Omni-channel retailing: The journey of a thousand miles…

Retail as an industry is going through a lot of change. One of the biggest reasons for change is the change in consumer behavior which is much influenced by technology today. Most retailers that have existed as small or large format physical retail stores are making a transition to multi-channel and eventually to being omni-channel retailers. And online retailers are exploring physical meetings points with their customers, again in their quest to be omni-channel retailers.
I have been wondering about what is the secret sauce to being a successful omni-channel retailer. Many retailers are experimenting with different customer meeting points both in the physical and digital worlds. How does a retail brand connect with its customer base in a complex eco system consisting of many different ways in which the customer can interact with the brand and the products, remains a key question. I would like to share three dimensions that I think are very critical in making a successful transition to an omni-channel retailer.
1. Customer: At the heart of it, is the customer. What, How, Where and When the customer wants to shop is a key determinant. Being able to crack the code in this context is all about understanding customer behavior and the shopping journey. Right from the time, a person feels the need for a product or service to when the he/she has actually completed the buying process, all the way to the usage and enjoyment of the purchase, there are many steps involved. It is interesting to note that the first step could start in the digital or physical world and could go through a series of steps where the customer switches between physical and digital many times over. At every step along the way, the customer decides whether the interaction with a brand is through a physical or digital channel. Think about your own journey – how did you buy your sofa or how do you buy detergent or how did you shop for your dress that got you a lot of compliments or how did you buy your plumbing service? As you think through each of these scenarios, you will identify a set of activities in the physical or digital world that you took on to complete the buying process. Depending on your level of comfort in the digital world, there could have been many steps that you undertook in the digital space. This could also vary based on the frequency of purchase and level of involvement in the purchase of the product or service. To be a successful in the retail environment today, developing a deep understanding of customer behavior and the many different shopping journeys that a customer makes in order to complete the purchase process is one of the key success factors.
2. Technology: It is one of the key enablers to delivering a great customer experience. And it is not just in the context of delivering a good experience online. A well designed technology backbone is key to delivering a great experience in the physical meeting points as well and even more critical if a retailer wants to provide a true omni-channel experience to its customers; giving them the ability to interact with the retail brand in many different ways across many different medias.
3. Supply chain: It is another key enabler to delivering a great customer experience in the omni-channel context. It spans a host of activities ranging from sourcing to locating logistics units to last mile delivery to customer home. Getting one of these variables wrong would not just destroy the cost structure and thus the profitability of the business but also negatively affect customer experience. In the past, just being a physical retailer with one store format meant that all that one needed to do was to move optimized volumes of products to the physical meetings points or points of demand. The customers came to the retail location and purchased the product, often taking it home themselves, thus taking the responsibility for some activities in the end to end supply chain. With omni-channel, the customer decides where to interact with a retail brand, how to purchase a product and where to collect or get the purchase delivered; this creates more complex flows with much reduced scale.
In the end, a retail organization is all about its people, the many co-workers who interact with customers in many ways both in the physical and digital world thus bringing the retail brand to life. It is important to create and nurture an organization that is open to change and sees the journey to becoming an omni-channel retailer as a positive step and is resilient to the many challenges and is adaptable to finding new solutions in order to make a successful transition.