As businesses try to define what makes an optimal customer experience, the word “omnichannel” will inevitably be a part of the conversation. Omnichannel has become a buzzword in ecommerce, and as it becomes clear that omnichannel marketing is an indispensable tool for the increasingly competitive and data-driven market, brands need to rethink their marketing strategies from an omnichannel perspective.
While the idea of omnichannel existed before the pandemic, it has evolved into a different look given the pandemic’s impact on consumer expectations. Customers expect personalized experiences, efficiency, more payment and delivery options, and brands’ commitment to their values. Omnichannel is the key to meeting these expectations, and brands are excited to give their marketing strategies a makeover.
However, before brands rush to expand their omnichannel capabilities, they need to first understand what omnichannel means for their business. What works for one business might not work for another, and given the costs and resources that brands will need to dedicate to going omnichannel, it is imperative for business leaders to be strategic about crafting their omnichannel marketing strategy.
This guide will help brands get started with everything they need to know about omnichannel and how they can create an omnichannel marketing strategy that is right for them.
There are a few misconceptions about omnichannel marketing that we’ll debunk throughout this guide. Let’s start with the differences between two phrases that are often used interchangeably in ecommerce: omnichannel marketing and multichannel marketing.
Multichannel marketing is a system made up of several channels that allows customers to easily discover and shop products on their most preferred platform. The distinguishing feature of multichannel marketing is that each channel works independently to work towards a sale. Whether it’s the website, mobile app, Instagram ads, or a pop-up store, each channel is a separate sales opportunity.
Picture a wheel with spokes—at the center is your product, and each spoke is a channel that serves as an additional touchpoint for customers to purchase the product. This model demonstrates the ability of brands to land sales beyond their website. There are boundaries between channels, which limit cross-channel opportunities.
The website is a brand’s home ground — it’s where the brand can show its best self. First-time viewers on the website might encounter a welcome pop-up with a discount to be applied at purchase. Should they ignore the pop-up, the call-to-action (CTA) would show up in other places on the website, such as the banner.
If they decide to leave without making a purchase, there might be one last pop-up with a CTA to enter their email and claim the discount in their inbox. Email capture allows brands to maximize their interactions with a customer post-visit as much as possible.
Brands can also leverage Amazon’s large consumer base in its multichannel marketing strategy. While Amazon has a fixed look for each product page, brands can optimize this channel by providing photos, videos, and detailed product descriptions to create a native shopping experience for the customer.
Instagram is a convenient platform that allows users to make purchases directly on the app. One way that brands can leverage this channel is through shoppable posts, which feature tags for items in the post and a “View Products” CTA that directs users to the brand’s Shop page.
Brands can really own this channel by including influencers and curating well-designed posts.
This is only one example of what a brand’s multichannel marketing strategy might look like. The key takeaway is that each channel is a separate sales opportunity that allows brands to reach customers in various ways.
Omnichannel also operates using multiple channels, but while multichannel prioritizes the product, omnichannel puts the customer first. What does this mean exactly?
Multichannel marketing is focused on optimizing the platform’s ability to attract customers, but omnichannel thinks about what the customer experience looks like across all platforms used. With omnichannel marketing, each channel was chosen because it creates value for the customer. Brands think about how each channel contributes to the overall consumer experience, from product discovery to post-purchase engagement.
A Shopify comparison puts it succinctly: “[O]mnichannel accounts for the spillover between channels and offers customer experiences within and between channels.” Marketing Evolution adds, “Multichannel is more reflective of operations, reaching as many channels as appropriate, while omnichannel is more reflective of the overall customer experience.”
This is the main differentiator between omnichannel and multichannel. In essence, because omnichannel places the customer at the core, the customer becomes the unifying force between separate channels. This model opens up immense opportunities for brands to think strategically about the channels they use to deliver a seamless and personalized experience for each customer.
1. A customer comes across a brand that sells sparkling water and visits the website for more information.
2. A welcome message pops up with a discount offer and the customer decides to enter their email address to claim it but leaves the website without buying anything.
3. The customer receives an email the next day reminding them to claim the discount, as well as staggered ads on Instagram featuring the brand’s sustainability efforts.
4. This recaptures the customer’s attention, and they decide to engage with one of the brand’s shoppable posts.
5. However, they’re still not convinced to make a purchase. The brand sees that the customer is located in Boston and emails them to try out some samples in a nearby pop-up store.
6. The customer decides to try it out and finally makes a purchase.
7. The customer receives a thank you email and regular shipping updates until the product is delivered.
8. A few weeks later, the customer is invited to provide a review for the product. This email is ignored, so the brand follows up a few days later via SMS.
9. A few weeks later, the customer almost finishes their supply and promptly receives a reminder via text message to restock and check out added flavors.
10. The brand continues to engage with this customer through periodic emails, ads, and text messages.
The key feature of an omnichannel marketing strategy is that the customer’s behavior determines the experience they get with the brand. A lack of consumer engagement requires the brand to employ different tactics across its channels in a strategic and aligned way.
In the omnichannel vs. multichannel debate, omnichannel seems like the obvious choice. But the decision and timeline of implementation depend on an individual brand’s capabilities and priorities—brands that are just starting out might be wise to choose multichannel first and build up to the capabilities necessary for an omnichannel marketing strategy. These capabilities include having a compatible tech stack (more on this later) and IT investment.
But all paths (should) lead to omnichannel. When brands do have the resources to build an omnichannel strategy, they can expect to be rewarded for the work that they put in. Omnichannel marketing takes the customer experience to the next level by delivering highly personalized and interactive content seamlessly across all channels. The value that this approach brings to brands and customers alike is ultimately what makes omnichannel marketing superior to multichannel marketing.
Personalization matters. According to an Epsilon survey of shoppers ages 18 to 64, 80% of respondents say they are more likely to shop with a brand if it offers personalized experiences. Omnichannel marketing allows brands to reach the individual customer with relevant information at various touchpoints. Customers who value personalization are 10 times more likely to shop more than 15 times with a brand. Read more here about how personalization is the key brand differentiator.
Leveraging multiple channels means reaching more customers, and research has shown that customers that engage with multiple touchpoints are 30% more valuable. Loyal customers spend more, making repeat purchases 130% more valuable than a first-time purchase.
Omnichannel marketing requires brands to think about a collective appearance. There is power in consistency, and when brands present a cohesive identity across all channels, they are amplifying their voice and communicating to their target audience more effectively.
The pandemic undoubtedly played a critical role in catalyzing brands’ adoption of an omnichannel marketing strategy. In fact, this early diversification of channels made all the difference between survival and shutdown during the pandemic. According to the Federal Reserve, more than 200,000 businesses, which would not otherwise have closed permanently, did so during the first year of the pandemic.
On the other hand, the businesses that acted early and diversified their outreach to customers were able to weather the storm. This meant setting up curbside pickup, contactless payment with QR codes, and communication with consumers, among other capabilities that encouraged shopping without sacrificing safety.
An Atlantic article described the pandemic’s multifaceted effect on brands and their relationship with omnichannel: “The pandemic has been a gauntlet for businesses everywhere, forcing them into hard choices and creative thinking. It has also positioned thoughtful, strategically executed omnichannel growth as a key to getting the most out of the present and building your brand into the future.”
Indeed, omnichannel is here to stay. As we enter this new normal, businesses are taking their omnichannel marketing strategies with them. According to a survey conducted by Square and Atlantic Brand Partners, 80% of the companies who launched new channels during the pandemic planned to keep them. If adopting one or two omnichannel capabilities helped them stay afloat during the pandemic, a thorough omnichannel transformation has become a powerful tool for increased resilience and sustained growth for the future.
Why are businesses going omnichannel? The answer involves recognizing the unique power of omnichannel marketing strategies to address pain points and keep up with changing consumer expectations.
It is expensive for businesses to spend all of their marketing dollars on one or a few channels, especially digital channels. Digitally-native brands, especially, are starting to think about expanding their marketing channels to brick-and-mortar to combat rising online CAC..
Businesses want to find the balance between spending too little and not expanding their customer base, and spending too much and not being profitable. According to Shopify, “Pumping money into marketing campaigns doesn’t necessarily mean you’re going to get a return on your investment. In order to create a more precise marketing strategy and budget, you want to assess your profitability by channel.”
Omnichannel is the optimal model for growing your business because it allows you to leverage several organic marketing channels, such as brick-and-mortar and social media, that see high returns on investment. Brands won’t be dependent on a single channel, and can harness the power of each channel to deliver personalized experiences that drive customer loyalty.
A McKinsey article states, “Successful performance marketers take a surgical approach to optimizing click-through rate, cost per acquisition, paid media (for example, paid search, paid social media, display advertising, and video advertising), and earned media (such as organic search results).”
The flexibility and cross-channel communication of an omnichannel marketing strategy means that brands at every stage of their business can refine and expand their strategy.
Mobile devices are the main symbols of convenience and ease of use. As customers increasingly use their phones to research and purchase products, they expect a frictionless experience. A journal on omnichannel strategies describes the role of mobile devices in the consumer experience: “[T]he customer uses mobile devices before and during their visits to physical stores, obtains and processes information, and makes comparisons before buying. During this process, the customer wants a personalized, seamless, and unified experience and expects coherent and uniform returns from all the channels.”
The high penetration of mobile devices around the world makes them a powerful touchpoint between brands and their customers. It’s no exaggeration to say that brands can reach customers literally at their fingertips. A Retail Dive article identifies four advantages of mobile commerce: (1) drive in-store traffic through the use of geo-targeting, (2) offer coupons that are only redeemable in stores, (3) power loyalty programs, and (4) optimize inventory management.
We have already seen the opportunities that mobile commerce brings, including SMS marketing and augmented reality capabilities. These opportunities can only be executed successfully with a strong omnichannel marketing strategy that facilitates cross-channel communication.
It is no secret that we love first-party data. It gives brands control over valuable consumer data that drives personalization. It is one of the main reasons that DTC and digitally native brands have such a strong consumer base. What sets them apart, according to a McKinsey article, is that “brand owners know exactly who their customers are, what online behavior led them to their initial contact with the brand, and what they’re likely to buy next. This insight creates opportunities to build deep and lasting relationships with customers.”
The move away from third-party data is real. As tech companies strengthen their commitment to increasing consumer privacy, brands will turn to first-party data in their search for a new data collection strategy.
Amidst all this talk about consumer preferences and expectations, we’d be remiss not to discuss exactly who these consumers are. While individual brands are sure to appeal to a mix of generations, one group is quickly becoming the next influential generation of consumers: Gen Z.
According to Forbes, Gen Z’s annual spending power is an estimated $143 billion, not including the $127 billion spent annually on their behalf. The Gen Z consumer is careful about where they spend their money, which means brands have to be value-driven. What does value mean to the Gen Z consumer? It means that they care about brand storytelling and community. Brands should, at the very least, have sustainable practices, respect their workers, and give back to the community.
Gen Zers grew up with mobile devices, which means that they care about seamless experiences and are active on social media. An omnichannel marketing strategy enables brands to deliver the experiences that Gen Z consumers are expecting.
As mentioned above, it's expensive to acquire new online customers. Many brands can decrease expenses by diversifying their channels. Each channel has its own strengths that brands should bring together to create a synergistic omnichannel strategy. Physical stores, for example, are a great opportunity for building community and encouraging interaction between customers and brand members.
“What few consider is that customer acquisition costs are typically lower in owned, physical footprints. But for [brick-and-mortar] to work, the brand must be strong. And no Facebook ad can buy a strong brand,” said Web Smith, Founder of 2PM.
Multichannel shoppers, according to Deloitte and Touche, are worth up to 208% more than single channel shoppers. This makes sense: brands that can be in multiple points of a customer’s shopping journey are more likely to make an impression.
Being able to curate a strong and unified brand identity is native to an omnichannel marketing strategy. Why is this important? According to Veugeler Design Group, “This consistency not only establishes brand recognition, but it also builds trust with consumers and creates a loyal customer base that can help generate your desired ROI. In fact, according to Forbes, presenting a brand consistently across all platforms can increase revenue by up to 23%.”
The benefits of omnichannel marketing have attracted brands across industries to rethink their marketing strategies. While it is tempting for brands to expand their omnichannel capabilities with new IT investments and channel integrations, business leaders need to first think about how these capabilities can create value for their customers.
A McKinsey article advises brands to (1) understand which channels to prioritize given the company’s long-term goals and current resources, (2) focus on customer value over seemingly exciting tech innovations, and (3) invest strategically based on the company’s capabilities. The very essence of omnichannel is personalization, and every brand’s omnichannel strategy will look different.
Mimi Margalit, an advisor of omnichannel merchandising strategy and retail innovations, provides insight on how brands can get started with omnichannel: “You have to meet the customer where they are right now. There are strong wholesale businesses that need to enter the digital space, and digitally native brands that need to enter wholesale. These are two completely different business models.
“I help brands cost-effectively reverse engineer the DTC business model by partnering with a tech company that makes sense for their specific model,” Margalit says. “For me, it’s about thoughtfully matching the capability to the brand – which will ultimately surprise and delight the customer. That's the magic of good retail.”
Crafting an omnichannel marketing strategy also comes with high costs, especially with last-mile delivery. Going omnichannel oftens means undergoing a major structural transformation, which heightens the need for brands to have a strong strategy from the get go. Omnichannel capabilities will be expensive at first, but if brands are able to identify profitable investments and make plans to optimize these capabilities, they can expect reduced costs and greater efficiency in the long-run.
Crafting an omnichannel marketing strategy requires individuals to think from the omnichannel perspective—and this means putting the consumer at the center. When teams are structured in this way, they are able to coordinate across physical and ecommerce channels to create a cohesive consumer experience.
First-party consumer data opens up immense opportunities for brands to tailor the shopping experience based on individual consumer preferences. Knowing what kinds of products the customer typically buys, how often they make purchases, and which channels they engage with the most are all valuable pieces of information that allow brands to keep up with changing consumer preferences and points of interaction.
There has been a lot of buzz around digital channels, but the brick and mortar store remains an important piece in a brand’s omnichannel marketing strategy. It is a cost-effective way to handle fulfillment of online orders and returns. Plus, customers are nostalgic for the in-store experience. Brands should think about elevating their physical stores to meet consumers’ ecommerce-inspired expectations. This means providing fast and contactless payment options, updated inventory information, and other features that are native to the digital experience.
Fulfillment is a major pain point for brands and retailers, and with increasing delivery costs, the following omnichannel capabilities provide more affordable options for both the brand and consumer.
Given how omnichannel marketing is all about meeting customers where they are, it is no surprise that brands need to be active on social media platforms. More than 50% of customers use social media to research products. For brands who want to reach younger consumers, having a strong social media presence is an essential part of their omnichannel marketing strategy.
Social media provides many synergistic opportunities for brand storytelling and community building. Live-selling or live commerce, for example, is a rapidly growing channel that combines instant purchasing of a product and consumer engagement. It has transformed China’s retail industry and is gaining traction in the West. Live commerce brings products to consumers in a familiar and fresh way, making it an attractive channel for younger consumers who are “keen on innovative shopping formats and experiences”, a McKinsey article writes.
“Everyone has a different tech stack. Not every tech stack is created equal,” Margalit says. “What are the right ones for your specific brand?”
This is the million-dollar question. From augmented reality to automation to QR codes and other forms of contactless payment, brands have an ever-growing list of capabilities to add to their tech stack. Business leaders need to think about what data to use and how to track it.
As we move away from third-party data, brands will increasingly rely on first-party data for a sustainable way to create personalized experiences. In a later section, we talk more about a few platforms that brands could add to their tech stack. Brij, for example, harnesses the universality and accessibility of QR codes to help brands keep track of data, increase product registrations and consumer engagement, and ultimately deliver a seamless omnichannel experience to consumers.
Starbucks is a perfect example of a great omnichannel marketing strategy. The company increased its database of registered customers by requiring them to provide their email in exchange for free Wi-Fi. This was the top of the customer funnel, according to Starbucks’s Global Chief Strategy Officer Matthew Ryan, and it provided a way for the company to encourage customers to join their rewards program.
The rewards program has been incredibly effective at customer retention. Customers are able to access discounts, pay for their orders, and track their points—all in one app.
Sephora’s omnichannel marketing strategy enables seamless and consistent experiences both online and in-person for shoppers. Sephora has applied learnings from the pandemic and transformed the in-store experience with technological capabilities that aim to help customers find the right product for them. Customers are also able to try on products without going to the store through virtual reality capabilities. For example, shoppers in need of the right shade of foundation can use the Color IQ.
The company’s Executive Vice President of Omni Retail Mary Beth Laughton said on an episode of the NRF’s Retail Gets Real podcast: “We coined this term ‘omnitude,’ and it’s this idea that we’ll do whatever we can to delight our consumer wherever she’s shopping with us.”
Sephora’s omnichannel marketing strategy leverages email, physical stores, and the mobile app to deliver personalized experiences that delight customers. The key takeaway is that each channel reinforces one another so that shoppers are getting the most updated and relevant information each time they interact with the channel.
Bark’s omnichannel marketing strategy includes subscriptions, which power its cross-sell and upsell opportunities. Subscriptions are great opportunities for personalizing orders that fit consumers’ schedules and budget. The role that subscriptions play in their strategy is so powerful that they accounted for $10.3 million of Bark’s $118.1 million direct-to-consumer revenue during the third quarter in 2021.
Bark does a great job of making sure their customers are aware of all of its channels by following up with customers at more opportune times. In addition to these DTC changes, Bark is also leveraging the power of retail stores through partnerships with more than 10 retailers, including Walmart, Target, and Petco. This is in response to rising online CAC.
Magic Spoon has leveraged influencer marketing as part of its omnichannel strategy, which has allowed the company to experience triple-digit growth year over year. The success of its influencer marketing has allowed Magic Spoon to curate a brand identity that invokes nostalgia around eating and purchasing cereal.
The cofounders are currently focused on strengthening their DTC business but have plans to diversify their channels. “[W]e’ve been able to leverage all of the benefits offered for all of the DTCs like having a close relationship with your customers,” Cofounder Gabi Lewis tells Retail Brew. “Three years from now, we’re certainly not going to be only DTC. Eventually, we want to be everywhere and anywhere that cereal is purchased by consumers. So that’s going to start to mean we need to be in traditional brick and mortar.”
Currently, Magic Spoon collaborates with a variety of fitness and lifestyle influencers, and even Olympians, to promote their products. They also have an affiliate program that allows individuals who fit their target market to further help spread the reach to different audiences. They have also found podcasts to be an effective acquisition channel.
By knowing who their target consumers are and integrating channels that work best for their product, Magic Spoon is able to establish itself as a leading brand in the cereal industry and reach the right audiences.
Shopify is a popular and convenient platform for brands of all sizes who want to create an omnichannel marketing strategy. Shopify allows business owners to build and manage an online store, and provides a wide range of e-commerce and marketing tools, such as customizable website templates, integrated payment processing, and apps built by third-party developers in the app store. Shopify is uniquely merchant-forward, which means that they prioritize empowering brands to take ownership of their online store.
Shopify’s point-of-sale, especially, is optimal for brands who want to strengthen their omnichannel strategy. It enables brands to tap into DTC, keep inventory updated across all channels, and offer multiple fulfillment options. With ownership over consumers’ first-party data, brands can create a more personalized experience for consumers and drive loyalty. We discuss in more detail the advantages of Shopify in our blog post.
The bridge between the digital and physical worlds opens a whole new world of possibilities, and Brij leverages the universality and accessibility of QR codes to help brands strengthen their omnichannel marketing strategy in the most seamless way possible. With a simple scan of a QR code, customers have the ability to perform a wide range of actions, such as redeeming a discount, placing a reorder, searching for recipes, and connecting customer support. It’s essentially giving superpowers to a physical product.
When customers register their products, brands gain a better understanding of who their customers are, where they are shopping, and other valuable information that drive personalized experiences. Brands can keep track of this data on a centralized dashboard and make informed decisions. Customers can expect experiences that will continue to delight.
There is no one size fits all when it comes to crafting an omnichannel marketing strategy. The bottom line here is that omnichannel has become a must have, and business leaders need to be strategic about their omnichannel marketing strategy. There is an increasing need for brands to be value-driven, to delight, and to be creative. The pandemic has catapulted brands into a new normal that will continue to evolve.
It is only through omnichannel that brands can consistently deliver highly personalized experiences to their customers. The right tech stack enables brands to leverage consumer data and use predictive analytics to reach high-intent customers in the right channels with relevant information.
When brands know more about their customers, they are better able to deliver a shopping experience that drowns out irrelevant information. This approach is good for brands and better for their customers.