How Retailers and Suppliers Can Work Toward Omnichannel

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How Retailers and Suppliers Can Work Toward Omnichannel

By Nishat Mehta, Head of Brands, 84.51º - 01/20/2016

The omnichannel retailer trend is beginning to mature. Amazon opened its first physical store, and many large retailers have announced "buy online, pick up in-store" options across their entire store network.

However, the analog in omnichannel marketing is still in its infancy. Today, products that are still mostly purchased in brick-and-mortar stores, such as consumer packaged goods, haven’t adopted digital media as quickly as other industries, though these companies are some of the most experienced marketers in media channels such as TV. Brick-and-mortar retailers can play a big role in enabling this transition.

First, retailers have valuable and varied marketing options of interest to their suppliers. Besides traditional in-store opportunities including graphics, promotion, display, circular, at-till, etc., digital in-store signage and direct mail represent channels that online retailers rarely or cannot use. Because these vehicles are so close to the point of purchase, they have significant impact, yet few marketing mix models or cross-channel measurement methodologies accurately reflect them due to their broadcast nature. As more marketing vehicles become addressable (digital circulars, in-store advertising linked to an individual mobile device, addressable TV, etc.), these customer touchpoints are beginning to more accurately affect strategies across all marketing channels.

Second, e-commerce retailers have comprehensive data on browsing behavior, including every product a consumer considered before making a purchase. By nature of the medium, brick-and-mortar retailers will never have equivalent data in this area, but numerous in-store technologies are helping to close this gap. Respect for customer privacy is critical as these technologies mature, and retailers will need to be transparent and provide tangible benefits to customers in exchange for this data. However, if executed properly, these data can enable brick-and-mortar retailers to play a much bigger role in helping advertisers attribute purchase behavior and loyalty. The ability to collect social opinion data can also help provide information about other products in which a customer expresses interest, rather than only data about purchases.

Lastly, brands that sell directly to consumers have the freedom to focus only on what is best for their brand. Suppliers that sell through brick-and-mortar retailers rely on data from the retailer in order to better understand their joint customer and how to best market to them.

This symbiosis between retailer and supplier, however, requires that suppliers direct their marketing in ways that benefit both their brand and their retailer merchants. For instance, acquisition campaigns directed towards loyal customers of a supplier’s competitor have little benefit to a retailer and, therefore, struggle to obtain full permission from the retailer to leverage any of their customer knowledge. Recognizing that addressable marketing channels can be better personalized when injected with retailer insights will force better collaboration between brick-and-mortar retailers and their suppliers. More critically, insisting on doing what’s best for the customer is most likely to meet the needs of both parties, which is good news for customers.

While the massive explosion of marketing technology companies is often painted as creating confusion for advertisers, it delivers the benefit of being able to solve hard problems in creative ways. As brick-and-mortar retailers continue to evolve into true omnichannel retailers, they shouldn’t forget just how valuable a role they play in increasing the efficiency of their suppliers’ media budgets. That might require going outside their comfort zone, but the benefits are well worth it.

Nishat Mehta has spent nearly two decades at the forefront of data analytics and software innovation, helping sophisticated organizations reap more informed and scalable business strategies and tactics from their data assets. In his current position as the Head of Brands at 84.51°, Nishat works to leverage consumer behavioral data to make lives easier for consumers and the brands with which they engage. Follow Nishat Mehta on Twitter at @nishatmehta.