The future is omnichannel, write Rasmus Houlind and Colin Shearer
Omnichannel is more than a marketing buzzword. It refers to a significant shift in marketing practice, to the point at which the entire organization has recognized that customers’ buying decisions are not linear.
Consumers today do not distinguish between e-commerce and commerce. Nor do they care whether they buy from a local company or not. They do, though, expect a seamless experience when switching between digital and physical sales, and between communication channels; and they get annoyed by irrelevant offers that fail to take account of their history with a company.
As a result, more and more companies are moving from a sales-oriented multichannel focus to an omnichannel focus, where customer profitability and customer loyalty are at the heart of all major decisions. A 2017 study from Brightpearl, The State of Omnichannel Retail, found that 91% of retailers already either had an omnichannel strategy or planned to invest in one. However, only 8% felt that they had mastered it. While doing research for our book, Make It All About Me (LID, 2019), we found six common disciplines shared by that minority of market leaders – disciplines which have made firms like Sephora, Amazon, Nordstrom, The North Face and Telenor masters of omnichannel.
How are these six areas set to develop in the years ahead?
1 Being recognized in the physical world will become the norm
Leading omnichannel marketers recognize their customers across channels and ask for permission to communicate directly. At Forevermark’s Shanghai jewellery store, Libert’aime, customers that have signed up through WeChat and booked a try-on session are automatically recognized and greeted by name on arrival. This comes as a surprise to many customers today, but it will become the norm. Consumers will expect sales associates to have full insight into their previous purchase patterns and communication history, and to be treated accordingly.
2 Data collection will be ubiquitous
Today’s leaders collect data systematically from all touchpoints and channels; that will become ubiquitous. Amazon collects customer data from Amazon Prime, Kindle, Echo, AmazonGo, Amazon.com and a host of other services. Data sources aren’t limited to website visits and email clicks, but include physical presence recorded by camera, voice recorded by Echo, and rich behavioural data, for example from Kindle devices. In the future there will be no customer interaction without data collection.
3 Algorithms will bring superpowers to marketers
Modern start-ups such as the audio book subscription service Storytel.com are already using AI and machine learning techniques to systematically uncover the most important moments of truth with customers’ use of their services. They extract features such as sentiment and excitement curves for brand new books that no-one has even read – except the algorithm. Technology will offer a hitherto unseen variety of insights on customers, which can be leveraged with each customer to gradually increase their satisfaction and lifetime value.
4 Marketing becomes service
Today’s leaders already act on their data and insights to create better communication, service and CX (customer experience). What we used to think of as marketing will become helpful communication that guides consumers to take the right decisions earlier – whether that’s putting the next audio book on the reading list, or purchasing that outdoor jacket from The North Face before cold weather hits.
Consumers will find this useful, not creepy: in fact, they will abandon brands that fail to use their data to create truly personalized and meaningful customer experiences.
5 Customer metrics will overrule channel metrics
Successful omnichannel companies such as Nordstrom have started reporting to the stock market using customer metrics that ensure satisfaction and profitability on a customer level. Relying solely on channel-specific metrics, such as sales per square foot or sales per channel, court danger: there is a risk of sub-optimizing the channels and damaging the customer experience.
6 Organizing for omnichannel success
Success with omnichannel marketing calls for some heavy changes in how most companies organize. But since omnichannel has become an accepted business strategy, it’s easier than ever to anchor customer-centricity with senior management, and implement the necessary changes.
For instance, Sephora in North America has merged its retail, digital and customer service departments under one roof. New organizations will be born without the inherent conflicts of interest that arise from channel-specific silos and compromise CX. New staff will come from organizations that already work in an omnichannel way. Systematic training in understanding omnichannel and using digital tools will be a mandatory part of employee onboarding programmes.
We don’t expect to see brands suddenly leap-frog to a position of omnichannel excellence and customer centricity, because these six predictions aren’t based on simple dos or don’ts. They are guiding principles for where marketers should focus and how they can gradually improve the customer experience, while balancing resources and personalization efforts to maximize profitability. The omnichannel hexagon (above) is our way of slicing the elephant into small bites and providing a channel-neutral common ground for understanding and enabling collaboration around customer centricity.
These six predictions may sound like science fiction for incumbent brands. If that’s the case for you, it’s time to start catching up: they are already reality for today’s omnichannel leaders.