Podcast: Winning in the New World of Omnichannel Retail

Matt Salem 

Hi everyone, welcome to the [Behaviorally Speaking] podcast at [Behaviorally (formerly PRS)]. We help marketers improve shopper and consumer experiences, enhance people’s lives, and contribute to a better world. We are part of the BVA group of behavioral experts focused on human and data sciences. I’m your host, Matt Salem. And each month, we interview one of our esteemed colleagues in an effort to share industry insights on trending topics with our beautiful audience.

Today, we’re joined by Ruben Nazario, who will be talking to us about omnichannel work.

Ruben Nazario 

Yeah, that’s right. How’s it going, man?

Matt Salem 

It’s going great. How about yourself?

Ruben Nazario 

Pretty good. Pretty good, can’t complain.

Matt Salem 

Glad to have you here today. How long have you been in town so far?

Ruben Nazario 

A couple of days, I’m leaving later today. I’ll be back here next week.

Matt Salem 

Okay, well, I’m glad to hear that maybe we can catch a bite to eat at some point while you’re in town.

Ruben Nazario 

Absolutely. Sounds like a plan.

Matt Salem 

So let’s talk about omnichannel work a little bit and why you think our clients should show interest and excitement around omnichannel research?

Ruben Nazario 

Yeah. So omnichannel is a reality. That’s how shoppers shop today. There’s a lot of stats that prove this right. Not only are two-thirds of shoppers equally shopping online and offline. But we know that the majority of shoppers a 1%.

Research online before they buy in-store or online, and that’s those figures in the West and China. You know, these numbers are even bigger than we have 1 billion WeChat users in China that use this app for everything from messaging to shopping to researching items. So it really is a reality.

And in some Western markets, some CPG brands, especially the low impulse or low involvement categories, like to dismiss online because e-commerce only represents a small fraction of total sales. But really, that ignores that many shoppers are actually using digital touchpoints to engage with the brand to look for information coupons, either before they actually go and buy it or during the shopping process.

Matt Salem 

I do it myself all the time. I tend to do it a lot for big-ticket items. But to your point, even for smaller items, if they’re not the electronics of the world. I do break out my mobile when I’m in the aisle, particularly when I’m perusing craft beer. I will say I like reading reviews. There are just so many IPAs to choose from that I need help choosing. So it seems to be an everyday behavior.

Ruben Nazario 

Absolutely. Yeah, that’s correct. You know, we’re now so used to picking up our phones and looking up stuff, whether it’s entertainment, information, or just anything we need. In the US, for example, people spend an average of three hours per day on their smartphones. And when you look at the younger folks, you know, even Gen Z, that’s even longer for up to five hours. And we’re using smartphones everywhere, you know, 69% of shoppers use their phones while shopping in-store in the US. And this varies by category.

There are some categories, even low involvement categories, where these numbers are actually really high. Like oatmeal, for example, that’s even around 30% of shoppers, which, you know, could be surprised it’s surprising to some people. And in China, you know, as I mentioned before, that that number is even higher, you know, in stores like Hema. In China, you require an app to shop for everything meaning absolutely everyone uses their phone while shopping.

Matt Salem 

Wow. So a must-have app to shop in the store. That’s a very interesting proposition. How pervasive is app use When shopping? Are people thinking about using a specific app rather than just, say Google, when they shop all the time? Are there apps that are geared toward shopping all the time? Perhaps not one that matches with the store? But just a Hey, you go to the supermarket? This is the app you should use when you’re in the supermarket all the time? And are you seeing that being relied upon for big-ticket items, as I mentioned earlier, or maybe their beers too?

Ruben Nazario 

definitely for both, you know, there’s definitely usage of information for big-ticket items that that path to purchase tends to be more involved. People spend, you know, more time researching, of course, because it’s a higher volume. It’s a bigger, bigger investment.

Matt Salem 

Exactly.

Ruben Nazario 

But we’ve seen our research shows that even for smaller, lower involvement CPG products, people are using apps or their phones either before the store or at the store for CPG. We’re seeing that roughly 60% of shoppers use their phones while shopping, as I mentioned earlier, even for categories like oatmeal or food. It’s not just the beauty products you imagine. It’s absolutely everything, which really matches natural shopping behavior.

As I mentioned before, it’s just very natural for us to pick up our phones and browse no matter what we’re doing or wherever we know where we are. And what we found is that browsing tends to be very impulsive and dynamic. And as a result, people can be influenced to do certain things that they weren’t even planning to do.

So say you’re walking down the soda aisle at your local store to buy Mountain Dew, you’re you know, that’s the brand new typically buy and then as you’re about to pick it up, you remember hearing somewhere that hey, Mountain Dew contains a lot of sugar. So you know you pull out your phone and Google it. See what this is all about.

As your Googling and you see, hey, it actually does contain a lot of sugar, and other brands contain less, like Sprite. So you’re looking around the shelf. And you notice this is sprite lemonade on the shelf. You’ve never seen that before. So you again, Google’s Sprite lemonade, and you find, hey, it actually contains even less sugar than Sprite, which has less, a lot less over the Mountain Dew, I’m just going to go ahead and try.

So that random Google search, which reflects natural behavior, actually influenced a very low involvement, otherwise automatic purchase.

Matt Salem 

So that’s interesting because it sounds like not only our omnichannel interactions influencing shopper behaviors but also that they can be used to better address specific consumer wants and needs. Perhaps if they’re looking for the healthier alternative, as in your soda drinker example, would you say that omnichannel is empowering consumers to address their needs more frequently and perhaps more successfully?

Ruben Nazario 

Absolutely. I mentioned earlier a lot more. The majority of people are researching before they go to the store. There’s a lot of people using their mobile phones while they’re at the store buying CPG items. One of the things we found is that the majority of the searches are for quote-unquote, jobs to be done, which are essential.

That’s a design thing in term four needs. Basically, consumer needs that a brand or a product can solve. So the majority of people are actually doing that searching for these needs to find how a brand can solve them. For example, Matt, I know you like to cook a lot. I do. So say you’re planning to cook muscles, you know, you’ve cooked them before, it has been a while. You see him at your local store. And they look good. You pick them up, you remember something about cleaning them, but it’s been a while.

So again, you Google Hey, how to clean muscles, okay, click on the first search result that pops up in here. Google happens to be branded page by the brand corner, right? So if you look there, it actually contains detailed instructions on how to clean muscles. Nothing specific about quinoa or just instructions. So you read it, you finish reading it, you have an understanding. All right, I’m gonna cook these muscles. But then you notice the recipe, ignore the recipe on the bottom, of course, of course, right? So you click on the recipe, you get a little bit of inspiration. Now you know exactly how you’re going to cook these muscles. And guess what you’re obviously getting by the core product that’s needed for this recipe.

Matt Salem 

So sites are being used by brands to address everyday questions. And then guess what? They’re selling you something at the end makes a lot of sense.

Ruben Nazario 

exactly. I love this example because, at the end of the day, it’s a brand truly understanding the job to be done. And by doing that, they’re able to influence desired behavior.

Matt Salem 

Well, I got a secret for your muscles, you throw them right on the barbecue, nothing else, about seven minutes, 400 degrees, give or take if you just like that natural fish taste unbeatable. Nice.

Ruben Nazario 

I’m gonna try that next time.

Matt Salem 

So I’ll save the rest of that for my cooking pass. But yes, very interesting. Indeed. The konar example I really like. So how can other brands figure out how to best influence shopping behavior, such as that example?

Ruben Nazario 

Yeah, no, that’s a great question. I’d say there are two things that are critical for truly understanding omni-shopping behaviors. Number one is to observe actual behaviors in context, right. So if we’re looking at online or in-store behaviors, then we need to look at the actual behavioral data of their online and in-store activity.

We also need to observe shoppers in an unnatural shopping environment as they interact with brands or the products at the store, on their phones, or on the phones at the store. That’s really the only way truly to truly understand actual behavior to look at it in context.

The second thing is to look at these behaviors through a behavioral science lens. While the omnichannel environment is perpetually changing with more and more innovations and brands, and the way people shop is constantly changing. The other day humans will always be humans, are their predictable biases and their rationalities. So having a good understanding of these biases and heuristics enable us to influence specific behaviors that ultimately drive sales like, like nor did you know, nor is a great example of one, but there are others.

Matt Salem 

Yeah, I’m sure there is love to hear. I don’t know if you have any top of mind. But if there are other examples that do come to mind that use these types of behavioral science principles.

Ruben Nazario 

Yeah, absolutely. So another slightly different category is Nike. I think it’s a great example. They use behavioral science principles and technology to really improve their consumer experience and to drive more sales. So today, you can go online and shop at the Nike website, and there’s a lot of functionality. You can look at 360 views of your shoe. You can look at videos, reviews of pictures, so on and so forth. At the end of the day, for a lot of shoppers, there’s gonna be hesitation because you don’t want to try that shoe on before you actually buy it. So what ends up happening is you’re gonna, you know, Stop that purchase cycle there that purchase activity and go to the actual store, try it on before you buy. So what’s happening is you’re either disengaging with a brand at that point, you might need to abandon the cart, you need to actually go into different to store and buying a different to either Reebok or just you know, you saw something else at the store. So obviously, there’s friction there from both a sales standpoint, but also from a consumer and brand experience. Okay, so what did Nike do? So they created technology, which is basically a digital foot scanner, where you take your mobile phone, scan your own foot, and tells you exactly what Nike shoe size will fit you. So not only is the technology really, really cool, but it follows the behavioral science principle or the driver of influence of immediacy, where you postpone a constraint for an immediate advantage to drive a specific behavior. So, this technology really matches that principle because now you don’t have to try on the shoe. You know, the technology tells you this is your shoe size. You can just order it online. So, you don’t have to go to the store. You just finish that shopping process right there. And then when you get at home, you’ll try it obviously, to make sure it fits. That’s awesome. But again, it’s how it’s Nike by really understanding the pain point of this consumer journey. And by really thinking about behavioral design and using technology, they were able to drive a lot more conversion and improve the customer experience. It turns out that three out of five shoppers actually buy the wrong shoe size, and this tool actually helps improve that. Therefore, improving the brand experience.

Matt Salem 

So it’s serving a dual purpose. It’s actually helping you get the best fit.

Ruben Nazario 

Exactly, exactly. So it’s not only helping Nike. It’s actually helping the consumer. Look at that.

Matt Salem 

Hopefully, it can’t track foot odor.

It doesn’t, unfortunately, maybe in 2020 the update.

Matt Salem 

Ruben, this was great. Before you go, let’s bring it back full circle. We talked about omnichannel. We talked about the beer; we talked about food. I know you love to cook too. We both love to eat

Absolutely.

Matt Salem 

Probably it doesn’t need to be said that we both love. What is your omnichannel experience? Like when you shop for food? Do you when you shop for food in particular at the supermarket? Leverage your cell phone? Do you do any desktop research before you go if you’re shopping for a specific recipe, just curious?

Ruben Nazario 

Absolutely I do all that stuff. When I look for my surprise, I’m gonna say recipes definitely the other day. I found this very specific Italian pasta recipe that I googled for a while. I actually googled Italian sources try to read sometimes that didn’t work out. But yes, I informed myself about specific products, went to the store, actually bought specific things, and then used them when I was buying groceries. I, you know, take out my phone and Google things here and there. So definitely, my own experiences actually match this.

Matt Salem 

Okay.

So yeah, that’s I think my experience is definitely a microcosm of how omnichannel is actually taking place for most shoppers. And yeah, at the end of the day, I think that in order to, as I said before, in order to really understand omnichannel, really need to understand behavior in the context you really need to take to view it from a behavioral science lens. And a [Behaviorally (formerly PRS)]. You know, this is exactly what our OmniPath solution does. We drive brand growth by enabling marketers to map the full omnichannel path to purchase. And specifically, find those key moments where behavior can be influenced, right? We use behavioral science to identify those inflection points and to design interventions to be able to influence consumer choice.

Matt Salem 

Well, I’m sure if our listeners would like to hear more about it, they can contact you directly. Ruben, I’ll tell you what I’ve told you before you demand.

Ruben Nazario 

Appreciate it.

Matt Salem 

Thanks for being here today. Thanks to everyone who has listened, and we’ll catch you on the next podcast here at [Behaviorally (formerly PRS)].