Omnichannel: Why the Most Innovative Retail Brands Don't Stop At Digital When Optimising Customer Experience
Omnichannel. It even sounds techy, like an offshoot of online retail. Maybe that’s why, historically, retailers have been so fixated on eCommerce innovation as a means of delivering omnichannel experiences.
But behind the hype, 80% of retail sales are still transacted in-store. That’s already the lion’s share, but even that 20% attributed to the online channel may not be what it seems. Based on the brands we work with at least, click and collect plays a significant role in this, sometimes accounting for more than 50% of sales. All of this goes to show that offline retail, or the store, is still the powerhouse.
But what does that mean for omnichannel?
Well it means too many retailers are still looking through the wrong end of the telescope – thinking first about how online contributes to omnichannel, when the starting point, logically, must be the store.
Relevance and Survival
It’s no secret that these are tough times for retail – but the businesses that survive will be those that find ways to remain relevant. In turn, that means finding sustainable models that allow them to constantly adapt in meeting the needs and expectations of customers – as we can surmise from the continuing importance of physical retail, the most important of those needs must be met in-store.
That includes being masters of instant gratification, so, that when customers want something now, and that's literally now, they can get it straight away. But it also means slick service delivery and the development of compelling in-store experiences and engaging retail theatre.
Don’t get me wrong, some stores are already doing exactly that. Halfords is a great example – as a customer, I don’t need a replacement bulb for my car headlight, I need my headlight repaired at a time and place that’s convenient for me, cost effectively and with minimal hassle.
But the brands that survive in the age of Amazon will do more. They will constantly focus on the unmet needs of their customers and experiment with ways to meet them. In my view, for omnichannel retailers at least, stores will be an essential component of this – and therefore, peak omnichannel can only be achieved by thinking about things from a store perspective.
Brands Starting to Take Note
Again, I’m delighted to say we’re starting to see brands thinking beyond the online channel, online sales and click and collect, and developing features to improve the in-store customer experience, not just to promote online ordering and click and collect. I was heartened to discover recently how The Home Depot has been focusing on precisely this kind of innovation with the The Home Depot app.
Alongside the features you would expect, such as the ability to create shopping lists and place orders for delivery or collection, the app has a range of tools specifically to support users once they are in a Home Depot store.
On detecting the user’s location, the app switches to ‘in-store’ mode and offers real-time stock information, precise product location details (specific to each store), access to detailed product information, via barcode scanning, and relevant local offers.
That’s just one example of digital transformation in retail and there is a long way to go, but it confirms many of my own beliefs based on conversations with the retailers we work with – Change is indeed in the air and retail businesses are starting to think about the online to offline journey.
In truth, these are not really new concepts, just retail fundamentals that have been lost in the rush to take the store online.
Years ago, when I was Director of Advertising at Dixons Group, we used advertising in newspapers just to get people into stores at the weekends. Why on earth don’t we using our digital channels to do exactly that? Still today, most retailer’s websites are entirely focused on selling online and treat click and collect as just another fulfilment channel.
The message to customers is not exactly one that epitomises joined up, omnichannel retail: “Not sure what you need, or want to take a look at products first? Here’s where your nearest store is and when it’s open.” That’s it.
The good news is that things are starting to change and Home Depot is not the only one thinking about its customers and how to stay relevant.
IKEA’s online experience not only tells you which store has the item you want but also offers information on where to find it and stock levels at your chosen store. Evans Cycles online offering tells you which store has stock and encourages customers to visit and check out a bike before they buy.
Businesses are beginning to work out how to use their digital real estate to drive customers into store – and this useful connection from online to offline has to be the beating heart of omnichannel.
It’s About User Needs
Not everyone wants to buy everything online, there’s pre-consideration, you may want to look at stuff, sit on stuff, try stuff before you buy and meet your friends during the process.
That’s what stores do. Added to that, once in-store you will want to understand what’s in-stock, find the items you’re interested in quickly and easily, get more information or expert advice, then maybe transact there and then on your phone, before walking out with the product. Why not?
Why can’t the website provide interesting and compelling reasons to visit a store today (like a print ad used to)? Why can’t it provide useful functions and features like The Home Depot?
Imagine a high-ticket purchase item where store colleagues know when you’ve arrived, know about your recent purchases, the favourites you’ve selected online before coming in and the questions you’re looking to answer – making your trip to the store enjoyable and satisfying. It’s not far away and its what omnichannel has to be about – at least as long as the store dominates sales.
As I intimated at the outset, I think the term omnichannel obscures its purpose – we’ve spent so long refining the eCommerce channel and extending this from online sales to click and collect, it has somehow become a branch of online.
Now it’s time to redefine omnichannel according to customer need, and that means connecting the journey from online to offline.
Ironically, a huge part of this will be digital.
Technology provides answers to questions like ‘How can the transition from online to offline be better?’, ‘What features and functions should be provided to customers in-store, whether through customers’ own devices or provided devices?, ‘How can these features be constantly improved and periodically re-invented?’, and ‘How can store colleagues be supported in the same way, with really useful digital devices and features that are simple to use?’
There’s a huge and largely untapped opportunity here, but it is absolutely not about technology for its own sake. We need to take what we’ve learned from online retail and remember that innovation needs to be about the usefulness of functionality and features for customers, not just ‘cool tech’.
It’s time to realise that omnichannel is about more than growing online sales and click and collect. It’s about a retail experience that encompasses all channels – that’s the nirvana of omnichannel.
Those brands that get it and strive relentlessly to deliver remarkable customer experiences, and remember that the store is still where the action is – will be the ones that survive.
For more information on omichannel and a customer expererience strategy to implement it, get in touch.