Posts Tagged ‘Cross Channel’
Omnichannel Differences in the US & Europe
15 years ago, we embarked on the first “multichannel” retailing study for the National Retail Federation, during the midst of the Dotcom Bubble era. Little did we know how long it would take before retailers truly committed to the long journey we now call omnichannel or cross channel retail strategies. Today the ubiquity of “omnichannel” is enough that the mere mention draws a grimace or a roll of the eyes from industry insiders, similar to other industry buzzwords like “big data” and “customer centricity”.
Despite this growing cynicism, the retail industry marches forward at a steady pace of omnichannel development with each passing season. We’re still excited to see new developments emerge that will change how retailers win the hearts and wallets of shoppers. Macy’s announcement of their latest wave of omnichannel capabilities sets the bar higher: ApplePay in-store, same day delivery in select markets, national rollout of in-store pick up, enhanced mobile apps and pilot tests of digital tools in-store (associate and consumer-facing). In the same week, Staples similarly announced a range of new cross channel capabilities to position themselves as innovative leaders, and Whole Foods launched their own version of in-store pick up.
But how does all of this US omnichannel development stack up against European retailers’ drive towards omnichannel innovation?
In recent years, among our Ebeltoft Group of retail consultancies, we have benchmarked global cross channel capabilities and a vast wave of retail innovation driven by digitally-infused retail concepts. The global trend is clear, but some findings such as the more advanced omnichannel among UK specialty apparel retailers (vs. US retailers) were a tad surprising. Some of the most innovative new concepts, born of the digital world and transforming into physical store retailers (Emmas Enkel or My Meusli) are award-winning German retailers. And while many leading European retailers started later than their US counterparts, their commitment to omnichannel has been impressive.
This week, I will speak at an Amsterdam retail event on omnichannel strategies and will have the opportunity interact first hand with the retailers who are “raising the omnichannel bar” in their markets. The competitive intensity within mature, slow growth retail markets of Western Europe are macro drivers pushing retailers to find new sources of advantage, and we’re quickly seeing many retailers embrace integrated digital strategies (aka omnichannel) as their strategic priority. In many ways, we draw analogies to our work in international ecommerce, where European retailers more naturally plan for growth outside of their domestic market, and therefore have different attitudes among senior decision makers to take these risks.
We will report back from Europe, and the upcoming Shop.org conference in Seattle where we expect to hear even more of the latest and greatest omnichannel innovation, to share our impressions of these attitudes to embrace digital retail in our next post.
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.