Why Emerging Brands Need Omnichannel Assortment Optimization

by NielsenIQ

July 13, 2023

In the ever-evolving world of retail, consumers are changing the way they shop. Omnichannel shopping has emerged as a modern approach to buying CPG products. This integrated approach aims to provide a consistent and unified shopping experience, allowing consumers to make purchases through a combination of in-store, online, and click-and-collect channels. It recognizes that consumers today interact with brands through multiple touchpoints, including physical stores, websites, mobile apps, social media platforms, and more.

Unfortunately, the retail landscape of 2023 is a bit complicated when it comes to omnichannel shopping. While e-commerce has been steadily growing for years, it is the blending and mixing of channels that truly defines the current and future state of retail. According to NIQs Omnishopper data, 2022 brought close to 15 million new online CPG shoppers to the table. Within the US, 86% of CPG dollar sales are represented by “omnichannel shoppers.” More consumers than ever are embracing an omnichannel mindset, with 22% of shoppers (one in five) now planning in-store shopping trips combined with prior online orders. Additionally, more consumers are shifting their spending habits to combat growing economic insecurity and high supply costs. This is leaving many brands in the dark as they scramble to keep pace and stay on the shelf.

This shift presents both opportunities and challenges for emerging brands as they strive to gain a foothold in the market while navigating the complexities of marketing and understanding consumer behavior. On the surface, this seems like a positive development as it opens additional avenues for revenue. However, there are benefits and challenges that should be considered.

Benefits of Omnichannel Assortment

The benefits of embracing an omnichannel approach are substantial for retailers, brands, and customers alike. For retailers, it provides a competitive edge by improving customer satisfaction, increasing loyalty, and driving sales growth. By leveraging multiple channels, retailers can reach a wider audience and cater to different customer preferences and needs.

Brands can expose consumers to their products regardless of how they shop, helping them stay relevant and keep pace with demand. Customers benefit from the convenience, flexibility, and seamless shopping experience that omnichannel retail offers. They can choose how and when to interact with a brand, whether it’s through a physical store, a website, or a mobile app, and expect consistent service and product availability across channels. Maintaining a consistent and identifiable brand and message is crucial to ensure a cohesive experience for customers as they transition between channels. Personalized messaging based on previous interactions, consumer interests, or other relevant criteria can further enhance the customer experience. Brands should also create intentional funnels that guide consumers through each stage of the buyer’s journey, regardless of where they start.

In the end, growing a brand and increasing sales in an omnichannel world requires focus and accurate, actionable data. Tracking retail sales, market trends, and consumer behavior all play a role. Brands need to leverage data and analytics to gain insights into how customers engage with their products and make informed decisions. This includes analyzing purchase patterns, identifying popular product attributes, and understanding the impact of pricing and promotions across channels.

Omnichannel Challenges

One of the biggest challenges that comes with omnichannel shopping is tracking and analyzing data. As consumers navigate between various channels, it becomes increasingly difficult to accurately track their purchases. Mixed purchases, where consumers buy items from multiple channels, can be incorrectly attributed, or overlooked entirely. This poses a significant challenge for brands in terms of understanding their customers’ behaviors and preferences, as well as making data-driven decisions.

Omni sales measurement incorporates the full view of online and offline channels. In the case of the US market, this omni perspective highlights two factors of growing importance. In-store sales continue to outpace the slowed performance of the 2020-2021 period. Nearly 30% of CPG growth was driven by e-commerce. This highlights the true omni nature of consumer demand today and the need to uncover where channel strengths exist across the CPG landscape. In the future of retail, consumers will continue to develop deeper preferences for where particular needs are fulfilled across the omni channel.

Another challenge of omnichannel shopping is the need to spread resources more thinly across multiple channels. To target consumers everywhere at once, brands may find themselves stretching their marketing efforts and resources to their limits. This can result in diluted messaging and a lack of focus, ultimately impacting sales and customer engagement. The goal is to keep the brand messaging recognizable and engaging, so the consumer feels like everything is cohesive as they go between channels. To achieve this, brands must take a consumer-centric approach that keeps the comprehensive customer journey top of mind.

To overcome these challenges and succeed in an omnichannel world, brands must prioritize focus and accurate, actionable data. Growing a brand and increasing sales require a deep understanding of retail sales, market trends, and consumer behavior. Only by leveraging comprehensive and reliable data can brands align their product offerings with the needs and preferences of their target customers and ensure visibility across all channels. To get the full view of your position and opportunity, you need to look at both sales data and panel data. With e-commerce expected to reach $36 billion in 2023 – a 20% projected increase from 2022, every optimization can lead to big gains, but only if it’s based on accurate data.

Optimizing Omnichannel Assortment

When it comes to optimizing omnichannel assortment, there are several key areas that brands should focus on.

  • Use Product Attributes Wisely: Rather than searching by brand, omnichannel shoppers tend to search by product attribute. That is, using terms like “gluten-free,” “sustainably,” and “ethically sourced.” This means you can bring your products to the forefront by optimizing the product attributes you use on your products. The key is making sure the claims you use resonate with the market. For example, 26% of shoppers find it difficult to find sustainable products on the digital shelf, but 45% of consumers say they’re willing to pay more for environmentally friendly products, so a focus on sustainability could boost your chances.
  • Analyze Consumer Behavior: By tracking and analyzing consumer behavior, you can uncover valuable insights that inform your assortment strategy. Look at purchasing patterns, demographic information, and other relevant data points to understand what consumers want and how they shop. This information can help you make data-driven decisions about which products to prioritize and which channels to focus on. In an NIQ and Dash Hudson study, we found that brands that entertained their audience on TikTok grew 34% faster than those who approached the platform with a traditional marketing mindset.
  • Leverage Online Marketplaces: Online marketplaces like Amazon, Walmart, and Target have become go-to shopping destinations for many consumers. By listing your products on these platforms, you can increase your visibility and reach a larger audience. Be sure to optimize your product listings with high-quality images, detailed descriptions, and positive customer reviews to stand out from the competition.
  • Optimize for Mobile: With the rise of smartphones, mobile shopping has become increasingly prevalent. Ensure that your website and online store are mobile-friendly, providing a seamless browsing and purchasing experience for customers on-the-go. Consider implementing features such as mobile payments and one-click ordering to streamline the checkout process.
  • Provide Consistent Pricing and Promotions: Consumers expect consistency across channels, especially when it comes to pricing and promotions. Ensure that your pricing is consistent across all channels and that any promotions or discounts are applied consistently as well. This helps build trust with customers and avoids confusion or frustration. For example, though 40% of Health and Beauty sales occur online, in-store presence is still key. In fact, 50% of consumers surveyed prefer to pick out personal care items personally in the store, even when collecting an order, they made earlier. Without adequate promotions catching their eye in-store, you can end up missing out on easy sales while you focus on other channels.
  • Embrace Data-Driven Insights: Leveraging data and analytics is crucial for optimizing your omnichannel assortment. Monitor sales and performance metrics across channels, identify trends, and adjust your strategy accordingly. Use tools and software that provide real-time data and insights to stay agile and responsive to market changes.

Omnichannel retail is the way forward in today’s consumer landscape. The blurring lines between online and offline shopping demand a comprehensive and integrated approach to meet customer expectations. Marketers who embrace omnichannel strategies and leverage multiple channels in their campaigns have a 28% higher purchase rate than single-channel marketers. The key is to understand consumer behavior, track customer journeys, and provide a seamless and consistent experience across all touchpoints.

Are Your Ready for the Future of Omnichannel?

Omnichannel retail is an essential strategy in today’s consumer landscape. It offers convenience, flexibility, and personalized experiences that customers seek. By understanding the interconnectedness of online and offline channels, analyzing consumer behavior, and delivering a cohesive shopping experience, brands can position themselves for success and drive business growth. Consumers will continue to seek convenience, flexibility, and personalized experiences. Embracing the omni future of retail unlocks new opportunities and ensures relevance in the dynamic retail landscape of 2023 and beyond.

To reach omnichannel shoppers, you need to know where they are choosing to shop, how, and why. But that’s only possible if you have access to reliable, up-to-date data. As a member of Foodbevy’s community, you can sign up for a free Byzzer subscription, NIQs platform built for emerging brands and their budgets. Free access gets you 3 free reports and a weekly alert to get you started with data. Byzzer provides breakdowns of a wide range of attributes and markets in easy-to-digest reports. Best of all, we’ll even show you how to leverage this information for your action plan. It’s never too early to start acting on data.

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