Five tips for omnichannel success
Omnichannel shopping isn’t particularly new. In 2003, when I was visiting a GAP jeans’ store in San Francisco, they were already offering customers the choice of more styles/sizes/colours from an in-store internet kiosk. Customers could try for size/colour and then get the combination they wanted sent home.
It meant GAP could have a smaller selection of items in their stores, but still offer their customers their full-range of products - they called it “leveraging the market”.
Twenty years later many retailers are still dreaming about this sort of leverage but are still unable to offer their customers such omnichannel shopping possibilities.
There are different reasons why companies have not started with omnichannel business, but possibly the one we hear most regularly is that it is such a massive task that it always ends up as no. 3 or 4 or the prioritisation list and never seems to make it to the top of the “big projects” list.
However, the urgency of having an omni presence became acute for many companies during Covid lockdown, when click and collect was the only way to deliver out of stores. Suddenly full-blown omnichannel moved to the top of the prioritisation list and our phones started ringing.
This post is an attempt to give some advice to companies working with omnichannel projects and hopefully to inspire the way forward.
1. Your own organisation is the key to success
Getting your organisation to work with omnichannel business involves a completely different mindset than working with physical stores and websites separately. Pure digital players only have an advantage when traditional retailers are not able to utilise the massive muscle they potentially could muster. To do this the whole company needs to be involved.
A key issue for anyone working in the web department of a traditional retailer is often a lack of resources. It is not unusual for one or two people to be given the responsibility of making omnichannel business work for the whole company, in addition to their daily responsibility for online sales.
Often it is demanded that they “prove the potential of online sales” before the company invests more. In a worse-case scenario the department is not even given the resources of a small-medium size physical store. Unfortunately this can lead to burn-out and frustration in many cases.This under-staffing is cause for concern because it shows lack of understanding from top management with regard to how they could be “leveraging the market”.
However, finding the right resources to coordinate the organisational change is frequently an issue. Even though there are increasing numbers of experienced omnichannel retailers, having the insight and knowledge of how to make this change is potentially a costly and rough road to ride.
The relative power of internal departments such as purchasing, operations and accounting often needs to be tempered and adjusted to suit a new reality - not an easy task for a mid-level manager in a single department, who can be seen as having bias to an online result.
Sometimes a neutral, external force is best brought in to negotiate the changes, but top management support is essential however this is done.
Often a crisis, such as Covid, is just what is needed to get the winds of change to blow at the top management levels and to increase the sense of urgency of implementation of omnichannel.
2. Evolution, not revolution
The second insight, and sometimes bitterly learned truth, is that you really can’t do everything at once, however urgent the crisis is. In fact, you most likely should not do everything at once.
What is important however, is to ensure that the different phases of omni development are clear so that there is no mistaking which direction you are moving in. If we loop back to point 1, the organisation will not, and often cannot move faster than the slowest part. Sometimes going too fast will just be a reckless mission and set the organisation back several years, and in worse case lose the trust of the management.
Pilot-projects are often the best way of identifying pain-points, potential growth areas and budget deficits. If used correctly they can also allow people who believe in the omni-potence of the company to surface and become ambassadors in their own departments.
Finding the right people to expedite the changes sometimes means not using the existing “key players” who can dominate company decisions. Often useful skills or experience are lying latent in the company and not capitalised on adequately because of traditional organisational structures or that the company culture is being dominated by “truths” that are no longer relevant.
Industry knowledge and known limitations are important to consider, so time is not wasted, but sometimes they can be used as excuses to not change the status quo.
3. Keeping it simple is still important
The old mantra from digital development, “KISS: keep it simple, stupid” is still as important today as it always was.
If you are a manager who succeeds with the first two points you might suddenly wonder why you wished for more involvement from the rest of the company. Once the creative juices get flowing they may not be easily stopped and this is where good project management comes into play.
Every incremental increase in complexity will come and bite you in the back. Complexity increases costs, testing and deployment time and limits future ability to expand. Complexity can cloud the way forward and every effort to avoid unnecessary complications should be made. Sometimes it is unavoidable, mostly it isn’t.
In an omnichannel context this involves many decisions about how to allow customers freedom of choice, i.e. where they can buy or collect their purchases, versus existing distribution systems, and costs involved in filling in the gaps. You do not have the distribution system of Amazon (I presume) and every order has to be profitable at the same time as customers need to be kept happy.
The most basic observation here is that companies who have not already implemented inventory management control in a smooth and simple way will not be able to offer a smooth and simple customer experience without sacrificing either efficiency or costs.
E-commerce is like a mirror to the existing organisation and if it has, for example, a complicated, franchise based set-up then implementing simple omnichannel sales will be much harder. Distribution and delivery contracts that are city based and not based on national agreements make presenting a simple price structure for delivery to customers more complex.
Looping back to point 1 - the whole company has to be on board in creating business structures at every level that simplify business processes in order for omnichannel to work.
4. Seek out the unique opportunities your company has to offer
At the same time as you have involved the rest of the company, initiated a pilot project and are focusing on keeping business processes simple, it is important to keep identifying what customers really want. It is incredibly important to not just copy/paste what your competitors do - it means you will only ever be a weaker copy of them.
Talking to your customers is a no-brainer recommendation, the biggest surprise is that many companies are still not doing it on a regular basis. Turn over every stone to find gaps between what you sell and what customers want.
For example, finding out more about product returns and deep-diving into customer complaints is still an underutilised way of product improvement. For this reason outsourcing your customer service can be a decision that limits growth and performance.
Browsing history on your website is a fantastic source of information and what customers look at but do not buy is something the whole organisation should be responsible for understanding.
Each channel has its strengths and weaknesses and it is important to use them correctly.
It is important to remind yourself that your industry is unique with regard to weaknesses and strengths that can be leveraged to increase profit in an omnichannel context.
When I was working with a Norwegian online florist we were working with consumables that had a life-time of max. 5 days. Florists have always been good at using older flowers in funeral wreaths and so we increased this focus in our online store to increase our market share and therefore boosted profits for all our stores at the same time.
Be brave enough to delve into the pain points of your organisation as there is always an angle that can create an opportunity, but it takes time and creativity to find it.
5. Create a flexible data infrastructure
Finally, even though not having the correct tools in place shouldn’t be an excuse for not succeeding, it is very much easier when an omnichannel solution is built on flexible data access and an architecture that it is possible to grow with.
It takes time to plan and move existing data to new forms that enable flexibility so it is sensible to do this in phases. Insight from within the organisation is invaluable for ensuring that plans for products and services are not just built on wishful thinking.
Control over a company’s master data has often been limited and controlled by ERP systems and internal budgeting needs. However, by moving product data out of ERP systems and into a PIM as a master data repository, a more flexible solution can be built.
In an omnichannel context details are important. Understanding, for example, how products are shelved in the store can make the difference between accurate and inaccurate stock data (e.g. are products checked out of availability when they are moved to a summer warehouse?). In early phases it is possible to control damage by for example only allowing reservation in store, rather than paid click and collect.
It is also important to remember that your customers can approach you via many different channels so implementing a centralised customer data platform is a way of ensuring that customers' feedback and permissions/access are controlled across all channels and you do not bombard them with irrelevant offers.
It is critical to involve the whole of the organisation in an omnichannel process. Make sure everyone understands the mission of simple business processes that are well-planned and give flexibility. Allow time for the organisation to mature and allocate enough resources to all departments, not just those working with e-commerce.