Is omnichannel marketing ideal for companies?

Nov 28, 2017

Hi all!

I came across omnichannel marketing in a book by Philip Kotler pertaining Marketing 4.0 and I thought it will be interesting to get your views about it. According to Philip Kotler, omnichannel marketing is defined as the practice of integrating multiple channels to create a seamless and consistent customer experience. Examples of it include Tesco’s virtual store of grocery store shelves in subway stations, enabling busy customers to shop online, without visiting the brick-and-mortar store.

The author suggested that omnichannel marketing as one of the ways in which companies can capitalise to increase commitment (i.e. increasing conversion rate of ask to act). However, in my point of view, omnichannel marketing can potentially cannibalise existing retail sales, given that we are channelling our potential customers to online stores. As online shopping is deemed to be more convenient and faster, the same pool of customers may be attracted to resort to online shopping rather than offline shopping.

What are your thoughts on this? Is omnichannel the way to go?

2 responses to “Is omnichannel marketing ideal for companies?”

KyuJin SHIM

December 7, 2017 at 10:44 am

Hi Cheryl,
Thanks for your interesting post.

What you have mentioned here is the concern about “Showrooming.” It refers to the practice of examining merchandise in a traditional brick-and-mortar retail store or other actual – i.e., not online – setting, then buying it online, sometimes at a lower price.

So, nowadays omnichannel marketing focuses on taking advantage of consumers’ changing purchasing behaviors, rather than struggling against the tides.

And that is why some online clothing shops open offline stores, not to create sales on the spot but to promote their clothing and to give actual fitting experience to their online consumers … In that way they can (and do) lead consumers to online purchase while at the same time freeing consumers from the big negative about buying clothing online, namely receiving clothes that don’t fit well. In this clever way, as online blurs the line between sales platforms and marketing platforms and incorporate offline sales platforms into digital, firms want to use offline space as more a marketing platform than a sales platform.

Also, as in the SWEET FIT case we covered in class, the offline store offers digital experience.
So the value of omnichannel marketing can be better understood in the context of convergence rather than cannibalisation among offline/online sales platforms.

By coincidence, only yesterday (December 5), the USA program National Public Radio – NPR – ran an interesting radio piece on yet another variation in online/offline marketing of fashion clothing, namely the use of YouTube by private entrepreneurs (young, adventurous, start-up mode) … For your possible interest, I attach the NPR transcript (see below my signature below).

Kyu

‘This Is A Business Now’: YouTube Stars Influence Generation Z’s Fashion Tastes

https://www.npr.org/sections/alltechconsidered/2017/12/05/568590295/this-is-a-business-now-youtube-stars-influence-generation-z-s-fashion-tastes

National Public Radio (USA) All Things Considered Dec 5, 2017, 4:35 pm Eastern Winter Time

Erica Louie, a YouTuber who goes by Miss Louie, left her corporate job to make fashion videos full time.

Denise Tejada/Youth Radio

Gen Z is the generation that follows millennials. The oldest members are now going into college, they have tons of buying power, and marketers are trying to figure how to sell to them. Youth Radio’s Rhea Park reports on how fashion trends reach Gen Z.

I used to be addicted to an Internet phenomenon called haul videos. It sounds kind of weird. But I’ll watch someone sitting in their room, trying on clothes and talking about how they fit.

Erica Louie, a YouTuber who goes by Miss Louie, explains how she makes the videos:

ERICA LOUIE: “This week we’ve got our Super Bowl shopping event, the Nordstrom anniversary sale. So I’ll literally turn on both cameras, stand in front of the white backdrop, and then model clothes, and then change out, and then just do it over and over again for hours.”

A corner of her Santa Clara, Calif., living room has been converted into a film set. She has a white floor-to-ceiling backdrop and a rack full of clothes with tags still on them. Louie’s been working on these videos for six years. She has a quarter-million followers.

“Whether it’s young women entering college, trying to get internships, or women trying to enter their first job from college, or people who are already working right now,” Louie says, “I was like, ‘Oh my God, I found my group. I found my niche.’ ”

Earlier this year, Louie left her corporate job at Dell to grow her YouTube channel, and her decision is paying off. Now she says she’s earning a six-figure income, but it’s not easy money. Louie puts in 50 to 60 hours a week on her videos.

So how does she make money?

Well, let’s say you like the jacket she’s wearing in a video. You can click on a link in the video description, which directs you to the retailer’s site. For every jacket that’s sold, Louie gets a percentage from the cart total. And that link is accessible even years after the video is posted — so Louie could be making money from a link she posted five years ago.

Ilse Metchek, head of the California Fashion Association, calls people like Louie “influencers.” She believes they are changing how the fashion industry works.

“Influencers are the new Vogue,” Metchek says. “They get front row seats at the fashion shows. They get merchandise sent to them daily. ‘Here, free! Please wear this.’ This is a business now.”

Louie’s business model is surprisingly personalized. She buys what she likes for her wardrobe — with her own money — and then approaches brands, instead of the other way around. So she’s not tied to any one label.

That freedom and customization is refreshing to Gen Zers like me. Plus, we are more interested in connecting with real people than with companies.

My friend Trinity Balla’s favorite haul videos are from YouTubers Sophia and Cinzia. She asked me to watch their haul from a shopping trip in London. Part of the appeal of Sofia and Chinza is that we see ourselves in them. “They’re close to my age. They’re maybe three years older than me,” Balla says. “And they don’t have a bunch of money, like, they both have jobs. They’re working.” Sofia and Cinzia feel genuine. They are buying things they like for themselves. It’s a level of customization and a feeling of authenticity that speaks to us.

Metchek says it’s going to be hard for retailers to keep up, since we’re so individualized in our tastes: “You will not all have the same hairdo, and you will not all be wearing torn jeans, and you will not all be wearing the same footwear. And you may not even use the same cosmetics,” she says.

Maybe Metchek has a point. I know this sounds nuts, but over the course of reporting this story, I even found myself getting bored with YouTube haul videos. What’s next? I don’t know. Maybe I’ll even go to the mall.

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cheryllai13

December 8, 2017 at 4:01 pm

Hi Prof! Thanks for your insightful reply! It’s indeed interesting to learn more about how retail shops complement the online store! J

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