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Many fashion retailers treat omnichannel as a burden — something they are forced to do, just to keep up. But I try to remind them that, with the right approach, omnichannel also provides an enormous opportunity, since cross-channel shoppers — those who both buy online and in stores — are significantly more profitable than the average customer.

Based on my work with fashion clients, I have found multichannel customers deliver:

• Higher revenue: Average annual revenue is two times that of other repeat buyers.

• Higher margins: Annual margins run about 130 percent higher versus other repeat buyers.

• Greater loyalty: They are 50 percent more likely to keep shopping year after year.

While they contribute an outsized share of the bottom line, multichannel customers tend to represent only 10 to 15 percent of the customer base. In other words, 85-plus percent of customers are not multichannel shoppers. Of that 86 percent, around 60-plus percent of customers are one-time buyers only, and 25-plus percent are repeat buyers who only shop within a single channel.

But what if you can shift this distribution slightly — let’s say just a 1 percent increase in the cross-shopping segment? It would mean reap millions in incremental revenue annually.

These numbers help explain why we are in the midst of an incredibly dynamic period of growth in multichannel retail, as traditional stores invest heavily in digital growth, and young, direct-to-consumer brands establish more and more physical retail experiences.

So how do capture the potential value of the cross-channel customer journey? Here are three critical best practices that, again and again, have delivered success to the retailers I have worked with.

Identify Customers Most Likely to Become Cross-channel Shoppers

A certain number of your one-time and single-channel customers have already given signals that they could become cross-channel customers. And your first task is to figure out what, exactly, those signals are.

Distance-to-store is one of the most obvious features if you are targeting online shoppers. But there are many other possibilities. For example, look-alike modeling can be very effective in identifying likely target segments. By comparing behavioral and profile attributes of your current multi-channel shoppers to online-only buyers, you can find single-channel shoppers who exhibit a set of traits similar to your target group.

The same approach can be used to discover segments for your “offline-to-online” strategy — i.e., discovering store-only customers who would benefit from shopping online.

Prioritize Personalized Messaging — Not Discounts

There are many ways to personalize messages when promoting in-store shopping among online-only customers. Based on a customer’s zip code, you can invite her to the store closest to her home. Or you can go a step further, and give her the opportunity to choose a different location through a preference center — for example, the store nearest her place of work.

In addition, you can:

• Highlight the potential benefits or services of a given physical location.

• Send a personal message from the store’s manager for fitting service based on her online shopping history.

• Offer a glass of champagne or a cup of tea to make her experience welcoming and engaging.

Just make sure to concentrate on personalized experiences, not discounts. Ultimately, your goal is brand engagement, not to turn existing customers into discount hunters.

The same principles apply with when reaching out to store-only customers with messaging about online shopping. Tailor messages based on their account contact availability and customer preferences. In addition, create messages that highlight advantages of the online experience, which might include:

• Convenience.

• A no-hassle return policy.

• Relevant products informed by the customer’s in-store shopping history.

Test and Measure, Early and Often  

In my experiences, brands invariably achieve greater success cultivating cross-channel shopping when they build in testing from their very first efforts. Testing doesn’t just help you refine future iterations of your cross-channel strategy. It also helps provide clear evidence of the business value of your efforts. That is critical in winning buy-in across the organization if you plan to scale your efforts and, ultimately, maximize bottom-line impact.

I worked with one brand that launched a journey with a hold-out control. Ten percent of an online-only population that looked like potential cross-channel shoppers were excluded and continued getting business-as-usual messages. The rest of the target group was sent on a 30-day journey, promoting shopping in stores. At the end of the 30 days, this brand saw significant increases not just in cross-channel shopping, but also in the overall repeat rate of the target group compared to control.

When the strategy was rolled out beyond a single test campaign, the brand established a dashboard to continue measuring trends in cross-channel shopping, and this became one of their top key performance indicators. They were able to attribute an increase in this KPI to several million dollars of incremental revenue and margin annually.

Scaling Cross-Channel Customer Journey Design and Execution

To scale your cross-channel journey strategy, consider adopting what Gartner calls a smart hub technology. Without requiring any changes to your current mar-tech stack, the right smart hub can speed and automate everything from lookalike modeling and personalization to testing and measurement. You can quickly:

• Unify online and offline behavioral data from across disconnected marketing systems.

• Provide self-service access to that data, so marketers can identify opportunities.

• Identify targets with predictive intelligence.

• Optimize personalized execution across channels.

• Support short-term and long-term KPI measures and incrementality assessment.

Tamara Gruzbarg is head of industry insights at ActionIQ Inc.

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