Digital transformation in brick & mortar retail. Part 1 — Omnichannelisation
Now, the traditional example in any article about online/offline retail: Amazon. “Amazon accounts for 44 cents on each dollar spent in online”. Bla. Bla. Bla.
Yes, we are looking to a nascent giant. So what, there were another giants around, dinosaurs, mammoths and General Electric. A 100 years old company that saw its $500B stock wiped out in less than two decades. Why? They felt in digital transformation. They lost everything because they didn’t understand what’s happening, how customer needs are changing and yes, management was stuck in their skyscraper. A corporate bubble, same shit as social bubbles.
Amazon can fail in the same way if they don’t create a wide and integrated experience. But here, at least for now, Amazon owns the crown— they are not just opening new doors for its conversion funnel, but they are interconnecting them. Doors and rooms, like no others (till now).
Just few days ago, Amazon announced they will open a new concept store in NYC, called Amazon 4-Star. So what, just another store… Not at all. These new stores will sell items from its website rated 4 stars and above. See the difference?… So, is not only about sales, is not just another store, a new door, a new channel. It’s part of an ecosystem.
A brick & mortar store is selling goods rated 4star+ by people in online.
According to their official announcement, digital price tags in the new store will show how much Prime members are saving, the average star rating and how many ratings a product has received, similar to what shoppers can see on the website today.
To survive in the economy 3/4.0 world, traditional retail should not only build a competitive online presence (potentially the best one), but also integrates it with all the other channels, at all levels: sales, operations, marketing.
Today is very likely to see a product on an influencer’s video, touch it in a store and buy it online. Channels integration is different from creating a new distribution or marketing channel. Omni-channel is different from multi-channel.
Multiple channels = multiple touch points for the customer.
Omnichannel = data exchange and communication between touch points
For example (see the image below):
- I’m at work, search for something on Google, see an ad
- I’m clicking on the ad, just curious. I’m landing on a page, part of a promotion offer on the e-commerce site, desktop version
- Later, when I’m my way back home, I’m scrolling down Facebook timeline and I’m re-targeted with the same product line I’d checked earlier. Seems to be something interesting and I’m reading some reviews. Not decided yet.
- In weekend I’m at the mall. The mobile app is detecting the beacons installed in the store. Data are stored, I’ve been tracked.
- Two days later, I receive a special offer, including an extra service. By email and mobile push notification. Two hours between them.
- I’m opening the link and I’m buying the product online, at work.
- My account is loaded with loyalty points, now available in the app for later use.
- For some extra points, I’m asked to write a review about the product
- Two days later I’m invited to tag a friend on social media and get extra points.
Awareness, consideration and purchase are parts of the conversion funnel. They are integrating with retention and advocacy to bring future conversions.
We have different customer touch points across all the channels. E.g., the deal can be closed everywhere, the product can be bought even on a Messenger window on Facebook. Or my experience can start with an outdoor advertisement on the street and then continue in the mobile app with a push notification.
This is the beauty of omnichannelisation: it creates a seamless and natural customer journey by melting together the all channels and experiences. But deeply behind, is a lot of data and a painful organisational process. Because omnichannelisation isn’t only about the concept, cloud or fancy technical stuff, is a about driving a conscious and assumed digital transformation approach at all organisational levels.
How can it be done?… Stay tuned for the next episode :)
Takeaways:
- multi-channel is not omni-channel
- start thinking in terms of a platform rather than channels
- first step: define your customer touch points.
- observe and learn. know your customer
- prepare for data acquisition. no data is too much data
- change the way your organisation is structured — build a customer oriented approach rather than channel based
