Omnichannel Retail: How to Build Winning Stores in a Digital World

Our world is being radically changed by the fact that almost everyone is always digitally connected. This has led to a fundamental shift in the ways businesses should engage and interact with consumers.

I first realized the importance of data and a direct connection to customers during 30 years spent in marketing and leadership roles at the U.K.’s largest grocer, Tesco. I was the chief marketing officer when Tesco launched Clubcard in 1995.

Tesco launched Clubcard as the first mass grocery loyalty program. This gave it a rich source of insight into who its customers were, which enabled it to tailor its offer and marketing to consumer preferences.

Little did we know the extent to which one-point-per-£1 spent at checkout and quarterly direct mailings would unlock the value of customer data to not only run Tesco’s business better, but also drive sales and loyalty.

Tesco’s U.K. market share grew from 25 percent to 33 percent in the 15 years after Clubcard’s launch. Tesco was the second largest retailer in the world by revenue in in 2014. In 2017, Clubcard still had some 17 million members.

That first-mover advantage helped to drive unprecedented growth for Tesco. Meanwhile, retailers with loyalty marketing programs are still investing in them today, including Sainsbury’s, Kroger, and Woolworths in Australia.

Connection and the role it plays in winning modern consumers is important. Just as Tesco first began to realize the power of customer connection and data to enhance sales and marketing strategy, so too must "digital-first" brands exploit a first-mover advantage over traditional brick-and-mortar retailers.

Digital customer connection comes built into doing business online. Those that recognize this, such as Amazon.com, Alibaba, and ASOS, are challenging traditional market leaders, which have also made e-commerce gains.

Consumers share personal data when purchasing online, including credit cards, email and delivery addresses. Yet, even a valuable online customer becomes anonymous in-store, and gets treated the same as a casual shopper.

In spite of this opportunity to connect digitally with customers at speed and scale, few brick-and-mortar businesses capitalize on any digital connection with a customer on entering their store.

Retailers’ ability to harness customer insight beyond loyalty data significantly lags the opportunity. Google can guide me via mobile to a nearby store, but the store is likely still a digital "black hole," void of connection. The good news is that indicators support the fact that physical stores aren’t going to disappear anytime soon. However, retailers must invest in a mobile makeover to digitally augment the instant gratification available in them.

Just as online, that layer should recognize those customers that interact with relevant, engaging content; expert forums; recommendations; reviews; and promotions, and then incentivize and reward them for their behavior. Retailers need to demystify digital engagement and loyalty in today’s customer-facing physical spaces, tracing the impact and growing opportunity online and bringing digital via mobile into the store.

Tim Mason is CEO of Eagle Eye Solutions Group, a SaaS platform that allows retailers to create intelligent, real-time connections with its customers. He's also the co-author of the new book, "Omnichannel Retail: How to Build Winning Stores in a Digital World."