Brick-and-Mortar Retailers Can Take Back The Holiday Momentum

  • by , Op-Ed Contributor, November 22, 2016

With the holiday shopping season already in full swing, the all-important question is once again being asked: “Which retail brands will be winners in 2016?” As in recent years, all eyes will be on the battle between brick-and-mortar retailers and e-commerce sites. E-commerce has certainly seen a strong increase in market share over the past years, growing from 9.9% of total retail sales for 2013 to 11.3% for 2015. That growth is projected to continue this holiday season.

Retailers have responded by investing in their own e-commerce sites. And yet any retailer will tell you Amazon is the biggest threat to holiday success this year. In fact, Amazon, the largest online retailer in the U.S., accounts for about 25 to 40% of sales growth, compared to 9% from Walmart, the largest retailer with physical locations.

Given that perspective, it’s easy to think that brick-and-mortar-based retailers are in serious trouble. But that sentiment overlooks the fact that despite e-commerce gains, about 90% of retail purchases still take place in-store, accounting for about $4.3 trillion of annual revenue in the U.S. alone. This fact certainly isn’t lost on Amazon, as shown by its recent initiative to build physical store locations across the country, the first of which opened earlier this year in Seattle.



All of this means that traditional retailers are in a much stronger position than many believe to counter Amazon’s growth and expansion into their markets. The retailers that are poised to win this holiday season are embracing that strength by leveraging an unlikely but formidable asset —  their brick-and-mortar stores.

Building a Brick-and-Mortar Advantage

So how can traditional brick-and-mortar retailers use their offline presence to counter e-commerce growth? By combining their shopping channels into a single branded experience that leverages the enormous power of in-store sales. Today’s consumer isn’t a single channel shopper. They browse in-store, research on mobile devices, go deeper with merchandise online and ultimately buy across all three. To the omni-channel shopper, that is all part of a single brand experience. Therefore, retailers must become a single omni-channel shopping solution.

There are several ways that retailers need to transform to meet the demands of today’s omni-channel shoppers. The first step is to rethink the approach to one of the oldest traditions in holiday shopping. Traditionally, “Black Friday” and its cousin, “Cyber Monday,” have been the start of the serious shopping season. And traditionally, retailers have approached these as two separate events. Simply put, they aren’t any more. As consumer shopping behaviors become more integrated, this four-day shopping event must also be thought of as a single promotion. Launch online deals on Black Friday. Dial up compelling in-store promotions on Cyber Monday. And cross-promote both buying channels throughout the weekend. 

This is easier said than done in some cases, pointing to a structural challenge retailers must overcome. Within a retailer, sales and marketing departments are often organized with in-store and “dot com” groups acting as independent teams. The impact on the consumer experience can be tangible. For example, take the national retailer that offered a mobile coupon promotion one holiday season and was confounded by low redemption rates. The reason? The in-store team ran a higher discount promotion at the same time.

Many retailers have found that consumers who purchase both online and in-store spend the most. The key is optimizing towards that behavior. How well are you promoting your “Buy Online, Pick Up In Store” services to your customers? Do you have online shopping terminals in your brick and mortar locations to help customers access your full merchandise catalog? Do you have promotions that activate when a customer buys across both online and offline channels? These are just some of the examples retailers are emphasizing to drive that omni-channel strategy.

Unified Data for a Unified Brand Experience

Effectively engaging with consumers across the digital and physical world requires important work behind the scenes, starting with your customer data. Retailers need to work with partners that can easily unlock that first-party data and activate relevant marketing campaigns. For example, promoting that “Pick Up In Store” service can be far more effective when it is targeted to a brand’s existing customers or prospect list. Once unlocked for activation, that customer data can be enhanced with other unique data sets. Adding geo-location shopping data enables a retailer to identify customers who also shop at top competitors for more targeted retention and loyalty programs. Similarly, less frequent customers with a high propensity to shop at competitors can be identified for conquesting programs. 

Furthermore, by integrating traditionally disparate customer data, retailers can have a single view of the consumer across all brand touch points. For instance, what did a customer buy online and did that same person browse the same products in-store? Does a store visit precede an online purchase or vice-versa? Adding third-party data can answer questions such as where the consumer went prior to and immediately after the retailer’s store visit to better understand the consumer journey. These insights feed a powerful cross-promotion strategy by mapping different messages to different audience segments: browsed online and bought online, browsed online and bought in store, browsed in-store and did not buy and so on. The great news is marketers already have the tools to build this exact customer advantage.

Attribution to Close the Loop

Just as integrating online and offline data creates a market advantage, so too does applying online and offline attribution solutions. E-commerce attribution has existed for years. Now retailers can also leverage sophisticated attribution platforms that correlate in-store visits to a retailer’s marketing and promotional efforts. These offline attribution tools reveal what drives that 90% of in-store retail sales, such as which segments convert, which promotions resonate and even which media channels prove most effective. And that online to offline link can be leveraged to understand how visits to stores and visits to the website drive purchases.   

The bottom line this holiday season is that brick-and-mortar retailers have what it takes to successfully compete in the evolving landscape of consumer shopping behaviors. Most importantly, their most traditional asset — the stores themselves — provide a significant advantage in their battle against e-commerce rivals such as Amazon. But taking advantage of new opportunities means abandoning the old divisions between in-store and web teams and separate Black Friday and Cyber Monday marketing strategies. Today’s consumer is omni-channel. The retailers who win this season and beyond are those who can deliver a single customer shopping experience that seamlessly crosses offline and online worlds.

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