Fighting the Battle for Omnichannel Excellence with Crocs and Hudson’s Bay CompanyOct 29, 2015 - by Jason Grunberg
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The old adage is that to succeed in business you cannot be everything to everyone. While this remains true from a brand purpose and vision standpoint, when it comes to engaging with modern consumers, brands must be everywhere to be anything at all. But few companies have reached maturity in their approach to omnichannel marketing given the shifts needed in organizational design, cross-functional processes and technology implementation.
Crocs and Hudson’s Bay Company are two companies leading the battle for omnichannel excellence. In a recent webinar with the National Retail Federation, the retail industry’s largest advocacy organization, Crocs and HBC presented their respective approaches to omnichannel retailing and outlined key opportunities for brand, marketing, IT and operations leaders. Given 84% of marketers have made multichannel, cross-channel and omnichannel key priorities for this year (eMarketer) and the same percentage plans to increasing spending in these areas, having a clear understanding of best practices and areas for improvement are critical.
Here’s our snapshot of what both brands presented and thoughts on how other retailers might adopt and even augment these tactics.
Crocs: Always Be Consumer-Centric
Crocs is one of the 10 largest non-athletic footwear brands in the world, according to VP of Ecommerce, Technology and IT, Harvey Bierman. After only 13 years in business, they are already operating in 90 countries and posting more than $1bn in annual sales. For Crocs, omnichannel isn’t just about owned media, marketing and operations, rather leaderships works to extend connectivity and consistency across the wholesale, retail and ecommerce channels.
Key #1: Email Marketing remains critical to omnichannel success
Email remains the single channel that delivers the highest ROI for marketers. But there remains tremendous opportunity to improve. When it comes to thinking omnichannel, the most modern marketers – Crocs included – are no longer treating email as an island. Rather they consider it a primary driver for cross-channel experiences and a key to maintaining a customer-centric approach to marketing. Crocs is focused on four primary areas of email marketing including engagement, conversion, reactivation and transactionals; all with the overarching strategy of using email as a retail store driver in addition to sparking online sales.
Welcome streams and abandoned cart series are just two of the email marketing best practices being used by Crocs today. For their welcome stream, Crocs encourages social connectivity to further connect newly acquired customers to the brand.
At Sailthru, we recommend that brands increase relevancy of their welcome stream by serving = content based on acquisition source. So, for the case of customers coming from Facebook, longitudinal testing may reveal that pointing them to the closest brick-and-mortar location drives the highest long-term ROI. In abandoned cart communications, Crocs leverages content that incites buyer urgency (“get it before it’s gone!”) within incrementally increasing time horizons following abandonment. Our advice to Crocs and to any other retailer would be to augment these communications through the use of personalized recommendations within the abandoned cart email. Customers abandon for a wide-range of reasons, but by offering product recommendations based on their complete history of interests and behaviors marketers can increase the likelihood of recapture and can further their approach to investing in customer-centricity.
Key #2: Treat all channels as an “endless aisle”
To ensure that their ecommerce channel is optimized for their global audience and scalable for all points of access – desktop, tablet and mobile – Crocs continues to invest in visual navigational elements and interactive design. Functions that allow online customers to sort by color, style, size and customer-type (i.e. gender) empower customers to quickly find available products based on multiple factors.
In retail stores, Crocs has enabled their teams with iPads that allow for assisted selling, web fulfillment and payment processing. This reduces friction in the traditional brick-and-mortar experience and allows sales associates to open up product searching far beyond their single store inventory. Offering free shipping for in-store orders acknowledges that consumers are no longer expecting free shipping as an online-only offer and creates consistency with digital offers.
We recommend that retailers not only follow suit, but enhance the experience by enabling sales associates to make personalized recommendations in-store based on the individual customer’s multichannel behaviors. By asking if they have shopped with your brand before, brands can capture valuable interest and behavioral data and apply it to email and web personalization. To reduce friction in this interface, brands can also leverage beacons to alert a sales rep to a specific customer entering a retail location and use customer profiles to serve as the foundation for engagement, rather than the traditional use of beacon technology to ping the customer. For those retailers who are not yet using tablets or beacons in the retail environment, capturing customer email addresses at the point of sale and connecting these transactions to digital profiles will allow for increasing relevancy in automated digital personalization.
HBC: Consistency is Critical
Department stores are among the most mature in their approach to omnichannel. Roger Scholl, SVP of Operations for HBC Digital, represented this retail cohort following the organization’s high performance in the NRF’s Omnichannel Retail Index. Hudson’s Bay Company is the parent company to Saks Fifth Avenue (and related properties), Lord & Taylor and Kaufhof (Germany’s leading department store) and views omnichannel as the future of the company. Approximately 70% of all transactions are digitally influenced, yet only 10% of transactions occur online, and Scholl cites cross-channel connection and marketing relevancy as being mission critical to understanding and evolving with their customer’s shopping journey.
Key #1: Inventory innovation is critical
Achieving top marks in omnichannel customer experience design requires realignment across and within multiple departments. For HBC, inventory management was pinpointed as critical component and the organization prioritized a wide-range of innovations within their approach to cross-channel connectivity and control using machine learning to update inventory levels at least once per hour. The end result is that customers can shop on any channel without worry that a desired item is sold-out.
From our perspective, HBC and other department stores can further increase the ROI of marketing programs by connecting inventory to personalization in email, on their websites and in mobile apps. Personalized product recommendations are proven to increase purchase frequency, average order value and customer lifetime, but without connectivity to inventory a brand risks serving product recommendations that may no longer be in stock. Solutions like Sailthru offer inventory connectivity and even margin-based personalization, allowing retailers to serve products that match a customer profile, predicted purchase behaviors and offer the greatest impact to the bottom line.
Key #2: Promotions must be consistent
In the golden age of direct marketing, connectivity and consistency between a retailer’s acquisition and retention teams was nonexistent. But today, brands like HBC have made consistency pure table stakes – offers sent via email are reflected online, in retail stores and via mobile app. The result is as much quantitative success as it is qualitative; when consumers know that there is consistency in offer they trust that they are getting the best deal at any given time.
The next generation approach to promotions and offers is to personalize at a 1:1 level AND maintain consistency across all channels. The most modern retailers are able to identify the most efficient promotion for an individual customer by predicting their propensity to purchase, timeframe for transacting and the dollar amount they will spend through predictive analytics. With the predictions as the foundation, a brand can identify a customer who will spend $200 in the next 24 hours and then automate serving an offer to save 20% off of an order of $300 or more in order to maximize the individual revenue opportunity regardless of the channel through which the customer chooses to engage.