The Matrix guide to the Omni-channel. A Matrix White Paper
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1 The Matrix guide to the Omni-channel
2 CONTENTS: 1. Introduction page 2 2. What is the Omni-channel? page The difference between Multi-channel and Omni-channel page Features of the Omni-channel page 4 3. How to engage with the Omni-channel page Making it happen page Engaging with the Omni-channel page 6 4. Issues page Dealing with the app explosion page Managing the supply chain page Breaking down the silos between in store and online page Conclusion page 9 6. References page 9
3 2 1. Introduction: You can usually tell when something is new and emerging when there is no agreed way to spell it. Such is the case currently for Omni-channel. Throughout this document we have referred to it as Omni-channel, but you will also see it spelt Omnichannel and Omni channel and sometimes without the capital O. Omni is a Latin derived word meaning all or every. So in the context of the channel haven t we already had this with Multi-channel? Well, the answer to that question is no. In its simplest form, Omni-channel can be looked at as the next logical step from Multi-channel and as such, represents a clear advancement. About this white paper: We have endeavoured to bring together ideas from leading sources in the Omni-channel sector to present you with an easy-to-follow guide. We start off by looking at what the Omni-channel is, how it differs from Multi-channel approaches and its key features. We then go on to look at how best to engage with the Omni-channel, before finishing off by looking at some of the key issues you are likely to encounter. But, what is the Omni-channel and how do you engage successfully with it? Well, as mentioned earlier, because it is evolving there are many and varied opinions on what it is and how to engage with it. So to save you the time and bother of reading through everything out there, we have summarised it for you in this white paper.
4 2. What is the Omni-channel? 2.1 The difference between Multi-channel and Omni-channel: To make things easier, let s start with a Wikipedia definition: Multi-channel is the merging of operations in such a manner that enables the transacting of a customer via many connected channels. Channels include: retail stores, online stores, mobile stores, mobile app stores, telephone sales and any other method of transacting with a customer. Seems straightforward enough, so what does it say about Omni-channel? Omni-channel is the evolution of Multi-channel, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, bricks-and-mortar, television, radio, direct mail, catalogue and so on. Again, it sounds pretty straightforward but to understand more fully the opportunities (and threats) that Omni-channel offers, it is necessary to understand where it has come from. Interestingly, many observers trace it back to 2012 when a PriceGrabber survey was released: 3 Methods US Online Shoppers plan to Use to Shop in % of respondants Mostly in brick-and-mortar stores - 12% Primarily from a mobile device - 1% Mostly online - 42% Combine online, brick-and-mortar and mobile shopping - 45% Source: PriceGrabber 2012 Shopping Outlook survey as cited in press release, Feb 2012 This revealed how few shoppers (12%) were planning to spend their money in mostly bricksand-mortar stores. This caused many retailers to change their approach in an effort to link all their different channels. According to Andrew Solmssen of creative agency Possible 1, there are 3 factors to consider here: consistency, awareness and tracking. Consistency is fairly obvious as, if you are operating across multiple channels, you want to put out the same message to each so as not to confuse and alienate customers.
5 4 Awareness is probably a new consideration for many organisations, as each platform you are operating on needs to have awareness of the others. For example, your web site needs to know what experience a customer has had on Facebook, how they have interacted with your mobile apps and what kind of in-store digital experiences they might have had. The premise here is that customers and prospects are going to move from platform to platform on a regular basis, often to perform the same task, and that they have expectations that their behaviour in one place will influence the experience in another. The final factor is tracking, which, according to Solmssen, is the most significant infrastructure issue around the whole idea of Omni-channel. Awareness is only made possible by building a sophisticated consumer profile and by being rigorous about adding to it at every turn. All of this requires a lot of coordination between your IT and marketing departments. It also means that marketers need to think of what they re doing more as a series of products and less like a series of messages. 2.2 Features of the Omni-channel: So, we have identified that Omni-channel is the next logical stage to Multi-channel, but what are its actual features? A recent white paper from the Winterberry Group 2 highlighted 6 key features of the Omni-channel: Customer analytics and multi-platform attribution - the foundations of a deeper understanding of the customer and the engagement strategy best tuned to their needs. Rich content - optimised for context and strategic intent - enhancing the value of every consumer interaction and supporting a range of tactics, addressing both branding and performance marketing priorities. Operational infrastructure geared to the needs of customer engagement - including media buying and selling tools that support various channels (and metrics), as well as business processes, incentive structures and key performance indicators aligned with the same. Cross-platform, audience-driven media products - allowing advertisers to more readily identify and engage with customer segments through their chosen platforms. Integration of deeply engaging yet effectively disconnected - media channels including addressable television, mobile video, out-of-home media and others. Elevation of the Omni-channel strategist as a senior role - ensuring accountability and coordination of customer decision making, product development, pricing and other critical functions. We will look more about how these factors affect engagement in the next section.
6 3. How to engage with the Omni-channel 5 So now we have a clearer picture of what defines the Omni-channel and how it is different to Multi-channel, we need to understand how best to engage with it. Again, opinion differs on this, so we have included below two sources of information to help answer this question. Firstly, in a blog on Econsultancy, Darren Hitchcock, VP of Omni-channel personalisation company RichRelevance, identifies 5 important ideas for engagement 3 : Social media: Peer-to-peer communication is one of the most effective ways to sell something. Brands using social media and social communities are moving beyond the traditional advertising model and allowing customers to help build the brand, through their own discussions and recommendations. Integrate customer reviews Like social media, reviews are powerful advertising tools. Shoppers tend to trust the experiences of their peers more than brand advertisements. Companies are beginning to take advantage of the growing mobile trend to make reviews and product guides available in-store. Customers can access this information while they shop and use it to help make purchasing decisions. Being able to read reviews and see detailed product information while shopping, creates a comprehensive buying experience that can help drive sales. Technological advances in-store As technology becomes more powerful, businesses will be able to offer more detailed, personalised shopping recommendations. Instore kiosks that allow customers to interact with the products available for sale, can collect important information about things such as clothing size and buying history, allowing retailers to deliver comprehensive product guides to each individual consumer. Merge social and local: Location-based social media, like Foursquare and Facebook Places, allow businesses to use social channels to market to local customers. These services link mobile users to their friends via check-ins, showing who has stopped where and any comments they had about the experience. Businesses looking to capitalise on this, can offer coupons, sales alerts, messages about important events and more, delivering advertising and information to shoppers as they go about their daily routines. 3.1 Making this happen: All the above factors make good business sense, but making it happen within existing organisational structures can be a difficult task. Marketing, in particular, needs to embrace and understand these challenges and look closely at itself. The Winterberry Group 2 has identified what they call the New 4 Ps that your marketing department should be embracing: People - the continuous recruitment, education and performance-driven compensation of talented individuals, whose work powers the four contiguous processes that support customer engagement. Processes - the development, refinement and alignment of internal workflows, handoffs and informational feedback loops, designed to promote the optimal flow of resources (including insights), both within the
7 6 organisation and among key partner stakeholders. Platforms - the technologies and tools that support a continuous customer dialogue across each of the four key engagement processes, including: - analytical platforms, recognition / match engines and multiplatform attribution tools (insight) - data management platforms, campaign management and real-time offer management tools (decision making) - content management systems, variable content deployment engines - customer messaging/crm management platforms and channel-specific optimisation tools (engagement) Partners - the network of advisers and other third-party solution providers, whose support through consultation on creative, process management, user case development/validation and other best practices, will be critical to ensuring a continuous improvement capability, is built into the overarching infrastructure. May include agencies, database management vendors, management consultancies and other stakeholders. 3.2 Engaging with the Omni-channel: If we now return to the 6 features of the Omni-channel identified by Winterberry in section 2.2, we can look in a little more depth at the actions they recommend should be taken to effect engagement Customer analytics and multi-platform attribution: Create a unified data structure that leverages multiple streams of data to fuel a robust view of the brand, bearing in mind that a 360-degree view may not be possible, economically practical or actionable. Maintain an ongoing data-sourcing capability, which is tasked with identifying and assessing the potential contributions of first, second and third-party data sources. Deploy best-in-class data integration, visualisation and segmentation tools - such as a data management platform (DMP) - to develop custom audience segments that may directly feed into campaign execution tools. Develop and/or source multi-platform attribution models (and supporting technologies), that are closely aligned with enterprise strategy and that are continuously reviewed and updated, as the strategy evolves Rich content optimised for context and strategic intent: Leverage content repositories, libraries and personalisation engines, geared to orchestrate the dynamic management (i.e. the storage, accessibility and sharing) of digital resources. Automate the execution of targeted content (and offers) wherever possible. However be mindful that the dual demands to create variable content for targeting, while providing the ongoing content credibility that s critical for fostering consumer engagement, are not always congruous. Where necessary, this may require reallocating resources to strategic creative development and away from manual tasks, like creative production, that may be automated more easily. Leverage emerging media formats, such as native advertising, to reinforce the holistic value of a user experience, that seamlessly blends editorial and paid content.
8 Operational infrastructure geared to the needs of customer engagement: Assemble a cross-disciplinary steering committee that includes key customer-facing stakeholders from across the organisation. Define a phased implementation plan that is realistic, yet informed by the need to deliver speed-to-market as a key consideration. Identify a series of preliminary quick wins that will be attainable, as a means of reinforcing senior-level buy-in from an expanded panel of stakeholders within the company. Assess existing resources (data, creative assets, media commitments, supporting technologies, etc.) - plus the business processes that undergird their utilisation - so as to better understand current-state gaps and crystallise an ideal future state. Outline a series of channel-agnostic use cases that collectively support the organisation s customer engagement goals. Investigate internal and partner-provided options for addressing those objectives, with the goal of building a modular solution stack that includes technologies and service-driven solutions, which collectively address enterprise business needs Cross-platform, audience-driven media products: Expand the audience-driven media paradigm beyond its current narrow scope, to encompass a range of addressable media - TV, digital video, mobile promotion platforms, direct mail, etc Integration of deeply engaging - yet effectively disconnected - media channels Regularly assess media mix with an eye on identifying opportunities to leverage emerging media channels, as well as those that offer the potential for interactive customer engagement - digital and live promotions, for example - that may now be managed through parallel organisational silos. Apply the same infrastructure - grounded in customer insight, powered by continuous data analysis and furthered by automated and/or rules-driven execution - to those new and experimental media. Cast aside legacy distinctions between the value of digital and traditional media - with the goal of leveraging a combination of tools, to foster a robust level of engagement Elevation of the Omni-channel strategist as a senior role Determine the interdisciplinary stakeholders whose contributions would best support the expansion of an Omni-channel strategy for the enterprise, and task one among them to lead the effort. Identify a series of clear performance objectives and associated timelines for the senior strategist to pursue, with the goal of elevating the role to the highest level. Assign broad organisational oversight to the strategist and their team, including responsibility for customer strategy and insights, channel coordination, data management, marketing technology and other functions.
9 4. Issues So, we now have a clearer understanding of the Omni-channel and how to engage with it. It all sounds pretty straightforward doesn t it? But, like most things in life, it isn t. Like any new paradigm the Omni-channel is evolving and challenging pre-existing structures and ideas. This creates issues with current strategies and stakeholders. These need to be understood and tackled, to enable headway to be made. In a recent white paper on the Omni-channel by Motorola 4, they identified a number of issues that need consideration. 4.1 Dealing with the app explosion: The rise of the Omni-channel means that app innovation is continuing at a rapid rate, with new apps appearing seemingly every day. But customers have only so much space on their smartphones and only so much time to spend on learning new applications. That s why, on the horizon, are so called over-the-top apps, single applications that customers can use across a number of different, even competitive, retail operations. These Omni-channel applications provide customers with value when they re not in your store, then add retailer-specific functionality inside the store. This includes: Viewing a store map. Getting product information by scanning shelf or kiosk barcodes. Accessing selected social networking tools such as likes and peer reviews. Finding online help. Seeing limited price matching from respected retailers. Requesting associate assistance. Streamlining electronic payment. 4.2 Managing the supply chain: The speed of Omni-channel retailing can place substantial new demands on the supply chain, especially for premises-based retailers. If the customer s purchases aren t in stock, the traditional take-it-home-with-you advantage disappears. Now you have to compete with online retailers who offer numerous shipping options, including next-day delivery and even same-day delivery. Bricks-and-mortar retailers are relying on their wireless mobile systems to enable more effective management of their supply chain, warehouse and shipping environments. Although the customer nirvana has always been same day delivery, what s most important is actually time-defined delivery, usually within a 2-4 day window. The truth is, only a small percentage of online shoppers are willing to pay extra for expedited delivery. What shoppers most want to know is when their goods will arrive. If they arrive within the promised time frame, the customer is satisfied. 4.3 Breaking down the silos between in-store and online When in-store operations and online merchandising channels exist as separate silos that don t consistently talk with each other, customer experiences and sales can suffer. The Omni-channel model gives bricks-andmortar retailers the opportunity to interact with customers in many different ways: Face-to-face in their stores. On their guest WiFi network. On their online e-commerce site. On their store mobile application. On e-tailing partner sites. 8
10 9 Connected customers are well prepared for this model. No matter where they are, no matter what device they re using, they know how to connect with your store, virtually any time they choose. Retailers themselves, however, may not be as prepared for the Omni-channel world as their customers are. Many bricks-and-mortar operations have fallen into the silo syndrome. They re organised into separate teams: instore, e-commerce, network application, outlet management and more. All too often, these silos and teams are neither integrated nor coordinated, so much so, that they can even end up competing with each other. That can cause customer brand experiences that may not be consistent across all channels, which can lead to customer confusion, dissatisfaction and loss of business. That s a problem which Omni-channel retailing is helping to eliminate, as the issues caused by lack of communication among silos become more and more apparent. The reality is, as retailers better understand the benefits of Omni-channel, they see more clearly the need to break down the internal barriers, which can lessen or negate those benefits. 5. Conclusion Omni-channel is new and challenging. As the old adage says if it was easy, everyone would be doing it and this is no different. It requires the detailed integration and combination of many different factors, both internal and external, that will challenge existing structures and stakeholders. The premise at the heart of Omni-channel is pretty straightforward let s look very closely at how we interact with our customers and seek to make it as easy as possible for them to do business with us, however and whenever they want to. However, as has been noted by many observers, this does not really give many pointers in terms of actual next steps to be taken, to transform an organisation. Despite the problems faced, organisations that seek to make this paradigm shift in their approach to customer interaction will be well placed to succeed for many years. Going through the pain now will enable you to: Streamline and standardise many processes. Deliver integrated and useful content, in line with the increased use of social media. Elevate marketing to a higher influence within the organisation. All of which will set you up to carry out more extensive integration of strategy and process for the future. 6. References 1. Omni-Channel marketing: Your next challenge Andrew Solmssen, Possible. com/content/cmo-com/home/articles/2012/8/17/ omnichannel-marketing-your-next-challenge.frame. html 2. Taking Cues From the Customer: Omnichannel and the Drive For Audience Engagement A Winterberry Group white paper. OmnichannelAudienceEngagementJune2013.pdf 3. Five ways to embrace Omni-channel retailing Darren Hitchcock, RichRelevance econsultancy.com/uk/blog/10621-five-ways-toembrace-omni-channel-retailing 4. How bricks-and-mortar retailers can win the Omni-channel battle A Motorola white paper Solutions/Industry%20Solutions/Retail/_Documents/ static_files/retail%20motorola_omnichannel_wp_ FINAL_HIGH_ pdf
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