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Five Steps to Omni-channel Success

November 26, 2014

Since the birth of the Internet, the promise of unifying sales channels has been a tantalizing goal for retailers. The opportunity to get inside the consumer’s head by tracking purchasing behavior across retail channels is the Holy Grail for a truly personalized shopping experience. Recently there’s been progress in this omni-channel quest, but many retailers still struggle with the cost and complexity associated with unifying retail data and the shopping experience across consumer touch points.


Delivering a true omni-channel experience is likely to require overhauling many processes and technologies. For most retailers, the journey will require a significant outlay of capital and time. What follows is a practical guide to getting started.

Should You Do It?

Forrester recently conducted a study, “Consumer Desires vs. Retailer Capabilities: Minding the Omni­Channel Commerce Gap,” that features some remarkable statistics that make it clear omni-channel is a worthwhile investment:

1. Customers Want It

  • 69 percent of consumers expect store associates to be armed with a mobile device in order to look up product information and check inventory
  • 50 percent of consumers expect to buy online and pick up in-store

2. It’s Good Business

  • Forrester projects $1.8 trillion in online and Web-influenced retail sales in 2017 – up from $1.3 trillion in 2013
  • Multi-channel consumers spend 82 percent more per transaction than customers who only shop in-store

3. We’re Not There Yet

  • Only 39 percent of retailers today have enabled their sales associates to look up product information, although half of all consumers that visit a physical store expect this capability
  • Only 33 percent of retailers have operationalized even the basics, such as store pickup, cross-channel inventory visibility and store-based fulfillment

Consumer expectations for omni-channel engagement are remarkably high, but there’s still time to get ahead of the pack and leverage an omni-channel approach for differentiation and a tangible competitive advantage.

But How?

In order to get started, you need to break down your omni-channel implementation into three primary initiatives:

Data Integration – Integrate the most important retail data types, including product information (detail, inventory, pricing and promotions), customer information and order/transaction data.

Customer Experience – Since all retail customer touch points can be delivered through mobile devices these days, start with a “mobile first” user interface strategy and work backwards to ensure optimization and consistency across all devices.

Data Collection & Action – Design all your customer touch points to be data collection machines and create a segmentation strategy that leverages business logic for creating a highly personalized shopping experience.

Fortunately, you don’t have to do all three omni-channel initiatives at once. What follows is a practical, step-by-step approach to create and execute a plan that will help you achieve your brand unification goals.

FIRST STEP: Digital Rebrand Using Responsive Design = Fast Track to Brand Consistency

As a starting point, you want to expose both consumers and store associates to in-depth product information and equip them with the ability to easily purchase any item from your full product assortment. Mobile devices make it possible to buy anywhere – at home, on the go, or even from a competitor’s store. Design all your touchpoints with a “mobile first” approach in mind. The quickest approach to maintain a consistent brand and user experience is by using Responsive Web Design (RWD), which offers a quick, low-maintenance way to use one code base to provide an optimal experience on any size screen. Changing over a current website to be fully responsive is a two- to four-month project depending on the complexity level, but once it's done, it’s done.

SECOND STEP: Integrate Product Information, Transactions and Customer Data Across Channels

The key to a truly differentiated shopping experience is to provide the right customer with the right product at the right price and at the right time. Having a Customer Relationship Management System (CRM), a Product Information Management System (PIM) and an Order Management System (OMS) are the cornerstone technologies on which the omni-channel vision is built. The problem is that all this relevant, related data resides in many disparate systems. So, getting your data warehouse in order is critical for success. Representational State Transfer (REST) and REST-based AP1 layers can enable you to quickly accomplish data integration with minimal disruption and cost. Using a RESTful AP1 layer lets you leave your data where it is and integrate it using two-way data synchronization.

THIRD STEP: Use Mobile to Improve the In-Store Experience

There are two audiences to keep in mind when mobilizing your store: your customer, and just as important, your employees. For customers, there are two primary ways to offer a differentiated mobile experience: mobile kiosk and in-store mobile native or Web app. The mobile kiosk, like the one used at Nordstrom, offers customers the ability to use a tablet to augment their shopping experience. The in-store app for consumers can take many forms, from a couponing vehicle to more complicated functions like mobile self-checkout. You will need to determine what functionality will provide an optimal level of service to stave off competing apps being used in your store.

For employees, mobile devices provide clienteling apps that allow employees to have a consultative dialog with customers anywhere in the store – perfect for high-touch retailers. Another popular mobile device being used in the store is tablet-based point-of-sale (POS) devices. The mobile POS enables employees to move into the aisles where the customers are making purchasing decisions. The portable nature of the mobile POS allows for purchases to be made outside the store, such as sidewalk sales.

Retailers that implement mobile devices in the store will need to configure, secure and register the devices with a Mobile Device Management (MDM) system to be able to track and respond to breakage or theft. The harsh reality for retailers that don’t invest in mobile today is that they will soon find their stores transformed into showrooms for Internet retailers and their direct competition.

FOURTH STEP: Location-Based Promotion and Service

Now, think about improving the in-store experience by using beacons to present offers and information to shoppers based on their exact location in your store. A beacon is a small transmitter that exchanges data with mobile devices that come within range. You can accurately determine the customer’s location in the store and deliver offers based on customers’ proximity to items they might be interested in. Or, make it easier for shoppers to find what they're looking for by letting them search for items and get directions to the right department, aisle or rack.

FIFTH STEP: Get Personal

You can integrate personal data with transaction history and in­store and online browsing behavior to get extremely detailed insights about personal behavior, preferences, likes and dislikes of mobile shoppers. This will require further data clean-up and analytics to make it possible, but it can be worth it. 75 percent of consumers say they will switch brands if they receive a personalized offer on their mobile device.

Personalized offers is a great long-term goal but not as a starting point. The place to start is segmentation. If you’ve cleansed and pulled together personal data, transaction data, browsing history and other information, you can analyze the data to create a customer segmentation model. The model can help you understand who your most valuable customers are, when and why they buy, and what motivates them. Based on this information, you can create offers that will increase the frequency and size of their purchases. By the same token, you can identify customers that you're in danger of losing and take steps to build satisfaction and loyalty.

Conclusion

There’s no question: customers expect a seamless omni-channel experience. Mobile technologies are producing a watershed moment in retail. Creating an integrated omni-channel experience for your customers will enable you to extend your brand, increase online and in-store sales and improve loyalty and satisfaction. Failing to act now will open a competitive gap that will only get worse as leaders deliver the experience customers demand and laggards fall behind. The good news is that the omni-channel experience can be implemented in stages, and you can expect business performance improvements at each step along the way.

 

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