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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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Omnichannel: Will it work for your business?

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Omnichannel: Will it work for your business?

Major e-commerce players such as Amazon, Shopify, Warby Parker and Casper are opening up brick-and-mortar retail spaces, signifying a new trend that might prove beneficial to small to medium-sized online stores.

 

An increasingly crowded online marketplace is fuelling a rise in online advertising costs, and for many startups, gaining a foothold in the online marketplace is becoming cost-prohibitive. Even established e-commerce sites may be looking to offset the rising costs of online advertising with other methods of raising brand awareness. One solution is an omnichannel strategy: a fusion of e-commerce and physical retail that can help drive online sales.

 

Evaluating whether or not an omnichannel marketing strategy is the best way forward for your business will require an in-depth dive into what your current online marketing costs are, and the creation of a theoretical model that takes into account various aspects of the physical location you are considering, including potential passby traffic and in-store drop-ins. An omnichannel strategy may not be the right choice for every business, but it’s worth considering for e-commerce retailers that are looking for increased brand awareness and unique marketing opportunities that capitalize on a product that is best experienced in person.

 

Is Omnichannel Right for your Business?

 

When considering whether an omnichannel strategy best suits your business, start with your product and/or the brand value proposition. Is there something about what you offer that customers can only truly experience in person? At StickerYou, we use proprietary technology that allows customers to create and order die-cut sticky products, including stickers, labels, iron ons, decals, patches, name badges and temporary tattoos. But there is a big difference between seeing a sticker design on a computer screen and feeling the quality of the paper or vinyl in your hands, or seeing the sharpness of the colors on thousands of stickers displayed right in front of you. For us, a tangible offline experience is a powerful marketing tool, which is why we have decided to open a brick and mortar retail location in early 2019. By giving customers the chance to experience our product in real time, we aim to drive brand awareness in a way that isn’t possible in an e-commerce-only store.

 

Developing Metrics

 

Though a brick-and-mortar retail space may not generate profits in the traditional sense, we believe that a storefront provides significant value that online ad impressions don’t that can translate into an overall gain. The store may technically operate at a loss if you look at operating costs compared with product sold, but retail can still work and be ROI positive if or when the incremental traffic from retail driven to the website is less costly than using such funds to pay for online traffic.

If the store breaks even, all subsequent marketing value generated by the store is “free.” Seen in this context, and using digital marketing metrics, we can compare online and omnichannel marketing strategies based on projections for the retail space and averages of current online marketing strategies. If walk-by traffic is considered as an impression, and a walk-in or inspiration to check out the store online from viewing the retail space is considered as a click, the metrics may look something like this:

 

Impression Cost:
Brick and mortar: $0.03
Online: $0.01

CPC
Brick and mortar: $0.20
Online: $0.50

 

As long as the KPIs of the marketing campaigns for retail are equal to or less than that of your current online strategies, the business isn’t truly operating at a loss in the retail space, as it may first appear, and is actually operating at a profit.

 

Adding a Personal Touch

 

Aside from the obvious benefits of in-person product comparisons, a brick-and-mortar store offers opportunities for a unique brand experience that can’t be replicated online. Not only can you construct a visually impressive presence through decor, product layout or in-store special events such as pop-ups or exhibitions, there is a dopamine hit that presents in physical retail that can lead to an impulse purchases or online searches and hits. And, important in a time where the majority of both personal and business interactions are conducted from screen-to-screen, there is someone behind the counter in a brick-and-mortar who provides real, in-person interaction that counterbalances the lack of human connection in the online space. This is a benefit for the customer, but also for the retailer, as it offers a chance to glean information about consumer behavior in both brick-and-mortar retail sales, and through interactions with store staff, who can converse with customers, ask questions and observe behaviors that can provide invaluable feedback on your product.

 

Omnichannel isn’t just for the major players anymore. Pursuing an omnichannel strategy can offer significant rewards for small to medium-sized e-commerce businesses that are interested in experimenting with and broadening their marketing strategies.

 

Author: Andrew Witkin founder and president at StickerYou
Bio: As the founder of a global ecommerce leader in custom-printed, die-cut products, Andrew Witkin is widely recognised as a leading authority on ecommerce, customisation, startups, marketing and the tech economy. Witkin has also served as vice president North American Licensing for Nelvana/Corus Entertainment and director of marketing for MegaBrands/Mattel.

 

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