From paths to points: The new shape of retail marketing

'Omni-channel' is the new buzzword that every client and agency is striving to understand. How will it affect my business? Am I doing it already? Do I need to change my business model to fit?

Omni-channel communication is ensuring that you think about shoppers. Omni-channel replaces studying the demographics of a consumer with understanding the behaviour of a shopper. This change in approach seems small, shifting the focus away from types of consumers and their attitudes and onto their physical behaviour and mindset; but it is revolutionary. It is marketing focused not on who people are, but on what they do.

Shopping journeys vary. That means that the timing and location of the communication matters as well as the message. The difficulty is in aligning communication disciplines within a business around one human insight. How do we knit all the channels together to create one integrated shopper story?

The traditional approach to marketing communications used to be linear: ‘from sofa to store’. One, build awareness; two, drive preference and, three, sell at point of sale. But lifestyles have changed, transformed by technology. We have much less control over the timing of our messages—everything can happen in any order. The one constant is that retail must be the focal point of communication.

The two key communication challenges are the point of experience, where the shopper physically interacts with the product, and the point of transaction, where the purchase is made.

The role of the store is changing: we talk about ‘showrooming’ and ‘ROPO' (research online, purchase offline). If the purpose of the physical store is as a point of experience, store sales may be largely irrelevant as the final purchase—the point of transaction—moves online. Store ROI has to be measured with new metrics such as customer satisfaction, dwell time, brand affinity and product understanding.

Lower sales numbers from physical stores clearly do not, any longer, imply that stores are not fulfilling an important part of the purchase journey. Physical experience is still a key factor in many purchase decisions, and people need stores to touch, feel and interact with the product. They can talk to sales staff and be influenced by their recommendations. Obviously, retailers’ overall sales need to increase, but they need to be measured across all the touchpoints to truly record the effect of marketing programmes. Every touchpoint is a communication asset that must be considered and used effectively.

Understanding how shoppers use touchpoints, what type of message they want to receive at each touchpoint and the order they will journey through them is critical to building omni-channel campaigns. This varies by product category and by shopper audience and mission.

Strategically, we need to understand what kind of experience will change their behaviour to engage with our product. Then we need to know how and where they want to transact, to make the purchase. These two parts of the journey may occur in totally different environments at different times, sometimes weeks apart and sometimes consecutively.  

In Seoul, Kanu Coffee created a point of experience—a whole cafe—replicating its packaging, in order to launch a new instant whole-bean coffee (see pictures below). The shop was a temporary pop-up store built when the product was first launched. This branded point of experience generated awareness and enabled shoppers to experience the taste to reassure them that it equalled the quality of fresh-brewed coffee served in coffee houses. Stage two was to direct shoppers to the point of transaction, either in the café or in a supermarket, to purchase the product. 

In another example, Emart, Korea’s largest retailer, flew balloons that also acted as free WiFi hotspots in shopping malls and other locations. When people connected to the WiFi, their phone automatically received a shopping app for Emart and discount coupons, enabling them to order groceries immediately. Here, the point of experience and the point of transaction were joined, taking place consecutively through mobile devices.

Five thoughts changing retaii

None of us can predict the future, but we do know that the expectation from retail is changing. Here are five thoughts that will shape change in retail marketing and beyond.

1. Shoppers are demanding that their retail experiences are everywhere, instant and personal

2. Mobile means we have a retail environment in our pocket. Since 2011 when we created a virtual store in a Seoul subway for Tesco Homeplus, the number of Koreans who shop with a smartphone has increased from 11.9 per cent to 62.6 per cent.

3. There is no longer a 'path to purchase'. Nothing is linear anymore. Shopping is an intertwining journey of searching, shopping and sharing. The world’s top three search engines in shopping today are Google, Amazon and YouTube.

4.  Point of transaction has replaced point of sale. The growth of e-commerce means that where we search and where we buy are often not the same. But every brand must have a point of experience and a point of transaction. Simply putting POS in a store is not enough.

5.  Content will be everything, both online and in-store. It will fuel the future of consumer and brand relationships driven by three human behaviours: searching, shopping and sharing.

Diana Cawley is global head of retail for Cheil Worldwide