Navigating the future of omni-channel retailing
- 12 November, 2015 09:05
When ecommerce burst across the Internet in the late 1990s, it was natural to see it as something new and different. Traditional retailers regarded pure-play online competitors as alien invaders, and those who set up a clicks-and-mortar model often did so using separate divisions with unique tools and processes.
But as retailers gain maturity in their omni-channel ambitions, many are finally coming to realise customers don’t perceive them as a separate group of channels, but as a single brand.
Meeting consumer demands for a unified experience means bringing together systems and processes across different channels, and is increasingly leading to the same tools being applied across all. For progressive retailers, the future is not an omni-channel experience, but a unified one – perhaps better described uni-channel.
“This idea of a universal experience, or experiential commerce, is becoming the focus of retailers,” says David Geisinger, retail innovations and product marketing chief for the Magento commerce platform. “And it’s not because retail had the idea, it’s because that’s what consumers are forcing retail to work towards.
“As shoppers, we don’t think of shopping as a channel experience. We think of it as a brand experience.”
Customer expectation of their experience in store is the same as they expect online, across activities such as access to inventory, product knowledge, and ease of check out. At the same time, the information regarding a customer that is resident in CRM and ecommerce systems should also be available to floor staff in a store environment.
“Consumers are demanding much more relevancy and personalisation, which they historically have received online with recommendation engines and digital commerce platforms,” Geisinger says. “But that hasn’t translated in store.”
Winning over with experience
One company running with the concept of a unified experience is Winning Group, which picked up the award for Best Customer Experience for its Appliances Online pure-play online retailer at last year’s World Retail Awards.
Chief executive, John Winning, says the win was the direct result of leanings he gained working with his father in his family’s century old retailer, Winning Appliances.
“We aim to offer the same high level of customer experience across every business and channel of the Group, whether that’s online or offline,” he says. “Some of the learnings acquired through our online presence are universal and can be applied to every channel used by the Group, however, there are obviously some insights specific to an online experience.
“As online involves less face-to-face interaction, we try to replicate the traditional service found in a store in a modern context, by offering 360-degree imaging and product videos, 24/7 customer support and live chat.”
Winning says the company’s CRM integrates Web analytics, point of sale/ERP information and phone interactions between all channels to deliver a single customer view. This is currently being rolled out to customer service representatives.
“This single view has allowed our marketing teams to better understand the customer lifecycle and whether they are focussing on replacement or renovation requirements, as the businesses within the Winning Group attract different customers,” he says.
Unifying channel experiences is being picked up by other Australian retailers, such as Magento customer, Harvey Norman. Long criticised for its cautious adoption of online retailing, Harvey Norman is now showing progressive thinking in its desire to translate the benefits that customers experience online into its stores.
Chief digital officer, Gary Wheelhouse, says customers have embraced the more extensive inventory they can access online, along with the site’s live chat function. Chat staff have immediate electronic access to information regarding all of Harvey Norman’s product range, including availability – something floor staff can’t currently match.
The goal now is to bring the two experiences together, starting with improved training for floor staff. But that is just the beginning.
“In our mind, we still have a lot to do in terms of getting the salesperson in the store into the ecosystem that we’ve built,” Wheelhouse says. “Without giving too much away, the logical thing is you look to try and understand how you make your people more mobile.”
Whether that will lead to Harvey Norman sales staff patrolling stores with tablets in hand, Wheelhouse won’t say. But the strategy will focus on eliminating tasks where the customer experiences ‘friction’ – finding a product, finding someone to help them, and standing in a queue waiting to pay. None of these tasks create friction online. So far this has led to the rollout of electronic receipts, but Wheelhouse says much more can be done.
“We think we are a good way down the road in giving online customers those things that they love about stores, and that is great product range and the ability to be able to talk to somebody,” he says. “But the reverse of that – trying to give customers in store the things they love about online - that’s hard.
“They are nice big problems to solve. But when we do solve them, we are seeing good traffic to stores.”
UP next: How to bridge the gap Australian retailers still face in providing consistent experience across retail channels
If Harvey Norman still has a long way to go in providing a unified experience for consumers, it is far from alone among Australian retailers. According to A/NZ business development director for SAP hybris, Stuart O’Neill, while retailers across the world are seeking to be more consistent across channels, Australian retailers have been lagging.
The Australian Digital Experience Report released by SAP in August surveyed 3000 customers and found an alarming gap between the digital experiences and delight that customers expect, and what brands are actually delivering. But O’Neill says there are signs that they are seeking to catch up.
“I’d say the US is about five years head of us, and the Europe is three,” he says. “We are closing the gap and we are doing it quickly, but we are not doing it as quickly as customers expect us to.”
What customers do expect is contextual, relevant experiences that are consistent across all channels.
“They don’t want to be dictated to as to how they buy,” O’Neill says. “They want to be engaged in the purchase process. We are seeing organisations who get this right getting massive dividends in terms of cost savings from being able to retain those acquired customers, and they are seeing benefits in terms of increased sales from the loyalty of these customers returning.
“The traditional way of building silos inside an organisation doesn’t work. These has been the elimination of online and offline revenue. It’s just revenue.”
The barriers to such a vision are numerous, however, and many of them are very human. O’Neill says retailers that pursue a unified path have to change basic principles such as how sales and commissions are attributed. These challenges intensify when a retailer finds itself with limited control over some of those customer touchpoints, as is the case for many franchise operators.
One example is Barbeques Galore, which has two fifths of its stores operated by franchisees. According to online marketing manager, Charles Zeitunian, the franchise model brings additional complexities in achieving a unified experience.
The company recently relaunched its ecommerce platform on Magento, which Zeitunian says has delivered promising early results.
“The numbers are up and the sales are up,” he says. “It allows us to have all our customer data held in the one location, and also integrates key touchpoints from ecommerce, store POS and our internal customer order management systems into one single point of view.”
But that benefit only extends to the company stores. Zeitunian says the franchise stores operate a separate POS system, and don’t have company-wide access to stock levels. Hence, if a customer orders an item online and chooses to click-and-collect with a franchise store, head office may have to manually confirm if the store holds it.
“If the product is not at a franchise store we’ll put it on a truck and get it there as quick as we can for a customer,” he says.
Zeitunian is confident that challenges such as these can be overcome with time.
“The omni-channel vision is something that is thrown around a lot in Australian retail,” he says. “For us, we have it tattooed across our arms almost, and we are aligning the business to really chase after that.
“We are living and breathing that, in the way we have hooked the ecommerce ecosystem into the stores. Despite all of the technical challenges, as an ecommerce team we have led the way to provide that visibility of the customer through each of touchpoint that ecommerce and the store guys are now using.
“The next level of that is how you amplify that data for conversion, customer understanding and improving the store environment.”
Ideas for innovation
How far retailers can go in unifying their online and store experiences remains to be seen, but a slew of ideas are waiting in the wings. Geisinger says one concept now being tested is of a universal cart, which is effectively an extension of click-and-collect, where a customer can start their shopping journey online and then pick it up instore.
Magento also has a number of retailers deploying systems he describes as commerce order management, which provides a seamless view into product and availability regardless of the channel.
“Whether you are on the Web or in-store, it doesn’t matter where that product is located,” Geisinger says. “It presents itself as available to the customer. And so it comes a process issue for the retailer to ensure that the customer gets that product.
“These organisations are rethinking how they sell and putting how the customer engages with the brand before their own brand creative, before their own physical store layout. And they are really starting with how the customer wants to buy.”
Read more about Australian ecommerce brand journeys:
- Launching an ecommerce platform: le coq sportif’s brand story
- eBay makes omni-channel retail a reality for other brands
- How Kathmandu is future-proofing omni-channel ecommerce
- CMOs talk digital delivery part 1: The Co-op's Greg Smith
- How Bras N Things is serving up customers the right product fit