American Marketer


The inflection point of omnichannel marketing

November 19, 2013

Dan Hodges


By Dan Hodges

Intel cofounder Andy Grove describes an inflection point as "an event that changes the way we think and act."

Inflection points can be the result of action taken by a company, government or invention. But how do we know when we are truly at an inflection point?

Another Silicon Valley success story, the late Apple cofounder Steve Jobs, explained that “you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”

Dialing back
Looking back at several inventions over the last two centuries provides a guide as to how one innovation building upon the past led to new industries and products that could hardly be imagined a generation before.

For example, the first commercial telegraph was used in 1839 in England and ran for 13 miles, and by 1866 a telegraph line was in operation between the United States and Europe.

The telegraph connected continents for the first time in history and changed communications forever.

Ten years later, communications were transformed again when Alexander Bell was granted the patent for the telephone and the first telephone exchange was created in Boston.

The telephone system, of course, was the mother of many subsequent innovations, the most important of which being the Internet.

Less than a century after Bell got his patent, the Soviets launched the Sputnik satellite and communications were no longer limited to the earth.

Today, everything from cable television to meteorology can trace its origin to Sputnik’s success. In each of these inventions were inflection points, or moments after which things irrevocably changed.

Marketers are now at an inflection point of their own.

Indeed, marketers are able to locate, target and reach consumers in a way that could hardly be imagined even 10 years ago.

Through omnichannel marketing, consumers can be reached through every possible medium.

The savviest marketers are asking themselves how to use omnichannel marketing and ensure that they are not left behind at the moment when everything changed.

The right strategy for your company to reach consumers at a time when media and shopping habits are rapidly changing begins with the basics: look at consumer behavior when measuring the impact of change.

Technology, innovation and new platforms make the headlines but how are consumers using all of this in their daily lives?

How are the consumption of media and shopping behavior in 2013 different from 2003? How much will consumer behavior change in the next five years?

Research shows that consumer behavior patterns are in a transformational stage unlike any change cycle that we have experienced.

EMarketer projects that 16 percent of holiday sales will come from purchases made on smartphones for the 2013 holiday season, yet retail sales transacted on smartphones were not even on the radar five years ago.

“If you don’t invest in social technology as a way to reach out to, communicate with and support your customers, you really run the risk of being left behind,” said Kate Leggett of Forrester Research. “Overall, it’s a competitive disadvantage.”

Cycle of progress
It goes without saying that marketers use data to understand consumers.

A recent McKinsey study showed that the world’s data is doubling every two years.

Marketers will need the tools and the training to gather consumer insights to drive business decisions from this data.

Successful marketers, startups, software companies and retailers will be those that embrace the art and science of omnichannel marketing. A new level of cooperation and business building partnership will be born out of this effort.

The omnichannel world requires new investment in business process and consumer insights software, supply chain management, increase in innovation and experimentation and the continuous education of marketing professionals and their advertising agencies.

Omnichannel marketing is a seamless approach to the consumer experience through all available marketing channels, such as mobile, Internet devices, computers, in-store, television, radio, direct mail and catalog.

The last 20 years are, in part, the story of an explosion of innovation, faster than any other time in human history.

In particular, the rise of the Internet and the smartphone transformed the world in profoundly disruptive ways.

To understand what is coming next, it is necessary to understand how we got to where we are today and why we have gone from 50- to 20-year innovation cycles to five-year innovation cycles.

It begins with the World Wide Web in 1992, which led to creation of companies that helped organize the Web and gave birth to Yahoo, AOL and Amazon.

When the Internet created a global marketplace, community and scale players with game-changing businesses models were created.

Google, Facebook and Twitter were started during this time and reached hundreds of millions consumers in a short period of time.

The present phase is the mash-up of Web, social and mobile business models that include the launch of the iPhone in 2007.

The expansion of niche Web business and hybrid bricks-and-mortar businesses continues to change the retail landscape.

These digital innovations also impacted the political world. The extensive use of social media and mobile for targeting key groups during the 2012 elections forever changed politics.

The next phase, which we are about to enter, is “The Great Disruption,” which as a byproduct has spawned omnichannel marketing.

The evolution towards integrated physical, digital, mobile and social shopping experiences is just starting to begin the omnichannel revolution.

Defining brand purpose and the value proposition will be critical in this phase.

In the omnichannel world, each platform needs to have awareness of the other.

For example, a brand needs to know what experience you had on Facebook, Twitter, Pinterest, TV, radio and multi-screen experiences and how you interacted with the brand's applications, and what kind of in-store digital experiences you might have.

As Stephen Quinn, chief marketing officer of Walmart Stores said, “Mobility is going to be a massive game changer and it will change the entire retail industry. If you don't change, you will like irrelevance less."

Arc of growth
In a fast-paced world with highly disruptive technologies changing the relationship between consumers and producers on a daily basis, it can be difficult to figure out what works.

However, just as Noah’s Ark was built before the flood began, so too can marketers prepare for the future.

Here are some ideas on what to do:

1. Continuous training of all team members in technology, data and consumers insights.

Just as doctors have Continuous Medical Education (CME) classes, so too do omnichannel marketers need Continuous Digital Education (CDE) classes and the constant updating of skills.

2. Making use of social media in all consumer communications.

Marketers can harvest consumer insights and monitor feedback in real time while sharing this information with all stakeholders in the company.

3. Customer service must radically improve.

Marketers need to create their own two-way 24/7 omnichannel service where consumers can ask questions and get answers to their questions on mobile phones, cars, desktop, kiosks, wearable mobile, TVs and appliances for all of their products and services.

Brands that delight consumers always get the best financial results and word of mouth.

4. Integrating customer reviews into the shopping experience.

5. Personalize physical shopping with customized service.

6. Investing in technological advances in-store and making the retail experience smarter.

7. Merging mobile social, local data and targeting with time of day and day-of-week shopper profiles.

8. Understanding and using omnichannel data to build the best customer experience.

9. Training and getting the right people to manage this value chain.

10. Getting the right technology tools in place to manage and monitor real team consumer behavior.

Former U.S. president Theodore Roosevelt once said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

For marketers who want to stay in business, doing nothing is not an option.

WE ARE AT an inflection point at which the entire media landscape is changing.

Given the rapid pace of change and the fact that the majority of your revenue in a decade may come from products and services that can only be imagined, the most successful marketers will be those who embrace change, rather than ignore it. Doing so will not only ensure relevance, but also success.

Dan Hodges is managing director of Consumers in Motion and president of the New York chapter of the Location Based Marketing Association. Reach him at