New tech on the block: 5 steps to drive technology adoption across the business
How to build a seamless omnichannel retail strategy in 5 steps
As the shift to online grocery continues post-Covid (online is forecast to account for 11% of total US grocery sales in 2022 and more than 20% by 2026), CPGs need to figure out how to thrive in an increasingly omnichannel world building a successful omnichannel retail strategy.
Already, McKinsey estimates that between 60 and 70% of US adults are omnichannel shoppers, meaning they shop and/or research purchases both in-store and online. It’s a similar story in other parts of the world. A 2021 report by YouGov found that 74% of global shoppers had made purchases through both channels in the previous three months.
Although grocery is currently less omnichannel than other categories (the YouGov report suggests household food and drink is the category with the largest penetration gap between online and brick-and-mortar globally), the direction of travel is clear.
So, how can CPG brands adapt and build an omnichannel retail strategy that’s truly seamless?
Ultimately, there are no secrets here. I’ve worked with numerous CPG brands on omnichannel retail strategy and can say unequivocally: Success in the omnichannel is not about finding ‘this one weird trick’ that none of your rivals has thought of; it’s about the quality of attention you bring to everything you do, regardless of channel.
With this in mind, here are five steps to set you up for omnichannel retail success.
Step 1: Do your due diligence
Start by taking a very close look at the retailers you work with or want to work with. What is their model, and where are they on their omnichannel journey?
A lot of brand teams don’t do enough due diligence on omnichannel. Most brand managers are very familiar with the brick-and-mortar strategies of their various retailer partners and know how their brands fit in with those strategies. They have a routine where they walk the category and review the shelves, assortment, and end caps etc, but don’t bring the same level of understanding or attention to detail to ecommerce.
To build a seamless omnichannel retail experience for the shopper, you need to apply that in-store mentality to online. You need to be crystal-clear about how and where your brand appears, and you need to know the differences and/or similarities between brick-and-mortar and eComm. Otherwise, you won’t be able to align the in-store experience with what you’re doing in the digital world.
Pay particular attention to content. What content is required and supported? Product titles may be very different from one retailer to the next, so you need to understand what’s expected. Also determine to what extent your retail partners support rich content. Do they support video, for instance? And do they support marketing statements or benefits statements? Content management on the digital shelf is critical.
Always remember: You will be operating on somebody else’s turf and need to comply with the rules they’ve set. That’s why it’s imperative that brand teams know each retailer’s technical capabilities and understand their specific vision for omnichannel.
Step 2: Identify gaps and set clear goals
Once you’ve done your due diligence, you should have a good understanding of the status quo. Next, conduct a gap analysis to identify areas for improvement and unlock opportunities for growth.
Much of that gap analysis should focus on your content and how you currently appear in search. Of course, sell-through is the ultimate metric, and CPGs will have outcome goals around whether they’re gaining sales. But your day-to-day process goals should focus on search performance and content because they’re areas where you can take meaningful action today.
Make consistency and brand safety your watchwords and use digital shelf analytics as a KPI for success. Is your brand being portrayed in a consistent manner online and in-store that represents it to the highest level? Can your customers see exactly what they’re looking for? Is key information about pack size, flavor, and ingredients displayed clearly? How do you show up in search versus your competitors? Is your product title consistent across all your brands, and are all your images consistent? What is your threshold for compliance?
Identify the top three areas you want to improve – many of our CPG clients initially focus on perfecting titles, images, and descriptions – and pinpoint the people you need to work with to achieve those improvements, whether it be content strategists, digital marketers, or the retailer.
These are all low-hanging fruit, they’re easy to manage using a digital shelf analytics tool like e.fundamentals, and they will lay the foundations for a successful omnichannel retail strategy.
Step 3: Zero in on assortment and fulfilment
When you’ve covered the basics on content and search, and as you head toward the implementation phase of your omnichannel strategy, pay extra-close attention to assortment and fulfilment. Work with retailers to ensure the assortments are correct and help everyone on your team understand different retailers’ fulfilment models and their impact on your strategy.
A retailer with central warehousing and shipping via a dot com site will have very different assortment and inventory requirements to one that’s picking from a brick-and-mortar location. This sounds obvious, but it’s easy for busy CPG teams to lose sight of this. Before you know it, you’ll be struggling with stockouts or wasting time running promotions across two channels when the product may only be available in one or the other.
Use digital shelf analytics like our Winning Campaigns feature to review past promotions and price campaigns, and assess their impact on sell-through, inventory, and depletion. This will help you predict the impact of future campaigns and ensure you have the right assortment and sufficient inventory levels across all channels.
Step 4: Share omnichannel digital shelf insights across teams
Operational silos are a big potential stumbling block for CPG trying to win in the omnichannel. To succeed, teams need to take collective ownership of what’s happening online and in-store.
This starts by clearly communicating your omnichannel goals and the strategic rationale behind them. Make sure everyone understands what you’re working toward, and why. Also, get in the habit of sharing omnichannel insights across teams. This will build knowledge and confidence, and help people make better, data-driven decisions.
Crucially, don’t put brand managers in a position where they are responsible for everything. Give them the tools to bring other teams into the process. It’s one of the reasons why we give our clients unlimited users for the e.fundamentals service. We want to encourage brand teams to share the insights they are seeing within our tool with other teams, whether it’s digital marketing, procurement, or supply chain.
If your teams can identify problems and share successes together, and understand the metrics that are driving performance, they will make better omnichannel decisions.
Step 5: Measure digital shelf success and keep learning
I’ve said it before and I’ll say it again: ‘Set it and forget it’ doesn’t work.
Retailers make changes to their websites all the time, so you need to monitor your digital shelf just like you monitor your in-store shelf. You need to stay nimble and be ready to pivot in response to new trends, technology, or disruptions. In an omnichannel world, you are never ‘done’.
Digital shelf analytics services like e.fundamentals can help you stay on top of this fast-changing landscape, understand what drives performance for you, and identify the triggers that could cause problems. They can also help you make sense of how customers are rating and reviewing your products – an important way to measure your performance in the omnichannel.
Ultimately, it comes down to doing the basics well repeatedly. The brands that are winning in the omnichannel are obsessed with creating a fluid, consistent experience for their customers no matter where they shop. They consistently get the basics right both online and in-store. And they back ecommerce with consistent effort and investment – not because it accounts for a huge proportion of their sales (it doesn’t in most cases), but because they know you cannot be a true omnichannel brand if you treat online as second best.