The omnipresent subject of conferences, analysts’ speeches, and media criticism of retail could be summed up in one word for years before the pandemic: omnichannel. Selling, marketing, and fulfilling across multiple channels became the overarching goal for retailers. However, many failed to achieve it.
Over the past few years, omnichannel has undergone several changes. It’s critical to consider “channel-less retail” or the “everything channel” in a world where relying on historical data could be misleading.
Omnichannel rose to prominence because silos and disconnects between discrete channels compromised customers’ interaction with suppliers: browsing, purchasing, upgrading, delivering, and returning all came with challenges. These silos and disconnects made it difficult for customers to access their channel of choice, whether a customer service representative, a bricks-and-mortar store or a website.
Omnichannel was seen as a noble pursuit. Therefore, retailers created multiple entry points because “the customer is always right” and customers deserved the chance to choose their preferred channel. But these multiple channels led customers to one destination: an underlying mess where inconsistency of look, feel and experience reigned and when switching between channels was problematic.
Retailers must focus on productivity and experiment with new methods of offering consumer access without hassle. They need a system similar to the serverless computing paradigm used in IT, where the hardware is managed by someone else. In a nutshell: the friction of business infrastructure needs to be removed so retailers can provide the simplest possible processes for buyers to interact as they please.
Smoothing the path to omnichannel
Today, it is essential to relieve retailers from the stress of creating and experimenting with omnichannel. The pandemic accelerated digital transformation and highlighted that retailers who fall behind in the digital transformation stakes find themselves at a significant competitor disadvantage to those ahead of the game.
When COVID stay-in-place orders were introduced, wreaking havoc with global supply chains, organisations realised reinventing themselves was nowhere near as difficult or as time-consuming as they had imagined. Art galleries became virtual, theatres became streaming media entities, restaurants became grocery stores and delivery services. With most of Australia’s population in lockdown and shopping online, delivery of physical goods became a key real-world component of the omnichannel shopping experience.
As consumers’ online purchasing grew, so did their expectations of the experience. This put pressure on retailers to lift their game, to offer more flexible, customer-friendly delivery options. The winners in this game offer the smoothest of rides to customers, putting them in the driver’s seat to mix and match channels throughout their buying journeys without having to think about the multiple channels they use to seek, purchase and receive products.
Australian retailer OZ Hair & Beauty has been selling online since 2012 and in September 2020 integrated a new service from Australia Post, Collect, into its online purchasing portal. Collect offers parcel delivery to, and collection from, Australia Post lockers accessed via a PIN emailed to the customer, or a range of retail outlets, many such as pharmacies with extended opening hours. OZ Hair & Beauty has integrated this service into its shopping cart. Customers are presented with a range of delivery options and collection points when they check out. Australia Post then keeps them updated on the progress of their delivery. This resulted in a 20% rise in first time delivery from July 2020 to July 2021, receiving a perfect Net Promoter Score of 100 for the Collect service, proving its popularity.
Another success is Forever New, a global fast-fashion retailer with headquarters in Australia. With an extensive range of garments in its online store, its key challenge was to get customers to these choices and ultimately make a purchase. It therefore implemented an AI-driven recommendation engine that automatically suggests products with patterns, style, colour or shape similar to the product images a customer is viewing. This was positive for customers and also in-store staff that can also use the system to make recommendations to customers when they come in. The Forever New result was a significant increase in the number of items bought and a significant reduction in page exits.
It’s all about the data
Both examples have in common how these online retailers collect and use customer data. They are developing deeper customer intimacy to streamline and manage the customer journey.
But there’s a catch: retailers can no longer rely on previous patterns of behaviour to call on what buyers will do next. They must operate on the basis that the pandemic changed everything and adapt to a new age of uncertainty. This makes real-time analysis essential, as it can no longer be dependent on historical trends and behavioural patterns. To win, retailers need to move faster and revise faster than ever before, translating streams of current data and hard-won experience into changing consumer habits.
Increasingly, the formula for success will be data analytics combined with domain and niche expertise. The technology ethnographer Tricia Wang notes that many organisations only pay lip service to getting close to customers because they suffer from “reporting overload”, pay too much attention to quantitative data and not enough to qualitative and ‘thick’ data. They are also failing to make sufficient use of tools that can help them, such as AI.
They are not helped in these endeavours by the dearth of data scientists, but they also need to boost their use of critical thinking: to be more objective about querying facts and insights to discover outliers and why following global, empirical data may lead to a dead end. In a globalising retail environment, they need to seek out anything that goes against trends, figure out why and then adjust their strategies for new countries, new buyers, new tools and new channels such as the metaverse.
They need to be more discerning, more opinionated and rely much less on hunches. The pandemic has changed retail forever on the sell side and the buy side. We need to go beyond obsessing over omnichannel, and start to really understand it, and implement it.
David Rosen is technology and customer leader at TIBCO Software.