The coronavirus pandemic has exposed weaknesses in many areas of the economy and society and revealed the true scale of our shortcomings. The consequences of underestimated or deferred issues, such as home schooling, have become very apparent. In the past year, politicians, parents, teachers and students have learned the painful lesson that, without up-to-date learning strategies, without an efficient infrastructure, without data protection compliant platforms and without all those involved having the necessary media skills, the virtualization of education cannot succeed.
The same is true of the digitalization of sales and marketing: The coronavirus lockdown has accelerated the paradigm shift and mercilessly exposed existing weaknesses.
Coronavirus has shone a light on the challenges of selling
For a number of years, Amazon, Zalando, Apple and others have been demonstrating the advantages of incorporating both brick-and-mortar and digital channels into Customer Experience and User Centricity strategies. Many retailers and brands were already following suit before the coronavirus pandemic, others were hesitating – often with drastic consequences – as during the first lockdown, sales models without digital sales options, such as eShops, digital marketplaces, social media or affiliate platforms, came to a standstill almost overnight.
An increasing number of market players are drawing their own conclusions from this enforced “emergency stop” – but not always the right ones! As simply establishing or optimizing an online shop solution is not sufficient to set yourself up successfully for current and future sales. Branding, marketing and sales will fundamentally and permanently change, irrespective of the end of the pandemic. Coronavirus is merely shining a light on the need for action. The focus: Omnichannel.
In the future, omnichannel will be at the core of every commerce strategy
Customers interact with brands, products and offerings via different touchpoints within various digital and brick-and-mortar channels. It must be possible to address the customer’s situation-based needs by means of these touchpoints and channels – for example, providing information or product advice for positioning within the Relevant Set1, as well as the actual sale or increasing loyalty within after-sales.
Omnichannel consistently focuses on the customer. High-quality seamless networking of channels is crucial for a compelling brand and product experience. The aim is to communicate consistently with the customer across all channels and for the customer to be able to access “their” sales offers at every touchpoint at any time.
This orchestration principle2 is currently experiencing massive change as the result of progressive digitalization and the coronavirus pandemic – on the one hand, in terms of smart functionality within touchpoints and channels and, on the other hand, in terms of the role that the individual touchpoints and channels play within the customer journey.
Showrooming and webrooming are being redefined
“Showrooming” and “Webrooming” refer to typical shopping scenarios or end-to-end journeys within the networking of digital and brick-and-mortar channels:
- With showrooming, the customer draws their inspiration from brick-and-mortar stores and then seeks advice and broadens their product knowledge within digital channels (eShop, comparison sites, expert blogs, social media) and also makes their purchase online.
- With webrooming, the customers uses digital channels to obtain information on a product or a brand. Depending on the product, the customer also sets up a configuration online but then makes their purchase in a store.
During the coronavirus pandemic, many small, local retailers have made a virtue of necessity and used showrooming in a modified form, by specifically designing their store displays for product presentation. In this case, a call to action – for example in the form of QR codes – links to either the retailer’s own webshop or to digital marketplaces, where the customer can buy the products presented.
In recent months, larger operators, above all, have redefined webrooming: In conjunction with the click and collect model, they have transformed their brick-and-mortar retail spaces from a point-of-sale to a point-of-experience. Customers find and order their desired items via the brands or the retailer’s online channel and then collect them from their local store. Despite same day delivery, the need for this kind of shopping experience has increased during the coronavirus pandemic, because delivery services are frequently overstretched and are, therefore, less reliable. Furthermore, there is also a desire for a “hands on” product experience, which cannot be entirely replaced by virtual product presentations.
The orchestration and roles of channels are thus experiencing a distinct shift. It is largely the role of the brick-and-mortar store that is changing: The store is now primarily operating as a presentation space, in which products are staged and brought to life, with more in-depth research and the purchase transaction increasingly moving to digital channels.
Brand management, customer centricity and logistics are becoming more challenging
Not only in lockdown, but definitely amplified by changed coronavirus shopping behavior, customers, who would previously have preferred not to shop online, are also turning to digital services – and will also continue to use them after the pandemic. Brands and retailers must face up to this fact. There is therefore an urgent need for action in terms of ensuring a presence, offerings and sales options on digital channels and, if necessary, expanding them further.
The vendor’s own online shop is not sufficient for this, but rather the omnichannel principle described above must function properly. The availability of products on digital marketplaces and a presence within suitable social media channels is crucial. It is important to achieve an intelligent balance between the loss of control in terms of brand management and becoming an authentic part of the customer dialogue, by highlighting the relevance and usefulness of the brand, product or offering for potential customers and continually adjusting it. What is absolutely essential is a precise knowledge of target groups and their persona, as well as an understanding of the individual customer’s actual requirements during the particular phase of the customer journey.
In terms of technology, the challenge is to consolidate data from all the systems in which user information is collected and stored (e.g.web analytics, CRM, eShop, ERP, etc.) to establish a “Single Point Of Truth”. All market players, regardless of their size, are facing this challenge i.e. in future, retailers and brands without appropriate digital infrastructures and platforms will barely be able to compete.
Product information, the individual customer’s needs profile, as well as logistical aspects, such as inventory management for the various touchpoints, must be available across all channels – both digital and brick-and-mortar. It must also be possible to flexibly adjust orchestration of the channels to changes in the customer’s shopping behavior – in order to ensure in the future, in situations such as lockdowns, that trade does not grind to a halt.
And what about B2B?
The same paradigm shift also applies to the B2B market. When sales representatives or consultants are no longer allowed to visit their customers during a pandemic, or on-site appointments need to be reduced for economic reasons, sales dialogue needs to take place virtually via digital platforms. And, in doing so, the customer expects exactly the same shopping experience as for private B2C shopping – but with the special characteristics of a B2B sales process, such as shopping lists, bulk discount prices, purchasing limits for employees, bulk consignments, etc.
The recent experience of the coronavirus pandemic makes it essential for all retailers and brands to face up to the “Sales Shift”. The digitalization of marketing & communications, sales and business processes is a must. What is absolutely vital is a digital infrastructure, which is based on intelligent and powerful software solutions. The first step is an intensive analysis of the customer journeys of target groups and the development of an omnichannel strategy based thereon.
1 In Marketing it is a phrase for a brand or product of interest to a potential customer. A product or brand which is in the relevant set is likely to be bought.
2 The principle of harmonizing all channels in terms of communication, branding, interaction and transaction options.
Head of e-Commerce & Engagement