Omnichannel Is the New Black

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Companies are racing to provide a seamless experience across channels, with varying results.
Customer Experience

The term "multichannel experience" is no longer the reigning buzzword. Concerns about how to engage customers across different channels are being edged out by a larger challenge: connecting those channels to provide a seamless, or omnichannel experience.

The growth of mobile usage and broadband connections has made online shopping effortless and constant. Some might argue it is too easy as consumers expect to receive the same experience when they move from a brand's online sites to its customer service department or brick-and-mortar store.

Connecting insights and data in a comprehensive or single customer view is critical for delivering a seamless experience, but many companies are struggling to do so. In fact, 42 percent of companies are working to achieve a single customer view to enable cross-channel marketing and to reduce operational costs, reports Experian Data Quality, a subsidiary of the information services company, which surveyed 250 people in marketing, data management, and customer service departments in June. Only 24 percent of the respondents said they have a single customer view.

Ninety-four percent of the respondents are linking some customer information across channels and just more than half are linking all customer information. The most popular piece of customer data to be integrated across channels is the email address, followed by a customer name and phone number. At the same time, companies are drowning in first and third-party data and are investing in analytics teams to analyze the data to help them engage in personalized and targeted interactions with customers. On average, companies are investing $137,000 on analytics efforts annually, according to the report.

Retailers must deploy new tactics to preserve sales and keep up with consumer demands. These approaches include redefining the role of traditional, brick-and-mortar stores; breaking through organizational silos, and aggressively mining and analyzing data to track buyer behavior.

One of the ways that companies are deploying these tactics is by blurring the lines between online ecommerce sites and physical stores. Real estate costs are one of the largest expenses for a brick-and-mortar retailer. And as customers increasingly visit stores only to look at an item before purchasing it online, business owners find themselves maintaining expensive showrooms.

In response, retailers are readjusting their inventory data to accommodate the shift toward omnichannel buying preferences, notes Forrester Research analyst Sucharita Mulpuru."Inventory data is the heart of omnichannel [experiences]," Mulpuru says. "It allows retailers to know what item is available in what store at any moment in time."

Leveraging inventory data across a company's physical stores and online site offers several benefits. Companies can fulfill online orders faster if they ship items from stores located near the customer; customers are exposed to a wider assortment of products, and having the online presence helps offset the costs of maintaining a physical location.

Online auction and retail giant eBay saw an opportunity to help other brands reorganize their inventory systems to offer ship-from-store and in-store pickup capabilities. In January, eBay Enterprise rolled out its ship-from-store SaaS solution.

"Our strategy is around the notion of connected commerce," says Jeffrey Wilks, senior vice president of marketing at eBay Enterprise. "And our ship-from-store and in-store pickup programs are part of this omnichannel growth where we are driving customers to a retailer's physical operation."

Retailers, Wilks adds, can also drive more revenue by cross- and upselling customers who pick up their items in stores or sending targeted offers based on data about a customer's in-store and online purchases. Retailers like Best Buy, Toys R Us, and Designer Shoe Warehouse are some of the companies that combined their in-store inventories with their online data via eBay's technology.

Even though most retailers are aware of the demand for an omnichannel experience, defining that experience and how it will affect customers is a challenge, observes Bryan Kirschner, director of Apigee, a mobile app development and management firm.

When developing an app, the critical question, Kirschner says, is "how do you create an experience that people will find useful or want? For companies that have been operating in silos or channels, you have to think about the customer journey and how to innovate around that in a way that makes sense for the customer."

As an example, Kirscher points to a client, the drugstore company Walgreens, which is strengthening the connections between its online and in-store channels. Walgreens operates about 8,200 pharmacies across the U.S. and runs several ecommerce sites including Walgreens.com, Drugstore.com, VisionDirect.com, and Beauty.com.

Its mobile app includes features that are designed to help customers save time while enticing them to visit a Walgreens store. App users, for example, can print photos from Instagram and Facebook at a Walgreens store, refill a prescription by scanning the RX barcode on their phones before picking it up, and exchange text messages with a pharmacist.

Walgreens released data last year that showed people who engaged with the company through several channels were likely to spend more. Customers who engage with Walgreens in person, online, and via mobile apps spend six times more than those who only visit stores, according to the company. And those who used a Walgreens app before visiting one of the stores, but not one of its websites, generated four times the sales of store-only customers.

"Many of our [app's] features start with interactions that take place outside of the store but end up with the customer in the store where we can continue to meet their needs," says Walgreens Mobile Senior Product Manager Joe Rago.

In addition, the company could further connect its customer data across channels. When asked if Walgreens could send a customer a coupon in real time for frames if the customer prints over-sized Instagram photos, Rago responded, "We haven't crossed the bridge yet for personalized in-store coupon mechanisms that work like that, but we're still growing."

Even though most omnichannel strategies are still in the developmental stages, companies are getting closer to the single customer view that they need to deliver a consistent experience across channels, says Branden Jenkins, general manager of global retail at Netsuite, a business management software maker.

"Having a single customer view is the Holy Grail for businesses," Jenkins says. "Consumers want to interact with brands however and whenever they want to and technology is beginning to orient around the customer instead of the channel."

The consolidation of systems and data will lead the way to a seamless brand experience, Jenkins continues. "If a retailer can get a single system to maintain customer insights and order management, then you're on the right path," he says.

Organizational alignment is also key, comments eBay's Wilks. Before a company can connect data and services across silos, it needs to ensure that its marketing, IT, sales, and other departments are able to collaborate on the same goal, he says.

"Are your departments using similar languages? Do they use similar design constructs and are they based on similar insights? These are some of the things that need to be clarified before a company can move forward [with its omnichannel strategy]," Wilks says.

Focusing on the customer experience journey and what is needed to create a seamless experience will help departments align their targets, Wilks adds. "Build a rich view into how people interact with your brand and their perspective of the service or product you provide."

And finally, gather meaningful measurements. "Setting yourself up," Wilks adds, "with an integrated tracking system that allows you to see your progress, measure it meaningfully and make adjustments quickly is essential."

EXPERT OPINION
EXPERT OPINION