Winning the Battle Between Bricks and Clicks

By forgetting the "line" between online and offline, retailers can grow conversions, build loyalty, and step into an omnichannel world.

This article originally appeared on ClickZ.

Contrary to what many 2014 marketing headlines might have led you to believe, online is not the enemy of offline: both channels are absolutely complementary, and I’d say that customers seldom think about the difference.

As channel convergence comes to the fore in 2015, it’s time for marketers to stop focusing on the divisions between channels and devices, to put aside the latest hype, and instead focus on putting their customers back at the center of marketing strategy. And channel convergence is accelerating indeed: In 2012, 14 percent of in-store purchases were influenced by the Web, and 36 percent in 2013; the Web’s influence on purchases has also increased significantly from 5 to 19 percent in one year, according to The New Digital Divide, Deloitte 2014.

No one predicted such rapid growth, but there’s no questioning now that the lines between digital and physical retail are blurring more each day. Thanks in part to the high mobile penetration of the region, Asian retailers are leading the world when it comes to omnichannel retail innovation.

For example, take Homeplus in Korea, which installed virtual grocery points in several train stations to allow customers to shop via cell phone on the train platform and have goods delivered to their homes.

It goes the other way as well, with previously pure-play online companies investing in a physical presence, many adopting the “pop-up” concept to move into the high street.

Late last year, Southeast Asia’s leading online fashion store Zalora opened up its first physical presence with a pop-up store on Singapore’s popular shopping street, Orchard Road. Besides offering their customers an opportunity to preview the latest collections from the various fashion labels, the pop-up store also featured a parcel collection point and a dedicated returns station. These obvious benefits of the physical location are combined with digital convenience to complete and complement the overall shopping experience on Zalora.

These are just two of myriad examples of how Asian retailers are crossing channel barriers to delight their customers in new and exciting ways. But as multichannel goes mainstream, dazzling new shopping options won’t be enough to hold customers’ loyalty, especially when the next offer is only a click away.

In order to truly win, retailers must not only offer new shopping and convenience solutions, but also deliver the goods and services that each consumer wants in the very instant and on the channel that meets each customer’s needs. A 2014 consumer survey commissioned by Sociomantic and conducted by Research Now, showed that more than two-thirds of the 1,000 respondents claimed to use several devices (desktop, mobile, or tablet) before finalizing online purchases, increasing and distributing their total number of digital touch points with the brand before conversion.

And lest we not forget the tremendous opportunity of leveraging in/near-store mobile technologies, the Deloitte study also showed that 84 percent of visitors to a store use smartphones before or even during purchase. In light of all this, the key challenge for marketers is to reconnect online and offline data to benefit from a 360-degree view of customer behavior.

Data has always been the key to effective customer relationships for retailers. Long before the Big Data Bang, customer loyalty cards and discount coupons already allowed retailers to record and measure transactional data tied to specific shoppers and to use that data to improve the shopping experience for those customers.

Digital and mobile technologies now allow retailers to go even further in identifying, predicting, and satisfying the needs and desires of customers on an individual level. Multichannel message personalization is a great first step in building lasting customer relationships.

Today, programmatic display can already go a long way to help achieve this mission in digital, and with new programmatic channels and inventory types scheduled to go programmatic in 2015, I believe we will see only more touch points personalized, more marketing narratives linked across devices, and most importantly more happy customers created as a result of real-time personalization.

In the not-so-distant future — indeed, in the early part of this year — we will see the most aggressively customer-centric retailers utilizing cross-channel, individually personalized marketing that combines the following aspects to reach customers with real-time relevance.

These ads will not only target the right inventory, but also deliver the right message (including products, pricing, and promotions) and appear at just the right moment. The right product in this case is not just the hot new thing, but rather the offer that has the highest probability of interest to the customer, based on analysis of both previously purchased products, especially those that need regular renewals, such as cosmetics, or benefit from additional accessories, like electronics.

The right price should entail offering the right promotions to the right persons based on previous basket sizes or promotions used. The right frequency and timing should be based on measures such as previous purchase and the degree of loyalty of each customer behavior. Retailers are now cornered: their customers expect to live a truly personalized shopping experience.

The bottom line in all of this is that customers don’t think in channels — only in terms of shopping experience. So it’s time for retailers to forget the “lines” and adapt their strategies to offer consumers a truly cross-channel, personally customized experience.