Omnichannel is all about the Customer

Stephen DeAngelis

March 29, 2018

We all know the World Wide Web introduced customers to a new way of shopping. The rise of e-commerce has played havoc with traditional brick-and-mortar stores — which all struggle to counter the so-called “Amazon Effect.” Omnichannel operations were supposed to be traditional retailers’ solution to the Amazon challenge; but, many retailers and manufacturers have struggled to master the concept. Just as some retailers are beginning to master omnichannel operations, Jason Rosing (@JasonRosing), founding partner of Veridian, asks, “Is omnichannel dead?”[1] He asks that question in response to an article published a couple of years ago by Michael Jones (@mdjonesy), a business consultant. Jones bluntly wrote, “The omnichannel approach that retailers once took is dead. Just ask your customers.”[2] Rosing dismisses the notion that omnichannel operations are dead; but, he agrees with Jones that customer experience is the true measure of success. He explains, “While omnichannel is still going to be around, denoting the blending of channels into one experience, the customer experience in omnichannel will become the new unit of measure for success in modern shopping.” Consumers now take the digital path to purchase more often than not; but, they don’t care what retailers call their shopping journey or what strategies they use to make the shopping journey a seamless one. They do care about having a good experience.

Omnichannel Operations and the Consumer

Steve Halford, Group Managing Director of Crystal, writes, “This isn’t a simple battle between online and bricks and mortar. The challenge is combining the two into a seamless, slick, omnichannel experience that matches how people are getting used to buying and how they like to buy. The first, crucially important part of the customer journey takes place mostly online, before formal contact is made. The challenge is in coping seamlessly with buying anytime, from anywhere, with any device. And in managing customers’ different information needs.”[3] The consumer’s digital path to purchase begins with a search for information and ends when a purchase is fulfilled. Every touchpoint, from beginning to end, needs to please the consumer. Jones explains, “Online, offline, mobile. E-commerce, m-commerce, brick and mortar. These things are beginning to blur more and more, because, really, only one thing matters: Your customers, and your customers are digital. It doesn’t matter if they’re in your store with phone in hand or browsing on a tablet from their couch. They want one seamless experience, and they don’t care what you call it.” Rosing adds, “It is just shopping. Omnichannel is shopping. Omnichannel is just business. It is the standard way consumers interact with retailers, so companies must turn their attention to how they can convert shoppers into final purchases.” The following infographic by PK4 Media suggests some ways marketing strategies can be tailored to the omnichannel environment (click to enlarge).

Referring to the infographic, Laura Forer (@LauraFWrites) writes, “A truly omnichannel advertising campaign is not just about the ability to have ads on those different channels, but also to have a well orchestrated customer experience and effective tracking. All of which can pay off: [As the infographic notes,] companies with a strong omnichannel presence have a 9.5% increase in annual revenue, on average.”[4]

Omnichannel Operations and the Supply Chain

Getting the consumer’s attention with advertising and getting him or her to make the purchase may be the easiest parts of the omnichannel challenge. Ensuring the purchase gets into the consumer’s hands in a timely and efficient manner may be the most difficult part of the challenge. Analysts from Inbound Logistics assert, “As retailers transform their market strategy to embrace new e-commerce and marketplace channels, their supply chain must be ready to pivot as well. Some brick-and-mortar merchants are adding online sales, direct and through partners, while some online retailers are investing in physical stores. Either way, e-commerce will continue to play a larger role in retailers’ strategies. Omnichannel is not just a logistics decision. Re-orienting the company to embrace omnichannel retailing requires integration with IT, sales and marketing, and procurement as well as transportation.”[5] One big decision, of course, is where merchandise is going to be located. Analysts from Veridian explain, “Retailers must align inventory placement, its physical location, with demand. This means moving inventory to make it closer to markets where it is sells. Since using a store-as-a-distribution center is integral to keeping storage costs down in omnichannel, retailers should leverage technology and analytics to align inventory correctly.”[6]

As Rosing notes, “Omnichannel is just business.” That means the entire enterprise, especially the supply chain, must be aligned with omnichannel operations. As the Inbound Logistics analysts note, “Omnichannel is cross-functional. It’s an enterprise-wide transformational strategy, not a supply chain initiative. It will require involvement from all quarters including IT, procurement, marketing, and sales as well as logistics.” Since omnichannel operations are all about the customer, one thing not to be forgotten is returns. Nearly one-third of purchases made on-line are returned and a good returns policy can affect a business’ reputation. As the Inbound Logistics folks note, “Some omnichannel transformation strategies start with the returns process. That approach allows you to work your way up the chain from the consumer to the distribution center.” Whether you start with last mile delivery and work backward or with returns and work forward, the customer needs to remain the focus.

Summary

Rosing concludes, “Put customer experience in omnichannel at the front of your organization’s goals and mission. … Find out how your organization can empower customers and ensure a positive experience by integrating your systems and selecting the systems that reduce work, hasten order fulfillment and delivery, and reduce costs.” Jones adds, “Retailers, it’s time to turn your focus from mobile-first to consumer-first. This doesn’t mean you have to abandon mobile or online or even your brick-and-mortar stores. Rather, it implies that you use these avenues seamlessly and in line with the consumer. … We should aim to remove siloed channel teams and instead focus on a more holistic ecosystem for our businesses. Remember: Consumers don’t shop ‘omnichannel.’ They simply just shop.”

Footnotes
[1] Jason Rosing, “Is Omnichannel Dead? Of Course Not…However, the Focus Is Now on Customer Experience in Omnichannel,” Cerasis, 23 February 2018.
[2] Michael Jones, “Omnichannel Is Dead — Just Ask Your Customer,” Forbes, 29 October 2015.
[3] Steve Halford, “2018: The Year of Omnichannel,” Builders’ Merchants News, 19 January 2018.
[4] Laura Forer, “Omnichannel: The Secret to Digital Advertising Success,” MarketingProfs, 24 October 2017.
[5] Staff, “H.O.W. | How to Transform the Supply Chain for Omnichannel Retailing,” Inbound Logistics, 18 November 2017.
[6] Staff, “Implementing Omnichannel: How to Get Your Supply Chain Ready to Go Omnichannel,” Veridian, 30 January 2018.