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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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GUEST COMMENT The evolution of omnichannel retail strategy

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Omnichannel strategy.jpg
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Consumers are more tech-savvy and highly connected than ever before, demanding convenience, speed and choice, even as they readily switch between online, mobile and physical touchpoints at various points in the customer journey.

Retailers and merchants, dealing with this constantly evolving and unpredictable landscape, require fresh strategies and technologies that allow them to adapt to the changing expectations of omnichannel customers. In fact, a new survey carried out by ACI Worldwide and Ovum finds that 79% of merchants see adopting an omnichannel approach as key to creating a seamless customer experience.

The challenges faced by retailers are compounded by generational shifts. The ‘millennial’ cohort (typically defined as those born 1980-1999) now hold the most spending power and have different views towards shopping and payment to their older cohorts. Over 62% are comfortable connecting payment information to retailer apps to speed up payment, 45% are comfortable with the idea of connecting payment information to wearable devices, and 44% would prefer to use phones instead of cash to pay for small items. On top of this, millennials have come of age in a Web 2.0 world, where customised and highly personal online experiences have become the norm.

The implications are clear as they relate to the need for genuine omnichannel solutions, but it goes a lot further than simply enabling more sales channels.

More channels, more money?

Without a doubt, providing consumers – whether Gen X, Millennials, Gen Z or whatever comes next – with more than one sales channel can boost revenue, customer loyalty and market share. But is it as simple as more channels = more money? Perhaps that was the case years ago, but these days, customers want far more than just a collection of different channels from which to choose. Omnichannel customers want to shop on their own terms. They want to browse, research and compare information across channels to find the best products and deals before making their purchases. ‘Showrooming’ and ‘webrooming’ are now everyday practices for many of these connected consumers and the lines between once siloed channels are blurring as customers engage with retailers in-store, online and on the go; whenever, however and in whatever combination suits them.

There is growing recognition that shoppers buying across multiple channels in this way are becoming the most valuable type of customers. For example, in the recent study ‘Payments trends in the European retail sector,’ consultants Edgar, Dunn & Company state that leading UK retailer John Lewis found that omnichannel shoppers spend, on average, three times more than single-channel shoppers. Additionally, they also found that over 60% of their customers browsed online before making a purchase in store.

Customer experience is the driver for connecting channels

It is no longer about offering goods and services across multiple channels – nor is it enough to focus on driving sales within those individual channels. Retailers need to acknowledge that – for their customers – channels are not separate entities, but integral and interconnected parts of a singular customer experience. This, of course, presents retailers with both opportunities and challenges – tearing up the textbook on the traditional multichannel approach and instead placing the customer centre stage, as retailers find the best ways to engage and convert them.

An omnichannel strategy creates the opportunity to deliver a seamless and consistent customer experience – giving shoppers a connection to a brand, not merely a sales channel. Moving to this approach can deliver a range of benefits to retailers, including increased sales, improved customer loyalty and satisfaction, as well as an increased competitive advantage.

Customer experience has become a key brand differentiator for most retailers, and the need for a seamless, personalised, multi-touch experience has become an imperative. This simply does not leave room for separate experiences in different sales channels.

Retailers are moving to implement their omnichannel strategy

Retailers are starting to respond to the need for an omnichannel approach, according to ACI Worldwide’s survey with Edgar, Dunn & Company. Over 31% of respondents stated that they had already put their strategy live, and a further 46% claim that their strategy is in development.

The key to realising this omnichannel and customer experience ideal lies in deploying a centralised, integrated strategy. If managing each channel separately, retailers will struggle to maintain a single brand identity and build a comprehensive picture of customer behaviour and preferences across channels – something that plays a critical role in the ability to deliver a personalised and compelling customer experience.

Above all, the right technology must underpin an effective omnichannel retail strategy – and this technology must address channel silos and inconsistencies to facilitate better customer visibility and service, bringing channels together to deliver that all-important seamless customer experience. And while the technology continues to evolve, the concept of customer experience is one that will continue to transcend any arbitrary generational barriers.

Andrew Quartermaine is vice president, SaaS customer management at ACI Worldwide

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