As the year 2015 has just started some of us seek a framework for an effective omnichannel strategy to compete successfully in the years to come. In this article I will share some insights about how to obtain the capability for a true omnichannel strategy.
First let me outline what omnichannel is and what it is not. For me omnichannel is: offering the customer a consistent, sequentual, logical, integrated and seamless brand experience across any device or touchpoint the customer is on while engaging with your business.
Second: how big are these omnichannel opportunities really? According to Deloitte omnichannel offers merchants the opportunity to engage in a meaningful way with the most lucrative consumers group that’s out there. For example, in the UK, this group is a mere 20% of the population while this group is good for 70% of all retail spending. They are more likely to use several channels during a purchase journey and is twice as likely to use a mobile device while shopping in-store.
Today 71% of the consumers expect, according to Forrester (in research commissioned by Accenture), to be able to view in-store availability online while 50% expect to buy online and pick up in-store. Also 39% of consumers are (very) unlikely to visit your physical store if they aren’t able to check the available inventory online.
Google published research (October 2014) that shows even more astonishing data. The research found that 79% of shoppers used their smartphone looking for product information while being in-store. Also this research confirmed that price and availability information are key for consumers while location, route and opening times are close followers. To find this information consumers use search engines. So make sure your business and it’s branches are well found in Google Business (and remember: Google rewards mobile ready websites)!
These trends amongst consumers create huge possibilites but also many challenges.
The end goal is to create an excellent user experience (UX) across channels because this is the key driver of loyalty. So what capabilities should your organization have before your actually can deliver that great UX along different channels and implement your engagement-, pricing- or service strategy?
The three capabilities that enable an effective omnichannel strategy are:
Device agnostic User Experience;
Cross device tracking and targeting;
Multi- and cross outlet fulfillment;
The first capability, a device agnostic user experience, is relatively easy to obtain. A well designed and fast loading responsive website will do the biggest part of the job for you. You will do well by adapting a ‘mobile first’ design strategy. This is: optimize for the smallest (smartphone) screen and create a superior user experience on that device; this forces you to leave a lot of options out; and only offer the absolute minimum functionality or else the user will be overwhelmed by the amount of options offered. And once you have got that perfected you will have it easier once your are designing for the bigger devices (tablet, desktop) is a lot easier and you are able to add more navigational options and functionality.
Obviously you have to consider typical smartphone functionality like shortened forms and buttons like ‘Re-order’ for repetitive purchases and one click buy options for returning customers from whom you already have all necessary details.
Of course this cross device availability of data (about your customers, inventory availability, etc) is dependent on your databases and infrastructure. For (my) convenienceI assume you have a cloud based solution which provides you with a robust (>99,9% uptime), fast (<100 miliseconds) and secure infrastructure. What remains as an extremely important capability of this technical infrastructure is the ability to connect with other platforms; preferably through API’s.
One of the most important capabilties of your infrastructure is your PIM (Product Information Management). Your PIM enables you to deliver the available and requested data and content about your product from/to any source. Either your resellers needs product data (e.g. ingredients, allerchy information, production series, green/sustainability, stock levels, etc.) or your own organization does (for supporting API’s; an accurate, fast and completed with a lot of metadata). PIM: it is essential for omnichannel commerce.
The second capability, cross device tracking and targeting, is hard to master and is Big Data pur sang. To get a grip on this capability one must have a 360 degrees view of the customer (or prospect / suspect). One does this by connecting digital behaviour across devices with other available data and especially with CRM data. For most SMB’s Google offers an easy to implement solution.
In April 2014 Google introduced their Universal Analytics (UA) (it was in beta for over a year) With UA, Google brought some new features to the table to track users (with the ID’s from your own CRM e.g. User-ID or Customer-ID) while also tracking offline conversions and several cross device tracking capabilities. De facto this means that everybody in the world can track offline conversions and implement website behaviour on an individual level while tracking and measuring cross device behaviour. A really nice post about how this could work for your business you will find on the E-Nor website.
How can you track offline conversions? I will illustrate this with a basic example. A tagmanager (like Google Tag Manager) enables you to connect several datasources and -services like Google Adwords, Google Display, Appnexus, Google Analytics and your CRM-data. This offers an enormous potential. E.g. for a cross-sell activity based on an analysis of your customerbase you can create a list with the User-ID’s (which are both the ‘key’ in your CRM-list and in your UA-configuration). With Google Analytics you create a (remarketing-) list with the same ID’s and by doing so you are now able to target those selected smartphone users with an attractive offer (‘temporarily 25% off!’) when they are on their desktop device. You can also match offline conversions with your online ads. And here are a few ideas to send traffic from offline to online or vice versa.
Besides Google Facebook offers cross device targeting possibilities with it’s Atlas product. Other platforms are also mentioned in this article.
The third and last one, adressing a multi- and cross outlet fulfillment gateway, is, in my opinion, the most difficult capability to obtain. Because this is where the digital and physical world really merge.
guarantees that the product is available in-store (retailers say that 10% of online orders canot be fulfilled due to inventory inaccuracy; Forrester/Accenture);
rapid picking and notification alerts (41% of consumers expect to be notified within one hour that their order is picked and ready for collection, in-store that is Forrester/Accenture);
pay at the point of pick-up (49% of consumers considers thit (very)important; Forrester/Accenture);
alternative locations to pick-up (54% of consumers thought shipping to a local store is a very important factor of online buying; Forrester/Accenture).
With these high demands in mind most retailers will see some challenges ahead. When setting up or restructuring your supply chain management typical (sub-)capabilities you want to pursue are:
Ship-to-Home scenarios like shipping from: A) Distribution Center, B) Store and C) Vendor location;
In-Store pick-up scenarios like: A) Using store inventory, B) Ship-to-Store from Dropship Vendors and C) Ship-to-Store from Distribution Centers.
Ideally these (sub-)capabilities are supported with real-time services like Track&Trace, inventory feeds and notices so customers can follow the progress of their shipment at any time from any device.
As you can imagine these supply chain activities (or fulfillment) are incredibly complicated to organize. The trend is that more shipments will be shipped from decentralized outlets and that means packaging and some kind of (decentralized, micro) warehousing.
A thorough report about Omnichannel Supply Chain Vendors is the Forrester Wave Q3’14 Omnichannel Report. More reports on this subject can be found in this article.
The choice for which WMS (Warehouse Management System) or fullfillment vendor depends on the configuration of your other (legacy) systems (CRM, PIM, webshop/ecommerce, data warehouse, etc) and of the processes you want to support. Another consideration should be integrated cloud based solutions (platforms connected with eachother through API’s). Unforuneately there is no simple answer and you will always have to keep your eyes on your endgoal.
I suggest you constantly keep connectivity and compatability top of mind while connecting the dots in a omnichannel landscape. Big Data has become real data and there is a lot to analyze and optimize between all the frictionpoints.
Once you own these three capabilities you can implement your strategy. Whether it is a discount strategy, a service strategy or another one; you are capable of implementing it!
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