IMPLEMENTING A SUCCESSFUL OMNICHANNEL STRATEGY IS A TIGHTROPE ACT THAT
OFTEN INVOLVES FORCING THROUGH CHANGE WHILE MAKING SURE THAT STAFF SEE
THE NEED TO DO THINGS IN NEW WAYS, ADVISES CHLOE RIGBY
Omnichannel is now the only game in town for retail boards in search of growth. Analysis from etail trade
association IMRG suggests that mobile commerce is now the only real source of retail growth. The onus is firmly on creating joined-up systems that work across all channels.
That’s important because the strategic importance of mobile goes beyond the transactions that are completed and researched through smartphones and tablet computers. It lies in the way customers use mobile devices to bridge the store and the online, pushing retail businesses to make ensure their channels are as connected as the customers who use them.
For many traders this means a radical change of approach. Ecommerce is no longer a separate part of the business that is secondary in importance to the stores. In an omnichannel world, all the channels should be in balance, working with, rather than against, the store estate. Already, some 11.8 per cent of UK retail takes place online, according to ONS figures for December 2013, an that proportion can only increase in years to come.
Still, many retailers operate in silos, putting stores and digital in competition with each other. But that’s not how consumers see it: they use stores and online together. Traders are already finding that when they organise themselves around that fact and create customer-centric businesses, they harness the greater spending power of omnichannel consumers. Retailers that put the emphasis on balancing the stores and digital are establishing new and progressive ways of doing business.
There’s no doubt that the impetus for omnichannel must come from the top. Most businesses need a considerable change if they are to deliver customers a consistent experience across all channels, and high-level leadership of that process is important. “To deliver that change requires board alignment and a commitment to invest significantly years,” says LCP Consulting retail partner Phil Streatfield range selection to service delivery and all elements in between. Turning that strategic vision of what the customer offer needs into an operational reality is the challenge.”
House of Fraser executive director, multichannel, Andy Harding, spoke of the strong advocacy for multichannel that comes from his company’s chief executive when he recently discussed the retailer's move to a mobile-first website in an interview with Internet Retailing.net. High-level advocacy of this sort, coupled with a director-level place on the board for the head of multichannel or omnichannel boosts acceptance of omnichannel strategy across the business, even when the chief executive themselves is not a digital native. “In order for it to work it needs to be the chief executive,” says Sophie Albizua, director and co-founder of multichannel consultancy the eNova Partnership.
Streatfield concurs. "The role of the chief executive as the overall sponsor is really important, because it does raise questions to be addressed in terms of how accountabilities and things work around the board table.”
Even when the chief executive is on board, implementing the omnichannel project requires a new level of understanding of both digital and analogue retail, something that's hard to find. At chief executive level, says Albizua, “Many still don’t have the training or the understanding required to drive it themselves. They need to rely on others to drive that.” Experienced and effective heads of multichannel are, however, few and far between. "There aren't that many out there with with the capability of managing both a retail portfolio and an online channel, and a catalogue at that level," says Albizua. "it's not an easy thing to find, and it's expensive."
In the meantime, Streatfield sees board roles starting to change as organisations adapt to new ways of shopping. "Traditionally, separate roles are starting to become combined,” he says, pointing to the example of John Lewis ’ Dino Rocos who, as operations director at the department store group, is responsible for distribution and merchandising.
“At the board level,” he adds, “the challenge is to grow and take on different responsibilities, or different people will start to emerge as the skill set starts to merge.”
FROM ANALOGUE TO DIGITAL
So just how do traditional retail businesses add the digital skills needed to become omnichannel operators? That's an issue across the business, from head office roles such as merchandising and marketing to the wider store network. "Typically we see marketers with relevant digital skills are recruited in response to the need for an omnichannel approach,” says Dan Vawter, VP digital marketing at customer journey specialist Astadia "That is not to say that retailers do not train traditional marketers to make the leap and upskills for digital but it is less common. Traditional marketers who also understand managing a single customer view across mobile internet devices, computers, bricks-and-mortar, television, radio, direct mail, catalogue and so on are currently quite rare.”
LCP'S Streatfield sees skills that have had to be developed in-house trickling down through the industry as skilled individuals move into new roles. “You can now see the early pioneers moving between businesses and developing new skill sets,” he says.
Meanwhile, in-store staff must be educated and incentivised to work with, rather than against, online. When sales assistants’ pay is tied purely to their own sales, regardless of the online channel, the omnichannel project may stall. How that might change is still being developed. Some useful approaches to date have included the John Lewis model of crediting store staff with online sales ordered from within a certain postcode area, and the Virgin Media approach of incentives related to the organisation’s net promoter score.
But the task of getting the whole organisation singing from the omnichannel hymn sheet is still a work in progress. “It’s one thing saying from a strategic point of view we’re going to move our technologies to serve the customer across channels in a more seamless way,” says Simon Walker, director of innovation, at Stibo Systems . “However you’ve also got to bring the rest of the organisation along with that vision. Making sure that in-store colleagues and the operational side at head office are aligned with an omnichannel outlook is where I think there's still a lot of work to be done."
SPEAKING FROM EXPERIENCE
THINK ACROSS CHANNELS
“If people throughout the organisation are incentivised on overall key performance indicators (KPIs) as opposed to their own division’s KPIs, I’m sure they’ll start thinking multichannel as opposed to single channel.”
Sophie Albizua, director and co-founder, eNova Partnership
INCLUDE THE STORE
“Store colleagues have to be part of the brand delivery experience.They have to be as knowledgeable about what’s going on through the multichannel offer as they are about what’s going on in stores.
Phil Streatﬁeld, retail partner, LCP Consulting
“As you’re trying to create consistency of the product message across the different channels, you really need to understand the customers’ behaviour around certain products to then help you better market them in a consistent way across the different channels.”
Simon Walker, director of innovation, Stibo Systems
LESSONS IN OMNICHANNEL
Beyond inventivies, there's also a role for teaching and explaining in this task. Many staff learn from their own experience of online shopping, but for those who just don't operate in the way that their customers do, there's a need for something more.
"Training plays a massive role in multichannel success,” says Albizua. Here too, leadership from the top is important, she says. "Training the entire organisation on the benefits of multichannel and really the absurdity of separate chennel and really the absurdity of separate channels is very important."
Dan Vawter, VP digital marketing at customer journey specialist Astadia, says: "As organisations switch to being customer-centric, changing their interaction with customers from being transaction-based to a relationship, every function of the business needs to understand how individuals interact with them whether that is on a tablet, in store or via social media." Everyone in the business, he argues, should be cross-trained on omnichannel. That's particularly true as roles start to develop, blurring and merging under the pressure of omnichannel selling. "For istance," says Vawter, "opportunities to cross-sell and upsell during interactions wich were previously handled by service leads could now involve marketing being involved in the full customer experience. Initially, intensive trining will be required across functions. However, as the workforce changes and employees who have only ever consumed in an omnichannel world are hired, the need for such rigour will diminish."
LEARNING FROM DATA
Key to the new, emerging omnichannel skills base is the ability to learn from the data. The large amounts of information now emerging from digital retail can give unprecedent insight into how customers shop, and behave. It's a questions says Stibo's walker of "being able to understand from the different data sources they're analysing how customers are interacting with the store using digital technologies".
Once such data starts to be understood, he argues, it builds "trust in data, and that helps build confidence across the business”.
Data has a role not only in helping to educate staff about omnichannel strategies and customer behaviours, but also in creating a unified approach to retail. If retail strategies are led by the data, the business will become more consistent, says Walker: "Although it's a challenge, mastering data will provide a more agile business in that whenever there's a new initiative from marketing point of view or an operational point of view, having the data ready to go, and from a centralised source so it's consistent with other activities in the business, then it allows agility but also that omnichannel consistency retailers are striving towards."
Data can also be used to manage the retail business. Metrics and key performance indicators measure the progress of a retail organisation. But as the organisation changes, so too will che KPIs used to measure it.
Rather than measuring single channels, such as store sales or ecommerce growth, omnichannels KPIS focus instead on the sales growth and profitability of the whole organisation.
Streatfield consules measuring and understanding the impact of channel economics, and wheter sales are growing profitably across the business. then, by focusing on customer, retailers can gain new insights into consumers behave and spend across channels by measuring and understanding the long-term value of individuals' spending.
Albizua suggest retailers also aim to measure customer satisfaction through social media tools. That means monitoring feedback through social media, the store and online together.
Measuring the way that channels work together can also provide useful answer. Useful measures here might include the proportion of online orders placed in-store. It's important, says Albizua, "to make sure that these types of metrics go back up to the board level and don't just stay hidden somewhere in the ecommerce division".
Rather, sharing the information aross channels can help guide strategy for the business. And that's important in an omnichannel world, where startegy is firmly led by what works in each retail business, and for individual customers.
It’s fast becoming clear that creating an omnichannel strategy is about more than introducing new technology. It’s about gaining the trust of staff in the omnichannel project – and that depends both on leadership and developing skills throughout the business. Some retailers are working on that right now; others are now starting to realise the importance of doing so.