Macy’s is one retail giant that expertly executes omnichannel experiences. How do they do it? With metrics – because numbers don’t lie. The company’s digital sales efforts boosted last year’s fourth-quarter sales to $9.4 billion, up 1.8 percent from the prior year. Like many large retailers, Macy’s has taken a “single view” of its inventory, with no real distinction between physical stores and direct-to-customer warehouse departments.
But as a small business, do you wonder if omnichannel is worth it?
A new study by the Retail Industry Leaders Association would argue that ominichannel is definitely a must. But it is frustrating for most, with 45 percent of business executives polled say they aren’t happy with their omnichannel return on investment (ROI). More specifically, respective businesses recognize the need to develop a more effective omnichannel strategy to get more bang for their buck.
Further, research firm Forrester predicts 50 percent of U.S. retail sales will be credited to omnichannel by 2017. So it’s important your platforms, from your brick-and-mortar store to mobile app, work seamlessly together for a better customer experience. When implemented properly, your company’s omnichannel experience could result in up to a 70 percent likelihood a repeat customer will buy from you.
Navigating ominichannel is no easy task
Take heed from the downfall of retailers like BlockBuster, due to failure to keep up with disruptive technology (think Netflix). And Best Buy’s battle against showrooming The B2B world isn’t immune to this harsh reality with “93 percent of buyers say that they prefer to buy online rather than from a salesperson when they’ve decided on what to buy.”
However, as you likely have found out, the execution of a successful omnichannel system is no easy task, nurturing customer loyalty and building a better ROI.
Inventory processes must be upgraded, websites updated, and employees trained. All with the goal of building retail relationships with consumers across all platforms and channels, meeting them where they’re at, exactly when they need your product or service.
And don’t think for a second that this only impacts B2C businesses. Forrester studies have found “93% of B2B buyers say that they prefer to buy online rather than from a salesperson when they’ve decided on what to buy.”
Here are some relatively simple steps to build better omnichannel ROI:
- Know the complexity of your product offerings
How much assistance will your potential customers need to close a sale? Do you sell clothing or home décor, which are commonly and easily sold online? Or do you offer services, like cell phone plans, which can be harder to navigate alone. It’s important to carefully define the points in the buying cycle where a customer service rep will be helpful to move the sale along. Or you might even determine that your product should always involve a sales person, and won’t work on a mobile app, for instance.
- Understand customer buying behaviors
An average of 40 percent of small business owners desire to grow revenue, according to the 2016 State of Small Business Report. One way to get your organization growing is to track customer buying habits. Thanks to the digital age, it has become more complicated with so many platforms from which a customer can research your brand. Not to mention, buying behaviors will certainly vary between industries. For example, a customer, who is in the market for a new TV, may look in a brick and mortar store to see how clear the picture is before he looks online for a better deal. In a B2B transaction, a technology company might be seeking your widget, but looks online for reviews before they contact you.
No matter the buying scenario, it’s vital to track customer buying behaviors and anticipate how they use your channels — from brick-and-mortar to online or partner to direct, to understand customer preferences. Having the metrics to show commonalities in customer habits creates significant advantages in prioritizing sales and marketing programs for
different channels. Ideally, trends in customer preferences allow expansion or promotion of channels with lower cost-to-serve, like reordering instead of using a call center (which can be 90% more cost-effective).
- Match buying phases with channel
In order to understand how and when current customers and prospects do their research and buying, there are a number of questions you can answer internally:
- What are the best channels for your marketing steps, including discovery, education, evaluation, etc.?
- Are there certain channels that have been more likely to raise awareness and lower cost-to-serve?
- What channels drive sales?
- Is there a certain platform that consistently captures mindshare and “hooks” your client?
- Where do customers commit to purchase?
Understanding such moments will help any effort to increase conversion rates. Activities to look at include how prospects and clients are browsing and researching products, their use of online reviews, when or if live persons are solicited for information, where purchases are made, and how reordering products or renewing relationships are done. A big issue is uncovering buying activity (often a majority of legwork in making a decision has already gone undetected) as well as moving
prospects from researching products online to channels best
suited to close deals.
- Build customer loyalty
With so many options available, people, customer retention and loyalty can present quite a challenge. In fact, 43 percent of small businesses hoped to improve customer retention this year. And Brand Keys’ 19th Annual Customer Loyalty Engagement Index found that customers have become more demanding, with expectations of brands growing by almost a third. However, most brands’ abilities to meet those demands have only increased by 7 percent. So how can you get (and hold) the attention of customers in such a crowded marketplace? Paula DaSilva recently gave some sound advice in a recent article in Total Retail.
“By making loyalty incentives more experiential, retailers can develop a deeper connection with their customers,” DaSilva offered. “The customer’s ability to accrue points on their terms is crucial as shoppers like the feeling of getting something that’s exclusive — or at the least extremely personalized to them.”
While the method may vary for your unique business, there are several steps to take, which resonate across industries.
- Implement mobile loyalty programs: Theses allow shoppers to collect points, purchase, and act on exclusive promotions in real-time.
- Digitize your loyalty programs: This allows you to cross promote across channels (in-store and online). DaSilva says this allows shoppers to “choose the channel that’s most convenient to them and get more value for their money.”
- Offer experiential rewards: Customers will love the exclusivity of special sales and discounts that come only to loyalty club members. It’ll keep them coming back for more.
Omnichannel can be a tough road to navigate. But when you start with right steps, you’ll gain accurate metrics to put your small business on the road to growth on all platforms.
Latest posts by Jay Schofield (see all)
- What To Do With Your Distribution Center Metrics? - July 5, 2017
- Supply and Demand Meets Consumer Demand - June 20, 2017
- How the Sharing Economy Has Changed the Supply Chain - May 30, 2017
- ‘Tis the Season To Prep 2018 Taxes: Asset Management Can Save You Time - May 16, 2017
- How Small Businesses Can Survive the Age Of Free Shipping - May 2, 2017