Big Bets from Retail’s Big Show
By: Mike Garcia, Managing Director, Client Leadership, OMD USA
For marketers, the start of the year is a fast-paced balance of chaos and opportunity. Between closing the prior year, setting the course for the 12 months ahead, the frenzy of CES, and the rise of retail in media, the NRF – Retails Big Show – has often eluded marketers. This year, I spent time hearing some of the retail industry’s giants and challengers alike share predictions and promises for the year ahead.
Raise your hand if you’ve heard these words before: Omnichannel, Personalization, Data, and AI. While not groundbreaking, these topics continue to permeate the zeitgeist and become more and more intrinsically linked while dominating NRF panels. AI is the spine that is anticipated to ultimately connect these themes together. It is key to understand that this is an evolutionary conversation versus a revolutionary one. Ultimately, it cements brands into the broad and niche cultures they belong to or aspire to be a part of in the future.
Omnichannel approaches aren’t new, but they are inconsistent. The stages in which brands execute successfully vary and the recent shift is to that of a unified Customer Experience (CX). Knowing that the customer journey has evolved to be much more fragmented and in no way linear, creating a Customer Experience that is unified across all channels and touchpoints is increasingly important. OMD Design and Omni ensure we’re planning holistically, ensuring our channel mix is built on outcomes, custom client data and measurement curves, growth audiences, and secondary or tertiary goals. Pre-pandemic, there was an undertone that pricing would drive brand growth. It quickly became clear that customers were looking for a connection to the brands, requiring a new focus on the role of the channel. That has held true as the world progressed forward. Consumers are looking for a seamless cross-channel experience and one in which they feel like the brand knows and appreciates who they are, what they need, and how to help. As a result, having a core data set define your customer and drive your channel allocations has become table stakes.
If consumers are not separating channel from message or message from the medium, then personalization becomes a lynchpin in satisfying this need. Brands are quickly shifting from segmentation to personalization at scale to make themselves more entrenched in their customers’ lives. Loyalty programs and deploying CRM insights into media are at the center of this, with swaths of first-party data coming into the ecosystem. Brands now have the necessary information at their fingertips to better understand the uniqueness of their customer base and what their individual journeys look like, and they can better anticipate their needs before the customer even sends the signals. Our team at Adyllic marry data with strategy to produce the most efficient and effective personalization at scale – across all digital channels. This is DCO 2.0 and has our clients ready for what’s next.
This understanding of their customers allows brands to have a more engaged loyal audience that gains experiences vs. just purchasing interactions. There is a shift to gamify loyalty with varying tiers to help drive that engagement. Rather than give points or cash back, brands like Amex now offer badges that offer experiences. While not directly targeted at Gen Z, this new form of loyalty gamification resonates with this cohort, looking for new ways to interact with brands. This allows deeper content and contextual experience that is unique to the individual customer, building a community of brand engagers versus a consumer set of repurchasers.
Including retail across channels and personalization throughout marketing efforts is only possible with the right quality data. There is still a need to understand the individuals, their journeys, and what they really want from a product. Whether through owned web, app, social, email, customer service, sales, paid media, commerce, or earned equity, these are all viable data points that require unification. Without a unified data strategy upfront, brands are often forced to be reactive to ancillary data points that may not tell the full story of the customers in question. Equally important is the understanding that the developed personas are not static. The same individual in a different stage of their customer journey can and will react differently within the context of that stage. This requires constant testing and learning to shift from basic implementation to deep unification. As Yang Lu from Tapestry said, “Iteration is the new perfection.”
So, if marketers have collected the right data, powered their personalization with the insights and signals it provides, and made cross-channel inclusive or retail and beyond, what’s left to improve?
A simple answer is speed, but the more complex answer is AI. With the myriad of touchpoints, the endless data, and countless permutations of consumers’ needs, experiences, and pain points, brand agility is paramount to staying ahead of the curve. This is precisely where AI will gain stronger footholds for brands moving forward. Whether it’s unique creative production, pricing, data organization and unifications, insight derivation, automated customer service, etc., AI will and already is playing a crucial role in expediting the process from weeks to days and days to hours. Ultimately, this will continue to enable brands to have the needed fluidity to remain competitive. Our end-to-end marketing orchestration platform, Omni, has us ahead of the AI evolution. We’ve integrated AI into the platform to help teams glean data into insights and provide users help via chatbot and education at the touch of a button. AI will disrupt the media landscape – we’re not betting on it. We’re guaranteeing it.
To paraphrase Carla Vernon from The Honest Company, “progress is like a game of Chutes and Ladders with pitfalls and shortcuts. It’s not a direct route, but ultimately, you get from point a to point b.” In the case of retail, point B is and should always be the seamless customer experience.
The final word on everybody’s mind was “culture.” With the technical acceleration of media capabilities, building a culture around your consumer becomes paramount to brand ambitions. Progress cannot happen in a silo. Collecting data that drives a better consumer experience falls flat when not aligned with broader strategies. Few brands today are moving at the speed of culture, but OMD’s newest client, Under Armour, is over-delivering on this goal. Under Armour dug into what Under Armour’s CEO, Stephanie Linnartz, calls a ‘data culture’, and how to create and use a data-driven DNA to push the brand forward. For example, the sports apparel space can feel crowded at times, and finding the right spaces to own is critical to long-term brand building. Particularly with new category entrants. Under Armour is finding room to grow by speaking to GenZ and A’s female customers through a sustainability lens – leading with a key product evolution, replacing spandex with material innovations that will enable less waste. Innovation lies at the heart of Under Armour. According to Linnartz, they are rethinking the life cycle of their products because, when it comes to the next generation, “they care about sustainability.”
One truth remains: balancing brand mission, revenue growth, and data independence is a new challenge, not a future one. The solutions presented at NRF are still just tools in a toolbox to solve the same problem: How to best serve the customer while putting them first. Marketers and retailers need to understand that the data and tech are just tools that enable us to create more seamless experiences when done correctly. The process will never be nailed the first time; by the time it is solidified, it will have evolved in countless ways. With customer habits and mindsets consistently changing, the landscape is ever-evolving, and technology is equally fragmented. The goalposts move on what seems to be a minute-to-minute basis. Marketers cannot afford to wait for a silver bullet. The time is now.
We put the customer first with every plan rooted in the client’s ambition and have empathy for speaking to them in the right spaces, at the right time, with a personalized story and a complete understanding of their journey.
Mike Garcia
Managing Director, Client Leadership, OMD USA
