What small retailers can learn from Disney about omnichannel strategies
The retail sector is constantly evolving new modes of customer engagement and operational capability. But these developments can often become obscured by buzzwords, marketing concepts and technical language that can get in the way of clear purpose and consistency in delivery.
As the roll-out of digital channels accelerated in recent years, the term “omnichannel” has emerged as a way to deliver long-term sustainability within the sector. Many family-owned retailers are wondering how they can turn this theoretical concept into a practical reality to ensure their business is fit for the future.
First of all, offering bricks and mortar, website and digital app options to customers does not amount to “omnichannel”. That is merely a multi-channel approach. A true omnichannel strategy must present an integrated brand message that is embedded in a clear operational framework with a consistent user-experience across these channels.
Unfortunately, many retailers who rushed to get online during the pandemic have become immobilised within a siloed multi-channel model, resulting in customer disengagement and cost inefficiencies across the business.
Disney, by contrast, offers an example of an organisation with an omni-strategy at the most sophisticated level of development. Disney has a highly responsive website and mobile apps that present a wide range of functionality whilst delivering a fully integrated, real-time experience for the customer at the physical location. This reflects years of research, development and capital investment.
But omnichannel is not just the preserve of large international retailers. In fact, a successful implementation of an omnichannel strategy leans heavily on the key skills and differentiators already possessed by family-owned retailers, such as knowing and understanding their market and customer base.
Steps to implementing a robust omni strategy
1. The core principles of retail – to connect authentically with customers, create trust and demonstrate ongoing value – remain relevant and at the core of any omnichannel strategy. Therefore, the first step in an omni-strategy involves identifying the channels, devices and platforms that your existing customers use daily. You will also have to gain insights into how they interact with them, their preferences, their experiences, and their pain points.
2. Create a range of customer personae and the journeys they undertake as they interact with your business. This involves identifying customers (both in-store and online) with the highest lifetime value and the common characteristics they share. The modern customer journey has five touchpoints: awareness, findability/accessibility, reputation, conversion and experience.
The diversity of these elements ranges from TV/print advertising, search engines, GPS, social media, influencers, mobile usability, in-store sales person and after sales service. These are all the elements that allow the customer interact with a business or brand.
Creating consistency of message and experience across these areas, whilst time-consuming and granular, is the key to a successful strategy.
3. The above groundwork allows a targeted, streamlined approach to underpin the most important phase of the strategy – seamlessly integrating all touchpoints, both digital and physical. Uniting all channels involves tracking the customer shopping experience across every touchpoint and understanding they are interconnected.
From reading about the store online to visiting the physical store to making a purchase on the mobile app – regardless of the order of such events, ensuring that the user experience remains uniform throughout is critical.
Understandably delivering this integration will require an overhaul of existing management information systems for many operators and identifying and deploying the most appropriate technological supports for them.
However, investment in technology needs to be nourished to thrive. Appropriate personnel buy-in, interdepartmental collaboration and cross-functional cohesion are key factors in making it work.
4. The development of an omnichannel strategy and the associated integration of technology systems can sometimes distract from the core function of a customer service development.
Numerous studies have identified that the principal reason that consumers switch retailers is not linked to product, price or technology but to service levels. An omni-strategy therefore needs to facilitate a customer model based on convenience, consistency, relevance and agility. These are the core elements of a high-functioning service environment that meets its true objectives and maximises return on investment.
5. The scorecard for measuring performance should reflect the breadth and scale of the omni-strategy across the entire business. It should consist of five key pillars: sales growth/preservation, margin development, cost management, customer satisfaction/net promoter score, and employee engagement. A disjointed, underdeveloped implementation of the strategy will only be captured if a broad impact assessment is conducted consistently.
For retailers taking their first steps, this involves integrating all physical stores with their online portal. Now when a customer orders a product, instead of being fulfilled from a central warehouse, if the retailer has a physical store within 50km of the customer’s address, the order will be fulfilled from this store instead.
This reduces delivery time, fuel costs/carbon footprint and creates a better customer experience. Expect to see more retailers utilising their physical stores as “micro-fulfilment hubs”, with the in-store and online strands acting in concert.
Effective omnichannel isn’t possible without channel fluency and competency across the entire business – not just sales and marketing but trading, purchasing, customer experience, innovation, IT, store design, personnel and finance functions.
When implementing omnichannel, commensurate skillset training that communicates not just the how but the why of the strategy is an imperative.
Too often in the rush to deliver digital transformation, businesses end up with fragmented management systems and incompatible technologies. An omni-strategy is only successful if a real end-to-end approach is taken.
Owen Clifford is Head of Retail Sector at Bank of Ireland