Look to the omnichannel future with how retail brands can thrive in a customer-centric landscape and how your business can start adapting now.
The core competencies of great businesses have changed.
Over the last five years, the business landscape has become more customer-centric than ever. The COVID-19 pandemic has exacerbated this trend, with consumers wanting a more custom customer journey.
9 out of 10 consumers want a seamless shopping experience, whether they're browsing online from a desktop or mobile app, on social media, by telephone, or in a brick-and-mortar store. They want personalized experiences, and brands now have the tools to provide them.
Omnichannel retail brands are oriented toward the omnichannel customer, with customer behavior driving every next move the brand makes. At the core, each customer interaction changes the next step the customer will encounter.
The brand is no longer trying to guide the customer toward a specific outcome. The brand and customer are now walking in lockstep.
Brands that win in this new customer-centric landscape will adopt an omnichannel approach to provide that seamless experience their customers want. As a result, those brands will show much higher levels of customer satisfaction and brand loyalty.
To adapt your retail strategy, there are five new core competencies to compete with the best brands out there.
Getting a product to market is now easier than ever.
The barriers to building a business are disappearing.
Take software, for example.
Years ago, starting a software company required a massive upfront investment, which was unfathomable for most. Companies were renting physical servers at considerable cost. The talent pool of engineers was small and hard to find.
Now, a startup can get $25-$100k AWS credits to kickstart all the infrastructure they need to host their new app. And it’s easier to hire a better team, as well. There's more knowledge available, with more engineers all over the world that can be hired from lower cost countries for a remote team. The remote work movement allows software companies to tap into talent from all markets.
And marketers can now access more customer data easier than ever. Privacy issues aside, the access to customer information, trends and metrics helps to optimize marketing on different channels.
Selling physical goods has gotten easier, as well, for both e-commerce and physical stores.
E-commerce platforms such as Shopify, WooCommerce, Etsy, and other niche platforms have matured, making it easier and more cost efficient than ever to start selling. Dropshipping has also made sourcing products easier and doesn’t require upfront working capital to fund initial inventory.
Sourcing products and finding quality suppliers has now become transparent, as well.
For example, with Import Yeti anyone can search the US Customs sea shipment records. If you know the legal entity of your competitors, you could identify where they are sourcing their products, their actual supplier names, the dates they received their shipments, and even the descriptions of the products included in each shipment.
In the past, creating a product and getting it to market was the difficult part that few could figure out. Accomplishing those things successfully was a core competency.
Now, creating the product and getting it to market are easier than ever.
As product becomes less significant, brand becomes more significant.
Let’s walk through the five new core competencies to build brand muscle in order to compete in this new customer-centric landscape.
1. Omnichannel marketing strategy will be about standing out and telling a story.
As new products can be more easily taken to market, new brands can also be spun up quicker than ever before. But along with that comes a crowded marketplace. The challenge now becomes standing out amongst all that competition.
Brands now find it more important to tell a story in order to stand out and ultimately sway their customer to choose their product over any other.
With more identical brands sitting side-by-side on the web (platforms like Amazon or niche websites) and in physical retailers, what is the differentiator?
Consumers tend to purchase what grabs their attention and resonates with them in terms of branding, packaging and their story. For a brand to resonate with their customers, they need to share values, leading to ongoing customer loyalty. 89% of customers stay loyal to brands who share their values.
The entire brand experience nowadays includes softer skills. 86% of shoppers prefer an authentic and honest brand personality on social media. This gives marketers more space to take risks.
Everlane has won over the hearts of consumers who value transparency with write-ups of each of their supplying factories and promoting the movement #KnowYourFactory. Allbirds, on the other hand, has resonated with eco-conscious consumers who appreciate their openness into how they source their materials and how they are working to reverse climate change.
Social media particularly allows retailers to have more personality. Tiktok is a channel where personality is rewarded. That is saying alot, as TikTok just surpassed YouTube in viewing time per user.
Dunkin Donuts made a big bet on TikTok by partnering with the #1 followed star on the platform, Charli D’Amelio. Together, they post humorous content to engage Gen Z. As a result, they’ve increased their app downloads and cold brew sales, particularly after naming two new drinks after the star.
As consumers spend more time on their mobile devices, brands can take advantage of these new trends to showcase their brand personality and resonate with their customers.
The rate at which new digital marketing channels open up is only increasing, allowing omnichannel marketers to devise new strategies to constantly reach new customers in small corners of the internet.
2. Gaining distribution and customer attention requires an omnichannel experience.
Direct-to-consumer brands are finding new online channels to have more touchpoints with consumers and create that positive, seamless customer experience.
Shopify, for example, now offers native integrations to sell via TikTok and other social media platforms. It’s also becoming more common for brands to sell via Amazon or even go back to retail, where they sell wholesale into specific retailers. Caraway achieved this by selling their high-end cookware in West Elm and Crate and Barrel, among other physical stores.
Finding that multichannel distribution is key.
Having an omnichannel approach to the customer journey builds that brand awareness to get and keep people’s attention. It allows the customer to, in an omnichannel environment, purchase wherever they want from you.
Consumers use an average of almost six touch-points with brands. Nearly half of them use more than four.
These different digital channels are not just meant to help distribute the product, but also the brand itself.
To do that, brands are betting more heavily on media. Email newsletters have long been part of the marketing repertoire, but brands are creating more content that is beyond the written word and the email inbox. Podcasts and videos are playing more of a role in telling a brand’s story and building out their messaging.
Here are a few examples:
- Trader Joe’s runs a popular podcast that covers new recipes to try and answers questions like why cheese melts the way it does.
- Allbirds ran a limited series in 2019 on SiriusXM about sourcing their shoes’ carbon negative soles and more.
- Sephora ran a successful podcast called #LIPSTORIES about self-image and how to be more self-confident.
Giving people different ways through which to have a positive customer experience gives brands a better chance of connecting and, ultimately, resonating with a customer, whether they be avid podcast listeners or loyal Twitter users.
3. Access to capital will give you time to solve challenges, particularly in e-commerce.
Manuel Koser, an investor in Cogsy, recently said,
“If you have access to capital, you have an infinite amount of time to figure out the other challenges within the business.”
Finding ways of capitalizing the business is essential.
Some businesses do that through venture funding, either from institutionals or angels. Other businesses find solutions through novel services. For example:
- Clear.co provides revenue-based cash advances to startups, SaaS businesses and e-commerce stores.
- Shopify Capital provides financial support and funding to eligible e-commerce store owners.
- Settle provides e-commerce businesses with cash flow management, including factoring invoices.
And there are many more where these came from.
Capital is now available through new avenues. The challenge has become attracting and qualifying for that capital.
Any brand that excels in this new business ecosystem will also know their financials like the back of their hand, so as to justify the capital they seek.
4. Hire the best team in the world. Literally.
To hire a team you must attract a team.
The hiring market is as competitive as ever, and the best people want to work for the best brands.
Brands will need to consider:
- How to get in front of those A+ candidates?
- What package will they need to offer to sign them?
To get in front of the right candidates and attract their attention, brands will need to flex their values. The ability of a brand to tell their story will be key to attracting the right candidates.
89% of workers at companies that support employee wellbeing are more likely to recommend their company as a good place to work. On top of that, nearly 80% of Millennials look for people and culture fit with employers, followed by career potential.
Post-pandemic, remote work has become a very attractive and more attainable perk that brands can offer top talent.
According to Lattice, 42% of businesses are planning on adjusting their remote work policy as a means of widening their recruitment pools. This strategy also fits into brands looking to increase their diversity, another element that attracts top talent.
In terms of packaging remuneration, top brands are finding that a mix of positive culture and a strong financial offer encourages star team members to join them and their mission.
5. Operational excellence is key to an omnichannel strategy.
Operational excellence will become more important than ever.
Throughout 2021, we are experiencing a bull market that has been accelerated by the COVID19 pandemic. In bull markets, industries grow so well that top-line growth plasters over deficient below-line unit economics, especially when they’re not great.
Growth can be misleading, and it’s necessary to take a long, hard look at the cracks in order to fix them.
Brands that win in this omnichannel commerce landscape are able to figure out how to get the most of whatever they’ve put into the business. Operational excellence will be key in terms of efficacy and efficiency.
Cogsy helps optimize these unit economics through accurate sales and inventory forecasting. Using real-time data, we help retail brands manage their operations and supply chain in a proactive (instead of reactive) manner.
So many brands have capital tied up in extra inventory sitting in warehouses. To flourish, brands can free up that capital to use it for other growth channels, instead.
Operational excellence and optimization is the glue that takes all the other core competencies and creates a flywheel that propels the best of brands to growth and, ultimately, long-term success.
Best-in-class brands will create the best omnichannel customer experiences.
Putting the customer at the center of a brand’s focus creates immense growth opportunities. Consider these statistics:
- Omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel.
- Purchase frequency is 250% higher on omnichannel vs. single channel and the average order value is 13% more per order on omnichannel vs. single channel.
- Customer retention rates are 90% higher for omnichannel vs. single channel.
The core competencies brands needed to prosper are different today than they were even five years ago.
To successfully pull off an omnichannel strategy, brands need to build muscle around these five new core competencies:
- telling a brand story that stands out,
- gaining new distribution, in both online and offline channels,
- attracting and qualifying for capital,
- hiring a great team, and
- achieving operational excellence.
Is your brand ready?