Most of us remember the first time we encountered omnichannel. More than just a new buzzword for an old idea, it really did encompass the evolving retail world and all its newness: speedy Internet everywhere including on smartphones; social networks that made it easy to share excitement about events in our lives (including purchases), and even TVs and video-gaming platforms helping us to shop from the couch. Our lives would never be the same.
Omnichannel was born in 2003, when Best Buy realized it couldn’t beat Wal-Mart based on price and focused on customer experience instead. Omnichannel was a new beast, which allowed customers to choose how and where they shop, rather than being forced into a specific retail channel. Despite (or perhaps due to) its radical focus on the customer regardless of channel, its adoption was slow among most retailers, which often preferred to address each channel in a silo, treating each as its own business despite having the same shingle hung out front.
This story first appeared in the August 10, 2016 issue of WWD. Subscribe Today.
Retailers soon realized customers did not think about channels separately, but rather looked at the overall brand, and expected the same consistent, seamless experience omnichannel could provide. A customer wants to buy something online and be able to return it to the store. She wants to touch and feel something in the store, but buy the color that’s out of stock on her phone while standing amid the racks.
Neiman’s on San Francisco’s Union Square and neimanmarcus.com are the same thing, aren’t they? Why can’t I buy that Rolex online that I tried on in store? Thus in 2010, omnichannel matured into a standard strategy for retailers, which began to merge the silos into an integrated whole.
In today’s world, e-commerce is simply commerce. The digital experience is simply the customer experience. And an omnichannel customer strategy should simply be part of the overall business strategy.
Why omnichannel needs to be redefined
Brands see the value of integrating across channels, but have lost sight of what drove omnichannel in the first place: the customer.
Focusing on the single conversion and expecting it out of every channel is shortsighted, but unfortunately seems to be how we define omnichannel. Remember when we all tried to sell things directly on Facebook? And how much more effective the social channel became when we started using it the way our customers do? Retailers should focus on what customers need at any particular touch point, whether it’s information, inspiration, customer support or community engagement, and optimize toward that goal.
The real value is in long-term engagement, built across the entire customer journey. It costs five times more to acquire a new customer than to keep an existing one. Successful brands gain retention by understanding their customers’ needs, building relationships with them outside of the purchase funnel as well as within it and shaping their business around serving those relationships. Ultimately, that’s what fosters loyalty and helps you stay competitive.
One size doesn’t fit all
Every company has a different strategy for putting customers first. Here’s how two companies created a strategy focused on their customers, beyond a single channel:
Warby Parker leverages data to power personalization across the spectrum.
• Warby Parker’s fashion-forward customer base wants affordable eyewear and a variety of choices. To cater to this group, the company mines data and uses algorithms to provide personalized suggestions and offers via the channels customers prefer. If a customer always browses cat-eye glasses on their phone but prefers to purchase via desktop, Warby Parker will customize messages to include those styles for that customer and a call to action that encourages a path from browsing to purchase.
• Warby Parker looks at the customer experiences through the customer’s lens by paying attention to his preferences and engagement patterns. With customers increasingly craving certain content at particular touch points, data can drive more meaningful interactions and increased customer loyalty.
BaubleBar continues the conversation beyond the buy.
• BaubleBar boasts fashionista customers who are on top of the hottest jewelry trends and want accessories that match their changing styles. It engages with customers when they’re completing a purchase or waiting for their package, to stay top-of-mind for when the next trend emerges and a new purchase is made.
• BaubleBar’s customer experience team also creates lasting connections with customers by sending individualized messages and recommendations with Instagram photos from their personal account as jewelry inspiration. Their customers seek and have come to expect this level of personalization that integrates the best of each channel.
There isn’t one strategy that works for all retailers because every customer journey is different. Retailers need to hit the reset button and realign to a customer-centric approach, which was the intent of omnichannel 13 years ago and should be again, regardless of what we call it. As retail continues to change to include last-mile delivery, lockers, augmented reality, virtual try-on and drones — not to mention raising customer expectations for highly personalized and curated experiences — brands need to take a hard look at their customers’ journey and provide unique, thoughtful experiences for them, when and where the customer wants them.
Omnichannel is dead; long live omnichannel.