Data

Omnichannel marketing: New vocabulary

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Deliver consistent, personalized high-quality  customer experience across channels

Introduction

How often do you check prices and availability online and in the store before you make a purchase? CFI Group survey data1 finds that 95 percent of consumers—nearly everyone—say they frequently or occasionally shop a retailer’s Web site and store, and 82 percent expect to be able to place an order online while in the store. To meet these cross-channel expectations, omnichannel is quickly becoming a priority for leading retailers.

The objective of omnichannel is to give customers a consistently high level of service regardless of where or how they interact with a brand. A successful omnichannel experience makes it easier and more convenient to shop, enriches the quality of buyer interactions, helps retailers anticipate needs and expectations of customers and allows retailers to tailor service in real time. Creating an effective omnichannel environment requires breaking down barriers and integrating data, systems and processes across the organization.

Customer interactions are generating data. If you can pick up this trail of data and assign it to an individual, you can form a more complete picture of the customer—and that picture can be the basis for personalization.

What it means

Omnichannel marketing engages the customer in a personalized dialogue across the channels in which they choose to engage, in store, on the phone, via a Web site or mobile app, through a catalog or on social media. By personalizing and coordinating the conversation across inbound, outbound, traditional, digital, social and mobile channels, brands build relationships with their customers, turning them into loyal brand advocates.

Why it’s important

Consumers buy everything—from clothing, books, electronics and groceries to medicine, healthcare insurance, bank accounts and cars—using a combination of in-store and online methods. They consider their time just as valuable as their money and they want to maximize both. Cheaper devices, nearly ubiquitous Wi-Fi access and intuitive retailer apps have made it easier for customers to shop more cost effectively. To meet these cross-channel expectations, omnichannel is quickly becoming a priority for leading retailers. In fact research from Forrester2 finds that retailers consider omnichannel a key brand differentiator and a top priority.

Omnichannel is also important because with the right tools and technologies, retailers can tap into the vast amounts of new data these channels capture to analyze consumer behavior to provide more targeted, personalized offers. Say, for example, a customer has found a product online that he or she is interested in purchasing. The customer has researched the product, read the reviews and shopped around for a better price. Now this customer is visiting the physical store to see the product in person. If the retailer has been tracking the online behaviors of this customer, the company might anticipate this step and send a coupon in advance, offer a mobile app that allows a customer to check in to receive rewards points and generate further discounts at the point of sale. The omnichannel relationship continues after the purchase is made, too. Retailers can follow up online or with a phone call to ensure satisfaction, recommend additional products that match the customer’s interests and buying profile, and offer other perks or referral benefits.

It’s not just retailers that are seizing on omnichannel. Services organizations are also being called on to deliver seamless account access over multiple devices, as well as in the physical branch. In turn, banks can use the data gathered across those interactions to provide customers with offers based on their unique banking habits. They might offer customizable alerts on account activity, for instance, letting customers know when a balance falls below a certain threshold, or provide resources, tools and online chat support to help a prospective mortgage applicant.

Reaching consumers at the right time across channels with the right offer turns casual shoppers into loyal followers. A report from Aberdeen Group3 concurs, finding that companies with the strongest omnichannel customer engagement strategies retain an average of 89 percent of their customers, compared with just 33 percent for companies with weak omnichannel strategies. These top performers also gain a 9.5 percent average year-over-year improvement in annual company revenue compared to 3.4 percent for their counterparts. By implementing an omnichannel strategy, marketers improve their effectiveness and efficiency, improving customer value, loyalty and retention, campaign ROI, response rates, and reducing cycle times, marketing costs and customer acquisition rates.

What will change

Creating an effective omnichannel experience requires breaking down barriers and integrating data, systems and processes across the organization. Omnichannel transforms a mainly siloed, multichannel customer experience into a more personalized, consistent and seamless interaction across all touch points. The channel becomes just one way to experience a brand rather than the primary focus in and of itself.

Omnichannel isn’t strictly a technology issue. It’s a business and operational issue that requires changes in underlying processes, changes in the way people work, and changes in culture and performance management. For example, different processes are required so that data can be captured, shared and analyzed across parties. The technology plays a supporting role, aligning with and enabling the processes. Technology changes likely include a master customer database, analytical tools, the cloud and enhanced data security.

All aspects of interaction change, too—not only sales, but also customer service, fulfillment and marketing. Answers to customer questions must be consistent across methods of communication—phone, online and in person. Systems must be integrated to optimize current operations, for example, ensuring timely order delivery at the lowest cost to the consumer and the business. Marketers have the ability to better anticipate consumer demands and identify new opportunities by using big data and sophisticated analytics to gain insights into emerging trends and historical patterns. Retailers also need to be prepared to shift their culture from focusing on their own objectives to focusing on customers’ objectives. And, working together, departments must be motivated and rewarded to achieve cross-department goals that benefit the company overall rather than just narrowly focusing on individual department goals.

Conclusion

Plenty of industry research exists to conclude that omnichannel isn’t a fad or a buzzword. It’s a movement led by consumers that is forcing retailers to evolve and take their customer relationships to new heights. The ultimate goal is to achieve full omnichannel sales and service integration and cross-channel transparency. But this transformation doesn’t happen overnight. It requires focus, diligence and support across the organization and from the top. And as with all strategies that deliver measureable business value, there must be continued innovation. A number of leading department stores, as well as big box chains, are creating new ways to use store presence to enhance the omnichannel strategy. Not to be left out, smaller retailers are taking advantage of new technologies that make omnichannel an affordable reality that can help level the playing field with larger competitors.

Key questions to ask

  1. What channels do my customers expect for what scenarios?
  2. What processes are affected by creating an omnichannel environment?
  3. What technologies do we need to support different processes and transparency?
  4. Who should comprise the cross-functional team that’s required to make this happen?
  5. Who are the key executive stakeholders and what are their goals?
  6. Do we have the right incentives in place to support cross-channel collaboration?

Related Reading:

Sources

1 CFI Group, “Omnichannel insights” April 2014

2 Forrester research, “Customer Desires Vs. Retailer Capabilities: Minding The OmniChannel Commerce Gap” January 2014

3 Aberdeen Group, “Omni-Channel Customer Care: Empowered Customers Demand a Seamless Experience” October 2013

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