Omni-channel: An Ugly Term; A Profitable Conclusion
A common problem with buzzwords is no one’s quite sure how to spell them.
Is it omni channel? Or omni-channel? Or omnichannel? The truth is all are being used consistently across all forms of reputable publications. What’s perhaps more tricky is understanding what this means in relation to what we do at SET.
In the last month, I’ve seen four different definitions of omni-channel at four different, highly reputable brands. While one uses it to define a consistency in communications across all forms of media, another speaks to it as a consistency in the physical experience between an event and the retail destination the event is driving traffic to. While consistency is a theme here, what’s most consistent is a lack of a clear understanding behind the meaning of omni-channel.
Perhaps it’s a battle of ownership. The one thing that’s true about omni-channel in my mind is that at its core is the transference of ownership of an interaction from the brand or retailer to the consumer or customer. The brand or retailer has to relinquish control of the path to purchase and in fact any level of engagement pre, during or post purchase. Instead brands and retailers have to become participants in the journey, being agile enough to respond to what’s being demanded of them by the consumer.
The most succinct, and in my mind the best, definition I’ve found for omni-channel is the following from Forbes:
“Omni-channel is a reflection of the choice that consumers have in how they engage a brand, and therefore is best represented as how brands enable their clients and consumers to use these channels to engage with them.”
Getting more granular, this definition of omni-channel is provided by one of the leading marketing automation providers, Marketo:
“Consumers can now engage with a company in a physical store, on an online website or mobile app, through a catalog, or through social media. They can access products and services by calling a company on the phone, by using an app on their mobile smartphone, or with a tablet, a laptop, or a desktop computer. Each piece of the consumer’s experience should be consistent and complementary.”
Omni-channel has become a key differentiator for brands and retailers, with many citing that getting it right increases customer satisfaction, loyalty and brand perception. Consumers now live in a world where some brands and retailers are aligned to their preferred shopping experience while others clearly fall short.
The consumer’s demand for omni-channel now includes some hard facts for brands and retailers. According to Forrester research “39% of consumers are unlikely or very unlikely to visit a retailer’s store if the online store does not provide physical store inventory information”. Why don’t they buy online you may ask, well 90% of retail sales still take place in the physical store in the US and according to A. T. Kearney’s report ‘On Solid Ground,’ “two-thirds of customers purchasing online use a physical store before or after the transaction”. A. T. Kearney states that “the physical store makes a significant contribution to converting the sale.” To round this out, according to Accenture’s research “38% of consumers have used their mobile device to check inventory availability while on their way to a store,” which says to me that not providing complete visibility of inventory to consumers means a brand and retailer will lose out.
A. T. Kearney goes as far as to conclude “the physical store is the foundation of omni-channel.” Major retailers are now starting to see this and last year, according to Bloomberg, 76% of their capital expenditure went into physical store experiences and offerings.
The world consumers want, or it would be fair to say are starting to expect, is one where they can choose how they interact with a brand — through social, through devices, through physical stores. They can choose where to enter a buying process and choose to buy in store or online; they can have products shipped or be able to pick them up from a store; they’re able to return unwanted products no matter how they purchased them to the store; and they’re able to have a continuous seamless interaction with the brand or retailer no matter where they started the journey or where they’ve got to in the journey (according to Neil Mohan at Google “90% of consumers start a task on one device and finish it on another”). Consumers want to know that when they go to a store, the sales associates know their products — not just the product in the store but also the product online (“45% of consumers expect the sales associate to be knowledgeable about online-only products,” according to Forrester).
Clearly, there’s a strong argument for going omni-channel and perhaps a couple of the most intriguing data points in support this argument were cited by A. T. Kearney in their survey of retailers who found that “23% of consumers purchase more items in store when picking up an online order from the store and 20% of consumers who return an online purchase in store make an additional purchase.”
Where omni-channel gets really interesting is when you collect all the data behind a consumer’s interaction with a brand or retailer and you provide relevant content or a more personalized journey based on that knowledge. This is what Julie Bernard of Macy’s had to say on that subject: “We have enough data at the customer level to see how she interacts both online and in the store, so we can tailor messaging and offers to her appropriately by channel. We strive to balance the use of customer data to inform content relevancy with the use of consumer insights to ensure that the relevancy is coupled with a sense of discovery and inspiration.”
Here’s the challenge according to Accenture: while “39% of the retailers surveyed cited that they strongly agreed that they would drive more sales and profit by becoming an omni-channel company, the problem they have is that many of them lack clear goals for what they are trying to achieve.”
I would argue from my last four meetings with clients on omni-channel, the bigger problem for them is truly understanding what it means to go omni-channel.
While it’s true that many Brand Experience Agencies are not experts in the operational side of omni-channel, which is very complex, it is in their client’s interest to have informed discussions with them on how best to develop an omni-channel strategy because getting this right will make clients more successful and will result in greater investment in the physical space.
So next time you’re sitting in front of a client who is talking about omni-channel, first of all ask them questions. Get to the heart of what they mean by omni-channel. Then start to use some of the facts included here to move the conversation into one where the client sees the opportunity of a consumer being put in the driver’s seat of the experience. Our job at Brand Experience Agencies is to help transform a consumer’s experience with the brand into one that, in the words of Steve Jobs, “surprises and delights them.”