Omnichannel Success

Customers who engage with a brand through multiple channels have a significantly higher lifetime value than those who engage with a single-channel distribution strategy. In today's consumer landscape, omnichannel is a necessity to building long-term brand value; it's key to long-term growth. For any organization, growth is a key component, which can take multiple forms, and for many brands, channel expansion is a necessary step. Over the years, I’ve transitioned brands from being single-channel distribution to multi-channel platforms. I've seen firsthand the challenges brands face when expanding into new channels: Siloed data, inconsistent messaging, poor promotional planning, a lack of a clear value proposition, and operational complexities that can quickly derail even the best-laid plans. Omnichannel isn't about being everywhere; it's about being where your customers are and offering them a consistent, convenient experience, no matter how they choose to engage with you. To navigate these complexities and build a successful omnichannel platform, several core components should be carefully considered. Let’s explore what goes into creating a successful omnichannel sales platform.  

• Strategy creation

• Leadership buy-in

• Customer segments vs. shopping behavior 

• Brand’s values and positioning

• Rules of engagement 

Strategy Creation

I’ve seen single-channel brands expand for one single reason: revenue. Revenue is not a strategy, but an outcome of a successful strategy. Choosing to go down the omnichannel path requires a thoughtful approach to take into account the requirements and the unique challenges each channel presents. 

If you are like the majority of brands, where your customers shop in multiple channels, your brand needs to be where they explore and shop. This includes retail, direct-to-consumer, and marketplaces. Customers shop in these channels for different reasons, which you need to recognize and understand when crafting your strategy. For example, if someone is shopping at a retail location, they may want more information or be able to touch the product. Make sure the packaging addresses their information needs and the product is accessible. Consideration should be given to how brand values, customer segmentation, and shopping behavior align with each other.   

My motto has always been “be where your customers shop”. If 80% of Gen Z are introduced to new brands on Amazon, be present and be relevant. If your customers value experience, selection, and personalization, make sure your ecommerce site caters to their need to be part of your community. And “yes”, people like being in a physical space, so be aligned with the right retail partners that elevate your physical presence. Customers have preferences that often involve multiple touchpoints throughout their purchasing journey. As a brand, make sure you are part of their journey, presenting your customers with the experience they expect from your brand.  

The nuts and bolts of strategy should address how your customers navigate different channels. This way, you address pain points, mitigate channel conflicts through pricing, product, and promotion strategy, while guiding your customers' journey to optimize their experience with your brand. Each channel will have its own plan that rolls up to an overall omnichannel strategy to connect the dots and provide a seamless customer journey. 

Leadership Buy-In

Nothing derails the implementation of an omnichannel strategy faster than a lack of leadership buy-in or understanding. While this may seem obvious, it's surprising how often these conversations are overlooked. Channel extension requires strong support and a well-defined strategy to succeed, as noted previously. 

Frequently, Sales teams are tasked with the goal of "closing the gap" or the desire to “accelerate growth,” only to charge ahead without informing operations, product development, and marketing teams. These mandates often lack a thorough discussion of how they will impact the business, from cash flow to resources. It's essential to view channel expansion as an investment. Therefore, make sure to allocate resources, plan effectively, and establish a solid strategy to achieve success. 

Having full buy-in and organizational commitment, you can prevent after-the-fact conversations that might include, "I need a new product configuration," "Why are we backordered?" "Why is this product discounted?" or "This doesn't align with the brand." When teams align and move in the same direction, time is saved, a shared and unified vision is created, and the opportunity for success accelerates.

Customer Segmentation vs. Shopping Behaviour 

Understanding "why" a customer chooses a specific shopping channel and "who" they are is crucial. People shop in different channels for various reasons, and we'll explore those shortly. It's also important to recognize how your customer segments interact with these channels.

I don’t want to over-generalize, but there are consistent reasons “why” people shop where they do. Each channel addresses a customer's pain point. 

• If I prioritize convenience, price, and service, I seek out marketplaces like Amazon or Walmart. 

• If I'm looking for a wider selection, human interaction, or the ability to touch and feel the product, I prefer to visit a physical retailer to engage with brands. 

• If I value uniqueness, trust, unique product offerings, or being part of that brand's community, I align directly with a brand that fulfills my needs.

Once you understand these motivations, it's essential to delve into customers' shopping journeys. Taking the time to explore your different customer segments and how they discover your products will help guide your strategy for each channel, informing messaging to address pain points, reduce friction, and ultimately transact with your brand across all sales channels. 

Brand Values and Positioning

Having an omnichannel strategy doesn't mean you need to be present in every channel. Instead, focus on the sales channels that best align with your brand. This principle also applies to your retail strategy; not all retailers are created equal. Discrepancies between your distribution strategy and your brand’s value proposition can quickly diminish brand value. Understanding how your customers interact across different channels is crucial.

For instance, I worked with a premium outdoor brand that had to reassess its distribution strategy, which had initially been built solely on revenue growth at the expense of brand alignment. The brand transitioned from a retail-only model to a broad presence, which resulted in challenges across every channel. They failed to establish policies to govern customer engagement, which led to pricing issues, dissatisfied retailers, and a lack of differentiation or clear brand communication.

One major problem was the absence of a product or promo strategy; all channels were selling the same items, causing each channel to compete on just one differentiating factor: price. There was no effort to distinguish product offerings or customer experiences between the brand’s website, its retail presence, and marketplaces. Additionally, treating all retailers equally resulted in numerous problems, particularly when a retailer’s positioning didn't align with the brand’s positioning.

Re-aligning the brand with retailers that share similar values became an essential side project to regain credibility and earn trust with these retailers. Retailers today understand the need for a brand to be in multiple channels, but what they want is an equal playing field and transparency so that they can plan appropriately. 

Ultimately, we tailored product offerings to align with the channels we chose to sell in, we culled retail partners to align with the brand’s value proposition, and we built out the DTC channel focused on “experience,” providing clear points of differentiation, while providing the customer a clear reason to engage with each channel. 

Rules of Engagement

The foundation consists of all the structural elements that enable each sales channel to coexist and thrive. These components include having shared policies regarding products, promotions, pricing, and the representation of your brand in each channel. Establishing these guidelines reduces the risk of potential conflicts or unintended consequences.

For example, you could designate three promotional windows throughout the year during which each channel can promote one or more products up to a specified maximum discount level. This approach allows each channel to drive awareness without competing on price and avoids the risk of a "race to the bottom." As a result, price integrity is maintained, and channels are discouraged from discounting outside of these promotional windows. This structure enables each channel to plan and execute programs to drive sales effectively. However, accomplishing this in the European Union (EU) can be more complex due to competition laws, a topic I can explore in detail in a future blog.

In addition to these tactical elements, each channel needs to be adequately resourced to implement its strategy. For instance, Amazon requires page development and optimization, along with a budget to support a paid and display advertising plan. The marketing team should be organized to support all the sales channels in which you participate while also optimizing performance in each key marketing channel. Your marketing efforts will build a web connecting sales and marketing channels, creating a brand’s omnichannel ecosystem.

To summarize, establish clear policies to govern your sales channels, ensure you allocate the appropriate resources to support them, and make certain your marketing efforts effectively communicate your value proposition while aligning with the shopping behavior in each channel. The more distinct you make each channel, the greater the opportunity each channel will thrive. Give your customers a reason to shop in that channel. 

Conclusion

There is no doubt that an omnichannel sales strategy adds complexity and involves many components. The more you can define the rules of engagement, the greater your chances of success. Omni-channel development acts as a force multiplier for any brand, expanding your reach from a narrow market segment to a larger audience through multiple touch points. This increases the likelihood you will be part of your customers' journey.