Omnichannel Analytics: The brilliant basics

Setting the stage for success through shopper understanding and omnichannel KPIs

Omnichannel analytics is the key to providing a seamless and integrated customer experience across various channels. This includes brick & mortar stores but also online platforms, mobile apps, social media, and any other touchpoints where customers interact with a brand. 

Omnichannel strategies aim to meet customers wherever they are to enhance satisfaction and brand loyalty. To achieve this, it’s essential to keep in mind that today’s shoppers consult digital touchpoints throughout all stages of the purchase journey. Our Digitally Influenced Shopper Report has found that nearly 1 in 2 consumers regularly consult a retailer’s website or app before shopping in-store, and 1 in 4 continue checking the digital shelf while in-store. 

Omnichannel analytics: the difference maker

Below are a few routine obstacles that any brand – even a #1 category leader – can expect to face, no matter how well prepared they are. Notice the difference in how brands with and without omnichannel analytics tackle these challenges: 

Hiccups like these are inevitable, but brands with omni analytics capabilities can resolve them quickly. They’re also equipped to identify and seize new opportunities. Brands without omni analytics are in the dark, spending all their time fighting fires and little to no time taking advantage of new trends and technologies that drive growth.

The challenge: connecting data and progressing from offline dominance

While the shift to eCommerce as the main growth driver has taken place relatively quickly, brands have generally been slower to adapt and remain organised around offline. This is particularly evident in sales structures, internal understanding especially at the c-suite level, and supply chain infrastructure. 

Many brands are investing in online capabilities but haven’t linked the online and offline worlds. Not only does this lead them to underestimate the importance of digital, it also prevents a true omnichannel view from taking root and driving growth. It’s no surprise our eCommerce Benchmark Report found that despite investment, many cross-functional teams are unequipped for omnichannel. 

The solution: understand your buyers and define your KPIs

Start with the shopper in mind

Shopper understanding should be the foundation of an omnichannel analytics strategy. Recent global events, including Covid, supply chain issues and the cost of living crisis have accelerated existing trends and created today’s digitally influenced shoppers, who rely on digital validation to support their omni purchase occasions. In thinking about how to reach these consumers, brands should ask themselves the following questions:

• For our category, region and buyers, what is our shoppers’ path to purchase - now, and in the increasingly digital future? 
• What is the balance of online and offline shopping in our category?
• Where are the opportunities for incrementality?
• How can we create a narrative to drive a growth agenda for retailers? 

While today’s consumer behaviour is relatively new, the overarching paths to achieving brand growth will look familiar. At the simplest level, omnichannel growth is a factor of basket building, category penetration, brand penetration and frequency. 

How does this look from an omnichannel perspective? For a start, offline growth drivers often translate to online growth drivers (to varying degrees), but online also presents unique opportunities. We encourage you to refer to the chart below and assess whether your brand has built out its strategies for driving growth online to the same degree as traditional offline tactics. It’s also important to consider whether your offline & online strategies are working in harmony.

Define how you measure omnichannel success

Even as CPGs are increasingly recognizing the value of unique online growth drivers, many are still chasing growth strategies before fully establishing a strategy that defines which levers are worth pursuing and how success should be measured. Omnichannel analytics defines the online and offline metrics not just for evaluating the success of campaigns, but also for informing which tactics are worth implementing in the first place. 

You are what you measure

Brands have a wide variety of potential retail levers to measure within the shopper journey. Broadly, these fall under discovery, consideration and loyalty, as shown below.

When mapping your brand’s current systems for measuring the shopper journey online and offline, look for gaps within this framework and consider selectively adding metrics to build out your omnichannel measurement capabilities. Ultimately, omnichannel measurement is about gaining access to leading metrics: the day-to-day signals that inform sales, market share and profitability. 

The end goal of thoughtfully measuring shopper journey levers is to create an internal process where brands assess omnichannel strategies against these leading metrics. This testing and learning allows brands to quickly hone in on the tactics that will drive consistent brand growth as reflected in the critical lagging metrics: sales, share, and profitability. 

How to choose the right KPIs

You’ve done the work to understand how your shoppers behave, and you understand what metrics can help evaluate omni growth strategies – and now you want to grow your brand. What’s the next step? 

First, define your desired KPIs – which will likely include sales and market share. The type of metrics brands focus on are fairly consistent throughout different maturity levels: value and unit sales, profitability, inventory, and market share. 

On global marketplaces such as Amazon, 1P brands tend to focus on 1P sales to start, but we recommend tracking 3P sales as well - especially if your brand’s products are frequently sold 3P via wholesalers, where failing to account for 3P sales shortchanges your brand’s performance metrics. Colgate-Palmolive’s Todd Hassenfelt believes monitoring 3P data is essential to keeping a finger on the pulse of your category: 

The depth and frequency of data collection around these KPIs vary widely based on maturity. As brands progress and come to rely on better data, monthly reports on category sales and own brand share should be exchanged in favour of daily, SKU-level data including competitors, broken out by fulfilment type. The best solutions should incorporate flexible categorization based on all relevant product attributes and purchase channels. 

While there is an increasing array of retailer sales data, many offerings are essentially extrapolations of bestseller rank or from shopper panel purchase history. It’s tempting to assume that any data is better than none - but accurate sales data is fundamental. As Circana’s Anne Zybowski puts it: 

Because sales & share changes often determine whether digital shelf changes and strategic efforts are deemed successful or not, brands with inaccurate sales data risk proceeding along the wrong path with a false sense of confidence. 

The gold standard of KPI measurement uses ePOS data sourced directly from retailers, ePOS data is most widely available in the US and UK, while retailer data in other markets is more likely to offer aggregated vs granular insights. In general, brands should aim to generalise & apply insights from retailers with more comprehensive data. 

Ultimately, the combination of KPIs that works for a given brand will always look slightly different. But it’s essential that whatever providers are used and whatever type of data is collected, brands harmonise the data to develop a smooth omnichannel analytics operation. This has proven to be a major struggle for CPGs:

No one provider will supply every KPI your brand needs, so interoperability is key. For example, Profitero’s sales & share solution offers full flexibility to match any data reporting hierarchy, including Amazon categories, brand custom categories, Nielsen and Circana. This flexibility allows cross-functional teams to connect online casuals to different use cases and critical decisions across the organisation. 

Profitero’s integration with Circana provides holistic, omnichannel measurement, combining the best of online digital shelf casuals with multi-retailer ePOS insights. Our interoperability is designed with omnichannel analytics in mind: the ability to integrate Profitero’s online Amazon sales and digital shelf causals with Circana’s store data structure & categorisation within their Liquid Data reporting and insights platform provides brands with the most advanced and flexible option available. 

You can learn more about the integration here. 

Stay tuned for Part 2 of our omnichannel analytics series, where we’ll tackle how leading brands leverage digital shelf insights to accelerate omnichannel growth.