Retail Copes With Meshwork of E-Commerce, Brick-and-Mortar

The digital world is becoming increasingly pervasive, and as a result most retailers are focused on efforts to strike the right chord with omni-channel strategy, an approach that aims to create a cohesive experience between online and in-store marketing and shopping.

It’s been a long road, but the industry as a whole is starting to gain a firmer grasp on the relationship between the two platforms.

“When Amazon was founded in 1996, there was the line of thinking that brick-and-mortar days were numbered,” said Bill Akins, senior vice president of business innovation at Rockfish Interactive, a Rogers-based digital strategy firm that often works with local suppliers on retail marketing.

Eighteen years later, only 6.4 percent ($75 billion) of purchases were made online during the second quarter of 2014, according to the U.S. Department of Commerce.

Physical stores have not been replaced, but that does not mean online retail is a non-starter. E-commerce sales are continually growing, gaining 15.7 percent on last year.

Both methods have pros and cons, and the result is a complicated, symbiotic relationship.

Consumers can check prices, read and write product reviews, make online purchases, access coupons or check in-store items out online, all while still in the store.

Studies show most customers have researched an item online before buying it in a shop, while others have tried out a product in person, then bought it online for cheaper.

“We used to think of two different shoppers, but now we realize there’s not two different shoppers online and in the store,” Akins said. “We are at the convergence of online and brick and mortar.”

 

Working Together

The goal for most companies right now is to create a seamless shopping experience between online and in-store. “We want the digital to complement the physical and for the two to work in concert,” Akins said. 

One aspect of this is referred to as the endless shelf. “Let’s say you are in Lewis & Clark [Outfitters] and you love a bike you see, but they only have it in yellow and you want it in purple. You can go online right there and the bike can be delivered to the store,” Akins said. “[The store] doesn’t lose the sale.”

Internet exposure to an ad campaign or a special offer can bring on an immediate online purchase, or it could lead the consumer to a store. In turn, store displays could direct customers to the Web.

“You have to figure out all the ways your shopper wants to be exposed to your content,” said Brad Lawless, senior vice president of social strategy at Collective Bias in Rogers.

 

Trending Topic 

Omni-channel retail has been a hot industry topic for a few months now.

“It’s triple word score in buzz word Bingo,” Lawless said, who added that, given the emergence of the Internet’s role, the emphasis an omni-channel makes sense. “You should always have an integrated approach to your business.”

In addition to considering which demographic they want to target and which marketing platforms to use, retailers should understand their audience expects to be notified differently, depending on the outlet, Lawless said. Consumers want different content on, for example, Instagram than they do on Pinterest.

“You need a message that is consistent with the core of your brand but that is flexible,” Lawless said.

People in the industry talk about liquid content, which can be repurposed and used in different formats.

“In the past, we would pay a professional photographer and hire a model to do a photo, and it was going to be part of an ad that was printed in [one certain] magazine,” Lawless said. “Afterward, the magazine was recycled and that’s it. Now, we can make something like a video that will take off on social but can also be aired on television between the new fall releases.”

Social media also lends itself to user-generated content. It lets consumers tell the story of the brand, and companies are tasked with leveraging that to their advantage.

For example, social media absolutely exploded this summer with users posting #ShareACoke photos with name-labeled Coca-Cola products.

As one of the world’s most iconic brands, Coca-Cola is continuing the message it has for years, which has little to do with the actual drink. “It’s about a moment in time, a relationship that makes you happy and usually involves another person,” Lawless said.

“They hit a channel using social media that they wouldn’t have hit otherwise,” he added, especially with a younger demographic.

 

Extending to Retail

While Coca-Cola’s Atlanta-based home office was the think tank responsible for Share a Coke, the local team in Rogers decided to get in on the action. 

The aim was to connect the viral brand message to a specific retail environment, Wal-Mart Stores Inc. 

Amanda Whittaker, senior shopper marketing manager at Coca-Cola, is on the brand’s Walmart team. She helped craft the Share It Forward campaign.

On July 6, the drink brand posted up in Walmart stores throughout the country with large bins of name-labeled Cokes to give away to customers.

The brand gave out 1 million Cokes, with the message for customers to repay the deed to others by buying one for a friend, Whittaker said.

Coke enlisted Collective Bias’ army of bloggers, who took to a variety of websites and social media to spread the word about #ShareItForward.

“Coke didn’t need us to get the word out in social, but they needed us to drive it to Walmart,” Lawless said. “That part of the channel wasn’t being addressed, and we were able to do that very effectively.” 

And that sort of strategy is steadily growing in popularity. 

 

Adding Value

Many marketers hired by retailers now aim to produce personalized content that enriches the online brand experience and adds value to consumers’ lives while integrating the product, Lawless said.

Content might include a personal story that would appeal to the brand’s target demographic, a fall recipe using all ingredients sold by a certain brand or retail site, or it might be a makeup tutorial showing how to achieve a smoky eye look with the products sold.

Akins said, “It is content that applies to your life, which helps make that personal connection all these brands are hoping and praying for.”

And retailers and suppliers are always looking for ways to get this sort of promotional material to their audience in real-time. 

“BYOD [bring your own device] is a major phenomenon,” Akins said. “The idea is, people are going to bring their mobile device in stores anyway, so why not capitalize on it.”

 

Beacon to the Future

One way is through beacons, small pieces of hardware placed throughout a store that can send alerts to apps on mobile devices via Bluetooth.

Akins said a few local, billion-dollar-club suppliers are developing marketing strategy using beacons, which, for example, “can alert the customer when they walk through the door that the store is in a hurricane warning area and point them to the emergency supplies, or remind them that Father’s Day is coming up and direct them to gifts.”

Beacons can provide general information about the product itself (e.g., how to hang that TV, the cables you need), reward customers with coupons and discounts, and can encourage customers to share their purchase decision with friends on social media.

Beacons represent a new level of convenience for customers, and Akins said that is key in retail innovation — enter self-checkout, smaller-format stores and now e-receipts and app features.

Another key is to make sure the content being offered is entirely local, tailored to a specific store or area, which beacons also accomplish well, Akins said. 

For example, technology can alert the staff that a shelf is getting empty and then can check the backroom to see if there are more products available.

It’s all part of integrating technology and the Internet with customers’ in-store experience, both directly and indirectly.

 

Keeping Tabs

While everyone in retail is talking about omni-channel, Lawless said it’s still uncharted territory, with no tried-and-true method to quantify its success.

“It’s really about understanding how people interact with content. Whatever they like, do more of that. Whatever you put out there that actually puts more money in your pocket, definitely do more of that,” Lawless said.

Collective Bias has an analytics team assigned to pinning down a formula for omni-channel retail.

“Everyone’s trying to build out this infrastructure. People used to talk about a purchase funnel and now it’s just some weird connection of dots,” he said. “I would love to be able to show that this content led to this many sales, but there are a lot of dots to connect in between … We’re working on it.”

Pieces of the puzzle are available.

Retailers and suppliers can identify someone who has viewed content through store loyalty programs, or the fact that they used a credit card online and the same card in the store, and they can then connect that to the customer’s Facebook activity.

“From a shopper perspective, it can seem sort of nefarious or Orwellian, but it’s all opt-in, and a lot of times people are willing to give up a little bit of privacy if they are able to get convenience or value,” Lawless said.

Walmart, for example, recently took a cue from online outlets and relaunched its website with ultra-personalized features that provide information and offers based on the consumer’s activity.

And if the world’s largest retailer is doing it, other stores are sure to follow.

“Digital is no longer an afterthought,” Akins said. “It’s no longer a tactic. It’s the strategy.