Karen McCandless finds out how the right technology can enable retailers to serve consumers at any point of their shopping journey anywhere and on any device in a consistent, personal and differentiated way.
Omni-channel retailing lies at the heart of many retail transformation efforts, according to a 2014 report from Capgemini Consulting and information standards organization GS1 US. Are You Ready? How to Create an Always-On, Always-Open Shopping Experience reveals that mobile shopping, sameday delivery, and growing volumes of data from online channels are forcing retailers to a tipping point to remain competitive and better respond to evolving customer needs and preferences.
“Retailers are transforming their organizations and market approaches to leverage the power of digital and satisfy the needs of the ever-changing consumer,” explains Dan Albright, senior vice president, and North America CPG, Retail and Distribution leader for Capgemini Consulting.
As Albright mentions, consumers are ever changing. Their shopping behavior, preferences and expectations change all the time, and vary greatly from person to person. Not only can customers shop whenever and wherever they want, they also have access to a wider than ever range of brands and products. The shopping journey has also changed completely and continues to evolve as a result of the wider range of channels available to shop in.
Luke Shave, senior global marketing manager of Microsoft Dynamics for Retail, explains: “Customers may start their journey by researching the company or brand on Facebook then ask their friends’ opinions on WhatsApp before going in store to try the product and then completing the purchase via their phone or tablet. Retailers need to get a handle on what the customer journey looks like so they can engage with consumers where and when they want to.”
Richard Carter, vice president of channels and strategic alliances at Ecrebo, agrees: “Retailers are continually challenged by new consumer habits and behaviors such as showrooming and shopping across multiple channels,” he says. “As a result, there is a need to ensure that consumers are being engaged in a consistent and joined up manner to any confusion or conflict.”
But legacy systems set up for the multichannel world can prevent a retailer from tailoring their operations to the new customer journey. “Multi-channel retailing was about selling goods across each individual channel with no need to connect them, so systems were set up to manage this scenario,” explains Shave. “The emergence of omni-channel has changed everything.”
“Retailers need to be there to receive customers in the shopping channel they choose when they choose it,” adds Dina Townsend, senior director of retail strategy at Scala. “It is not enough to chase the consumer down the channel; brands need to be there waiting.”
“Consumers don’t think in terms of channels but brands, meaning the brand promise has to be consistent everywhere,” adds Tony Bryant, K3 Retail’s business development director. “The difficulty is that there are many omni-channel permutations and one failure to satisfy the consumer can lead to damaged brand value and affected loyalty.”
Today, with so many ways to engage the customer, retailers must ensure that each point of engagement is personalized, consistent and connected. “Shoppers want to feel like they are unique,” says Shave. “They don’t want the same product or service as everyone else; they want a personalized experienced tailored to their needs.”
As Bryant explains: “It shouldn’t matter whether the consumer chooses to buy online or direct, with the right systems in place, retailers can give the customer the same experience.”
“Retailers need to orchestrate all digital capabilities to create a holistic and consistent customer journey and unique experience,” adds Fabio Chiodini, global consumer products and retail lead at Avanade. “To succeed, retailers need to provide a reason to engage customers and deliver relevant, convenient and delightful services able to activate brands and create ‘contextual epiphanies’ across time and space.”
Better use of data and analytics can enable this personalization and engagement, according to Ecrebo’s Carter. “Retailers need to make use of the data surrounding what the customer has bought, where and when they have shopped, and what channels they have used,” he says. “Only with real-time visibility of these data points can you deliver a truly personalized, seamless and differentiated experience.”
Getting this right could equal significant gains for retailers. According to research from IDC and Microsoft, providing a personalized shopping experience with detailed product and service information according to customer preferences could lead to a gain of US$9 billion for retailers.
“Retailers are using the data they gather in several ways,” says Capgemini Consulting’s Albright. “Predictive consumer analytics, which includes sophisticated algorithms and data mining activities, identifies current and historical facts to track shopping patterns. Examples of data reviewed include preferred items, colors, sizes and total cost.”
“Big data can be broken down into internal and external sources,” adds Townsend at Scala. “Used effectively, these aggregated sources give retailers remarkable insight into their target audience. It helps determine who is in their store and what they are buying. These predictions help shape content strategy, and inform and optimise marketing calendars to ensure the right message truly finds the right customer. The use of geo-location also helps retailers pinpoint a customer’s proximity to their store or location within the store, and tailor the messaging accordingly. With the right digital platform in place, brands can now use a customer’s buying patterns and preferences to target right to the individual.” So, has OSC passed the test? “I was really impressed with the discovery phase, but I wanted to see what they were capable of. And the implementations have been a real success,” says Foster. “I’ve also received positive feedback from each of the business teams that have worked with OSC on these projects. They’re finding the sites really easy to use. While users won’t need much training to get up and running on the new sites, the next step is to build up all the content correctly.”
“Online, you can leverage typical online data capture feeds such cookies, previous online purchases and e-mail,” adds Carter. “In store, you can use interactive displays and media that allow you to explore or discover more about the product. From a bricks-and-mortar perspective, the most effective method of using real-time data to enhance the customer shopping experience is demonstrated by targeted promotions at the till. This currently represents the single most effective way to make real-time, instore data ‘actionable’, helping retailers to both anticipate future needs and improve the lifetime value of the customer.”
To succeed with this strategy, retailers need to be agile and flexible so they can access critical information in real time and then communicate with consumers in the appropriate manner. “You want customers to feel like they’re part of an intimate and exclusive relationship with your brand, so reflect this in the language you use, for example,” says Bryant. “Find a tone that’s right for your audience, it might mean dropping your corporate marketing language for a more informal approach.”
Townsend says: “True analytics analyses the outcomes of content strategies against business goals, optimizes the messaging and predicts best results. This affords retailers a level of accuracy in their messaging that has previously been left to assumption.”
Convenience is also key and retailers must make sure that shoppers don’t have to repeat stages of the shopping journey when they move across different channels, or wait a substantial amount of time for a web page to load, for example. “Ease-of-use and speed of interaction across all devices is key to success,” says Jan Rosenberg, global head of Lifestyle at Dassault Systèmes 3DXCITE. “Today´s consumer is impatient and does not want to wait. Bearing in mind that lengthy download times are a killer for any application, consider not only the user interface, but also the amount of content you’re delivering and ensure that it is optimized for specific devices.”
When an omni-channel strategy is executed well, retailers can achieve significant benefits. “Retailers that are investing in omni-channel are achieving increased sales through alternate channels, thereby leading to improvements in inventory accuracy and productivity, reduced shrinkage and faster consumer demand fulfilment – which, in turn, leads to increased revenues, enhanced margins and improved consumer retention,” says Albright.
The strategies to achieve this will blur the boundaries between channels, which is the near future of omni-channel retailing, according to Avanade’s Chiodini. “For example, customers now expect on-thefly purchasing such as completing a purchase in-store using their own mobile device,” he says. “Or customers want to be able to use their mobile device to find items while shopping in the store or arrange for an appointment with a store associate. In these examples, the mobile commerce and instore channels blend to provide a superior experience.”
Successful retailers will also integrate digital technology and online selling techniques in store to rejuvenate the high street. “Providing Wi-Fi in store will allow consumers to share their experience with friends,” says Shave. “Then there are mobile POS solutions, which allow store associates to move round the store with a consumer while they are considering what to buy. Or a retailer could create their own app that alerts store associates every time a loyal customer comes in store.”
The role of the store may also change from being a place where all stock is held to instead becoming a showroom or fulfilment center. “Retailers are revaluating their retail estate in line with the changes in customer journey,” says Shave. “Click and collect is only just the beginning. UK retailer John Lewis allows consumers to order online and pick up either at its store, in parent company Waitrose or at newsagents and petrol stores. A number of retailers are also trying drive-through initiatives, such as Carrefour, Walmart and Asda. And Amazon allows consumers to pick up from lockers with a personalized code. Blending these options with more flexible home delivery options helps bring together online and bricks-and-mortar stores.”
“Further, with post-sale service, the store can be used as a local service center to get issues resolved, such as making alterations on an item bought online,” adds Chiodini. “The physical store gives traditional retailers many more options to be responsive to customers.”
To achieve this, active collaboration is key. “Pure play retailers can work collaboratively with distribution partners to ensure their messaging is incorporated into the in-store strategy,” says Townsend. “This methodology shares the costs associated with content creation and management, ensures consistency in messaging, and moves products while assisting the retailer with achieving their goals. An example is for a beverage or spirit retailer to work with a restaurant chain in promoting and even developing instore drink specials or upselling a meal with a beverage.”
With the right technology in place, retailers can serve consumers at any point of their shopping journey – whether it be research, shopping, purchasing or fulfilment – in any part of the world, on any device in a consistent, personal and differentiated way. The good news is that the technology to enable this is already available. “All the concepts and solutions for successful omni-channel retailing exist; what retailers need to do is execute them,” says Rosenberg. “Now is the time to invest and define a holistic strategy, otherwise retailers risk falling behind.”
“Microsoft Dynamics AX for Retail, for example, can help retailers and brands maximize opportunities to cross-sell products and improve customer service by providing a single view of the customer across every touch point,” says Shave. “Combined with other Microsoft solutions such as Office 365, Xbox and Skype, retailers have a single vendor integrated solution for reaching customers when they want in the manner that is preferred,” says Shave.
“Technologies like Dynamics AX give the modern thinking retailer a true omni-channel solution,” adds K3’s Bryant. “So much functionality has been added to the latest version, from a new modern POS and mobility using Windows 8 applications across devices, to call center management and enhanced warehouse management.”
But technology for technology’s sake is not enough; retailers need to align their entire operations with the omni-channel retail model and promote it throughout the entire organization. It takes a shift in company culture. “Until you see a convergence of processes, people and IT, you will always have a disconnect between different channels,” says Shave. “And it all needs to be about what suits the customers – retailers should keep up to date with how customers are using new technology and embrace any change in behaviour and trends to ensure they stay ahead of the curve.”
Ultimately, as Bryant explains, a successful omni-channel strategy should not only guarantee a retailer’s survival, it should deliver the kind of revolution in customer expectations and experiences that comes along every 50 years or so. “Retailers will find that the digital and physical arenas complement instead of compete with each other, thereby increasing sales and lowering costs,” he says. “In today’s environment, information and ideas can flow freely and retailers that learn to take advantage of both will be well positioned for success.”