Guide to Omnichannel Marketing
Did you know that omnichannel customers–those who shop through multiple channels- spend nearly twice as much as traditional brick-and-mortar customers?
Post-COVID pandemic recovery in the retail sector was fueled largely by omnichannel retail strategies. As consumers returned to their favorite retailers, they increasingly turned to digital channels to find store locations, compare prices, read reviews, and get discounts.
It turns out that double the exposure meant double the spending. During the holiday shopping season, these omnichannel customers spent twice as much as their single-channel shoppers. That is a profit-driving trend that can’t be ignored.
We saw similar themes in food and beverage, with online ordering reaching 26% of the food order share in 2020–and showing no signs of slowing down even as restaurants opened their doors for traditional dining options.
In this guide, we’ll discuss what you need to know about omnichannel marketing–what it is, why it’s important, and how to use it–to serve a growing consumer base that prefers to blur the lines between e-commerce and traditional retail.
What is Omnichannel Marketing?
Omnichannel marketing is an all-encompassing marketing strategy designed to provide a seamless brand experience across multiple touchpoints.
It begins with the fundamental understanding that customers may choose to engage with your brand in a variety of ways, like mobile shopping, social media engagement, and in-store experiences. Because these channels are not mutually exclusive–consumers often use multiple touchpoints.
For brands, it’s important that wherever and whenever customers engage with the brand, their experience is consistent. It’s also a growing necessity. The pandemic era push towards digital enablement brought a new level of comfort across multiple channels for brands and consumers.
Omnichannel marketing is a trend that’s here to stay. According to Cardlytics data, online spending has maintained increases between 90-130% YoY even as most consumers have returned in person. This means that customers are no longer either online or in-person. And that shift is reshaping how companies market to these consumers.
Omnichannel marketing vs. multichannel marketing
Omnichannel marketing occurs across multiple channels, creating some confusion between these two terms. Let’s look at how they’re different.
Multichannel marketing refers to using multiple channels to promote products and services, often with independent strategies optimized for each channel. This means different campaigns for different audiences in print, media, and digital formats.
A multichannel strategy tends to be broad in scope and siloed, with each channel performing independently to reach as many customers as possible.
With omnichannel marketing, the strategy utilizes multiple channels, but the focus is on consistency across all of those channels.
Brands using omnichannel strategies favor an integrated approach with personalized experiences that prioritize customer loyalty over exposure.
Brands that take advantage of omnichannel marketing benefit from strong, cohesive brand identity, better customer experiences, and more engagement leading to more traffic and better sales. In 2018, back-to-school shoppers proved that omnichannel marketing is more effective, with 48% more spending by omni-shoppers.
Learn more about omnichannel marketing vs. multichannel marketing.
How to create an omnichannel marketing strategy
Omnichannel retailers see benefits beginning with the ability to meet consumer expectations. A positive customer experience drives sales and loyalty, giving these brands a clear competitive advantage.
Here’s a quick look at how to get started.
1. Study Your Customer Data
2. Create Shoppable Touchpoints
3. Connect the Dots
Customer data is key
First, look at who your customers are and where they engage. Comparing sales from online orders, in-app purchases, and brick-and-mortar transactions will give you an idea of what channels to include in your strategy. Customer demographics will clue you into how to reach them. Take time to map the entire customer journey from first look to post-purchase retention.
Create shoppable touchpoints
Next, embrace the idea that revenue-generating transactions can look like many different things, depending on where they originate. Your in-person store experiences can look like racks of product and lanes of cashiers–or it can look like personal shoppers and QR codes.
Augmented reality can redefine e-commerce transactions, and your social media ads can transform into shoppable, influencer-driven sales. Bring the focus of your digital presence to revenue-generating activities by making every channel shoppable.
Connect the dots with omnichannel integration
Finally, connect your shoppable touchpoints. Find ways to engage app users in the store, direct social media traffic to your website or cue up discount codes scanned from smartphones in the checkout lane. In the delivery, prioritize customer service to balance the human interaction element and collect data to measure and monitor effectiveness.
When you get it right–you’ll see the difference in cross-channel pageviews, social media engagement, cross-channel conversion, average order value, and churn rate. Dig deeper with an easy step-by-step plan to create an omnichannel marketing strategy.
Benefits of omnichannel marketing
Omnichannel marketing strategies are a consumer-driven sales optimization tool offering plenty of benefits for shoppers and retailers. Let’s look closer at how each party benefits.
Consumers get a better experience
Omnichannel marketing enables brands to provide what customers really want–offering positive, personalized experiences.
What does that mean?
For consumers, it means that brands proactively anticipate their needs even before they shop. And meet them with:
In the moment, consumers want convenience–or the ability to get exactly what they want without waiting. To follow through, customers want flexibility–or the option to choose when, where, and how they will make a purchase. And to keep coming back, consumers want reliability–or trust that they will continue to receive the same experience each time.
But it’s not enough to go through the motions. Consumers want all of this–with empathy. The difference between a good experience and a brand loyalty-worthy experience is feelings. Consumers need to know that your brand cares about meeting their needs.
Omnichannel marketing enables customer-driven service models so that brands can balance automation, optimization, and human interaction to provide a positive customer experience.
Businesses get a better image and a healthier profit
Why are so many retailers going to great lengths to create positive customer experiences? It’s simple–catering to the demand for personalized experiences drives business.
An omnichannel marketing strategy can:
- Identify New Customers (Opportunities)
- Nurture Customer Loyalty (Efficiency)
- Increase Sales (Profit)
When retailers take the time to study their shoppers, digging into data-driven insights, they can discover entirely new subsets of customers they didn’t even know existed. Identifying these customers and their unique needs is the first step in reaching them with personalized service and driving more sales.
For example, Cardlytics data shows that online shoppers spend more by an average of $15 per basket. Still, three-quarters (75.1%) of shoppers remain loyal to the in-store shopping experience. Using an omnichannel approach, retailers can supplement the in-store shopping experience with digital channels to add convenience and flexibility for the customer, netting higher sales for the retailer.
Another key business benefit is optimizing the lifetime value of a customer. Retail businesses know exactly how much it costs to gain, service, keep, and lose an individual customer. And time and again–the data proves that the lifetime value of loyal, repeat customers is the key to sustainable growth.
When you know who your customers are–and you’re making an effort to give them what they need–you’re effectively driving sales. See how the omnichannel customer experience captures what the customer wants to increase sales with this in-depth
The takeaway on omnichannel marketing
Omnichannel marketing is an opportunity for retail brands to reach new audiences, drive loyalty, and achieve sustainable growth by improving the customer experience. It’s an opportunity to gain a competitive advantage using convenience, flexibility, consistency, and empathy. Cardlytics’ solution can support your omnichannel marketing strategy with transaction-based data that provides real insights into what your customers want most.
Omnichannel Marketing: Third-Party Cookies vs First-Party Data
An omnichannel marketing strategy is a gold standard for effective brand messaging. By leveraging consumer data gleaned from third-party cookies, advertisers can get the right message to the right customer at the right time, regardless of channel or device. It's no wonder brands with robust omnichannel strategies increase average order value by 13% and purchase frequency by 250%.
The coming cookieless future could threaten that success. Without third-party cookies, advertisers will struggle to track customers across channels and devices, analyze their journeys, and deliver personalized content and offers.
It's easy to assume that cookie deprecation means the death of omnichannel marketing, but that's definitely not the case. If you have the right data, omnichannel marketing still holds the key to success.
- Consistency in branding and messaging across every channel is among the key elements an omnichannel marketing strategy prioritizes.
- We can expect the deprecation of third party cookies from Google Chrome in 2024.
- First-party data in omnichannel marketing takes personalization to the next level, increasing a customer's lifetime value.
What is Omnichannel Marketing?
Omnichannel marketing seamlessly blends messaging and branding as customers move through online and offline touchpoints along the path to purchase. It puts consumers in the driver's seat, allowing them to choose how, when, and where to engage with your brand.
An omnichannel marketing strategy prioritizes the customer experience through the effective use of a few key elements:
- Consistency in branding and messaging across every channel
- Personalized messaging and offers relevant to consumers interests and behaviors
- Content shaped by past interactions and the stage of the customer journey
A well-planned omnichannel strategy lets you target customers at the right time with on-brand offers that increase your chance of a conversion.
Omnichannel versus multichannel: What's the difference?
Omnichannel and multichannel share similarities, but the differences are significant. Multichannel marketing gives consumers multiple options to engage with your brand, but the channels aren't seamlessly connected. The experience is optimized for each separate channel.
On the other hand, omnichannel marketing recognizes that the customer journey spans multiple channels and seeks to create a consistent, personalized experience as the customer moves between them.
The Coming “Cookie-geddon”
Although Google's cookie deprecation timeline has changed a bit since they first announced the phaseout in 2020, the final demise of the third-party cookie is slated for 2024. The news didn't come as a surprise to anyone paying attention to the growing concerns of privacy advocates.
Third-party cookies collect an enormous amount of personal data, usually without the individual's explicit consent. Data breaches and privacy violations caught the attention of legislators around the globe, resulting in the EU's GDPR and "cookie law." In the US, individual states passed their own versions of the cookie law in an attempt to promote transparency in data collection practices.
A few tech CEOs also took a stand for privacy. Apple and Mozilla were among the first to give users the ability to block third-party tracking as early as 2012, with both companies disabling third-party cookies entirely by 2020. Google, the browser behemoth representing over 60% of Internet traffic, was the only holdout. But by 2020, it too announced it would end third-party cookies, albeit on its own, slightly elongated timeline.
Now “Cookie-geddon” is almost upon us, and marketers are scrambling for solutions to replace the data cookies provided.
What Does This Mean for Brands?
Marketers have become addicted to the easy flow of third-party cookie data driving programmatic and digital advertising. It enabled personalization, targeting, and attribution to justify spend. But third-party cookies have their share of drawbacks:
- There's no transparency. The slightly underhanded way data is collected destroys the sense of trust between consumers and brands. Omnichannel marketing is a two-way street; consumers are willing to trust brands with their data in exchange for a more personalized experience as long as they feel confident their data is secure and only shared with consent.
- They're not people-based. Cookies are connected to devices, not people, so there's a lot of waste and duplicate impressions.
- They're not persistent. Cookies don't last forever, and the user can always delete them.
Third-party data made it easy for brands to acquire new customers, lose them to churn, and reacquire them with aggressive retargeting. What it didn't do is help them build the trust and loyalty that drives long-term profits. Customer retention has always been key to profitability; invesp, a conversion rate optimization consultancy, showed that increasing retention by just 5% led to a 25% increase in profits.
On the other hand, first-party data from past brand interactions and logged-in states give marketers the information they need to genuinely understand their customers and create highly relevant experiences throughout the customer lifecycle.
Leveraging first-party data in omnichannel marketing levels up the personalization and relevancy of the content you serve your customers. Where retention spreads customer lifetime value over a longer timeframe, personalization increases the absolute lifetime value of the customer. Boston Consulting Group found that marketers who could deliver relevant experiences at multiple touchpoints decreased costs by 30% and increased revenue by 20%.
The Cardlytics Advantage
Cardlytics is uniquely positioned to help brands deliver relevant and personalized experiences via cash back offers served through the consumers trusted digital banking channels. Using first-party data obtained from one in two card swipes in the US, we can provide a whole-wallet view with insights into the cross-channel purchase behavior and preferences of your customers.
Get in touch today to find out how Cardlytics can help you reach your customers with personalized offers in a brand-safe channel to help drive customer loyalty, retention, and revenue.
Tying it All Together with Omnichannel Marketing
More than 110,000 eating and drinking establishments closed in 2020 making the restaurant industry among the hardest hit during the pandemic. And the consistent theme I heard from the restaurant marketing execs I met with during this year’s Restaurant Franchising and Innovation Summit (RFIS) was the struggle to bounce back from a major disruption. As we head into fall and continue to work in an unpredictable climate, it looks like marketers will continue to face this challenge. Enter: omnichannel restaurant marketing, a strategy that will help brands simultaneously gain new customers and grow revenue in an increasingly fragmented marketplace.
National food spend is down.
Cardlytics analyzed the spending habits of U.S. online shoppers to help marketers navigate the changes in consumer spend that occurred across the broader food spectrum, including restaurants, grocery, meal kit subscription, third party delivery and non-traditional gas stations that feature mini marts. We learned national food spend declining by 2.5%, which would be the equivalent of all the restaurants in NYC closing for an entire year. Despite that, there have been tremendous opportunities for growth when restaurant marketing leaders were able to successfully target new customers. In other words, the upheaval reduced spending in the category, but opened the door to gaining new, high-value customers.
This is the advice I shared with the RFIS audience during our panel, “How to use Technology to Acquire New Customers.”
So how can restaurants win?
Omnichannel marketing is a customer-centric approach that delivers a consistent, personalized experience for consumers across all your brands. During the pandemic, online ordering became increasingly popular. In 2020, 26% of restaurant purchases came through online channels as compared to 13% in 2019. And we saw this behavior continue even as restaurants and grocery stores began reopening, with online restaurant spend leveling out at 28% of total restaurant spend and grocery at 14% of total grocery spend.
Now that many people are used to ordering via apps, mobile phones, and online websites, it is likely that this behavior will continue.
Tip: Recognizing third party delivery apps impact margins but bring in new customers, restaurants should stop worrying about the perceived risk from those platforms and focus on converting in-store only customers to omnichannel via their owned channels.
An effective omnichannel restaurant strategy means engaging with your customers where they are and accepting that third party delivery is just another touchpoint for you to deliver a seamless experience.
Here are a few tactics to consider:
Convert Customers to Omnichannel: The ‘omni customer’ is dining in-store and ordering online. These omnichannel customers tend to spend more than either an in-store only customer or an online only customer, spending 3X as much as a single channel customer on average! It’s obvious that the value lies with these diners.
More consumers than ever before have shifted their spending habits online so why not take your advertising where they're already spending?
It’s a straightforward task for most digital marketers to cookie and target online customers (at least for now) but targeting in-store only to get them to try online ordering is trickier. At Cardlytics, we help marketers do this by identifying and targeting consumers who have charged a meal in-store with a cash back offer to make a purchase online, or to purchase through a brand’s app. By reaching these single-channel customers and converting them to omni you increase their value.
Convert Grocery Customers: Grocery has increased their prepared meal offerings, further enticing consumer groups like families, gamers, millennials, and gen z, directly competing for a household’s take out or meal delivery business. And, with grocery share of food spend higher than it was pre-pandemic it continues to be important for restaurants to target these shoppers in an effort to bring spend back.
Online grocery shoppers are another great conversion point. In 2020, 11% of grocery purchases came through online channels vs 5% in 2019. Restaurants should target these online shoppers to convert them to online restaurant delivery. This blurs the line between in-store and online. Things like digital payments or restaurant specific apps designed to make ordering easier are all ways to entice new customers that are already using technology to purchase within this category.
Take Share From Your Competitors: Another major struggle that I heard from marketers at RFIS is how to target truly new or lapsed customers. The Cardlytics value proposition is probably most compelling when it’s used to target customers who’ve never interacted with your brand but are regulars at your top competitors. An offer to give your brand a try, whether in-store or online can bring in new customers who are very likely to become regulars.
If these tactics make sense, but you’re struggling to operationalize them in today’s difficult climate, you should check out this webinar with Fast Casual from Kamron Moore, Cardlytics’ Senior Director of Restaurant Partnerships, Laura Sporrer, Teriyaki Madness’ Senior Marketing Manager, and Stephanie Bauer, The Piada Group’s Director of Marketing. You’ll learn how restaurant marketers are putting these tactics to work with great results.
Restaurants Hungry for Omni-channel Strategy
The Coronavirus has disproportionately impacted the restaurant industry. The onset of the virus followed by restrictions and closures caused restaurants of all sizes to evaluate and redesign their services to meet the customers’ needs. Restaurants that are positioned well are those who recognize that the future is omni-channel, take the time to know their customers, and leverage technology and data to best serve their customers.
The term omni-channel has long been used in the retail space to describe the varied range of options given to consumers to collect their purchases (in-store, online, drive-up, app) but restaurants have typically only needed to engage with customers on one or two channels – dine in and carry out – to prosper. That is, until Coronavirus hit. With safety and convenience at a premium, today’s customers expect to be able to order and pay for food from an app, have it delivered, see a menu and order online, pick up with no contact, and dine in.
Know your technology
Restaurants have quickly invested in technology to help build the omni experience. From fast-food apps that let you to order and pay from your phone or allow quick, contactless pick-up, to connecting with third party delivery, restaurants have an opportunity to attract and retain customers by expanding ordering and service options. This is critical as total online restaurant spending has been trending 90%+ YOY since mid-April.
Now is the time to retain customers by catering to their personal preferences and using their purchase history to anticipate how they’ll spend in the future."
Know your customer
With the expectation for an omni-experience now a given, restaurants must know their customers better than ever, and personalized, relevant marketing is key. For example, a national chain promoting dine-in to Covid-restricted markets will get little from their efforts. Similarly, serving a delivery ad to someone who has never used delivery likely won’t generate a response, but serving a delivery ad & reward to a high-frequent delivery user will have a much higher success rate. Restaurants need to pursue the current purchase behavior in the marketplace. Now is the time to retain customers by catering to their personal preferences and using their purchase history to anticipate how they’ll spend in the future.
Know your opportunity
Understanding your restaurant’s individual opportunity is also critical when considering how to market, and having the right data is an essential part of identifying where there is room to grow. A great example is the third-party delivery space, which is not surprisingly on the rise. Spend in third-party restaurant delivery reached an astounding. As of 7/30, delivery spend was up 173% year over year—its highest increase so far in 2020. Year to date, consumers have already spent over $180M more on delivery than they spent in all of 2019. But is this lift sustainable, and if so, should restaurants continue investing in newly acquired customers beyond the pandemic?
The data says, yes. Cardlytics can see a wide range of valuable purchase insights through our advertising platform, which is built in banks’ digital channels. Our data shows that even as on-premise dining had a resurgence in mid-April in regions where infection rates were on the decline, Online purchases remained constant. For instance, consumer spending at physical restaurants increased nearly 40 points between mid-April and late August (from -55% to -15% YOY), but Online spend maintained increases of 90%-130% YOY during the same time period, demonstrating that there’s enough consumer demand to maintain both dining choices.
But is this being propped up with new customers, larger check sizes, or more frequent purchases? Our data shows there is growth in all three categories, which means restaurants should focus their marketing on acquiring new customers, enticing diners to spend more per occasion, and retaining customers to build frequency & loyalty.
The bottom line is: What consumers want – quality, convenience, and value – hasn’t changed, but the way restaurants deliver this experience has, and technology is enabling the purchase behaviors. The good news is, more and more customers are using technology as part of their restaurant experience, and it’s sticking. Add a renewed industry focus on personalization and convenience, and you get a bright future for consumers and restaurants alike.