The New Omni Channel

Mobile technology and capabilities is fundamentally changing the retail omni channel environment and this requires a re-evaluation of the retailer shopping and selling practices.  This change should be driving the retailer to view the long term relationship with the consumer rather than the short term purchase transaction relationship with the consumer.  While the consumer is moving forward and changing the manner in which they interact with the retailer along with the tools they use for this interaction, the average retailer is focused on pricing strategies along with new purchasing and delivery options.  Consumers have embraced mobile technology to help them change the way they shop and retailers must recognize this ‘new reality’ in order to support and retain the consumer and sales.

Don’t get me wrong, the logistics of the purchase and delivery is critical to the success of the customer relationship, however this is changing from a differentiating factor to a cost of entry.  Purchase and delivery logistics that support the changing consumer lifestyle and demands have been changing with the demands of the industry.  This has been considered and required as a market entry basic business requirement and carriers, especially parcel carriers, have been changing and enhancing their capabilities to meet these consumer demands.  The reason this has been successful for the carriers and the retailers using these carriers is that the carrier is focused on one thing; delivery to the consumer in the manner that meets the consumer demands.  This has worked very well because these carriers are focused on one function and they have improved dramatically based on the demands of the omni channel marketplace.

I see the challenge with the retailer and their new requirement to focus on the customer relationship to retain customers and maintain sales.  This means that retailers recognize the power and influence of social networking on the omni channel shopping and based on this  must develop new practices to engage the consumer in this social shopping.  Retailers know that every touch by a consumer does not result in a sale and up to know the key strategy of retailers has been a type of commodity sales based on price.  Retailers have now recognized that a low cost and ‘always a sale’ strategy impacts the retailer brand image in negative ways that generate a negative force in sales and consumer perception.  A key point related to this realization is that large omni channel retailers cannot continue to compete with Amazon or Google in a price war and hope to win.  

The new omni channel will focus on the customer relationship first and then on the sales because the relationship will encourage the return and retention of the customer.  This is a next step progression of the omni channel and the consumer is way ahead of the average large retailer in their utilization of mobile technology to create this true omni channel marketplace.  Retailers must now recognize and embrace the inevitable in order to maintain and grow their market share and sales.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Omni Channel Adaptive Shopping

I have seen discussions on methods of adaptive collaboration and adaptive supply chain and this resonated with me for consumer retail shopping and purchasing as it relates to the discontinuous and disruptive change that mobile technology is driving into the retail industry as a whole.  The objective that I have been discussing is a significant retailer challenge to adapt to the consumer’s changing demands that are being driven by mobile communication and technology capabilities.  There is a great need and unmet demand for flexibility to adapt to the changing demands of the consumer based on their ability to combine mobile technology and apps in new ways to support their changing shopping and purchasing requirements.

This challenge requires an infrastructure that is robust enough to support the heavy demands of both the internal research, support and management team along with the external customers to expand as the demands expand.  The internal demands on the infrastructure will increase dramatically as it relates to both the volume of data collected and the analysis of this data to understand beginning trends and ending trends.  I call out identification of ending trends because it is extremely important for the retailer to maintain currency, this includes not only adding new capabilities as they are identified and also, just as important, dropping capabilities as they run their course and the customer loses interest.  The external customer demands new capabilities and expanded services that are increasing across all channels.  These demands and services are falling now on the eCommerce sales channel due to the increase in mobile technology and capabilities that are utilized by the customers from all channels.  This is probably one of the greatest demands on the infrastructure.  

This challenge requires flexibility in the foundation framework to be able to quickly and efficiently add new features and functionality as they are identified by the internal management team.  This flexibility is the greatest challenge to retailers, in my opinion, because it requires the ability to support currently unimagined capabilities.  Of course the flip side of the new capabilities is the removal of non-performing capabilities.  This removal is also a very important aspect of maintaining a fresh and interesting site and it requires a robust evaluation and maintenance plan from the internal management team.

A third challenge is the actual internal management team tasked with analysis of trends and maintenance of capabilities (both the addition and removal of capabilities).  The retailer cannot downplay the importance of this requirement because the consumer, and especially the young consumers that should represent a key focus of the management team are quick to change and adopt new capabilities.  This requires an energetic, imaginative and inquisitive mindset to continuously monitor and explore the changing demands and direction of consumer interest in order to stay current in the omni channel framework.   

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Omni Channel Loyalty Through Relationships

Large retailers now have a great opportunity to expand and improve their relationship with consumers through an omni channel focus on customer relationships to increase consumer loyalty through improved focus on relationships.  One distinct advantage of the small and local retailer is the direct relationship they are able to develop with their customers.  This relationship provides a compelling reason for customers to return for the social interaction.  Extending the omni channel to focus on the relationship with consumers now provides a vehicle for large retailers to engage with their customers on a more personal level.  This personal engagement will allow the larger retailer to develop a stronger personal relationship with their customers to develop the same compelling reason for customers to return that is now enjoyed by the small and local retailers.

Large retailers lost this relationship as a result of growth and a single minded focus on profits and sales increases.  These large retailers focused on the transactional aspect of the purchase rather than the consumer experience and most importantly the relationship with the consumer.  This transactional focus by the large retailers worked well for quite a while however a key result is that the consumer relationship was ignored.  This focus on transactions and down playing of the relationship created the current environment for large retailers where the customer is focused on the transaction and demands the lowest cost transaction.  Consumers have incorporated the expanded search and shopping capabilities provided by the Internet and mobile technology to allow them to purchase at the lowest price, without regard for relationship, any time and from any place.  

This consumer demand and focus on price is really the result of the large retailer’s focus on the transactional purchase.  Consumer have incorporate omni channel purchasing capabilities with mobile technology and apps offered by third party developers to take complete advantage of the ability to identify and then purchase at the lowest cost.  This is a key and also unanticipated result of the retailer focus on cost, the retailers have trained their customers to focus on cost at the loss of loyalty.  Even loyalty programs are only another way to notify customers of sales and special offers, this is simply another vehicle to enforce and encourage a focus on cost.  

Large retailers have very long and difficult challenge ahead of them to turn the consumer focus on cost to a focus on their relationship with the retailer.  Retailers must refocus their interactions with consumers to a relationship focus rather than a transactional relationship.  The good news is that the retail omni channel capabilities provide the retailer with the tools to focus on the relationship across all interactions with their customers.  The bad news is that this will require the retailer to heavily invest from a time and resource perspective to develop loyalty through relationships because the retailer must retrain the consumers to focus on the positive and long term benefits of the relationship with the retailer.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?