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 Chuck Schaeffer The Future of Retail—Omni-Channel Retailing


Omni-Channel Retailing

Consumers expect that a conversation that starts on one channel can be continued on another, with all communication and context preserved across channels.

Omni-channel retailing empowers brands to engage consumers over any channel those consumers want and connect those conversations across channels – without losing data or context.

Omnichannel retailing also allows consumers to navigate among the retailer channels – be it mobile, online or in the store – that are most convenient for them at any given time or for any given activity.

Don’t confuse omni-channel with multi-channel. As an example, if the consumer can start a purchase transaction on your e-commerce site, and then finish the transaction in your store, that’s omni-channel. If two channels are not integrated or the consumer can’t begin a dialogue or process on one channel and continue that engagement on another, that’s multi-channel. Big difference.

Retail Omnichannel

There are a number of sales, marketing, service and other omni-channel scenarios that are increasingly used by consumers and offer retailers more opportunities to engage more consumers — and even improve engagement while shifting activities to lower cost channels.

Omni-Channel Consumer Behaviors

A common sales example is the ability for the consumer to buy online but pickup merchandise in the store. Or alternatively buy in the store but have the product shipped to the consumer's destination. There are a variety of similar sales use cases such as displaying inventory availability across physical locations, moving items between channels for immediate fulfillment or having visibility to incoming products from manufacturers.

From an omni-channel marketing perspective, the primary goal is to deliver a unified brand experience across all channels. If done well, the retailer improves consumer engagement, increases sales conversions and builds loyalty. However, interacting with consumers across channels and in context is a tall order.

For example, a consumer may receive an advertisement or catalogue in the mail, then check out some merchandise on the retailer’s website from their PC, then later research the product in online forums or visit the retailers social networks from their tablet, then receive an email offer on their mobile device, then visit the store to see the item and talk with a sales associate, and then return home to complete their purchase using any one of several devices. If at any point the consumer gets conflicting information, their suspicion rises and sales conversions fall.

Omni-channel customer service is often the tipping point in determining whether consumers become advocates (and repeat purchasers) or defectors. However, despite retailers’ obvious goals to satisfy consumers at their point of need or frustration, the complexity of omni-channel customer service is a factor of incident types, case volume and the number of channels.

For example, a customer complaint starts with an email to store manager, then becomes a question on the retailer's website chat function, then goes to a phone call to the billing department, then becomes a rant on Twitter, and then escalates to the Call Center. Linking these comments, let alone recognizing they’re the same consumer, so they can be responded to and resolved efficiently requires a central customer system of record (probably the CRM system) and data sharing among ancillary apps that integrate to the CRM system.

According to an Aberdeen report, titled Omni-channel Customer Care, companies with omnichannel customer service capabilities achieve on average an 8.5% year-over-year improvement in first contact resolution, a 7.5% year-over-year decrease in average cost per customer contact and a 9.5% increase in year-over-year revenue.

Consumers don’t think in channels. They think in terms of simple interactions that get them want they want quickly. To a consumer, omni-channel looks like a single, channel agnostic communication hub with just different conduits or touch points. Or put another way, you’ve achieved omnichannel when the consumer doesn’t notice any difference in service between channels.

For the retailer, it offers an opportunity to deliver consistent customer experiences across channels – and achieve consumer affinity and the financial payback earned from Customer Experience differentiation. It’s a win/win outcome – consumers get better service so they increase their patronage and retailers’ lower their cost of service when customer service staff are able to engage customers with all relevant and contextual information on demand, and without having to jump between many different siloed applications and incur multiple calls to resolve issues.

The Omni-Channel ROI

Omni-channel retailing is steadily sliding from a point of differentiation to an expected level of service. In the battle for customer affinity, failing to engage consumers in a consistent and contextual dialogue across their preferred channels and devices will clearly alienate an increasing number of consumers and be reflected in the retailers revenues.

The RIS News Omnichannel Readiness Report shares that retailers are missing out on 6.5% of revenue as a result of not being omnichannel retailers.

In a research report titled Satisfying the Omni-channel Consumers Whenever and Wherever They Shop, IDC Retail Insights reported that while multi-channel shoppers spend, on average, 15% to 30% more with a retailer than consumers who use only one channel, omni-channel shoppers will spend 15% to 30% more than multi-channel consumers and exhibit stronger brand loyalty, often swaying others to patronize the brand. The IDC research also found that consumers provided a seamless experience across multiple channels shop more frequently and make more purchases across a relatively broad number of product categories.

Omni-Channel ROI

For additional design and deployment guidance, check out my prior post on designing an omni-channel strategy and framework.

Next - Customer Experience for Retailers >>

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The IDC Retail Insights report shows that while multi-channel shoppers spend, on average, 15% to 30% more with a retailer than consumers who use only one channel, omni-channel shoppers will spend 15% to 30% more than multi-channel consumers.


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