Two Surprising Keys To Retail Omni-channel SuccessPosted: August 1, 2014
With most retailers investing in omni-channel capabilities in some way, stockholders, associates and customers are eagerly anticipating the future. A future where there truly exists a seamless bi-directional relationship between retailer and customer (my definition of omni-channel). Where every product in the assortment is available through stores, internet, or mobile and can be shipped in near real time from any location. And every customer activity, purchase, and behavior is known at both the individual and household level.
But will this will be retail omni-channel utopia? Once all of our favorite retailers have these omni-channel capabilities, who will win? Certainly customers will appreciate the ability to purchase and return anything, anytime and anywhere.
But which retailers will win? How can a retailer make their omni-channel initiative a success, differentiate themselves, and achieve competitive advantage? The two keys may be surprising…
1) It is NOT about the product or price…is is about the EXPERIENCE
Customers are both rational and emotional. As a father of two pre-teen daughters, this is a combination of traits that even I might have a hard time grasping. But it is true. The logic side helps them find the best price and quality. It is a fairly clear scenario often with quantitative and definitive answers. And this is where the omni-channel capabilities come in. A retailer either has them or does not. They work smoothly or not. They make the transaction and buying experience easier or they don’t. And the rational customer will research every other competitor to find the best price, lowest shipping, or fastest delivery. And unless a retailer has the scale and resources to take on Amazon, this is going to be difficult.
Those retailers who focus on the emotional side of the customer will have a better chance to succeed. Wow them with service. Create a memory. Do something for them that nobody else can. For at least a short time longer, the one advantage that every bricks-and-mortar retailer has over Amazon is their store. Use it! It is part of your brand and should be at the heart of your experience and customer engagement strategy. Make your store a destination. Give them an experience that they will never forget, an experience that they will want to do again, and an experience that they will tell everyone about!
Define your Customer Experience Strategy…and leverage omni-channel capabilities to bring it to life.
2) It is NOT about omni-channel…it is about ANALYTICS
First let’s get the basics out of the way. Everyone must have standard omni-channel capabilities: buy online return in store; ship from store; buy online pickup in store; and so on. But once most retailers have these, none of them, independently or as a collective, will differentiate or enable competitive advantage. They will simply become table stakes. And if you don’t have them, with few exceptions, you are likely to lose.
For those of you that have approved significant investments in these capabilities…don’t worry – it is not a sunk cost. It is necessary, but not the key. The key is analytics.
There are very few guarantees related to an omni-channel initiative, but I’ll offer two. Fist, the initial implementation will not be perfect. Second, it will generate lots of data. Being flexible and adapting to customers, trends, external factors and more will be critical. Retailers must make decisions quickly and with fact-based data.
Develop an analytics capability now…concurrently with your omni-channel initiative…and you will have the necessary information to make these decisions quickly based on facts. And more importantly, you will likely be 12-18 months ahead of your competitors who choose to focus on analytics only after they have completed their omni-channel initiative.
So take a look at your omni-channel initiative and make sure that you are addressing the customer experience and analytics. Your boss will thank you, your shareholders will thank you, and of course, most importantly, your customers will thank you with repeat purchases and goodwill.