Omnichannel - MyCustomer Guide by MyCustomer

guides

The omnichannel guide in association with

Omnichannel retail is attracting a great deal of interest â&#x20AC;&#x201C; but why are so few businesses actually doing it? The omnichannel guide

www.mycustomer.com

guides The omnichannel guide Foreword

1. 2.

An introduction to omnichannel How to build an omnichannel strategy

How staff deliver an omnichannel experience

Building an IT architecture to support omnichannel

B2B companies can be omnichannel too

6. omnichannel Five ways to create an shopping experience

in association with

The omnichannel guide

www.mycustomer.com www.mycustomer.com 2

Foreword

Mark Dauban, IBM Global business services Multi è Cross è Omnichannel. The world has gone from only a handful of channels to numerous – at the last count >30 - that organisations can use to deal with their customers. Put this together with customer power and choice and we have a recipe that serves up significant challenges around how and where to invest your precious time and resources to offer your customers the relevant information, at the right time across the channel they choose. With this vast array of choices, channels are now a key one of the strategic decisions to be made in an organisation. Exclusive jewellers and fashion retailers interact with their customers in very different ways to high volume supermarket chains, so understanding the answers to some important questions is key to success in the digitally-connected world. Which channels best align to an organisation’s value proposition and strategic competencies? Over the coming chapters, we will guide you through the world of omnichannel, step by step – from building a strategy to applying it effectively through designing (and implementing?) the right business and technical architecture/model, process, technology and organisation to bring it to life. The omnichannel guide

www.mycustomer.com

Chapter 1.

An introduction to omnichannel Natalie Brandweiner Omnichannel retail is attracting a great deal of interest at present – but why are so few businesses actually doing it? Perhaps it is the confusion over a precise definition, and how it differs to multichannel and/or crosschannel. The commonly held description is that it’s a joined-up approach to your multiple channels; the ability to seamlessly continue a single conversation or transaction even if the customer chooses to change channel.

What is omnichannel?

Paul Heathcote, senior manager at Deloitte Digital, defines omnichannel as “an experience that’s designed to work on the particular channel that you’re engaging with, which exists across different channels, and can often include those different channels interacting with each other.” An example of this from a shopping experience may be a retailer app I’ve got on my smartphone interacting with some kind of in-store displays, he explains. In a world of ever increasing channels, and increasingly channel-agnostic customers, omnichannel presents a huge opportunity for retailers The omnichannel guide

www.mycustomer.com

looking to differentiate themselves.. The mighty John Lewis is one High Street giant that has already announced its commitment to omnichannel service. As MD Andy Street recently told MyCustomer.com: “The strategy’s quite simple. We know that about 60% of our customers buy both online and in shops so the approach is to make it absolutely seamless for them to move from one to the other.”

Omnichannel opportunities

But omnichannel service also presents retailers with the opportunity to capitalise on a valuable demographic. Vivek Venugopalan at Wipro Technologies believes that the omnichannel customer shows a propensity for higher value in several different aspects of value measurement, including: • The value of interaction: “Customer value is measured by how frequently a customer interacts with a brand. The higher the number of interactions, the higher the value. Omnichannel customers by their very nature interact through multiple channels and thus have higher levels of interaction with the brand,” says Venugopalan. • The value of loyalty: “The typical omnichannel customer, when presented with seamless experience across channels, tends to display a higher level of loyalty to the brand. The typical cost of attracting a new customer is much higher than retaining an existing ones, hence why customers with higher loyalty to the brand are considered very valuable.” • The value of information: “As omnichannel customers interact more regularly with various brands, they provide more information about everything from their shopping habits to their food and lifestyle preferences. As a result, during the lifetime of the relationship, brands can expand their presence, tailor their offerings to customers and even create new products and services based on that customer information.”

The omnichannel guide

www.mycustomer.com

There is also evidence to suggest that omnichannel shoppers spend more than other shoppers. Deloitte’s recent 2012 Annual Holiday Survey showed that customers who purchase via a combination of instore, mobile and internet spent $1,585 each on gifts, compared to the average $1,428 spent using smartphones only. Research by IDC Retail Insights supports this, suggesting that while the multichannel shopper will spend on average 15% to 30% more than someone using just one channel, omnichannel shoppers outspend multichannel shoppers by over 20%.

“the multichannel shopper will spend on average 15% to 30% more than someone using just one channel”

Heathcote believes that when debating the value of omnichannel customers, brands must approach it in exactly the same way as they would the value of improving the user experience. “It’s all about delivering great user experience. And so omnichannel is just another way of achieving all of the things that are true about delivering great UX in general: that it drives loyalty, that you’re able to increase conversion rate, that you can extract more value from that relationship.” But when it comes to impressing the omnichannel

The omnichannel guide

www.mycustomer.com

customer, retailers must pull out all the stops. “They demonstrate an eclectic mix of independence, seeking answers though self-service and community as well as requiring one to one support at times, when only an immediate and personal response is good enough,” suggests Dennis Fois, VP EMEA sales at eGain. “The balance can be a fine one: when happiness translates to purchase and loyalty, they may trumpet the brand in public. Let down, they drive a hard response and have no shame in airing their grievances.”

Omnichannel demographic

So who exactly is the omnichannel customer? The reality is that while there is some evidence that the majority are aged between 20 and 40 and are traditionally tech savvy, the boundaries are changing. In a sense, we are all becoming omnichannel customer. Recent research from eMarketer on the methods shoppers use to buy products showed 12% still mostly use brick and mortar, 42% use mostly online, and 1% mostly mobile, but 45% say they use a combination of brick, online, and mobile. So nearly half of all shoppers are already exhibiting omnichannel behaviour patterns, with this number set to rise. Capgemini has projected that 60% of shoppers will expect a seamless integration across online, social media, mobile and physical stores to become the norm by 2014. Rather than simply missing out on an exclusive yet lucrative demographic, retailers that fail to deliver on this expectation may find themselves going the way of the dodo.

Omnichannel obstacles The omnichannel guide

www.mycustomer.com

So if omnichannel is such a powerful service to provide, why isn’t everybody doing it? The proliferation of channels has seen retailers evolve from single to multichannel organisations but historically, channels have operated as different business units, with their own inventories and pricing. Omnichannel demands that these channels are seamlessly connected, with experiences, promotions and prices all knitted together. In a recent report, Predicts 2012: Retailers Turn to Personalized Offers Through Mobile and Social but Will Struggle With Multichannel Execution Gartner suggested that 80% of multichannel implementations will fail because of siloed approaches and channelcentric strategies that turn off customers, impacting loyalty and sales. Indeed, it would appear that while omnichannel is now coming to the fore, the challenges undermining its adoption are issues that have been present for many a year. “Today in most businesses, the organisational structure of channels and brands doesn’t easily lend itself to omnichannel behaviour,” says Venugopalan. “This is one of the biggest stumbling blocks as it requires a fundamental re-design of organisational structure and processes, which can be a significant undertaking. To give an example, in any traditional retail organisation, the brick and mortar is created as separate P&L unit, which tends to be disproportionately large compared to the catalogue/ online business. Therefore, any omnichannel initiative will be heavily influenced by the brick and mortar owners and in some cases end up becoming another The omnichannel guide

project for sales uplift of the stores. This can be a real risk that faces disproportionately sized businesses within a brand.” In an omnichannel world, retailers will have to build unified supply chain capabilities that can handle store demand, ecommerce demand and any other channel simultaneously, allowing customers to order, receive and return products irrespective of the channel they use. Venugopalan believes those businesses that are concerned with omnichannel should be focusing on the following issues: • Ensuring a synchronised view of channels and a single cross-channel view of inventory • Automating order routing and transmission, order status tracking, shipping, invoicing, reporting, and order lifecycle visibility • Building a mobile presence • Embedding social into the shopping experience • Building apps and experiences especially for tablet-based shopping (use finger swipes, taps and pinching) • Delivering information to the customer via videos, reviews, ratings, recommendations and price comparisons • Addressing organisational and cultural roadblocks James Dion, retail speaker and consultant, added that The omnichannel guide

www.mycustomer.com

retailers must be more technologically savvy - both inside and outside the organisation. Have a mobileready site, a more sophisticated link between the store and its suppliers and embrace new technologies such as digital wallets and self-checkout, of which Apple is only just moving past the experimental stage. He advises:“This is not stuff that you can do on your own. In the old days, retailers were able to build their own IT department, write their own code and have their own inventory management systems, their own POS’. Those days are pretty much gone.” Meanwhile, co-founder of United Future Scott Holmes, focuses on the strategy aspect of omnichannel: “It’s absolutely necessary to achieve a holistic strategic understanding of the behaviour path to transaction: the new customer journey. And to tactically implement the best solution now requires an unprecedented level of coordination among marketing, sales, operations and IT to produce the optimum omnichannel/omni-tech brand experience.” Omnichannel may be a buzzword, and in some quarters an unpopular one at that, but in essence its philosophy is nothing new. It is about putting the customer at the centre of the business. And, similarly, achieving this also means confronting a very familiar set of challenges.

The omnichannel guide

www.mycustomer.com

Chapter 2.

How to build an omnichannel strategy Neil Davey Covering multiple channels, spanning numerous departments and requiring seamless IT system integration, if ever there was an initiative that demanded a strategy to get all the proverbial ducks in a row, it’s omnichannel. “Take [omnichannel] on with no forethought, and you’ll fall into the expensive trap of siloed information, inconsistent response and a poor perception of customer service,” says Dennis Fois. In response to this, retail leaders are already taking strategic actions designed to lay the foundations for their omnichannel evolution, with Aberdeen Group’s 2012 Omnichannel Retail Experience report suggesting that half of retailers are ensuring that there is product availability across all channels, almost a third developing an omnichannel marketing plan, and a quarter establishing relevant performance metrics. So what strategic actions do retailers need to develop and implement to give themselves the best possible chance for omnichannel success? What is the roadmap that they should be keeping in mind?

The omnichannel guide

www.mycustomer.com

Get executive buy-in

It’s an obvious one, but with the c-suite understanding the importance of integrating the company’s channels, the chances of breaking down corporate siloes is exceedingly slim. And this goes right to the top of the business. “We need the support of the CEO,” emphasises Vivek Venugopalan. “The initiative has to have highest level oversight to succeed and to bring all the large P&L owners together to reshape and rethink their business.” Heidi Chapnick, CEO of Channalysis, adds: “The first step is that the c-suite really needs to change how they speak about the company and align the different channels. Executives may talk about retail and the goals and incentives of the company, but employees are never given any kind of understanding of the importance of the different channels. So many businesses are still continuing to focus on retail. Some companies are now hiring c-level omni-employees to counter that and really facilitate that and force that integration because it has not been effective in getting the executive team to really engage and change the pillars of the organisation which never mention anything but the retail.” Sometimes, however, in cases where the c-suite has an entrenched retail-centric mindset, it may even be necessary to make personnel changes to facilitate the process. “Sometimes executives need to be changed. If you The omnichannel guide

www.mycustomer.com

have a CEO of a company who continues to not focus or integrate or create a roadmap which incorporates the different channels, then you need to change that and some of your infrastructure. Getting that executive engagement is a crucial path because if it doesn’t come from the top, it doesn’t filter down and then you’re creating siloed work efforts in different departments.”

Conduct an internal and external landscape analysis

“First of all, understand your customer,” advises Gagan Mehra, chief evangelist at Terracotta. “If you don’t understand your customer you won’t realise if omnichannel is for you or not – because not every channel is important for every business. You may have a business where nobody interacts with you on social networks. So it doesn’t make sense to invest in every channel if you realise it’s not something for you. Understanding your customer is very important.

“First of all, understand your customer” “The second thing is: understanding your competition. Once you understand who your customers are, how can you use your customers, because you have competition already doing something on these channels.” Chapnick adds: “Look at the external landscape – who are your competitors online, who are your competitors in the store, what do you need to do to leverage The omnichannel guide

www.mycustomer.com

yourself and your website to have the functionality and the pieces of core and supporting components that customers need so that they will come to your site instead of somebody else’s.” An analysis of this information will then allow you to prioritise your strategies and investments. Chapnick continues: “A lot of times infrastructure needs to be changed because often your skill sets or the people you have in place are based on 20 or 30 years in retail. They don’t have the web or mobile experience, for instance. So you have to look at their skillset and sometimes it’s a case of moving people around and sometimes it’s a case of having to change some people for those who have a better understanding of the web or mobile channel. It is an important step because it helps to break down the silos. It requires a lot, however, and sometimes change management can be rough.”

Create an IT engagement model

One of the big siloes to break down traditionally exists between IT and…well, everybody else. For an omnichannel project to be a success, it is imperative that there is effective communication between IT and the other departments, and that IT is absolutely clear on the initiatives that should be prioritised. “You have to make sure that the business is engaged and focused and aligned, and once you have that alignment and you are going to build your omnichannel business, then you need to be in the driver’s seat with the IT team,” explains Chapnick.

The omnichannel guide

www.mycustomer.com

“You can’t let IT run the business by letting them say ‘this is too many hours of work, and if we do this project we can’t do this one because it takes much longer’ and so on. Very often IT is running not only the enhancements and functionality, but they are also creating the business plan and the business cases without having a full understanding of the business needs. So the business needs to be transparent with the IT team, and they need to work collaboratively together. The business drives IT and not the other way around – it’s really important to get that straightened out.”

Roll out an employee engagement engine The next part of the plan is operational execution, and specifically an employee engagement initiative to ensure there is deployment in all areas of operation.

Chapnick says: “You need to engage your field employees by training them and getting them to be the ambassadors for the integration of your channels of sales. This can be difficult to do because there is still a mindset of not wanting to cannibalise the store – ‘we don’t want to take business away from the store’. So the training needs to incorporate certain facts, such as that the omnichannel shopper is five to seven times more valuable on an annual basis. You have to execute business planning 100% effectively or you will not be successful. And this is where many people fall flat because the first thing that gets cut is training money because it is not a tangible thing and is not directly mapped to an ROI.”

Develop marketing plans that are The omnichannel guide

www.mycustomer.com

integrated

“You need to centralise your marketing and you have to make certain decisions to spend the money to promote your web – because one in ten people online follows up with a purchase in store, which is a significant amount. So you must create that understanding to get the marketing team to break those silos down – and marketing is probably one of the most siloed departments in the company, which is where we falter a lot,” explains Chapnick. “You have to understand what marketing methodology works for online and then integrate it in your logo, in your print ads, in your store, on your trucks and so on. But also internally you have to understand how online marketing is different. Because it’s totally different and you need to allocate and spend funds to develop your online marketing, search engine optimisation, buying keywords, having the right content on your site, using tools that engage customers and keep them motivated, spending money on a recommendation engine, on ratings and reviews, and social media…so it is very different to traditional marketing.”

Provide 360 degree customer-centricity and care

This is the Holy Grail – the 360 degree view of each shopper, the single view of the customer across every shopping channel. “You can look at your existing technology and audit your ecosystem and look at experiences across the different channels and find the gaps and try to align

The omnichannel guide

www.mycustomer.com

them by doing lightweight business process work, or more heavy integration work, or if you really have this inflexible technology infrastructure that is weighing you down you may want to look at replacing your system,” says Kate Leggett, principal analyst at Forrester Research.

“You can buy all the

technology from a single vendor, or you can knit different technology” “You need to look at your people factors and make sure that your agents, even though they may be sitting in different functional organisations, have the same view of the customer, have the same view of success and know the type of customer service interactions that are aligned with the brand proposition that the company as a whole is trying to deliver. “You can buy all the technology from a single vendor, or you can knit different technology – modern and older – to be able to allow this level of omnichannel experience. Or third thing you can do is that even if you don’t spend time integrating all the channels you can apply process discipline and make sure that the process that the agents follow are in-line with one another on all the different channels and that even if the agents don’t have all these back-end systems integrated, that they do have access to these systems in a disconnected way so that they can answer customer questions in the same way. So there are The omnichannel guide

www.mycustomer.com

three different levels of effort and the last one is the easiest to do and it is all about processes and making sure that, for example, a social agent has access to the customer database so that they know who the customer is when they are talking to him on Twitter.” The single view of the customer, across every shopping channel, is the ultimate goal of omnichannel, says Chapnick. “A customer can call customer service and the data is integrated in a central repository, so that the person’s details are the same no matter what channel they shop on,” she says. “The customer can purchase in whatever manner they want to and all of their information is not only integrated, but they’re building a profile online as an individual so that the business can personalise and segment and be more relevant.”

No flight of fancy

“Online and social, in being instant and fast moving, creates the illusion that omnichannel retailers should be tactical and off the cuff. This is not the case,” warns Patrick Phelan, VP of client services, EMEA at Bazaarvoice. “Although retailers should take advantage of opportunities to engage with customers online and offline when these chances arise, there should still be a measurable omnichannel strategy in place. Why? Having clear goals and approaches ensures that your omnichannel tactics are in-line with your brand and what you stand for. It ensures that you do not lose sight of the bigger goal and the fact that customers are the ones with the power now.” While omnichannel may seem like a mammoth task to The omnichannel guide

www.mycustomer.com

undertake, demanding that organisations tackle some of the most infamous organisational and technical challenges that have long exasperated business leaders, companies would do well to remember that the project is no flight of fancy. “Simply put, if a business doesn’t develop an omnichannel strategy it will die,” concludes Trevor Harvey, director of planning at Saatchi and Saatchi X. “In today’s participation economy, a brand or business that deliberately chooses not to engage with its shopper audience in their preferred method of interaction chooses not to participate with them. As shoppers have developed new shopping habits, retailers need to adapt their strategy to suit these new behaviours. Failure to adapt will result in shoppers being lost to the retailers that get it right.”

The omnichannel guide

www.mycustomer.com

Chapter 3.

How staff deliver an omnichannel experience David Sealey We have covered some of the changes need to execute omnichannel, but it is also important to consider the evolution of people that needs to take place. While it is clearly important to deliver a consistent service experience across multiple channels, omnichannel also requires a new type of sales person. They are empowered, passionate actors who provide more than an ability to close deals. They shape the experience that your customer desires and are the physical personification of your brand. They are just as important in B2B as they are in B2C retail. Whilst much has been written about the technology, marketing and C-suite changes needed to execute a winning omnichannel strategy; very little has been discussed about the need for an evolution of frontline sales people. Allow me to start the discussion and speak for the [sales] people.

Delivering the experience through people

In order to best serve customers who are happy to swap channels at a momentâ&#x20AC;&#x2122;s notice, sales and store staff need to be developed along five dimensions as set out in diagram 1.

The omnichannel guide

www.mycustomer.com

• Training on experience • Ability to access all product and competitor knowledge • Cross channel attribution • Affect upon the whole result

Knowledge Measurement

• Role as a cast member • Part of the omnichannel experience

Role

Passion

Tools

• For the brand • For the customer experience

• Access to information • Ability to connect online and offline • Fulfill all service needs

Diagram 1: Omnichannel store staff and sales improvement dimensions 1. Knowledge: Specific product knowledge is vital. So is an understanding of competitor products and value propositions. If the representative inSOCIAL front of the customer can’t explain it then the customer can find out for themselves at home or via their mobile. Obviously even the best store person or sales rep isn’t going to know everything. Therefore mobile and easy to access knowledge management systems EXPERIENCE are an absolute must.

WEB

MOBILE

2. Passion: Store staff and sales reps need to be passionate about creating the brand experience. need to vary PRODUCTS / Customer experiences INTERACTION & depending on what the customer wants. When I’m fuelling my car I want SERVICE TRANSACTION the experience to be fast and efficient. However, if I’m in the Lego store with my family I expect the experience to be engaging and memorable. Similarly, if I’m in the market for a multi-million pound CRM project, I expect the experience to be simple, professional and collaborative. 3. Tools: Based on the knowledge requirements, do your reps have the right tools available to them? Can they check prices and stock

STORE

The omnichannel guide Intellience

www.mycustomer.com

availability instantly? Can they look up the price on Amazon and then make a counter offer based on the customer’s profile? Can they allow the customer to purchase on the spot rather than having to join the end of a queue? 4. Role: When you walk around Disney’s theme parks you’ll notice signs saying “Cast Members Only”. Whether they’re dressed as Cinderella or sweeping horse poop after the parade, each “cast” member is an actor in the visitor’s experience. People who represent your brand need to understand that they’re part of a broader omnichannel experience and how to fulfil their role in it. 5. Measurement: Controversial as this may sound, it is unfair in the omnichannel age to measure sales people on sales alone. Particularly when there are competing digital transaction routes available. Instead, measures need to relate to efficiency, ability to create positive experiences, quality of demonstration or contribution to other channel sales.

Changes required

Primarily I write about digital, innovation and marketing. This topic touches each of these points. Digital is the cause of the change. We live in an age of hyper-connected consumers. Innovation is applied through the harnessing of technology to improve the knowledge and abilities of sales reps. Finally, marketing is the matching of market expectations with the assets and capabilities of the business. In this instance, human resources is the primary agent of change. For frontline staff to achieve the five dimensions above, HR must shape a new training, rewards and recruitment regime. Change is never easy and is complicated further by the emotional issues of reshaping job roles. It is my belief though that frontline staff will leap at the opportunity to be recognised as a crucial part of the experience. The transition from the old to the new world of The omnichannel guide

www.mycustomer.com

New world Current world

• Supported by online • Enables showrooming • Case member • Experience oriented

• Competing against online • Afraid of showrooming • Staff member • Transaction focussed

Diagram 2: Old vs. new world – the effect of omnichannel on sales people

omnichannel (diagram 2) is not about automating or reducing frontline staff. It’s about empowering them to be the best customer agents they can be through training, information and tools. It should allow them far greater flexibility, personality and creativity in their roles.

Innovate to avoid disruption

New technology increases the hazard of disruption in markets. Fact. The technology that allows omnichannel experiences is here and is becoming ubiquitous. Harnessing this technology is the most effective way to deal with the threat of disruption. What better place to start with this adoption of technology than at the coalface where your sales reps or store staff are not just transacting but creating experiences. Omnichannel should offer the customer the same experience across all channels (diagram 3). Now is

The omnichannel guide

www.mycustomer.com

• Role as a cast member • Part of the omnichannel experience

Role

Tools

• Access to information • Ability to connect online and offline • Fulfill all service needs

the time to bring physical sales up to par with the information and price comparison offered by webbased channels.

SOCIAL

PRODUCTS / SERVICE

WEB

MOBILE

EXPERIENCE

INTERACTION & TRANSACTION

STORE

Diagram 3: Omnichannel should offer the same experience regardless of channel choice Intellience Foundation

DIGITAL MARKETING

David Sealey is passionate about disruptive innovation through digital technologies and marketing. He works for Capgemini UK’s Digital Services team designing enterprise level marketing, experience and Queue busting/ Commerce OMNICHANNEL solutions. ERP service predicting engine PLATFORM

You can connect with David via LinkedIn and Twitter. 1982402895 Self-scanning

Self check out

SPEED TO CHECKOUT

Content management/ Info repository

CONVERSION OPTIMISATION

OC fulfilment and integrated planning and optimisation tools

The omnichannel guide

Tablet

Speed and options Store/web layout and traffic flow

www.mycustomer.com

Chapter 4.

Building an IT architecture to support omnichannel Neil Davey IT has a tendency to attract investment and focus that is disproportionate to its importance in the grander scheme of many projects. Part of this is because tech vendors do a bang-up job with their marketing. And part of it is wishful thinking that investment in IT will be a silver bullet solution. But requisite time and resources must of course also be allocated to the likes of strategy, processes and the people involved. And so it is with an omnichannel project. However, in the case of omnichannel, there is little doubt that the IT infrastructure is absolutely fundamental. Omnichannel retailers must ensure that all channels are supported and integrated with each other to ensure that a customer’s experience with the brand is consistent and seamless. And trying to get a series of point solutions to tie together in a coherent channel strategy will make a challenging problem into a near-impossibility. Therefore, when it comes to an omnichannel project, it’s not just about getting the right pieces in place, but also about ensuring that they knit together. “If you want to do omnichannel then you can’t be

The omnichannel guide

www.mycustomer.com

living in a world of siloes,” says Paul Heathcote. “That’s where you need a high level of maturity in terms of your underlying tech architecture and your content or commerce operations as well. You really need to be dealing with an integrated platform rather than lots of different siloes for things like content and logging in. There’s no way without those things being integrated in some way that you could deliver an omnichannel experience because none of those channels would know who I was and identity’s really important. “So you’re starting to get into a world where if you want to be omnichannel then that has to be supported by a common platform across all of those channels. And this is why it’s so hard for companies to do because that’s not the reality that most organisations find themselves in, especially larger organisations because they have legacy stuff that’s built up over time. It’s hard enough for them to deliver content to multiple channels separately in a siloed way let alone consistently.” So how can businesses build a framework that meets customer demands quickly and consistently at every touchpoint? What technologies do they need, and how can they integrate them? MyCustomer.com spoke with experts for their advice.

Design a services architecture on a core commerce backbone “When beginners are enabling additional channels for their business, often they end up creating different silos to support different channels, simply The omnichannel guide

www.mycustomer.com

because their existing infrastructure and technical environment is not set up to support these new channels,” says Gagan Mehra. “You end up having a different set of technical products being used for the mobile platform, a different set for social, and a different set for the web platform. And that doesn’t really work and doesn’t really scale. It increases the operational cost and you need more resources to run the whole thing and there is an inconsistency between what you see on one channel versus what you see on another.” The solution according to Mehra is to design a services architecture, which supports the likes of customer, product, pricing and promotion, and build it on top of a commerce backbone, which supports everything from applications that display different prices to the systems that enable interactions with customers and partners. “The right thing to do is to build that commerce platform that can be extended to support any channel and any new channel in the future,” he explains. But he warns: “To extend an existing commerce application to become this platform usually requires a lot of customisation to the existing set-up unless the company is already using a platform that is serviceenabled. Unless you are a company like Amazon or Netflix, using leading-edge technology, you usually don’t have a platform that is enabled for it.”

Standardise interfaces across channels Omnichannel retailers can simplify their processes by building modular reusable services. This The omnichannel guide

www.mycustomer.com

standardisation not only also reduces errors but also helps to deliver a seamless consistent experience. Mehra says: “With product pricing, for instance, you not only want product pricing to be consistent, you want to avoid accessing your back-end systems again and again, loading the systems with multiple calls. So you need to build that service once and use it across all the different channels you support. Promotions is another example – you want a single way to set up promotions and distil those promotions across every channel. So it is important to focus on building those modular reusable services.”

Build a master data set to create consistency across touchpoints

It is common for customers to find that a business is offering a good at different prices on the web and instore, something that can frustrate consumers. This is often because the retailer is using two different data sources to display pricing on the different touchpoints. To ensure consistency, businesses must derive the data from one master data set – a single source of truth. Mehra notes: “Several times I have spoken to customers who have an SAP back-end for product descriptions, but they are different from what is used on the website, and the mobile application is not set up to use longer descriptions. So there are inconsistent product descriptions across different channels, but without realising that customers might be searching for the same product on a mobile device and may pick up the phone and call the contact centre, which is using the SAP back-end to place an order. And that The omnichannel guide

www.mycustomer.com

won’t really work!”

Consolidate reporting and performance management technology

“Businesses need a single report that demonstrates performance across all the different channels so that you can see what channels are working for you, and how successful promotions are on specific channels. Brands are most likely using A/B testing to use different promotions on different channels, or different product images on different channels. You want to get a report that shows what is being successful so it is important to consolidate all these metrics into a single dashboard to understand what is working.” For this to be possible, multiple channel data must be consolidated into a single repository that can be drilled down into. This also supports customer path analysis, so that the brand can understand how customers approach the buying process across different channels. Mehra continues: “How they end up buying a product is very important because if you understand that, you can push the right set of products to the customer, you can recommend them the right promotions and say ‘Hey we understand you’re interested in this product’ and if they use the mobile device more often, for instance, you can show them the promotion on the mobile device first.”

Ensure that there is adequate investment The omnichannel guide

www.mycustomer.com

in the back-end infrastructure

â&#x20AC;&#x153;Usually large organisations invest millions of dollars in setting up their back-end infrastructure, and usually enabling their infrastructure to support omnichannel is not something straightforward. But without making that investment to enhance your back-end infrastructure it will not be successful, because you may be able to have a commerce platform that will support all your channels on the front-end but if the back end is not set up to work with all those different channels then it wonâ&#x20AC;&#x2122;t work.â&#x20AC;? Furthermore, because the back-end system will be using more channels, it will be getting more traffic, so it must be able to scale and keep up the performance requirements of the business. The issue of scalability means that organisations should consider the Cloud to host their back-end infrastructure.

IT framework

While businesses have historically started their journey looking at front-end technologies such as mobile, in-store tech and kiosks, organisations need this to take place under a different framework according to Ivano Ortis, managing director of Accenture. This framework should include an intelligence foundation that is instrumental for delivering a seamless experience and personalised interaction (requiring analytics tools, demand forecasting capabilities and integrated merchandising planning) and solutions that can enable flexible fulfilment and returns management.

The omnichannel guide

www.mycustomer.com

Ortis summarises the structure to support this: “You require an ‘omnichannel management platform’, which upgrades ERP - an important requirement - and also adds more capabilities around content management, order optimisation and a number of foundational aspects to help the retailer develop and execute the seamless customer experience.” He continues: “On top of the platform you need an intelligence foundation. This is where traditional business intelligence tools operate in sync with demand forecasting: predictive intelligence tools. Built under the same foundation are a set of customerspecific analytics, which can be supply chain specific analytics or merchandise specific analytics. In the past, retailers were creating purpose-built or functionspecific demand forecasting system, depending on the specific needs – so for instance you have a way to forecast demand for driving replenishment decisions, and maybe a different tool and set of processes for forecasting demand to fulfil your marketing objectives. This creates a set of highly specialised tools but they are very siloed. In omnichannel you need to create a converged environment – not just an integrated environment – where you pool all the IT interfaces that complicate the life of the CIO. So transforming and reshaping the architecture with this intelligence foundation is place becomes instrumental.” And then underneath the platform and the intelligence foundation, Ortis says that there should be four pillars, with a software system and a set of technologies within each of them.

The omnichannel guide

www.mycustomer.com

• Ability to connect online and offline • Fulfill all service needs

These are: • A commerce pillar: A commerce engine that delivers against the

to serve all channels across merchandise categories, and also link back to your supply chain capabilities EXPERIENCE • Omnichannel fulfilment and integrated merchandising pillars: They create a seamless environment, delivering the customer the perception that the retailer is always in stock. This needs to PRODUCTS / sources of products, orchestrate the different the different INTERACTION & stocks SERVICE TRANSACTION you have on the shelf, in the back room of your store and the distribution centres that serve the ecommerce channel for instance, all to the advantage of the customer so that the products are always in stock and of course the retailer in terms of the ability to sell more. WEB

MOBILE

expectation of the customer that their journey is seamless and flexible, starting on one channel and continuing on any other channel and hopefully transacting and completing on any channel of choice” SOCIAL • A marketing pillar: Specific focus on digital marketing is required

A demonstration of the structure that Ortis recommends: STORE Omnichannel Implications - Technology Omnichannel platform drives conversion, speed, profits Intellience Foundation

ERP

OMNICHANNEL PLATFORM

DIGITAL MARKETING

Queue busting/ predicting

Commerce engine 1982402895

Self-scanning

Self check out

SPEED TO CHECKOUT

Content management/ Info repository

CONVERSION OPTIMISATION

OC fulfilment and integrated planning and optimisation tools

The omnichannel guide

Tablet

Speed and options Store/web layout and traffic flow

www.mycustomer.com

Where to start

However, it is inevitable that businesses won’t be starting this process from scratch. In many cases organisations will have legacy POS, while their ecommerce and mobile applications will be more recently implemented. For larger businesses things are further complicated by having operations in multiple countries, and having many different types of merchandise items. Ortis acknowledges that a roadmap approach to replatforming IT, delivering the omnichannel platform over time, is going to be the most common approach. But where do you start?

“And the good news is

that you can create the ability to support this because investment in omnichannel will mean you grow revenue” “Where to start depends on the business case assessment, but basically the initial step is about looking at the areas that provide the biggest business improvement potential for you as an organisation,” says Ortis. “But you should also look at ways to reduce costs, and not just in IT, but also in operational ways like energy reduction, IT support costs and other sources of expense. If you use the savings generating from cost containment actions to fund this omnichannel productivity platform, you are in a good spot. The omnichannel guide

www.mycustomer.com

â&#x20AC;&#x153;Once that is in place, it is the same as rolling out any other complex IT project â&#x20AC;&#x201C; you need a number of phases and milestones where you deliver a set of foundations and then extend the platform reach and integration, serving different parts of the business. And the good news is that you can create the ability to support this because investment in omnichannel will mean you grow revenue as you reach more channels and more omnichannel customers, and this in turn creates a business case that justifies an investment programme in things like mobile commerce or social commerce capabilities.â&#x20AC;?

The omnichannel guide

www.mycustomer.com

Chapter 5.

B2B companies can be omnichannel too Kees De Vos The world of commerce is increasingly complex and represents both a challenge and an opportunity for the enterprise. Ecommerce offered web supported customer transactions and multichannel delivered a broader variety of channels to market. However, many organisations are still seeking the right strategy to satisfy the demands of business customers looking for functionality that matches their online consumer experiences and they increasingly expect to be able to seamlessly interact through any medium â&#x20AC;&#x201C; online, mobile, call centre or sales representative. With the user experience becoming more fundamental to the adoption and success of B2B commerce sites, organisations are now starting to embrace an omnichannel strategy, which enables customers to interact with their business brand at every level, across all touchpoints and all channels. The objective is to deliver a consistent, relevant and contextual experience for the customer and this puts more onus on the organisation to plan and manage customer conversions across all channels simultaneously. As a result, organisations are improving customer engagement and loyalty in new ways, such as tailored self-service options and mobility.

The omnichannel guide

www.mycustomer.com

Meanwhile, from an operational efficiency perspective, organisations are battling with reduced product margins, shorter product life cycles and increased friction in sales. Companies are looking to consolidate systems on a single platform capable of supporting their global business, regardless of channel or locale. A comprehensive commerce solution represents an opportunity to streamline business operations and simplify the complexity of B2B transactions, delivering the necessary single view of everything – customers, inventory, product, content and orders This twin requirement to optimise and innovate means organisations are turning to ‘next generation’ B2B commerce to achieve targeted business outcomes and deliver the enhanced customer experiences that will be key to maintaining both revenue and market share. There are many similarities in the models for B2B and B2C. Where the offline channel for B2C is typically the store and sometimes a catalogue, in B2B the offline channel can be a branch, a catalogue or a direct sales force. These differences drive different demands; for example, how do you integrate the direct sales force into this model? They have a tendency to stop cross channel traffic to protect ‘their’ sales, which also has resonance in stores, but in the B2B market it is much harder to instigate change. B2B organisations need to focus on the enablement of the sales person, and demonstrate how an omnichannel approach can work to help them, not hinder them. Another notable difference is that the role of the branch as a ‘landing destination’ can often be even The omnichannel guide

stronger than the retail store. In many trades, for example, building supplies, it is common for customers to drop by for the goods they need, stay for a chat, and then move on to the job. This type of regular interaction with regular customers encourages loyalty, but in addition, tradespeople, in particular, smaller contractors will then frequently use their mobiles during the day and in the evening to order goods to be collected at a later point.

Top tips for putting B2B omnichannel into play

1. Offer customers their preferred channel – many customers don’t necessarily want to interact with a sales representative and would prefer to transact solely in the online channel; for example they may want to search for a solution online before discussing with the sales team. Ensure that your sales team has the level of knowledge to respond – you don’t want the customer to know more than them. 2. Improve responsiveness and service – using self-service, real-time chat or voice services makes it easy for customers to find information quickly and resolve issues, creating a stronger and more profitable relationship. 3. Make it easier to do business – implement streamlined purchasing, payment and inventory processes while providing unique product assortment, pricing and business flows. 4. Tailor the user experience – provide targeted dynamic content and sophisticated search capabilities. 5. Gain full control over content – managing content can be one of the most challenging aspects of managing your commerce operations, but with product content management you can centrally manage all your content – video, manuals, buyer guides and more ¬ and business data, and expand into new markets with ease. 6. Ensure full integration with ERP, CRM and inventory and manufacturing systems as well as customer data and contract terms –

The omnichannel guide

www.mycustomer.com

ensuring sales, call centre personnel and support teams have exactly the right information they need, when they need it, regardless of the channel the customer uses. 7. Identify ways to release sales teams from being customer service representatives, so they can undertake more strategic sales initiatives and focus on higher value sales activities. 8. Integrate web, customer service, print, mobile and social commerce to deliver a fully faceted omnichannel experience.

Conclusion

While enterprises can feel daunted by omnichannel commerce, thereâ&#x20AC;&#x2122;s no escaping the fact that simply paying lip service to this new strategic approach risks being left behind as others take up the baton and deliver exactly what their customers and partner organisations want. Getting omnichannel right is all about facilitating the buying cycle more efficiently, delivering the right information across every touchpoint and across every customer facing group within the extended enterprise value chain. The good news is that done well, omnichannel cuts through the complexity and cost of doing business, whilst making the enterprise a customer-focused and responsive organisation that has a 360 degree view of its customers. Kees de Vos is chief customer officer at hybris.

The omnichannel guide

www.mycustomer.com

Chapter 6.

Five ways to create an omnichannel shopping experience Katie Traynier Omnichannel is all about improving the customer experience. Often compared to multichannel due to its nature of integrating different marketing channels (social, mobile, online, bricks and mortar); where it differs is that omnichannel does not have to be all encompassing; it just has to focus on using the right channel(s), to target the right customer(s), at the right time. In todayâ&#x20AC;&#x2122;s consumer world, the customer wants more. Constantly exposed to a range of media sources, consumers expect to be able to reach out to a brand in whatever ways suits them best. The key, however, is knowing your customers. You need to know how your customers interact with your brand; you need to know what would benefit your customers in regards to the way they shop. And then you need to make it happen. To demonstrate how this can be achieved, below are five examples of brands taking an omnichannel approach, all optimising the customersâ&#x20AC;&#x2122; shopping experience, in very different ways.

The omnichannel guide

www.mycustomer.com

1. Waterstones’ bricks & mortar ebook service

Having expanded its product line to include eBook devices, Waterstones is allowing customers to buy and download content onto an electronic device using free Wi-Fi available in its bricks and mortar stores. The strategy (introduced last year) enhances the customer experience by providing consumers with the option of purchasing an eBook, whilst physically browsing books. While many consumers are moving towards purchasing eBooks, previously the online set up meant customers missed out on the ability to flick through the book prior to purchase. The introduction of Wi-Fi allows book lovers the best of both worlds in terms of hard copy or eBook purchases. The scheme also provides eBook customers with easy access to the shop’s specialist staff, trained to provide help and guidance on any of Waterstones’ books.

2. Boots’ loyalty scheme digital kiosk

Boots’ Advantage Card Loyalty scheme launched back in 1997 as part of a CRM loyalty programme. Kiosks, available in Bricks and Mortar stores, have always been used in conjunction with the cards, allowing users to print off special offer vouchers. Today, with over 16.4million cardholders currently using the loyalty card (both online and in store) the Extra Offer Kiosks enable card holders to obtain exclusive personalised offers, based on the number of points they have accumulated. The kiosks can also be used to check how many points customers have and update personal details. Whilst the Kiosks aren’t available in every boots store, customers can go online to find

The omnichannel guide

www.mycustomer.com

their nearest Kiosk store locator. Despite the fact that the kiosk and loyalty programme isn’t anything new, Boots continue to use the programme to enhance the customer experience. Points can be collected and used both online and offline and there is even an online points calculator to help users work out how much they have to spend.

3. Oasis’ online shopping in-store

The introduction of iPads across Oasis’ stores enables the customer to browse online, pay online and place orders online whilst in a traditional bricks and mortar store. The scheme gives users the option to try an item on, and then order it online and have it delivered, rather than having to queue at the till to pay. Likewise, if a garment is not available in the store, the customer can order it via the iPad. Staff are armed with the iPads and can help shoppers check sizes, colours and styles that aren’t currently available in the shop. Sales assistance via the iPad is available on both the shop floor and in the changing rooms, enabling the sales team to engage with the customer at the point of decision. In the first week of the iPad ordering system opening (back in 2011), 20% of store sales were made through the iPad each day. The iPad is a great example of enhancing the customer experience, as it decreases queue times, increases product availability and improves customer service.

4. M&S’ in-store experience online

The M&S ‘at home’ iPad app (launched in September 2012) is the second M&S app introduced for iPhone users. The ‘at home’ app focuses on home items from the M&S catalogue and provides a visual, digital, The omnichannel guide

www.mycustomer.com

journey mimicking that of an in-store experience. Free to download, the app offers enhanced touch interaction capabilities to enable the customer to browse through the companyâ&#x20AC;&#x2122;s homeware selection in a set up that would be found in store; interactive rooms are dressed with the companyâ&#x20AC;&#x2122;s products to provide a more realistic view of how that product would look in your own home; individual pages can be bookmarked for a speedy return at a later date; there is an in-app shopping basket for buying; and social features are also included allowing customers to share images or products via Twitter or Facebook. The app enhances the customer experience by providing customers with an easy way to browse homeware products and share items for a second opinion, before making a purchase (and that purchase itself can be made online, through the app or in-store; whatever suits the customer best).

5. John Lewisâ&#x20AC;&#x2122; click and collect service

John Lewis first introduced a click and collect service back in 2008. Today, the strategy that allows customers to buy online and arrange collection from a local store has been extended to its sister company Waitrose and covers 300 stores. In April 2012 John Lewis reported 25% of orders made through johnlewis. com were for click and collect. In addition to this, good Christmas business at the end of last year was also allocated to the click and collect service. While the service is nothing new, allowing online customers the option to pick up purchases in store removes the hassle of having to wait for a delivery and allows the customer to pick up an item when convenient for them. It also removes the cost of delivery charges The omnichannel guide

www.mycustomer.com

which can put some customers off purchasing online. Simple as it sounds, giving the customer the option of how they can receive their goods is an ideal way to improve the customer experience. Katie Traynier is marketing manager at RedEye.

The omnichannel guide

www.mycustomer.com

What is

www.mycustomer.com MyCustomer.com is an online community of customer-focused professionals, sharing news and advice on fields including customer service, customer experience, marketing, sales, CRM and social CRM.

Published by Sift Media

Sift Media is a leading business-to-business publisher specialising in online, interactive professional communities. With a range of services including websites, email publications, industry awards and events, Sift Media delivers original, branded content to over half a million professionals in accounting and finance, small businesses and start-ups, HR and training, IT, marketing, customer management and knowledge management.