Marketing Plan FMM-457 final project

Marketing Plan for the Omni-channel Merchandising Concept

Thomas McDonald

FMM-457

Southern New Hampshire University

Omni-channel is integration of traditional retail sales and supply chains with the technological

advances and concepts of Ecommerce to allow all retail operations to act seamlessly to provide

the customer with the best shopping experience regardless of time or location the customer is

making the purchase (Alaris, K., 2015).

With the transformation of the internet into and retail platform all of its own, retailers like

amazon and overstock successfully tapped into this demand and created the online shopping

trend that is now become standard of for all forms of retail and all sizes. Omni-channel is

becoming more than just a trend but a means to modernize a full service retail business. It is now

often the case that our customers will begin their product searches from their home, offices, or

even during moments of leisure. Most people have access to at least one if not more forms of

digital technology and will use as a primary source to do research on products and pricing in

order to make an informed buying decision. Customers then pick it up or have it delivered to our

homes and or offices (Cook, G., 2014). This makes the development of the Omni-channel

concept an essential. This marketing plan is to prove that any retailer can be more successful

generating sales using the integrated Omni-Channel retail sales environment (Newstex, 2014).

Omni-channel gives retailers like Macy’s the ability to compete with all industry segments and

gives them capacity to grow into the global marketplace (Young, V. M., 2012)

Target Customers

With the objective to determine who are the Omni-channel target customers. The traditional

target customer of most brick and mortars retailers is likely female with a family, 30-60 years

old, with some college education, middle class to upper middle class in income and lives in a

suburbs or lives in the city (STRUGATZ, R., 2015). However, the long term future for a

company depends on whether or not they can attract new customers as their more mature

customers that have been their core customers since the mid 1990’s are lessening their spending

needs as their households become smaller with their lifestyle changes with their children leaving

the house (Newstex, 2015). Macy’s are looking forward into the future to who their target

customer of the future. The result of the implementation of the Omni-channel is for Macy’s to

create their new target customer while continuing to grow market share of their current target

customer (Cook, G., 2014).

In 2012, at the adoption of the Omni-channel, Macy’s made it known that would use technology

and change their corporate philosophy to accommodate the target customer for their Omni-

channel target customer, the millennials. The key is to develop an integrated sales platform for

younger more tech savvy customers but give those slightly older more traditional forms of

marketing while performing more concentrated marketing on social media with special

promotions geared to their internet usage. The goals to reach current and perspective target

customers to compete with Online Retailers such as Amazon, Zappos and Overstock and the Fast

Fashion apparel retailers such as H&M and Zara. (Young, V. M., 2012)

Competitors

The essence of creating a retail sales system based on the philosophy that the consumer should

be able to purchase and acquire merchandise by the easiest means possible based on their needs

and the availability of the product is basis for the Omni-channel sales environment. There is a

simple way to determine the impact of competition towards the utilization of Omni-channel. By

comparing companies who use the Omni-channel approach as applied by retailers like Macy’s

and those that do not and the other is to compare different variations of the use of Omni-channel.

It is the differences in how certain retailers utilize the Omni-channel concept and even those that

do not utilize the concept that has the effect (Women's Wear Daily, 2014).

For companies now fully embracing the Omni-channel merchandising concept, Nordstrom’s and

Sak’s 5th Avenue has become aggressive with their Omni-channel sales concept. The key for

them is to be able to spread their products lines for better distribution for their customer,

including the use of robotics in the distribution system (Moin, D., 2013). Another company

making vast improvements in the last couple of years is J.C. Penney’s, after years of criticism

from many over the misconception of their value price strategy and failure to truly notice the

Omni-channel concept (Women's Wear Daily, 2012) has rebuilt their business on the Sak’s

model with creating a seamless Omni-channel.

As for a company not strongly utilizing the Omni-channel concept the abilities of Dillard’s has

not integrated their Omni-channel capabilities as readily as others. To maintain market share in

the wake of the growth of ecommerce are very much noted. But noted that it had higher not

made transition fully and was having higher operating costs a sign that improvement was needed

(Newstex, 2015).

Opportunity and Challenges

To look at what challenges retailers face today to be continuously successful businesses and to

compete with companies that have different retail business platforms need to focus on the

challenges that result from going forward with the streamlined approaches and logistics along

with maximizing access for your consumers. The purpose of this is to gain maximum customer

satisfaction with your business in order for those customers to keep returning time and time

again.

When we consider challenges that those who utilize the Omni-channel approaches the first and

probably most important is how the customer experiences the use of on the channel (Cook, G.,

2014). The challenge then becomes delivering consistency of service, information most

important price making the customer’s life easy as possible (Enterprise Innovation, 2014).

Because retailers concentrated on making digital retail viable by doing retail only specials it

caused a discrepancy in pricing that in particular brick-and-mortar retailers had difficulty

keeping track of (McCrea, B., 2015).

The second component to meeting the challenge of an Omni channel sales environment is

ensuring your company has an efficient supply chain environment that can logistically handle the

demands of an intense new retail environment. First, the supply chain has to provide flexibility

so that the consumer can be able to acquire the merchandise they are looking for at any location

where that inventory could be located (McCrea, B., 2015). It is important to understand also the

role suppliers play The result is the decision to use retail fulfillment also known as e-commerce

distribution is no longer a question because the increasing demand real-time supply chain

visibility created by on the channel retailing has made the fully mobile supply-chain a reality

(Andel, T., 2014).

When we look at the O and the initials CIO and the three keys a retail we refer to order

processing. The challenge with Omni-channel is the target customer for Omni channel requires

speed and that their orders have to be processed in a timely manner so that they can get the

products when they want them or need them (Gov, N. U., 2014). Working with those third party

logistics (3pl) companies that help distribute consumer merchandise such as FedEx and UPS in

sales planning can make the omni-channel distribution process go smoothly (Levans, M. A.,

2014).

The following are some of the Omni-channel applications being marketed at Macy’s several of

which have been successfully branded.

BOPS (Buy Online, Pickup in Store)

Advertisement for Buy Online and Pick up in Store (BOPS)

Target Customer: 30 to 50 year old career women and families that have no time for anything

including shopping (Prior, M., & Karr, A. J., 2013).

Application: Macy's store locations nationwide. To those customers that are the primary target

of the Omni-Channel concept. Allows the consumers that cannot shop during regular brick and

mortar store hours the ability to buy merchandise via different Ecommerce applications with the

option to later pickup at their local store. This has the largest impact in that they can do all of the

research at home, order it at their convenience then pick their purchase up at their local Macy’s.

Giving this customer the ultimate shopping experience they can imagine (Macy’s, 2015).

Benefits: customers save delivery time and money through shipping costs. Can later shop the

brick and mortar location (Digital Signage Today.com, 15 Sept. 2014).

Marketing: Heaviest marketing on traditional media outlets focus on major media events and

shows geared toward this age group.

Macy’s Wallet

Demonstration of the convenience of My Wallet through the use of a smart phone

Target Customer: The holders of the Macy’s Star Rewards consumer credit card (Prior, M., &

Karr, A. J., 2013).

Application: The first direct major introduction of the omni-channel concept for Macy’s

customers. Provides customers with electronic coupons and gives the consumer option to opt out

of receiving paper coupons by mail. It also allows the customer the ability to able to use coupons

they get in stores online without needing a special code (Macy’s, 2015).

Benefits: Allows customers the ability to receive a discount for their purchase without the

inconvenience of not having a special discount coupon that is provided to them from the Credit

Card or from a promotional flyer like a “WOW” pass. The result is increased customer

satisfaction and the ability for associates to provide more incentives to satisfy the customer.

(Digital Signage Today.com, 15 Sept. 2014).

Marketing: Most initial marketing for this is through mail advertisement from consumer credit.

Marketing is currently provided through Macy’s promotional advertising including sales flyers

and by the Associate at checkout or Macys.com checkout portal.

Magic Fitting Rooms

Advertisement showing how the Smart Fitting Room and other Digital Applications work.

Target Customer: Millennial and Gen Y Customers, male and female.

Application: Wall-mounted tablets where selling associates and customers are able to scan

merchandise items being tried on by customers to view other colors and sizes and check

availability and, in many cases, see additional product information, product ratings/reviews and

recommendations on complementary items to "complete the look."(Newstex, 2015).

Benefits: This application clearly seen as a means to attract millennials and Gen Y customers

who are very technological savvy but like to touch and try new clothes. The Smart Fitting rooms

will add to these of the shopping experience and this feature (Digital Signage Today.com, 15

Sept. 2014).

Distribution: Currently 50 stores set to be implemented to all stores in 2016.

Marketing: Heaviest marketing on social media, Facebook, Twitter, LinkedIn and Pinterest.

Traditional Media outlets focus on media events and shows geared toward this age group.

Sources:

Alaris, K. (2015). What makes 'Omni-channel' work? Industrial Distribution (Online), Retrieved

from http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/1658055593?

accountid=3783

Cook, G. (2014). Customer experience in the Omni-channel world and the challenges and

opportunities this presents. Journal of Direct, Data and Digital Marketing Practice, 15(4), 262-

266. doi:http://dx.doi.org/10.1057/dddmp.2014.16

Zacks investment research: Macy's eases shopping, introduces Omni channel strategies - analyst

blog. (2014). (). Chatham: Newstex. Retrieved from

http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/1642700996?

accountid=3783

STRUGATZ, R. (2015). Going Omni. WWD, 209(87), 24-n/a. Retrieved from


accountid=3783

Young, V. M. (2012). Macy's sets strategy for gen-Y shoppers: Millennials' moment. New York:

Fairchild Fashion Media.

Macy's Unveils String Of Omni Initiatives. (2014). WWD: Women's Wear Daily, 208(57), 1.

Moin, D. (2013). Saks creates omni-management. WWD, 205(27), 2. Retrieved from


accountid=3783

Key to Omni-channel customer care: Consistency. (2014). Enterprise Innovation, Retrieved from


accountid=3783

Levans, M. A. (2014). Meeting the Omni-channel fulfillment challenge. Logistics Management

(2002), 53(12), 9. Retrieved from


accountid=3783

McCrea, B. (2015). 2014 VIRTUAL CONFERENCE: Supply chain transformation: Meeting the

Omni-channel fulfillment challenge. Logistics Management (2002), 54(1), 4-56S,58S,60S,62S.

Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/

1648114168?accountid=3783

Gov, N. U. (2014). Retailers face big hurdles in bridging Omni-channel commerce gap.

Enterprise Innovation, Retrieved from


accountid=3783

Andel, T. (2014). Retailers increasing adoption of Omni-channel technologies. Material

Handling & Logistics, Retrieved from


accountid=3783

Prior, M., & Karr, A. J. (2013). Macy's working on in-store pickup. WWD, 206(64), 2.

“Macy's new tech plans include Apple Pay, smart fitting rooms, more." (15 Sept. 2014).

DigitalSignageToday.com. Business Insights: Essentials. Web. 20 Aug. 2015. Retrieved from

http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/1508569267?accountid=3783








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Marketing Plan FMM-457 final project

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