help you figure out which types of customers are your most valuable.

“Omnichannel gives organizations a strategic capability to get close to their customers they couldn’t have imagined 20 years ago,” says Peter Fader, the former co-director of the Wharton Customer Analytics Initiative. By using analytics, “businesses can really begin to see who the whales are — their best customers — and differentiate them from the minnows. They can see what makes the whales different and then build their business around them.”

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2. Make sure you have the basics in place.

You can’t run before you walk. A successful omnichannel retail strategy requires that you have some building blocks in place first. Make sure you’ve implementing the following:

  • Search engine optimization (SEO)
    You won’t even make a blip on people’s radars if they can’t find you. That’s why SEO, which consists of optimizing a website with keywords to achieve higher rankings in search engines, is critical. In fact, Deloitte reports that 65 percent of retailers say that SEO is an important part of their marketing strategy.

  • Search engine marketing (SEM)
    Investing in SEM — that is, purchasing online marketing like keywords — is also important. Forty-six percent of retailers rate SEM as a key piece of their marketing strategy.

  • Mobile-optimized website
    According to research by CWCS Managed Hosting, only 18 percent of people would recommend a business if they had a bad mobile shopping experience. Make sure that any e-commerce platform you choose works just as well on mobile devices as it does on desktops.

  • Targeted email campaigns
    Targeted email campaigns, which 46 percent of of e-retailers rank as critically important, are a low-lift, cost-effective way to deliver personalized, actionable content to customers.

  • Social media
    Forty-four percent of retailers say social media is vital. With its easy-to-use, advanced targeting capabilities, Facebook is especially important as a way to reach customers. It’s also a great way to create buzz.

3. Reorganize your business operations.

Omnichannel retail is all about creating an ecosystem, but many businesses are organized around a system of siloed channels. There may be one department responsible for email newsletters, another for customer service, another for events, and yet another for content marketing. If these departments aren’t working together closely, it’s going to be impossible for an omnichannel retail strategy to gel.

Make sure you include increased interaction with other channels as a key success metric for each of your departments. You might even consider reorganizing your marketing department’s reporting structure so that everyone is marching toward the same goal (rather than siloed ones).

You want your employees to constantly be looking for ways to move customers seamlessly through all the company’s engagement channels. Toward that end, PwC reports that Neiman Marcus merged its online and offline divisions so that the same team oversees merchandising, planning, and marketing for its brick-and-mortar and online stores. And some companies, like Macy’s, have even hired chief omnichannel officers.

It’s also important to think about your business’s technology environment. To support omnichannel retail, 86 percent of retail executives plan to implement a unified commerce platform over the next decade to consolidate key data, business rules, and functionality that historically have lived in different systems.

Creating a way for everyone in the company to easily get a holistic view of your business is paramount for success in omnichannel retail. By merging data and insights across channels, companies gain a better understanding of customer behavior and preferences, allowing them to produce promotional content, product recommendations, and engagement tactics targeted at their immediate needs.

4. Map out the customer journey.

Using data and insights, map out the web of how customers typically traverse all your channels.

Do people browse your products online before visiting your store? Do they visit your store and buy online? Are people more likely to buy a certain type of product online versus in stores? Do customers who read your educational content tend to buy something as a result? How likely is it that someone who signs up for your loyalty program becomes a repeat customer? How do your Facebook ads drive your in-store sales?

Drawing out all of the ways people interact with your brand and then buy your products gives you a picture of what your omnichannel ecosystem looks like right now. If you can anticipate how all of the channels are traversed, you can begin to understand customer preferences. And if you see a key section of the web faltering (or even missing), you can find a way to fill in that line.

5. Start with a few customer paths.

It’s best to start small, especially if you’re new to omnichannel retail. Pick out a few customer paths and figure out what might work to nurture them along from their starting point to a sale. McKinsey recommends creating different “customer personas.”

Say, for example, that you’ve found that there’s a cohort of people who read tons of online reviews of your products before making a purchase. You might consider adding touchscreens in your brick-and-mortar store so customers can look up product reviews right there. Another way to engage those information-hungry customers is to serve them in-depth educational content about your products as they’re browsing your website, or through retargeted Facebook ads based on their shopping behavior.

Fulfillment options are also a good place to start, especially if you notice customers are abandoning their online carts due to high shipping costs. In fact, PwC found that 71 percent of CEOs say that omnichannel fulfillment is a top priority for their business. You might consider turning your store into a mini fulfillment center by offering free in-store pickup for orders online or through your app. It can save your customers shipping fees and increase foot traffic at your brick-and-mortar store. In-store pickup has a great ROI, as someone picking up their online order may buy something additional once they see it at your storefront.

On the other side of the coin, you could save on inventory storage space and just have a physical “showroom” for your products, where customers can buy what they want on tablets in the store and get it shipped.

6. Continuously look at data and adjust your strategy.

It’s not enough to put some omnichannel marketing strategies in place and then leave them on autopilot. You have to constantly look at your data analytics to measure the results and tweak things accordingly. As the market evolves, you may even notice a whole new consumer trend that requires a different strategy across new channels.

Examples of omnichannel user experience

There are an increasing number of examples of companies that have doubled down on their omnichannel retail experience. Here are a few to draw inspiration from:

Frank & Oak

The clothing company based in Montreal which started as a men’s online company, has opened dozens of new inventory concept stores and has led the way in making the mall-shopping experience more unique and relevant for today’s generation with a striong focus on the omnichannel experience. Customers can book appointments with stylists via their mobile, order online, pick up in store, or go into the store where they don’t necessarily have a product available and order it and receive it at home the next day.

clothing retail location

Lululemon

Another Canadian brand with a successful omnichannel experience, Lululemon, connects with its customers through community events and in-store fitness classes. The classes are held at brick and mortar stores for ideal browsing ability, are free to attend and run by Lululemon Ambassadors. Classes can range from group fitness to cycling, yoga and more. All classes can be browsed online in advance, connecting online and offline experiences, while event photos are shared on social channels.

Sephora

Sephora is an example of a company that has developed specific apps and leveraged new digital communication channels to personalize the shopping experience and nurture customers toward making a purchase. The makeup retailer utilizes online chatbots in Facebook Messenger to help shoppers find a Sephora lipstick that matches the shade in a photo they’ve uploaded. Then customers can use the Sephora Virtual Artist app to upload a selfie and “try it on.” Four million people have used the chatbot and Virtual Artist app to date.

To attract today’s connected customers, businesses need to create a web between all their customer engagement channels. The result is not only more sales but also a superior customer experience.