October 26th, 2012 by Judith Aquino

It’s easy to tell when the holidays are here: pumpkins, turkeys, Christmas trees, and menorahs suddenly appear in stores—increasingly at the same time. Despite the fact that shop owners have been using the same holiday decorations for years, shoppers themselves have changed.

Thanks to mobile and social technologies, people no longer see a difference between online and offline shopping. Customers are also more likely to spend time researching prices to make sure they are getting the most value for every dollar spent.

Some retailers have taken note of the new interconnected customer and are making adjustments to their holiday marketing strategies. According to a survey of 179 retailers by Bronto Software and Retail Systems Research, nearly half of the respondents are increasing their online budgets this year over last, and more than 20 percent of respondents are allocating more than 50 percent to either mobile, social or email marketing channels.

Many retailers and marketers have yet to catch up to consumers, however. In describing the gap between customers and marketers, Gavin Heaton, vice president and principal analyst at Constellation Research, notes, “marketers still attempt to approach consumers with old marketing paradigms when they should be responding to the new connected consumer.”

The marketing funnel, Heaton argues, is no longer effective and should be redrawn from the customer’s point of view as a “series of stops” (think the London Underground) that combine online and offline interactions and allow for shortcuts and changes in direction depending on the customer’s experiences.

Heaton breaks the customer’s journey towards making a purchase into five stations in a new report, CMOs: Re-Casting the Marketing Funnel for Consumer Engagement. Highlights of the five stations are as follows:

Discover – The customer actively searches for products or learns about them through social networks.
Debate – Consumers compare, discuss, and debate the relative merits of an offering.
Decide – Consumers have many purchasing channels to consider.
Deepen – Connected consumers may deepen their relationship with brands or services through communities and social media.
Depend – As consumers purchase more from a certain brand, they move from a transaction to a relationship, i.e., become brand advocates.

To apply the “five Ds” to retail, “think about what else you can do in the store,” suggests Heaton. “When people walk into a store, they have often already gone through the discovery, debating, and deciding [phases]. To move them into the deepening process, make a location-based offer so it’s clear that because they’re in the store at a certain point and time, they can participate in a special offer, which provides your customers with a richer experience by being in the store.”

The key takeaway here is while some things, like holiday decorations, will remain unchanged, marketers can no longer afford to use traditional marketing approaches for customers who expect a multichannel shopping experience.

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