No one likes it when the left hand doesn’t know what the right hand is doing. You buy an item from a retailer’s e-commerce site, only to find that it doesn’t fit. When you return it to the same retailer’s physical store, the clerk looks at you blankly and says, “You bought it where?”
In 2018, customers want to deal with retailers in ways that make sense to them. This often means both online and offline interactions. Wouldn’t it be nice if the retailer recognized you and understood your needs and your history, whenever and however you shopped?
Starbucks nailed this problem with an app straddling both worlds. Customers can charge their loyalty card account online and use it to pay for goods physically in the store with a smartphone. The app also lets them order drinks in advance on their mobile, directing them to the nearest outlet, where their brew will be waiting for pickup. The result? Better customer service, and a wealth of analytics data for the company.
The Starbucks app is a great example of what experts call omni-channel retail, combining online and offline interactions to create a single, seamless customer experience. Search an omni-channel retailer’s site for clothing accessories and get targeted special offers on those products in the physical store. Conversely, buy dress shirts in-store and see tailored offers for cufflinks when you log into the retailer’s web site. These scenarios are possible when computers managing the physical stores talk to those running the e-commerce environment.
Whether they are in the store or on a mobile phone (or possibly both at the same time), an omni-channel retailer will have a 360 degree view of the customer across all channels. One company taking this to the next level is Nike. It has closely integrated not just its own stores with its online store, but other stores, too. Nike customers in some countries can order online and have their product delivered to a local convenience store or gas station for easy pickup.
Nike has also blended in-store experiences such as in-store treadmills that analyze a customer’s running style and recommend the best sneaker. It uploads data from this and other in-store activities to NikePlus, the personalized app that also documents running data from its Apple Watch app.
The result is an ocean of data that Nike can use to personalize product suggestions across all channels, a store that becomes a destination as much as a place for transactions, and a high level of customer loyalty.
While Nike races ahead on omni-channel, others haven’t laced up their shoes yet. Retailers that don’t embrace both digital and brick and mortar channels together may risk losing sales to other players. PWC’s 2017 Total Retail Survey quizzed 24,000 shoppers in 29 territories and found that globally, 28 percent of consumers shop less often at retail stores.
By seamlessly integrating online and offline channels, retailers can encourage customers to use their own retail ecosystem rather than going to a third party vendor. They can create a retail ecosystem that is more than the sum of its parts.
The PWC report found that budget constraints were the biggest barrier to omni-channel experiences for retailers. In an often low-margin business, it can be difficult to make those investments. When money is available, it gets absorbed by difficult technical challenges; 20 percent of respondents said that it was difficult to integrate existing systems. If your in-store technology infrastructure was already in place before you got into e-commerce, getting the two to talk to each other may be tricky, but it is far from impossible.
Tackling omni-channel retail takes a mixture of skills and investments, as companies adjust their technology platforms, their marketing strategies, and their supply/logistics operations to handle new customer demands. The potential rewards are impressive, though: A 21st century retail environment that meets customer expectations.
About the Author
Danny Bradbury has been writing about technology and business since 1989. His clients have included the Financial Times, the Guardian, and Canada's National Post.
All content provided herein is for educational purposes only. It is provided “as is” and neither the author nor Office Depot, Inc. warrant the accuracy of the information provided, nor do they assume any responsibility for errors, omissions or contrary interpretation of the subject matter herein.
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