Shop.org and the Omnichannel Obsessed
This year’s Shop.org Annual Conference was held in our own hometown of Chicago. We were delighted to participate and network with a “Who’s Who” collection of Ecommerce Executives with abounding expertise. The conference confirmed that chasing the Omnichannel customer experience is high on the list of priorities for most multichannel retailers in attendance. As a overview of what we learned we’ll stick to the highlights and a bit of generalization.
Our awards for the most discussed challenges from the Executives we spoke with were:
1) Prioritization of omnichannel efforts. Senior management and the board are pushing hard for rapid innovation. In many cases they don’t understand some of the underlying challenges, costs, or timeline (e.g. process change, infrastructure inefficiencies, visibility to data at a customer touch points, skill sets and training, etc) that are necessary to execute Omnichannel capabilities.
2) The role of the ecommerce team is changing. They are being called upon to either be “all things digital” within the organization. Tapped to handle digital innovation, brand initiatives, develop the mobility strategy and grow the ecommerce business all at the same time. In these cases, the team is concerned with resources and budget to support efforts coming from multiple areas of the business that don’t necessarily impact their P&L but are now their responsibility. Additionally the Ecommerce team is being asked to be aware of the challenges that the store team is faced with Omnichannel programs.
Alternatively, the business has restructured and Ecommerce traffic driving efforts have fallen under the “digital marketing” team, which is no longer inside of the Ecommerce team. The approaching holiday season has them on high alert. Their increasing resource needs and a necessity for marketing flexibility to meet revenue goals, without these direct resources, has them concerned.
3) Organization Design and talent acquisition remain a key hurdles in accomplishing the future vision. Fundamental questions are being posed as to “Where should Ecommerce report?”, “Who owns the marketing budget and how should it be spent?”, “How should we incentivize the store team to assure that they are digitally savvy and omnichannel advocates?”, “Who makes pricing and promotional cadence decisions and what are the guardrails associated with them?” .
Our favorite observation: With all the change and increased performance pressure Omnichannel has stirred up, Ecommerce executives appear more open to sharing insights and learning from one another again. We had several requests to connect retailers who were non competitive but focused on exploring the same issues.
Our roundtable topic “The Top 3 Myths of Omnichannel Retail” was well attending and enlisted a robust discussion about Omnichannel challenges and mobile efforts. Everyone was excited by Target’s Cartwheel app and it’s in store couponing using geo-fencing capability. We handed out our Omnichannel Self Assessment Tool. We hope it helps the team’s internal discussions regarding the Omnichannel vision and to exemplify the complexity of Omnichannel execution.
We are big fans of the content brought to the industry via Shop.org and this conference confirmed their dedication to topical and timely quality content. Bravo!
Cross Channel Marketing – The Planning Gap
Let’s face it, there is no longer a direct correlation between the marketing channel (e.g. email, Search, browsing) and the point of purchase. One of my favorite depictions of this is Brian Walker’s “From Channels to Touch points” image. http://blogs.forrester.com/brian_walker/11-03-11-welcome_to_the_era_of_agile_commerce.
Organization design for cross channel retailers to support an omnichannel strategy is one of the biggest issues retailers face as they consider their customer experience. In this post we won’t go into the changes we are seeing on organization structure, budgeting, marketing campaign handoff’s, the demand for specialized skill sets, or the need for clear lines of responsibility and accountability among the teams. These and a host of other considerations are issues that require facilitation and discussion from the very highest levels of the business.
Instead, we wanted to focus on the challenge of disparate marketing teams within our businesses. Brand marketing (or core marketing) and ecommerce marketing each have their own budgets, sets of goals, and processes. The question we are always asked is “How can we make a seamless experience for the customer across channels as we campaign for their buying dollar?”
Regardless of whether it is a branding, ecommerce, or social campaigns, we find that some of the biggest differentiators (and white elephants) within retailers are their planning rituals, campaign management processes, and post campaign performance measurements.
One common mistake we see in planning is including the digital team too late in the process. When done in this manner, the campaign lacks the benefit of a holistic customer approach. It runs the risk of a routine execution and poor return on investment. In the worst cases, the digital team is not aware of the campaign and is asked to support in the 11th hour. Equally guilty are the Ecommerce marketing teams running promotions that the retail stores are not aware of; leaving the front line team at the store vulnerable to customer dissatisfaction and a disjointed brand experience.
We juxtapose this with a best practice planning process that begins with rigorous channel calendaring and a cross team process that traces the customer journey from all touch points. Merchants are Included in this planning to help build a robust understanding of product and supply chain concerns. And store operations assure that the front line and customer care center is aware of the promotion and able to manage the questions or issues that may arise in store.
Big data, little data, and all the data in between should still rely on the same processes for campaign development. The big questions that have to be asked are:
- What are we trying to achieve (e.g., new customer acquisition, awareness, increasing page views, reactivation, retention)? Be specific about the campaign goal, it will help the team determine how to measure success.
- How are we going to measure it? If we are measuring across channels, what are the proof points? Will we be considering attribution from other marketing activities?
- What does success look like? It is always good to collectively agree on what success looks like. It helps to manage expectations and frame up the results.
- Who is responsible for measuring the effort? With multiple teams involved it helps to give the program measurement an owner.
- When will we look at the results? As with success measurement, timelines are important. You may want to see early results and later results too. But it is important to decide upfront to ensure that expectations are set.
- Based on our hypotheses, what are possible next steps? It is helpful to anticipate next steps with the cross functional team in case there needs to be longer term issues such as resources, inventory, or budget that might be impacted by the results of the program.
- Who needs to be notified of the program and what tools will they need to ready their team? This is always the one that gets the least attention but is crucial to success. Take a moment to make sure everyone who needs to be aware of the program is considered.
We consistently impress upon our clients that the most vulnerable parts of the customer experience are at the customer touch points. Through planning and cross team collaboration, brands reduce risk and improve the customer experience.
Myth Busting –
The Top 3 Omni Channel (Cross Channel) Myths
For our inaugural blog post (yes, we know we’re late!), we thought we would do some myth busting.
Myth #1 – The customer experience must be the same across all sales channels.
Defining the customer experience within an Omnichannel /Cross Channel strategy is one of the most difficult jobs of any retailer. Many retailers we work with find it difficult to describe what they want their customer experience to be. In many cases, dependent upon who we ask within the management team, we will get differing answers. The most common refrain that we hear is “We want our customer experience to be the same across channels”. This is when you will find us asking what we consider foundational questions:
- Are your customers the same in all channels or are they different?
- Do you have opportunities online to enhance areas of your business that may not be possible in the store? (e.g. you product offering, enhancing customer loyalty, or acquiring new customers, etc.)
- Are you considering channel differences (e.g. competition, and cadence) that you may be able to take advantage of?
We counsel retailers that the brand construct should be consistent across channels but doing the work to understand how to leverage the channel differences will result in happier customers and typically better financial performance.
Myth #2 – Omnichannel Retailing is a competitive advantage
There was a time in the not too distant past when Cross Channel strategies could only be delivered by retailers with scale and deep pockets. By default, those retailers who embarked on early Cross Channel strategies had to have the means to invest and the patience of their board for the time to realize that investment. It was a select group willing to take on big risk as Cross Channel strategies were unproven. These early and select pioneers envisioned big competitive advantages with their strategies. They were able to provide their consumers with a value proposition based on convenience and service as they shopped across the available channels. Today, consumers are much more demanding and their expectations include Cross Channel capabilities. Retailers of all sizes have risen to the challenge of considering how their channels can work together better to meet those expectations. We are seeing exciting advances across all segments of the market.
But, Cross Channel strategies are relatively unproven and represent a great deal of internal change to execute. We find:
- Advanced Cross Channel capabilities cannot substitute for good retailing in each channel independently, pure and simple.
- A good ecommerce customer experience is necessary to enable Cross Channel retailing. You cannot leap frog or short cut here.
- Understanding what Cross Channel capabilities will enable a robust customer experience for your business will help differentiate you from your competition. Selectivity and executional excellence are the keys to differentiation.
Myth #3 – The Omni Channel experience is all about technology and operations.
Omnichannel strategies have changed the role of the IT lead inside of retailers. Smart retailers have recognized that these technical visionaries are the gatekeepers to a smooth transition between channels. Their roles have been elevated to strategic thinkers and they have claimed their place at the Senior Leadership table if they were not there before. But, a leading technologist within a Fortune 500 company from our recent paper for the NRF “Organizational Structure for the Future of Retail: The Digital Effect” said “I can build platforms faster than the culture can absorb the change.”
Omnichannel Retail is a sea change in the way organizations work together, plan together, and service the customer. Without the ability to describe the customer facing experience and understanding how the work will get done to achieve Cross Channel goals, the development of technology and operations meant to support the customer experience will be costly and likely flounder.
We are watching as savvy retailers work closely with their IT teams to create prioritization and flexibility in their roadmap priorities. They consider the speed of internal adoption, competitive market conditions, and customer driven insights to shape their vision for the future and guide their development priorities.