Omnichannel: Is it Right for Your Business?
Major e-commerce players such as Amazon, Shopify, Warby Parker, and Casper are opening up brick-and-mortar retail spaces in addition to their e-commerce offerings, signifying a new trend that might prove beneficial to small to medium-sized online e-commerce stores.
Incorporating an omnichannel strategy into your business model is a major investment, but it may be worth it for e-commerce companies that want to increase brand awareness or take advantage of the unique opportunities a physical space presents for a tangible product.
So how do you know if an omnichannel strategy is right for you? Below are three things to keep in mind when evaluating the potential of an omnichannel strategy for your small to the medium-sized e-commerce business.
Does Omnichannel Fit your Product?
When considering an omnichannel strategy, begin with your product. Does an in-person experience expose your customers to an aspect of your product that they do not have access to online? 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. Because of the tangible nature of our products, an offline, in-store experience is a powerful marketing tool. Seeing a sticker on a computer screen is very different than feeling the quality of the product for yourself, or being surrounded by the many creative ways that our products can be used and being inspired by this. In order to capitalize on this aspect of our product offerings, we will be opening a brick and mortar retail location in early 2019. Our goal is not only to give customers a unique experience they can’t get online but to also use this experience and brand awareness to drive online sales.
Evaluate with Metrics and Projections
Before moving forward with a brick and mortar retail plan, it’s essential to run some projections of potential cost-benefit and ROI to evaluate whether this strategy will make sense for your business. A physical retail location may not translate into profits in a traditional sense, and may even operate at a loss if your measure using metrics of operating costs against product sold. But viewed through the lens of brand awareness and impressions, a storefront may provide significant value that online ad impressions don’t that will net out in an overall gain. Retail can still work and be ROI positive if or when the incremental traffic from retail driven to the website costs less than using those funds towards fuelling online traffic.
Considered in this context, if the brick and mortar store breaks even, subsequent marketing value generated by the store, including pass-by impressions, brand awareness, etc., is free. It’s possible to create projections for the proposed retail space and compare this against the averages of current online marketing strategies your business employs. One method may be to value walk-by traffic as impressions, and walk-ins, or people inspired to check out the online store from the physical store as clicks.
As long as the key performance indicators of the retail marketing campaigns equal that of your current online strategies, or are less than your current online strategies, your business may actually be operating in the black, rather than in the red as it may have first appeared.
The Personal Touch
While the ability of potential customers to experience your products in person and evaluate the quality and other tangible differentiators is a key reason for establishing a retail space, a physical location also brings opportunities for customers to engage with your brand in ways that are not available in an online-only experience. Studies have shown that there is a dopamine hit that occurs in physical retail that can result in impulse purchase or online searches. A physical retail space also gives you the opportunity to impress with visually arresting design and layout, or special events such as pop-ups. And don’t underestimate the power of person-to-person interaction. In an online world that often defined by a lack of human connection, being able to connect with a real person who represents your brand in a physical space can be a significant benefit to the customer. Not only that, retailers can also benefit from this connection, by learning more about consumer behavior and preferences through conversation and observation. The ability to ask questions and converse in real time can provide crucial feedback on your product that can be difficult to access in the online space.
It may take some work to evaluate whether or not an omnichannel strategy is a right move for your business. But it’s work well worth doing if you are interested in expanding and experimenting with your marketing strategies. There are benefits to having a physical retail space for a business model that supports it, and an omnichannel strategy may offer significant rewards to small and medium-sized businesses.