Understand the challenges of omnichannel marketing

The author analyzes the main contributions of academic authors on the subject, contrasting them with marketing executives’ practical experiences.
Administration
10 August 2022
Understand the challenges of omnichannel marketing

The “omnichannel” concept is exerting a growing influence on companies’ marketing strategies and distribution channels. It is a relatively simple topic in theory but it has proven hard to implement. Researcher Gabriel Borges reflects on “The Challenges of Omnichannel Marketing” in an article in GV-Executive, a journal published by Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP).

The author analyzes the main contributions of academic authors on the subject, contrasting them with marketing executives’ practical experiences and challenges when implementing strategies guided by the concept.

Digital transformation is a topic that Borges was already experiencing in his professional work, driving multiple changes in the field of ​​communication, in relationships between advertisers, consumers and the market in general. Therefore, this subject was already on the agenda of communication and marketing executives and decision makers.

“I sought to compile the omnichannel-related academic papers I had been reading and combine them with a slightly more pragmatic view of implementation work, in an attempt to understand what challenges marketing managers may face when implementing their strategies,” explains Borges.

Digital impact: the evolution in retail
 

Digital transformation has led companies to seek integration, consistency and synergies in all their online and offline contact channels with their consumers. Marketing areas now need to have omnichannel goals and plans, but implementing these strategies is not as simple as understanding the concept. There are various technical, operational and even political challenges. Thus, it is important for marketing executives to identify key implementation challenges and find ways to overcome them.

Since widespread use of the internet began, just over two decades ago, the digital world has been influencing the strategies of retail distribution channels, in three main phases:

  1. Exploitation of the internet as a sales channel formed the foundations of the first phase of influence. Consumers started to value e-commerce as a shopping channel, mainly guided by three vectors: accessibility, price and convenience.
     
  2. The digital world’s second impact on retailing was driven by the mass adoption of internet-connected cell phones. Consumers were able to access any information anywhere, including at points of sale.
     
  3. As technology evolved, the multichannel vision began to give way to the omnichannel approach, and then the third major phase of the internet’s influence on retailing emerged. An omnichannel strategy assumes that consumers can interact in a seamless manner with all of a company’s online and offline contact points during their shopping journey.
     

What is omnichannel marketing?
 

Nowadays, consumers are constantly online, on their phones, on social networks, in physical stores – all at the same time. An omnichannel view of marketing makes the most of this fact and takes offers and experiences to wherever consumers are, instead of trying to take consumers to only one of their channels. This strategy presupposes seamless integration of content, offers and experiences across the company’s different channels, whether internal or third-party ones.

As a result, consumer journeys can follow a variety of paths between these channels, allowing consumers to interact in a coherent and integrated manner across different points of contact, thereby having a unified and frictionless experience.

According to Borges, among the challenges for implementing omnichannel marketing strategies, three stand out: the complexity of conversion funnels, the paradox of personalization and privacy, and barriers to integration between data and metrics.

Complexity of conversion funnels
 

In omnichannel marketing, consumers can navigate through different combinations of channels and devices at each stage of their purchase journey. This fact challenges traditional management models guided by a linear conversion funnel approach.

Therefore, it no longer makes much sense to develop a conversion strategy based on these funnel models, as they will not be able to help with the formulation of marketing strategies that can embrace the multiplicity of purchase paths that consumers can follow, in line with their individual choices and interactions with various points of contact.

Borges emphasizes that one challenge on a journey like this can be choosing the message. Another challenge for conversion funnels is choosing media channels. Thinking about a more chaotic consumer journey in which consumers follow random steps can be a liberating path to devise modern strategies.

The paradox of personalization and privacy
 

One major challenge for companies in an omnichannel approach is to consistently identify each individual consumer at any point on their purchase path. Another common type of friction occurs when a brand offers different product exchange policies for each channel. In other words, something bought online cannot be exchanged in a physical store, and vice versa.

However, two strategies have become widely used to overcome problems in identifying specific consumers on their journeys: the use of advanced technology and the creation of robust relationship programs.

Barriers to integration between data and metrics
 

According to Borges’ article, an omnichannel marketing strategy assumes that all data about interactions between consumers and different points of contact is collected and, above all, connected. This is even more of a challenge when companies have to collect data from third-party channels and touchpoints.

Having a solid grasp of customers’ data is one of the greatest assets a company can have today. Thus, third-party channels are often not keen to share information across their entire commercial chain.

Prospects
 

While omnichannel marketing is a relatively simple concept, Borges notes that its implementation is complex and fraught with challenges. However, there are some success stories that support this approach, providing integrated shopping journeys for consumers. In Brazil, we can now observe movements in this direction by large domestic and international retailers.

“We can imagine that there is still a lot of room for this line of thinking to evolve, both in academia (through research to help design models and frameworks to facilitate the implementation of strategies) and in the market (through the sharing of success stories in various parts of the market),” Borges concludes.

To see the complete article, click here.

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