When Jeff Bezos boxed up the first book ever sold on Amazon.com from his Seattle garage in 1995 the term “omni-channel retail” hadn’t even been coined yet. Digital retail was in its infancy, and the number of channels with which you could reach a customer was a total of five (radio, print, TV, Web, and in store). For the most part customer interaction was easy to measure – brands measured audience share, sales, and clicks.
Nearly 20 years later global e-commerce is set to hit $1.5 trillion in sales, and the world of commerce has become a much more complex place. Mobile has catapulted commerce and the way people interact with brands into a new arena.
Big brands, such as Lowes, are even optimizing their mobile strategies by fine-tuning apps to boost online sales and arming in-store customer service staff with 42,000 iPhones to provide a better shopping experience offline.
While some brands are perfecting their mobile strategies, others are continuing to explore new ways to do business.
E-commerce giants like Ebay have their eyes on wearables as the next frontier. Video game advertising is starting to come into its own as a way to sell products, and is anticipated to reach $1billion in revenue this year.
In the meantime, brands like L’Oreal and Best Buy have reverted to a more old-school approach like selling their goods via vending machines in subways and rest stops.
The omnichannel challenge
In this age of innovation, the challenge that many brands face is how to begin to understand and manage a seamless consumer experience across a proliferation of channels, while competing for market share.
I recently spoke with Dilip Keshu, CEO of Group FMG (which also owns the creative commerce brand Pod1) and he says, “Many people have a very modest understanding of what omni-channel commerce means today. Even the way one defines ‘channels’ can even be controversial. We believe that there are at least 13 distinct channels (shops, voice/call centers, radio, ecommerce, web, mobile, social, advertising, gaming, broadcast/TV, events, packaging, point of sale…), but often people view the world of consumption through six or maybe seven.”
The reason brands struggle with omnichannel, he says, is that they have difficulty understanding and gaining a holistic view of what customer interaction means across various channels, and, in turn, using that information to deliver a great brand experiences both online and offline.
For example, a brand like Modcloth can tell you what Facebook does for today’s sales, but an automobile brand can’t tell you the value of a conversation on Facebook or amplification of that conversation. Take the same two businesses and ask them what the value of a Super Bowl commercial is and the situation might be reversed.
“Providing consumers with an omni-channel experience presents a chaotic problem for many brands,” says Keshu.
“The presumption of creating differentiated content via each channel leads to bigger questions about how do you create and manage a consistent experience across various mediums. Brands are in search of the Holy Grail, and it gets complicated when the economic models of some of the newer channels are still being shaped. How does one make money on some of these new channels?”
In the end it comes down to consumption of data from these channels and connecting the dots – establishing clear correlations and providing insights. When a brand can quickly make decisions on the fly about where to shift ad revenue, or make spot offers to customers regardless of channel (think online, offline, or phone with customer service), they are really fulfilling the full potential of what omni-channel has to offer.
To do this, they need data delivered in a way that they can act on it. Right now most brands know who their best customers are, but easily uncovering deeper insight about how they are engaged and how to optimize their experience to increase their lifetime value is ideal. Of course, the true “Holy Grail” would be to deliver that insight to retailers and automate engagement altogether.
