The best omnichannel strategy won’t meet your retail sales goals
About two years ago, I took an interesting call from the CEO of a large Dutch department store. They were doing very well in the offline world, running stores across the country and opening new ones abroad. Online, things didn’t run as smoothly. “I need your help,” the CEO told me. “We need an omnichannel strategy that doubles our online sales without compromising offline results.” I thought about it for a few seconds, and then I told him no. “We can create an omnichannel strategy, and we will,” I added, “but it won’t meet your targets.”
Of course, the CEO was confused. Was this some kind of joke? Or had he ended up in the worst sales pitch ever? It took us some time to convince him of my plan, but after we had presented our plan to his team, the CEO was on board. In this article, I’ll tell you what changed his mind.
There’s no difference between online and offline
To people who love numbers, it’s appealing to keep online and offline sales separate, and focus on one single channel at a time. The logic being that if offline sales results are excellent and online results stay behind, you can simply set a target to increase online sales and vice versa.
This, right here, is where it goes wrong. To your buyers, there’s no difference between offline and online sales. Whether they go online or walk into your store, they’re the same person buying your products. They’ll want the same experience regardless of how they buy and the money they pay winds up in your bank account either way.
After all, today, offline and online are part of the same, excuse my marketing jargon, buyer’s journey. A woman buying sunglasses can walk into a store to try on different frames and then visit your website to make the actual purchase. Does this mean your online strategy works better than your offline strategy? Quite the opposite: they both work fine, and better yet: they work well together.
Elevating the benefits per channel
A great way to look at your omnichannel strategy is to view your sales channels as slides leading to the same pool. One day, a visitor may want to go down a fast and exciting one, whereas, on another, they choose the closest one because they don’t feel like walking. There’s no such thing as the ultimate slide; the fact that the pool has options is what makes it worth a visit. It also doesn’t matter which slide the visitor chooses; they’ll end up in the same pool. And the fact that they chose a particular slide today doesn’t mean the other slides are not doing their job.
It’s just that, as a visitor, you can only go down one slide at a time.
In this analogy, the pool is your bank account and the slides are sales channels. There’s no right or wrong sales channel, as they all come with their own benefits you should elevate. Online sales channels come with the benefit of search and availability. It’s easy for your buyers to visit your site and find exactly what they need at the click of a button. In your store, however, they benefit from space, touch and human connection. Both add value to the customer experience, meaning both can make or break a sale. Hence, you should always try to remove barriers between channels so that customers are in control of where they click “pay”. In fact, multiple channels can actually help them make purchase decisions.
One of the omnichannel strategies I like belongs to Coolblue, a Dutch e-commerce company that started off as a 100% digital business. In all of their advertising, they promise they’ll do everything to make you smile, and so far, they’re doing a great job living up to that promise. After the first few years of being in business, Coolblue noticed its buyers missed a human connection with its employees. They also found that, for some items, buyers prefer to go into brick-and-mortar stores so they can touch the product and talk about it with the staff. In the name of making people smile, Coolblue chose to open stores throughout the Netherlands, and they now benefit from an omnichannel approach where all channels add to the customer experience.
Soft versus hard conversions
When I explained all of this to the CEO of the large Dutch department store, it clicked - the new omnichannel strategy would never meet their targets. This had nothing to do with the omnichannel strategy; it was the targets that needed changing. After all, you become what you measure. Your team will always behave according to the targets you give them. So, instead of trying to double online sales without compromising offline results, we developed new targets to boost sales across all sales channels and increase soft conversions online and offline.
The part about soft conversions was essential, as they are a great way to determine if (and how) a sales channel contributes to the buyers’ journey.
Hard versus soft conversions
Hard conversion: We’ve sold X amount of products
Soft conversions: X people signed up for our newsletter
Let’s say the CEO in our story wanted to increase the sales of personalised towels (you know, His and Hers, children’s names, etc.). In this scenario, a store visit makes sense, as buyers want to touch the fabric and see what the colours look like in real life. However, the department stores don’t come with a sewing workshop, meaning store staff would need to order the personalised towels from somewhere else. Now, what if the team placed signs with QR codes in the home department so people could go to the store, feel the fabric, scan the QR codes and order their personalised towels online to have the product delivered the next day? This would make the perfect combination between offline and online, and thanks to the QR code, the CEO and his team could measure the added value of the store visit:
Hard conversion: We’ve sold 5,000 personalised towels online
Soft conversions: 3,000 people scanned the QR code in the store
In this (fictional) omnichannel strategy example, the department store team have done everything right. They’ve elevated the benefits per sales channel and found a way to measure both soft and hard conversions. In this example, store visits have added to online sales, even though all the towel-buying people left the premises without making a single payment.
CEOs, go into your stores
There’s another perk of breaking the silos of online and offline sales: your people. Whether they work for your online shop or your brick-and-mortar store, they have valuable information that you can use to optimise the overall buyer experience. After all, if a customer has issues ordering a personalised towel online while in the store, a shop assistant should know how to help.
Also, offline and online sales teams do customer research daily, even if unaware. You need all of this quantitative and qualitative data to find out the gaps in the buyer's journey, which will likely be a mix of offline and online experiences. Further still, if you give the online and offline sales teams the same targets, you encourage them to work together instead of trying to steal away each other’s customers (which, as we now know, basically means stealing your own customers).
Your people can tell you a lot about what’s happening in your online shop and brick-and-mortar stores, but when creating an omnichannel strategy, nothing beats going through the experience yourself. This is why I advised the CEO of the department store to go into his own stores quarterly to feel what it’s like to make a purchase there and how the experience relates to the look and feel of the online shop. How long does it take to buy something in the store? How long does it take through a different sales channel? Where is the pain in the journey? I advised the CEO to add the answers to these questions to the backlog, so that, in turn, the company can help people make purchase decisions.
It’s something I believe everyone leading a company should do. Make time to (secretly) join usability research with real customers and hear for yourself how all of your online and offline efforts influence their decisions. Take their complaints and questions on board and listen to their advice.
And most importantly: forget about your target audience as online and offline sales targets. Think about them as people going down different slides and having the time of their lives.
Let’s talk about how
It’s all very well talking about the importance of omnichannel strategies in retail and e-commerce; getting started is found to be challenging. You must think about user experience, target metrics, and the technology required to make it happen. That’s why we’re here. Our tried and tested senior consultants are more than happy to jump on a quick call to discuss your omnichannel plans and to give you honest feedback.