Top reason why legacy retailers fail at omni-channel marketing

incorrect-messaging-loses-customersThe following was taken from an interview with a seniormanager at a Fortune 500 retailer responsible for their e-commerce strategy. He discusses the challenges with his organization, why Amazon is winning the war for consumer mindshare, and why omni-channel marketing has potentially huge upside for small, nimble companies.

Q: What kind of retailer benefits most from omni-channel marketing?

A: There is promise across the industry but omni-channel does not make sense for companies that operate in silos – a different division for store and a different division for e-store / website. The type of companies that are ready for omni-channel marketing are those that are big enough to have substantial revenues through e-commerce, but are small enough to not have separate divisions for online and traditional.

Q: Can you elaborate? Why would silo-ed divisions fail at omni-channel marketing?

A: Let me explain how messaging works for different channels.

    1. First an internal marketer crafts a creative brief based on some insight
    2. Once the brief is approved by the marketing leadership internally, it is shared with the creative agency on record, for them to turn the brief/insight into a customer facing message
    3. Once that message is approved, the agencies work with sub-contracted agencies across the relevant channels (TV, social, digital display, print)
    4. The agency is responsible for making sure the message is consistent and they bring it back to the internal marker for review (concept and budget)
    5. Once approved it is then trafficked to the various channels

The reality is that in large silo-ed organizations the sub-contracting agencies are totally disconnected from the parent and the messaging that goes out is disconnected. The thrust of the initiative is lost. It may seem like an obvious fix, but this is a fundamental organizational issue for most legacy organizations who pre-date the Internet.

So, while there is a strong opportunity with omni-channel marketing but even the big retailers are not doing it correctly. Although they are spending the  money- they are not getting the best bang for the dollar. Impact is diluted due to independent execution by channel partners as I described.

Q: It’s interesting you identified legacy organizations as being unable to take advantage of omni-channel? Is that why Amazon is doing so well? Please elaborate.

A: This is exactly why Amazon is doing so well. Because of its pedigree, it is much better organized for omni-channel marketing. On the other hand, I would not discountthe smaller retailers in the $50M-$500M dollar range who, just because of their size, can run much more cohesive omni-channel marketing. In that respect OCM is a small window of opportunity with potentially huge upside for them.

[Ed: Interview has been paraphrased for brevity]

Note: For a free omni-channel readiness assessment, use the tool in the link below.

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