What are the biggest obstacles to becoming an omnichannel brand?

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When considering the brands deemed most synonymous with the tag ‘omnichannel’, the usual suspects are cited – Disney, Starbucks, Virgin Atlantic; businesses whose traditions weren’t rooted in digital, but with enough financial clout and not too much IT legacy that it’s impossible to reimagine combining the digital side with offline experiences.     

Yet even the biggest brands face major challenges getting to this point. In November 2015, a study of 100 leading Chief Marketing Officers (CMOs) found that 55% of respondents had yet to implement omnichannel marketing, while 34% were in the early implementation phase, and just 11% noted a sophisticated implementation.

What are the main hurdles the large percentage of these brands have to overcome? TechTarget defines being omnichannel as an “approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device”. For this to be attainable, a business must have a progressive approach to data.    

“Many brands still strive to understand how they can use data to build the customer experience,” says Richard Robinson, MD of EMEA at Turn. “Marketers realise that inconsistent messages across channels damage the ability to build long-lasting relationships with customers, but developing a strategy to overcome this is the challenge.

“We all know that money can be wasted targeting the wrong consumer or ‘doubling up’ on messages already served. Brands are making progress in data collection and technology to help avoid this, however it’s not just about collecting the data. If these sets of data don’t interlink across channels, the customer experience will still be fragmented. This is annoying for the customer who, for example, has already purchased a pair of trainers on their laptop, but is still being served ads for the same pair on their mobile.”

Analyst dearth 

Part of this particular challenge is simply getting data streaming from multiple channels into one place. This is often due to legacy technology – in 2014, 47% of companies were citing IT roadblocks as major barriers to delivering more joined up and personalised marketing efforts, while 30% of marketers were citing disparate data sources in their CRM systems as one of their greatest obstacles.

Unable to tie data together, many marketers are used to looking at channel-specific data or wide demographics that don’t represent the customers companies are targeting.   

Conor Shaw, MD of EMEA at Marketo calls this a ‘five mouths, no ears” approach, where brands are broadcasting a one-size fits all communication strategy to customers.

“It’s not effective because today customers expect a personalised experience. As volumes of data and intelligence increase, marketers need to ensure that they are analysing the data they collect and choosing how they integrate this into their communications carefully. This avoids giving customers content shock, whilst ensuring that marketing messages are perceived as valuable and relevant.”

But, as Forrester research states, becoming this analytically driven is not something that always comes easily to marketing professionals, despite the demand for skills like analytics and data marketing increasing year-on-year. The response has been for most businesses to seek specialists to cover some of the gaps, yet a McKinsey study predicts that by 2018 the number of data science jobs in the United States alone will exceed 490,000, but there will be fewer than 200,000 available.

What if we just agree that customers want to talk when they want, on the most convenient channel they prefer in that moment? And that every interaction should use as much context as possible to be as smart and productive as possible. Wouldn’t that be much simpler? 

Added to this, digital headcount growth has plateaued, with teams averaging 94 people, down from 95 in 2014 and 103 in 2013. Many businesses are struggling to find the resources required to reimagine their omnichannel existence.

“There’s also a disconnect between the creatives and the data scientists within businesses, and this is holding back the full potential of omnichannel marketing,” adds Robinson.  

“At the moment, a creative team sits on one side of a brand and a media planning and execution team sits on the other. The union of these two teams will lead to brands creating more personalised, timely and relevant ads. Skills must be shared across departments to tackle this obstacle.”

Breaking the silos

It’s no surprise that organisational silos form a major part of the omnichannel challenge. In PwC’s CEO viewpoint survey of over 300 retail leaders, 82% said they were yet to break down the silos restricting them from offering an omnichannel shopping experience for their customers. Of these businesses:

•  74% felt they were failing to meet customer expectations across all channels
•  71% felt they were failing to keep pace with technological innovations
•  74% felt they were failing to integrate business silos and integrate physical stores with ecommerce
•  68% were failing to sustain brick and mortar sales
•  71% were failing to manage the growing costs of online returns  

Yet, of the 18% that had broken silo restrictions, the following benefits were stated:   

•  More confidence in revenue and profit growth
•  Less likely to make changes that could decrease customer loyalty
•  Investment in advanced applications for forecasting and analysing consumer demand
•  More confident in the ability to meet customers’ expectations for seamless omnichannel shopping
•   Less likely to be experiencing increased costs for omnichannel fulfilment

NetSuite’s general manager of global retail, Branden Jenkins, believes this level of improvement further proves the need for having fewer data silos across an organisation, and the need for one central management system for all data. Regardless of the business size:

“Silos and point solutions are undoubtedly one of a brand’s biggest obstacle. However, there are still businesses that use these solutions. They manually collect and analyse data from a number of systems, which requires resources and manpower, and therefore leaves room for human error. By not having an omnichannel management programme in place, businesses allow themselves to be exposed to faults, and incomplete and incorrect information. This kind of a set-up not only gives customers a sub-standard experience, it also limits growth for the brand.

“This accountability will primarily lie with decision-makers, so they need to make sure they are educating themselves on new technologies, thinking business-first and taking time to really gain an understanding of what is going on to keep their organisations at the top of their game. Customers expect a seamless experience, always. When there is even a minor disruption, it doesn’t go unnoticed by today’s savvy shoppers.”

Attention span

Savvy they may be, but today’s shoppers are also easily distracted. Research from SDL says that digital channels have an eight second window to capture the attention of new customers. A study from Mastercard also states this is directly as a result of consumers becoming more omnichannel driven. 62% of consumers research more today than two years ago. 43% of shoppers prefer online to in-store, but 80% say they are happy to combine in-store shopping with use of mobile devices.

As Shaw adds: “Consumers are faced with more and more content online but Facebook, LinkedIn and now Instagram have become content hubs for millions of users because they serve personalised, tailored content instantly. In this environment, even the most well executed omnichannel strategies are at risk of being too impersonal.

“Customers now expect direct communication with brands. With the Internet of Things and artificial intelligence like chatbots, technology offers a greater level of precision and scalability than we can have ever imagined for brands to achieve this. Effective marketing will now not only automatically deliver personalised content according to demographic targets and insight about customer preferences and interests, but it will make predictions based on the data it already has.

“A good example is - if a consumer’s car is connected to the internet and the brakes are wearing out, smart use of data allows marketers to pre-empt the need to visit the car mechanic. Depending on driving history, the car could direct the customer to a local brake shop.”

“With consumers’ attention spans at an all-time low, data-led omnichannel marketing once again helps provide invaluable opportunities for brands to collect insight about their audience to raise engagement,” Robinson adds.

“Whether it’s through first-party, second-party or third-party data, with programmatic, it’s never been easier for brands to understand their audience.”

Semantics

But whilst every cul-de-sac appears to lead back to data as the roadblock, Max Ball, senior product marketing manager for 8x8 Virtual Contact Center also suggests that this might be deflecting from the main reason for becoming an omnichannel brand:

“What about someone who is talking on the phone to an agent, and the agent can push web pages to them? Or send text messages with URLs? What about co-browsing? What about EPOS devices or stores or bank branches?

“All of these fall into different definitions of omnichannel, and the complexity of the ‘what if’ game that goes with the term takes us away from what really matters - the customer.

“What if we just agree that customers want to talk when they want, on the most convenient channel they prefer in that moment? And that every interaction should use as much context as possible to be as smart and productive as possible. Wouldn’t that be much simpler?”

As we’ll find out in further chapters of our omnichannel guide in the coming weeks, this is undeniably the right blueprint to work to. Putting the idea into practice is the true challenge.  

About Chris Ward

Chris Ward

Chris is Editor of MyCustomer. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News. He joined MyCustomer in 2014.

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14th Jul 2016 10:57

This comment from the MyCustomer LinkedIn group by member Vatsala Varun.

An interesting read :)Consumers these days see no difference between channels. They differentiate on price, service, convenience and brand. And to To keep up with today’s highly mobile, device-agnostic, omnivorous consumer, brands must adopt an omnichannel strategy.

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