Covering multiple channels, spanning numerous departments and requiring seamless IT system integration, if ever there was an initiative that demanded a strategy to get all the proverbial ducks in a row, it’s omnichannel.
With the entire premise of omnichannel being that channels and departments defy silos to work in sync, an actionable and understandable strategy is absolutely essential.
“Take this on with no forethought, and you’ll fall into the expensive trap of siloed information, inconsistent response and a poor perception of customer service,” says Dennis Fois, VP EMEA sales, eGain.
In response to this, retail leaders are already taking strategic actions designed to lay the foundations for their omnichannel evolution, with Aberdeen Group’s 2012 Omnichannel Retail Experience report suggesting that half of retailers are ensuring that there is product availability across all channels, almost a third developing an omnichannel marketing plan, and a quarter establishing relevant performance metrics.
So what strategic actions do retailers need to develop and implement to give themselves the best possible chance for omnichannel success? What is the roadmap that they should be keeping in mind?
Get executive buy-in
It’s an obvious one, but with the c-suite understanding the importance of integrating the company’s channels, the chances of breaking down corporate siloes is exceedingly slim. And this goes right to the top of the business.
“We need the support of the CEO,” emphasises Vivek Venugopalan, chief technologies, retail, CPG, transportation and government business unit at Wipro Technologies. “The initiative has to have highest level oversight to succeed and to bring all the large P&L owners together to reshape and rethink their business.”
Heidi Chapnick, CEO of Channalysis, adds: “The first step is that the c-suite really need to change how they speak about the company and align the different channels. Executives may talk about retail and the goals and incentives of the company, but employees are never given any kind of understanding of the importance of the different channels. So many businesses are still continuing to focus on retail. Some companies are now hiring c-level omni-employees to counter that and really facilitate that and force that integration because it has not been effective in getting the executive team to really engage and change the pillars of the organisation which never mention anything but the retail.”
Sometimes, however, in cases where the c-suite has an entrenched retail-centric mindset, it may even be necessary to make personnel changes to facilitate the process.
“Sometimes executives need to be changed. If you have a CEO of a company who continues to not focus or integrate or create a roadmap which incorporates the different channels, then you need to change that and some of your infrastructure. Getting that executive engagement is a crucial path because if it doesn’t come from the top, it doesn’t filter down and then you’re creating siloed work efforts in different departments.”
Conduct an internal and external landscape analysis
“First of all, understand your customer,” advises Gagan Mehra, chief evangelist at Terracotta. “If you don’t understand your customer you won’t realise if omnichannel is for you or not – because not every channel is important for every business. You may have a business where nobody interacts with your business on the social networks. So it doesn’t make sense to invest in every channel if you realise it’s not something for us. So understanding your customer, you know where your customer is, and that’s very important.
“The second thing is: understanding your competition. Once you understand who your customers are, how can you use your customers, because you have competition already doing something on these channels.”
Chapnick adds: “Look at the external landscape – who are your competitors online, who are your competitors in the store, what do you need to do to leverage yourself and your website to have the functionality and the pieces of core and supporting components that customers need so that they will come to your site instead of somebody else’s.”
An analysis of this information will then allow you to prioritise your strategies and investments.
Chapnick continues: “A lot of times infrastructure needs to be changed because often your skill sets or the people you have in place are based on 20 or 30 years in retail. They don’t have the web or mobile experience, for instance. So you have to look at their skillset and sometimes it’s a case of moving people around and sometimes it’s a case of having to change some people for those who have a better understanding of the web or mobile channel. It is an important step because it helps to break down the silos. It requires a lot, however, and sometimes change management can be rough.”
Create an IT engagement model
One of the big siloes to break down traditionally exists between IT and… well, everybody else. For an omnichannel project to be a success, it is imperative that there is effective communication between IT and the other departments, and that IT is absolutely clear on the initiatives that should be prioritised.
“You have to make sure that the business is engaged and focused and aligned, and once you have that alignment and you are going to build your omnichannel business, then you need to be in the driver’s seat with the IT team,” explains Chapnick.
“You can’t let IT run the business by letting them say ‘this is too many hours of work, and if we do this project we can’t do this one because it takes much longer’ and so on. Very often IT is running not only the enhancements and functionality, but they are also creating the business plan and the business cases without having a full understanding of the business needs. So the business needs to be transparent with the IT team, and they need to work collaboratively together. The business drives IT and not the other way around – it’s really important to get that straightened out.”
Roll out an employee engagement engine
The next part of the plan is operational execution, and specifically an employee engagement initiative to ensure there is deployment in all areas of operation.
Chapnick says: “You need to engage your field employees by training them and getting them to be the ambassadors for the integration of your channels of sales. This can be difficult to do because there is still a mindset of not wanting to cannibalise the store – ‘we don’t want to take business away from the store’. So the training needs to incorporate certain facts such as that the omnichannel shopper is five to seven times more valuable on an annual basis. You have to execute business planning 100% effectively or you will not be successful. And this is where many people fall flat, because the first thing that gets cut is training money because it is not a tangible thing and it’s not directly mapped to an ROI.”
Develop marketing plans that are integrated
“You need to centralise your marketing and you have to make certain decisions to spend the money to promote your web – because one in ten people online follows up with a purchase in store, which is a significant amount. So you must create that understanding to get the marketing team to break those silos down – and marketing id probably one of the most siloed departments in the company, which is where we falter a lot,” explains Chapnick.
“You have to understand what marketing methodology works for online and then integrate it in your logo, in your print ads, in your store, on your trucks and so on. But also internally you have to understand how online marketing is different. Because it’s totally different and you need to allocate and spend funds to develop your online marketing, search engine optimisation, buying keywords, having the right content on your site, using tools that engage customers and keep them motivated, spending money on a recommendation engine, on ratings and reviews, and social media… so it is very different to traditional marketing.”
Provide 360 degree customer-centricity and care
This is the Holy Grail – the 360 degree view of each shopper, the single view of the customer across every shopping channel.
“You can look at your existing technology and audit your ecosystem and look at experiences across the different channels and find the gaps and try to align them by doing lightweight business process work, or more heavy integration work, or if you really have this inflexible technology infrastructure that is weighing you down you may want to look at replacing your system,” says Kate Leggett, principal analyst at Forrester Research.
“You need to look at your people factors and make sure that your agents, even though they may be sitting in different functional organisations, have the same view of the customer, have the same view of success and know the type of customer service interactions that are aligned with the brand proposition that the company as a whole is trying to deliver.
“You can buy all the technology from a single vendor, or you can knit different technology – modern and older - to be able to allow this level of omnichannel experience. Or third thing you can do is that even if you don’t spend time integrating all the channels you can apply process discipline and just make sure that the process that the agents follow are in line with one another on all the different channels and that even if the agents don’t have all these back end systems integrated that they do have access to these systems in a disconnected way so that they can answer customer questions in the same way. So there are three different levels of effort and the last one is the easiest to do and it is all about processes and making sure that, for example, a social agent has access to the customer database so that they know who the customer is when they are talking to him on Twitter.”
The single view of the customer, across every shopping channel, is the ultimate goal of omnichannel says Chapnick. “A customer can call customer service and the data is integrated in a central repository, so that the person’s details are the same no matter what channel they shop on,” she says. “The customer can purchase in whatever manner they want to and all of their information is not only integrated, but they’re building a profile online as an individual so that the business can personalise and segment and be more relevant.”
No flight of fancy
“Online and social, in being instant and fast moving, creates the illusion that omnichannel retailers should be tactical and off the cuff. This is not the case,” warns Patrick Phelan, VP of client services, EMEA at Bazaarvoice. “Although retailers should take advantage of opportunities to engage with customers online and offline when these chances arise, there should still be a measurable omnichannel strategy in place. Why? Having clear goals and approaches ensures that your omnichannel tactics are in line with your brand and what you stand for. It ensures that you do not lose sight of the bigger goal and the fact that customers are the ones with the power now.”
While omnichannel may seem like a mammoth task to undertake, demanding that organisations tackle some of the most infamous organisational and technical challenges that have long exasperated business leaders, companies would do well to remember that the project is no flight of fancy.
“Simply put, if a business doesn’t develop an omnichannel strategy it will die,” concludes Trevor Harvey, director of planning at Saatchi and Saatchi X. “In today’s participation economy, a brand or business that deliberately chooses not to engage with its shopper audience in their preferred method of interaction chooses not to participate with them. As shoppers have developed new shopping habits, retailers need to adapt their strategy to suit these new behaviours. Failure to adapt will result in shoppers being lost to the retailers that get it right.”
About Neil Davey
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.