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3 Barriers to Delivering Omnichannel Experiences

2014-17-July-Caught-a-Fish.jpgI was recently searching for fishing rods for my 5-year old son and his friends to use at our neighborhood pond. I know nothing about fishing, so I needed to get educated. First up, a Google search on my laptop at home. Then, I jostled between my phone, tablet and laptop visiting websites, reading descriptions, looking at photos and reading reviews. Offline, I talked to friends and visited local stores.

The product descriptions weren’t very helpful. What is a “practice casting plug”? Turns out, this was a great feature! Instead of a hook, the rod had a rubber fish to practice casting safely. What a missed opportunity for the retailers who didn’t share this information. I bought the fishing rods from the retailer that educated me with valuable product information and offered free three to five day shipping.

What does this mean for companies who sell products across multiple channels? 

Virtually everyone is a cross-channel shopper: 95 percent of consumers frequently or at least occasionally shop a retailer's website and store, according to the “Omni-Channel Insights” study by CFI Group. In the report, “The Omnichannel Opportunity: Unlocking the Power of the Connected Customer,” Deloitte predicts more than 50 percent of in-store purchases will be influenced digitally by the end of 2014.

Because of all this crosschannel activity, a new term is trending: omnichannel

What Does Omnichannel Mean?

Let’s take a look back in time. Retailers started with one channel — the brick-and-mortar store. Then they introduced the catalog and call center. Then they built another channel — e-Commerce. Instead of making it an extension of the brick-and-mortar experience, many implemented an independent strategy, including operations, resources, technology and inventory. Retailers recently started integrating brick-and-mortar and e-Commerce channels, but it’s not always consistent. And now they are building another channel — mobile sites and apps.

Multichannel is a retailer-centric, transaction-focused view of operations. Each channel operates and aims to boost sales independently. Omnichannel is a customer-centric view. The goal is to understand through which channels customers want to engage at each stage of the shopping journey and enable a seamless, integrated and consistent brand experience across channels and devices.

Shoppers expect an omnichannel experience, but delivering it efficiently isn’t easy. Those responsible for enabling an omnichannel experience are encountering barriers. Let's look at the three barriers most relevant for marketing, merchandising, sales, customer experience and information management leaders.

Barrier #1: Shift from product-centric to customer-centric view

Many retailers focus on how many products are sold by channel. Three key questions are:

  1. How can we drive store sales growth?
  2. How can we drive online sales growth?
  3. What’s our mobile strategy?

This is the old way of running a retail business. The new way is analyzing customer data to understand how they are engaging and transacting across channels.

Why is this difficult? At the Argyle eCommerce Leadership Forum, Vice President of Multichannel at GameStop Corp Jason Allen shared the $8.8 billion video game retailer’s approach to overcoming this barrier. While online represents 3 percent of sales, no one measured how much the online channel was influencing overall business.

They started by collecting customer data for analytics to find out who their customers were and how they interacted with Game Stop online and in 6,600 stores across 15 countries. The analysis revealed customers used multiple channels: 60 percent engaged on the web, and 26 percent of web visitors who didn't buy online bought in-store within 48 hours.

This insight changed the perception of the online channel as a small contributor. Now they use two metrics to measure performance. While the online channel delivers 3 percent of sales, it influences 22 percent of overall business.

Take Action: Start collecting customer data. Analyze it. Learn who your customers are. Find out how they engage and transact with your business across channels.

Barrier #2: Shift from fragmented customer data to centralized customer data everyone can use

Nikki Baird, Managing Partner at Retail Systems Research (RSR), told me she believes the fundamentals of retail are changing from "right product, right price, right place, right time" to:

  1. Who is my customer?
  2. What are they trying to accomplish?
  3. How can we help?

According to RSR, creating a consistent customer experience remains the most valued capability for retailers, but 54 percent indicated their biggest inhibitor was not having a single view of the customer across channels.

 

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