"In order to compete with Amazon, we've got to be omnichannel, we must digitize our business or die."
Simulated Quote From A Simulated Executive. January 15, 2014.
In the image, Yankee Candle is cleaning house! Up to 75% off, signed all across the front of the store. In fact, I count twelve (12) signs that I can see - and you have to admit, 40% of the store has been blocked by two of the giant 75% off signs, so who knows how many signs are back there?
Omnichannel advocates generally love this - especially when we visit the website, and see 75% off as well.
And, no need to go to a mobile screen shot, but rest assured, you can save 75% there, too.
Integrated campaigns across channels, common creative, same product. You're communicating, across the board, that the customer shouldn't pay anything close to full price.
During the sale, Yankee Candle offered this item (which sold out) at 50% off.
Since the item is sold out, I checked out Amazon, where, yes, the item is available, at a much higher price.
It takes a lot of mental bandwidth to sell like this - to integrate campaigns and timing and vendors and creative and communications and signage, all to communicate deep discounts (or not to communicate discounts via Amazon but to do so on your own site). And we don't have a lot of evidence that profitability improves, do we? Go look at any publicly traded company, and compare gross margin rates to profit rates - do a longitudinal study over a decade, and you'll see that all of this integration is virtually pointless, from a profit standpoint.
Go look at this little ditty from Best Buy (click here). But read this one first (click here).
Let's get this right. Best Buy, by all accounts, does everything the experts want them to do. E-commerce and Retail, linked together? Check. Social Media? Big Check!! Mobile experience? Absolutely. Price matching - low prices? You Bet!
You must discount - "table stakes", as it has been called. The experts (who get more page views the more they tell you what you have to do) tell you that you must discount - so we all do it. Then the strategy fails (click here).
Now what the heck do you do?
Best Buy says they will grow e-commerce (not hard to do), it will work on personalization (harder to do), customer segment targeting (easy), and growing Geek Squad. Did you notice that the word "merchandise" is completely missing from the 2014 strategy? It's discounts and CRM from here on out. That's the story.
That's the magic of omnichannel.
You almost never hear of the importance of merchandise from omnichannel experts.
Story is increasingly important. If you sell the same stuff as everybody else, and you discount like everybody else, and you're tech team wants to digitize everything into a CRM database that delivers a 25% off coupon to the right customer at the right time, then it's all you have left.
Do you want the story of your brand to be large, percentage off signs?
Or do you want the story of your brand to be something else?
Alright, let's get to the bad news. Let's assume you have 100 customers who spent $100 12 months ago, via your online channel...
Say you manage a paid search program. Last month you spent $100,000 and the following happened. Cost = $100,000. Clicks = 200,000. Co...
Two weeks ago I ran a poll on Twitter, asking if users calculated the profitability of their marketing efforts. 32% said "no"...
Yeah, that's a lousy picture. Too bad. Today is essay day. If you don't want to read something long, stop here. I spend a...