How to create and measure an omnichannel ecommerce strategy with Kristen LaFrance

Transcript

Anna:

Hello, Kristen. And welcome to the show.

Kristen:

Thank you so much for having me.

Anna:

It’s amazing to have you here. I’m super, super excited to have a fellow podcast host on the show this time. And let’s jump with the first question. So you have interviewed many, many, many successful retailers, founders, marketers on resilient retail. What we’ve noticed during COVID, is that they have successfully pivoted from offline to online. So could you please share how they made these transitions? What made it possible for them to make these transitions?

Kristen:

Yeah. This transition is the heart and soul of everything that I do, is really talking to retailers about making this pivot. And all of us who are in e-commerce, know how hard e-commerce actually is. So I’m always so impressed that these kinds of local businesses were able to, in such a short time, completely change their business model into one that was more omnichannel.

I always like to point out that the first thing we saw these retailers do was not… Everybody kind of went through that first panic of, “Oh my gosh, our door’s closing, and our profits have now gone to zero because we’re fully dependent on foot traffic.” So everybody had that moment.

But what the most resilient ones did was kind of take this moment to pause and say, “Okay, let’s come back and figure out what our brand is? Who are we? Who do we want to be in this new future?” They bring all their store associates together and they have these conversations about how we are going to pivot into this new world.

So they really start from a place of understanding what is absolutely necessary for a brand to stay and what can change. So you see some retailers close their doors completely and go fully online. Dope Cookie Dough is a really good example of this. They are kind of a cookie dough bar, they used to be on the Las Vegas strip. Obviously, Las Vegas has been just completely kind of shut down from COVID. And being a tourist center, they just lost foot traffic.

So they went fully online. Other brands you see say, “You know what, actually, this retail aspect is something we can’t lose, but we could add in an e-commerce site as well.” So that’s the first one.

The next one is they start asking their customers what pieces they actually want out of this. So now they figure out, okay, we’re going to do e-commerce, but do we want to do curbside pickup? Do we want to do local delivery? Do people want to shop on Instagram? How do they want us to do this e-commerce site? Do they want all of the products available online? Do they only want some of them?

And so they start really talking to their customers a lot more. This is a benefit that kind of brick and mortar first has, is that they have really close relationships with their customers, and so they’re able to really ask these questions.

And then from there, they just start launching these things. They get on Shopify, they get their online store up, they get it out there, even if it’s not absolutely perfect. Great Lakes Brewery is an example that I love to use. It’s a brewery in Toronto and they had zero e-commerce presence. In less than three weeks, they had now all of their merchandise online and then they put up local delivery and you were able to go just with five $50 of beer, and somebody that you recognized from that brewery would come and bring it to your house.

And it’s just this ability to pivot and get into action. So then it was getting on Shopify, getting those stores set up, getting their inventory unified across both the point of sale and the online store, and then just starting to market it. And that’s the last thing they do is they start marketing first through their owned channels, so you’ll see a lot of them. They’re posting on social media, they’re sending out emails, anybody who comes in their store they’re trying to get their contact information. So they’re using QR codes on packaging. They’re texting people when the curbside pickup is ready, so they’re bringing them into that ecosystem. And now they’re just continuing to figure out how to optimize these experiences for their customers.

Anna:

Wow. I loved your answer and it definitely sounded like Shopify literally changed the lives of these retailers and also the entire business model has changed. That’s impressive and that’s amazing to hear.

Could you please now elaborate on the marketing activities a bit? So you mentioned that now that they’ve transitioned from offline to online, they started doing the activities that they maybe have not done before. Something in terms of email sendout could be one example of it.

So what are the activities these retailers started doing? How would they combine them into one sound strategy? And maybe you could elaborate on a few successful examples of how certain retailers were hosting virtual events, or you mentioned that they were talking to their community a lot more. So did they host an online community or were there any other successful examples of how retailers made this omnichannel strategy work?

Kristen:

Yeah. There are so many examples of this. I will try to keep it somewhat concise. You mentioned virtual events. Those have obviously been really big. I think we’ve all kind of seen that. But if you think about your local yoga studio, now most of them have kinds of online videos where you can have an online membership.

My local cycling spin studio has the same thing. If you have a bike at home, now you can pay a subscription to get their classes online. And so that’s been a really big shift now to the point where it’s expected that your local yoga studio has a digital version of their classes as well, and has some kind of Zoom connection. We understand what Zoom fatigue is, and Zoom outfits, and Zoom backgrounds. So all sorts of retailers, I think this is one of the biggest ones, have taken a lot of the kind of event-based stuff that they did in retail and started doing it virtually.

Another big one we’ve seen is a kind of membership program and loyalty program. So really leaning into, we have this local community around us, how can we kind of arm them to be our brand ambassadors and to keep coming back and shopping with us? Because now you’re starting to compete against the Amazons.

One of my favorite interviews from season one was with TC Running. They are a running store in Minnesota. They have two stores. Before the pandemic, zero ecommerce presence whatsoever. So they had that moment where all of a sudden their doors are closed and all of their profits are now at zero. And they got $1.5 million of merchandise onto an online store in about a week and a half. And then they said, “Okay, we have this connection with our community.” They had partnered with a lot of the high schools, they had partnered with a lot of run clubs around them. They had this local love but now all these shoppers are also looking at shoes online, and so they’re up against Amazon.

So they said, “Okay, how can we make it such a great experience that they’ll keep coming back to TC running?” And so they started what they call a Run Squad, and you pay kind of a membership fee, but then you get this gift bag where you get a special shirt, you get some stickers, you get a water bottle, you’re part of this exclusive club. And then you get a discount on everything you buy for that entire year that you’ve paid for. And they have seen insane growth from it. And now they’re even reaching new markets. That one is a really cool one.

We mentioned email marketing. This is, of course, big. And I just had an interview this week with a small business owner. The business is called Proper Lifestyle. It is in Toronto. And she sells Korean skincare. And she was saying, “As much as the pandemic really was hard,” and their closures have been super intense. I mean, they’ve been in full lockdown. So her doors have been closed for most of the last 12 months. And she said, “As hard as it was, what I decided to do was just show up in my store every day, turn the lights on. We were still closed.” But she was in the store working.

And I asked her, “Well, what were you doing if you were in the store?” And she said, “Well, all of a sudden I had all this time to go learn how to do email marketing.” And so she learned email marketing. The way she was collecting emails before it was in-store purchases. And people aren’t coming in stores and she has to still grow that list. So she wrote a guide to Korean skincare. She put it up on her site. She marketed it to all her customers. And she is making like two, three, four times her normal sales because of this work she’s done in email marketing.

Another thing we’ve seen is this idea of stores as fulfillment centers or dark stores. So in places where they can’t actually be fully open, they’re still using their stores to fulfill online orders locally so people can still do curbside pickup and local delivery. And so they’re still able to market the way they normally would in their local geography.

Other things we see, partnerships have been really cool. There’s a lot of this going on. I live in Colorado Springs. I was just at my local liquor store and they’re doing this partnership with four or five different women-owned businesses in the area where they are doing a donation for feminine sanitary products. And then they’re donating that all to our local shelter.

It created this kind of ecosystem of local love where now I was asking them like, “Oh, what other stores are in it?” And she told me about the five other stores, and throughout the last couple of weeks, I’ve actually now gone by those stores because, one, I want to donate because it’s something that I care about, but two, I just didn’t know that these stores were in my local community. So they’re now starting to help each other out and market local shopping together.

The last two are going to be live video and store associate chest. This is really cool. The detox market is a good example of this. They are a skincare and makeup company retail first, and now they’re using… There’s an app actually called Hero, who I’ve talked to multiple times, where you can put this thing on your site where now store associates can go online, and if you’re on the online store, you can click this button, and then you’re immediately connected to someone real-time on a live video.

So say I’m looking at this lotion and I’m not sure if it’s too oily or for it’s too creamy for my skin, I can pop onto a live call and this store associate can do what they would do in-person, have this one-on-one concierge experience where you get still the visceral experience that you can’t get in pure e-commerce, and they could spread it on their hand and show me the texture of it, and it gives so much more context.

The numbers around conversion rates and average order value when you go through that concierge experience are bonkers. And we’ve seen so many brands try to do this because they also don’t want to let go of their store associates, even if their doors are closed. So they’re utilizing their resources in a new way.

And then kind of similar to that is virtual styling. Knix has done this, Universal Standard has done this. All sorts of fashion brands are doing this in order to lower returns, increase average order value, increased conversion, increased connection with the brand, still get that human to the human experience that you would have gotten in retail. You’re able to get on a call with a stylist and figure out, “Okay, what size do I want? What products are actually going to fit?” And still, you’re getting that like walking into a store, having the stylist pull things from the racks for you, all of that, it’s just happening online.

So you can see a lot of these things kind of come around, is there an experience that retail gave your customers that you can not replicate online, but kind of bring to the digital world and shape it around so it still works really well for your customers? So those are kind of some of just a few of the most exciting, new marketing strategies we’ve seen.

Anna:

Wow, that was indeed a very, very comprehensive list of strategies. I love it. And I really love how the retailers embraced the situation and came up with what sounds like really, truly creative approaches to this. We’ve heard about the community, we’ve heard about online chat, email. But now that everyone is charting with all these different strategies, approaches, you have a lot of time so you can learn literally any single marketing tactic or approach, email marketing or community management. What should retailers really focus on? So how can they single out what they should be doing and when? And then my next question would be, how can data support this? So what are the leading indicators that retailers, marketers should look at when we want to understand that our new omnichannel strategy is actually working? And how should we analyze these campaigns? Maybe you could provide a few examples of how everyone can now work with the data around all these fantastic initiatives.

Kristen:

Yeah. So to answer your first question, what kind of what to do when? That’s going to be figuring out where your customers are already engaging. There’s something about the term omnichannel that I don’t love, which it sounds like we’re saying, be on every channel, be in all of the channels. Omni in itself means all. But really that’s impossible to manage that many channels and to do it well.

So the important part of omnichannel is you’re going to be selling on multiple channels, but you need to be selling really well on all of them. The experience needs to be fantastic, and they need to connect together to create a holistic experience. So when you’re trying to figure out what channels are best, how do I start? What do I do? Just ask your customers, because they’re going to tell you. Find out where they’re shopping, find out where they’re already engaging. You have all of this in your data, figure out what channels are most profitable.

So if a customer comes from a blog post to a product page, and then goes over to Instagram, and then comes back to the product page, and then comes into your store, are they spending more than someone who just went from an Instagram post to an Instagram checkout? So starting to look at those things will help you figure out which channels are most important to focus on.

On the data side, this is where omnichannel gets super tricky. It’s already hard enough indeed to see, to really have perfect attribution on everything of where someone is exactly… Tracking this exact journey that I was just talking about is very difficult.

So with omnichannel, to start, you almost have to have a little bit of a mindset shift from, we’re going to make every decision based on the data that we can prove. At some point, you kind of have to let go of a little bit and say, “Okay, are we creating a great experience across millions of potential customer journeys?” Because we can never say exactly how a customer’s going to get to conversion. So you just have to try and make all of this work together and make it really, really great. But there are things that you can track to see how things are working.

Just your normal stuff that you’re going to be tracking on your e-commerce site, everything is still important. Conversion rate, average order value, impressions to your site, where they’re coming from, how much that traffic is worth per incoming traffic. But the other things are going to be customer LTV per segment. So this one gets really interesting. Breaking your customers into, are they online-only shoppers? Have they shopped online and in person? Have they shopped on a marketplace and on your specific site? And then comparing which one of those segments has the highest LTV.

I just interviewed Gloriana and they have this insane stat that the customers who cross-shop across stores and online have two times the LTV and spend about 4% more than customers who just shop online. So that was one of those things for them that as they saw that they were like, “Oh, well, this retail thing is working for our brand.” Now they have 19 stores for a reason.

Other things, customer engagement, and actions. So are they following you on Instagram? Do they open your emails? People who opened your emails, are they spending more? Where are they spending more? Geographical data on store placement is another one. So looking at sales in the area around your stores. Are sales going up? Is revenue higher? Is the average order value higher? Are they connecting on Instagram more? Are they commenting? Are they the ones who are doing surveys?

Trying to figure out not just which customers are spending the most, but which customers are most engaged on all of your channels. And looking in that geographical range can be really interesting too, because it can also prove out, “Okay, this store is doing something for the community and it’s bigger than just sales.” Although that’s important, it’s also, okay, when we’re in a city, that city becomes our community as well. And that is a really good indication of wanting to go into more retail.

And then another thing would be useful features of things like curbside and local delivery. So when you turn on curbside pickup at your store, do sales increase, do more people choose curbside or local delivery? If they choose local delivery, do they come back? If they choose curbside, next time they order, where are they ordering? Is it online? Is it curbside? Are they walking into the store? Really it’s all these things just trying to figure out how my customers are behaving in all of these channels, and then how do those channels connect to drive deeper relationships and more retention within those customers.

Anna:

Fantastic. And I really love how you shared more about the segmentation because I think that’s a very, very core part of marketing. And it was super interesting to hear about the cross-shop stats on how it actually increases the LTV. I would have never thought that this could be something driving, but amazing to hear.

Yeah. So now definitely, again, that’s a lot of data coming from all different channels. So what kind of reports should marketers and analysts, shop owners have in place so that they could measure their marketing efforts? Because you could have weekly reports, we can have monthly reports, it all depends. So how would you recommend they structure this data? Would it be something related to the customer journey or something, if they were trying the new initiative, would they be pulling in data pretty much ad hoc to check how a particular campaign is performing? What would you recommend they have in place and how should they approach reporting?

Kristen:

Yeah. It’s a hard question to answer because it’s the classic answer, it so depends on your product and your brand and where you are, what you’re selling, how many retail stores you’re in. The reports that Target is going to pull on their omnichannel strategy are going to be wildly different than the report the local cafe down the street is going to pull.

And so it’s hard to give this blanket answer, and there are so many different ways you can do it. I think always when you’re talking about customer retention and LTV and multi-channel attribution, you’re going to want to do multiple kinds of reports. So looking over time is going to be really helpful, whether that’s, what is the payback window or the buyback window of your products? Do people normally come into a coffee shop? I might go in twice a week. So you can track weekly.

If it’s kind of a vintage boutique store, a customer is probably not coming in multiple times a week, so maybe you’re pulling reports that are more kind of monthly, 60 days, 90 days and looking, what all did we do and how many times did we come back? What is our average buyback window or repeat purchase rate? I think those are really important to do.

Also, cohort analysis is really helpful for this too. Like if you implement curbside pickup, you can go back and run an analysis on, okay, this cohort versus this cohort of customers or time cohorts, what was the difference once we included this new project or this new program or curbside or local delivery? And then I think on just kind of like a larger scale, the way it can be helpful to break it up on a very, very high level, is to break it into three buckets of attract, convert and repeat.

So the first step is attracting customers and you’re doing that on so many channels. So you’re going to be measuring all sorts of different reports. How are you attracting them online? SEO, emails, social media. How are all those things? How are people getting to you and how’s that going?

And then the next bucket is “Convert”. How are you converting the customers that find you? And this is, again, it’s online and it’s offline. So when somebody walks into the store, what’s that conversion rate? Are they getting to the checkout? What is the average order value? All of the standard kind of stuff you look at it conversion, but you put it with all of the channels into that bucket.

And then the real tricky one that we all know is so hard to measure is “Repeat”. So we’ve attracted them, we’ve converted them on all of these channels, we’re understanding how these are working together, now are they coming back again and again? Where are they coming back? Which channel are they coming back on? How are they acting on those channels?

So I think that’s one of the easiest ways, especially for a smaller retailer to kind of break up all of these reports so it feels less like trying to understand the universe and more like trying to understand how the three buckets kind of how they work and how they work together. To attract, convert, repeat is usually how I help my merchants kind of think through those reports.

Anna:

Kristen, that was amazing. Thank you so much for sharing these golden nuggets of knowledge for all of the marketers, for all of the e-commerce retailers out there.

And now if the audience would love to learn more about you, and I’m pretty sure they would love to, where can they find you?

Kristen:

Yeah. So I am most active on Twitter @KDlaFrance. La France is spelled like L-A, the country France. Very simple. You can find all of my conversations on resilient retail at shopify.com/resilient, or just search resilient retail on any podcast platform or on YouTube and you will find us. And on Instagram at Kristen.laFrance.

Anna:

Awesome. Thank you so much for coming to the show, Kristen.

Kristen:

Thank you so much for having me.