Omni-Channel: Commercial Omnipresence

Omni-Channel: Commercial Omnipresence

Introduction:

In our previous two articles, we had illustrated the historic rise and explosive growth of the digital channels: E-Commerce and its disruptive cousin, M-Commerce. With the growing adoption of the smartphone and the increasing spending power and clout of Generation X and Millennials, this new breed of consumer is changing the retail landscape in drastic ways. Retailers are scrambling to keep up, pumping vast amounts of capital into their digital advertising, as well as their infrastructure, whilst many are overlooking the lion’s share of their sales, originating from their traditional brick and mortar locations. As E-Commerce (including M-Commerce) sales inch towards a ten percent slice of the “retail pie”, overall retail sales growth alone has stalled and grown flat, if not in decline. This is perhaps a reflection of the overall strength of digital advertising and capitalization on the digital channels, instead of investing in a truly seamless experience for customers that could breathe new life into faltering brick and mortar. Sales are still increasing year over year and quarter over quarter, but the overall rate of growth has slowed.

Demographics:

The split on the demographics of today’s consumers has changed: The Boomers and the Silvers still hold a slim majority, while the Millennials and Generation X grow in number and purchasing power. The elder generations still put great value in customer service and physical tangibility of items, while the junior generations embrace the speed and efficiency of the mobile and desktop channels, and the deal-oriented culture it supports. Overall both demographic groups are seeking an “experience”, rather than just another purchase. Retail in general is in need of a rebirth, and in order to become the proverbial “Phoenix rising from the ashes”, retailers must unify all of their various sales channels into a singular experience we call Omni-Channel retailing. This is no longer a buzz-word, or a “nice-to-have”, it is a strategic imperative and reality that retailers must embrace and adopt, or risk falling on the sword of consumerism.

E-Commerce & M-Commerce:

The numbers set forth in our previous articles (E-Commerce Evolution, and M-Commerce Revolution) cannot be ignored; however one cannot focus strictly on the digital aspect in order to survive. In the E-Commerce Evolution article, we briefly highlighted two variations of the modern consumer: The Showroomers and the Webroomers. Both utilize all of your retail channels in order to obtain information, value in the product and its tangibility, the best prices, etc. What ultimately both are seeking is a unified experience, so that no matter where their “Journey” begins, that they receive more than just their purchase.

Consumers today are technologically savvy and deal-oriented; regardless if they are an experienced baby boomer, or a fast-paced millennial, they are seeking the same thing: an experience that allows them to shop in the ways that they are most comfortable, while feeling as though their purchase is a valuable one and secondary to their feeling of value to the retailer they are shopping with. Loyalty is at the core of this needed transformation, and while many retailers are scrambling to meet the technological challenges, many are overlooking the experience that set them apart in the first place, their brick and mortar locations and the sense of customer satisfaction that should go hand in hand.

We’ve all had an experience at a physical store that was less than ideal or optimal, and this shades our impressions of the experience, the location and or the brand. Keep these thoughts in mind:

• It can take months to obtain a new customer, and only seconds to lose them
• People are 10 times more likely to share a bad experience than a good one

That said, with today’s advent of the smartphone, and the ever connected sphere of social media, the consumer has a voice like no other time in history. The staff at your retail locations should be friendly and polite, highly informative and engaged. They should be ambassadors of your brand; so that no matter which location a consumer may visit that the information, offerings and overall experience should be the same.

This should be the same of any other sales channel your company utilizes; as with social media, your brand lives, or dies, by the opinions of your customers. Remember in today’s world you are no longer in charge of defining your “brand”, the customer decides what it should be, and should a large enough number of them become displeased with your products, prices or even the experience they have, the customer can turn your brand on a dime. The trick for today’s retailer is to break down the silos that separate your multi or cross channel sales path, and to unify that disparity so that no matter the origin point of the sale, that the experience is consistent and uniform.

Omni-channel Fulfillment:

A recent study by PwC has illustrated what is keeping a lot of C-Level executives up at night, being the challenges and costs associated with multi-tiered fulfillment logistics (Distribution Centers, Vendor Managed and Store Level) in order to keep up with customer expectations, as well as the competition. In the past, organizations were able to operate their multi-channel sales between brick and mortar, catalog, wholesale and later, E-Commerce; however often at odds with one another in offerings, content and prices.

Today’s consumers however are vastly diverse, and all want different fulfillment options (Pick up in store, ship to home/business) that the overall lines are becoming blurred and difficult for a retailer to plan and forecast. Essentially, whether a customer’s journey begins on desktop, mobile or in the store itself, retailers must be able to fulfill at any point (and sometimes multiple points) to ensure that the sale is not lost to a better equipped competitor, while ensuring that regardless of the origin point, that the journey for the customer is smooth and seamless, let alone, personalized.

Customer Expectations:

In a study from the advertising agency Merkle on the state of Customer Expectations in 2015, there is a marked preference across all demographics for email marketing, but therein lies the crux of the issue. Today’s customer is inundated with often-times irrelevant digital offerings, and most are deleted and/or flagged for spam. The key findings seem to show that by sending less frequent, direct email offers you can remain within the customer’s periphery, and by tailoring them to be personalized you can increase your chances for conversion, however obtaining that key information is a problem in of itself.

The credit card and security breaches over the past few years have hurt the trust of the consumer, and according to the findings of the Merkle report, very few consumers (regardless of demographic) are comfortable sharing more information beyond their name, email address and gender, making it nearly impossible to “personalize” the email offerings and become relevant to the customer’s attention. The state of today’s Loyalty applications and programs reflect this, even with billions of such programs/applications available most rarely see adoption rates of over 20%, as consumers are wary to supply their personal information.

To truly achieve customer loyalty, you must be able to provide a fair trade value: I, as a customer will provide you my information, and in return you keep safe and secure that data, while offering me products and discounts that apply to me on a personal level and not the masses in general. It can be a delicate balance, but well worth it in the end: Truly, what price can you place on customer loyalty? If you can gain the trust of the customer, as well as to provide them information, visibility into store inventory and multiple fulfillment options, you can achieve a state of Omni-channel Nirvana, gaining their loyalty and valuable voice.

Social Media & Social Commerce:

This brings us back to social media. With all the social media giants pushing to enter the E-Commerce sales game (and with limited historical effect), there is much conjecture whether social media should be used in this fashion. Many are experimenting with the “Buy” button.

Facebook:

Facebook has attempted to manage this concept for years: First with their failed “Facebook Stores” initiative in 2011 where retailers like GAP, JC Penney, Nordstrom and GameStop (to name a few) opened, then closed, their pages within a year as there was not enough ROI, or redundancy compared to their E-Commerce sites. Then there was the Facebook gifts concept, which failed to take off. Facebook is apparently testing their “Buy” button, but has of yet released it to the public.

Twitter:

Twitter also tried to monetize on Social Commerce with Amex and by using specific hashtags like #buyxbox360, to which Amex would reply and leave a 15 minute window for the tweeter to respond in order to complete the transaction. Amazon also tried using twitter in this fashion using hashtags like #AmazonCart and #AmazonWishlist to insert specific items into either “bucket” on the Amazon site, but saw very little success as it’s really not a hard site to shop on and tagging items in a 3rd party site was a bit redundant.

Twitter Offers may have gotten the mix right, allowing advertisers to offer virtual coupons with promoted tweets (based on technology acquired with CardSpring) however much is needed to be done within their profiling to ensure that the correct type of products/services are being marketed to the correct “Tweeps”.

Pinterest:

Pinterest recently announced their push into the social commerce world with Buyable Pins, a smart move on their part considering the popularity of the site for Showroomers and Webroomers both. The Buyable Pins concept works as a regular Pinterest Pin, allowing the same user experience the site is famous for; however, unlike the standard pins, the buyable pins allow the conversion of the “pinned” item into a sale with a merchant without leaving the application.

Google:

Even Google is testing out sales via mobile devices with a “Buy” button, which would show up in a suggested ad with each search. Still the question remains if social media should be used in this fashion, as the reason the majority of its use is due to social activity, not commerce. Social media is a place of information and humor, a place to vent frustrations or comment on social activities and happenings, a place for friends and strangers to connect, inform and learn; however, with the growing social tech bubble, only time will tell if social commerce is here to stay or a passing fad to appease stock holders.

For retailers, beyond the commercial aspect of social media, the proper use would be as a communication tool: to allow the customer to voice their overall experience and be able to communicate with them directly and on a personal level. It should be used as a way to grow your brand awareness, allowing your loyal customers to evangelize your business through success stories and photos/videos.

Also tying social media into loyalty applications on mobile devices is a way to ensure consumer trust, as well as to be able to garner valuable demographics data, which will help you to refine your marketing activities towards personalized, highly relevant, and hopefully highly profitable, advertising.

Final Word:

Keep in mind that a lot of this is theory and market based research, and may be open to debate, and while there is no cookie-cutter approach to achieving the state of Omni-channel Nirvana, but in today’s ever-changing retail environment the following checklist of items should be observed:

• Break down the silos that separate your sales channels; unify your offerings to the customer.
• Use social media to influence, inform and communicate with your customers
• Pair social media with a content-rich, and personalized loyalty applications
• Protect the Privacy and Security of your customer’s data
• Offer flexible fulfillment options for purchasing, shipping and returns
• Transform your retail locations into repositories of knowledge and information, as well as micro fulfillment centers
• Upgrade your infrastructure to offer unified visibility into inventory: in stores, in distribution centers, and via your direct vendors
• Engage your customers in a fair and honest way, and encourage (if not incentivize) them to share their experience with the world on social media. Allow your customers to evangelize as Brand Ambassadors, let them spread the gospel.

For many, changes to just their overall infrastructure and process represents massive investments of capital and man-hours, and many can question the ROI of all the new fulfillment options being enforced by the reality of today’s customer. Ultimately, it will fall to those who fail to meet their customer’s needs, or to foresee their future requirements, that will disappear into the annals of history.

Those who truly listen to the powerful voice of the customer, who fulfill their every need and more, will gain their loyalty; and if strategically mapped out, Omni-channel Retailing can breathe new life into your brick and mortar, without detracting from the growing digital world.