Category: Digital Transformation Strategy
As B2B enterprises place more emphasis on the experience of the customer, omni-channel is becoming a strong buzzword. Omni-channel is an approach to eCommerce that focuses on the customer by providing a seamless, consistent experience across all channels. An omni-channel strategy includes multiple channels – such as online storefronts, offline order taking experiences, social media and direct to consumer channels – to meet customers where they are and offer a consistent buyer experience.
Times have changed in the shift from brick and mortar malls to virtual commerce, but many of the same reasons the mall was so popular transfers to the digital, omni-channel realm.
- Every mall has its anchor department store which is the destination spot for consumers to buy from multiple categories. It is the go-to for diverse, and even routine products.
- Consumers shop unique, brand forward stores for clothes, shoes, and gifts where the curated product line established loyalty in driving repeat store visits.
- Lastly, the dotted kiosks throughout the mall catch the eye of casual shoppers, and consumers end up walking out of the mall with products they didn’t realize they needed or wanted before arriving at the mall.
Your Omni-Channel Strategy as a Virtual Mall
To better understand how a strong omni-channel strategy plays out, let’s take a stroll through our virtual mall.
The Anchor Department Store (Amazon.com)
Your visit starts at the anchor department store or destination of the mall. This might be a Macy’s, Nordstroms, or JC Penny’s, or even a Target or Walmart.
The anchor of the mall is usually the driver of traffic. There are multiple categories of products you need, and you know you can reliably go to one place to get them. When shopping at these anchor stores, you generally don’t care about the brand you are purchasing, and you depend solely on the inventory of product availability and the ease of the experience.
For example, you may enter the anchor department store looking to buy a toy for a birthday present. You want the wide selection of options available, and leave it up to the display to inspire your purchase. At the same time, you know you can grab some groceries for the party on your way out of the store. You rely on the convenience of the experience as your destination, no different than you do when shopping on Amazon.com or other virtual marketplaces.
Manufacturers and suppliers need to consider this channel in order to provide more access to their products and make their products available to a broader consumer base without relying on the direct costs of marketing or brand awareness. Product placement in these anchor marketplaces increases the ability to pick up sales through cross sells.
The consequence of only operating in this channel is that your success is based on the owner of the marketplace. The marketplace operator controls pricing, service experience, and product positioning. Relying on marketplaces for sales has a lot of opportunity to generate revenue at lower margins, but ultimately you are competing against similar brands in your category either directly with the consumer on the shelf or with the seller organization who is deciding which and how brands are presented in their marketplace.
Retail Branded Store (Nike.com, Gap.com, OnePeloton.com, etc)
After checking out at the anchor store, many will find their way to specialty branded stores across the mall.
For brand forward experiences where you want to differentiate on experience and be in control of which products are offered to consumers at what price point, owning your own storefront is an ideal approach.
For consumers, it creates a reliable experience and loyalty that they can expect from you versus that of the anchor department store (or virtual marketplace) channel. It also allows the consumer to have access to a greater variety of products within the brand, and adjacent accessories all catered within a unified, brand-forward experience.
Consumers will more reliably be able to differentiate why your product is better than competitors and craft that messaging much more easily by owning your own storefront. In the shopping mall metaphor, driving consumer traffic to your store through signage, ads, and digital campaigns further creates loyalty that is otherwise not achievable by only distributing through department store/marketplace channels.
For the manufacturer or supplier, an increased opportunity to create more consumer loyalty comes at a higher cost. You’ll have to more directly manage supply chain fulfillment, invest in marketing and experience no different than a brick and mortar store, but in the digital world, this cost is much lower to manage and investments in this space have a much broader revenue impact for you as a business.
As the manufacturer, you’re in the driver’s seat. A company like Nike generally makes some of their products accessible in the anchor department store or on the virtual marketplace. But where they really create lasting growth is through their investment in their own retail and online (B2C) stores. There a broader range of products are available. Higher margins or more profitable products can be marketed within a brand-forward experience. This is where Nike really owns the customer, not through the department store.
The Mall Kiosk (Facebook, Instagram, Google)
As consumers navigate through the virtual mall, kiosks line the center of the aisle. Unique gifts or services are offered that catch the eye and can result in additional purchases. These are [almost] never purchases the mall visitor intended to make, nor the reason they are at the mall in the first place, but sometimes profitable due to the traffic of consumers moving about the mall.
This is much like offering your products on Facebook, Instagram, or Google Ads. The buyers you get aren’t actively searching for your product (they would traditionally use other channels). Product placement through these ads offers an opportunity to increase exposure and convert new buyers through the reach those channels offer, without the overhead or expense that setting up a full retail store would require.
Leveraging these “virtual kiosk channels” allow you to uniquely target possible buyers and combine that with a sense of urgency to convert as they browse social media, for example. This channel is ideal for long tail, unique products that consumers aren’t actively looking for, but given the right audience, translates into a high conversion rate.
To get back to our example, that shopper went to the mall to find a present for their child but passed by a kiosk selling small gyrocopters. You didn’t go shopping intending to purchase that as the present for their child, but the positioning of the kiosk created that demand and intercepted that conversion from the department or branded store.
When you think of your omni-channel strategy like a virtual mall, it becomes clear why an omni-channel strategy is so important. Today’s shoppers – no matter if they are B2B or B2C – navigate the world of purchases across different channels and devices.
Today marketers need to focus on ensuring a strong product placement across their own eCommerce properties, across relevant e-Marketplace experiences (be it Amazon.com, Wayfair, Walmart, etc.), across social channels, and other digital sales avenues (like Google ads marketplace). An omni-channel strategy will set you up for the most future success.