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Strategy

Customer Experience: The New Currency of Omnichannel Retail


by Jim Perry

Retailers are realizing that a data-first approach to understanding their business gives them a substantial competitive advantage.

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The goal of any omni-channel strategy is to achieve greater customer engagement, profitability, and share of wallet per customer. According to eTail East and WBR Digital 75 percent of retailers consider omnichannel an essential part of their business. However, almost half are not actively investing in an omni-channel strategy. Inventory planning and supply chain logistics take the center stage, consuming most of a retailer’s energy, time, and focus – and therefore customer engagement too often takes a backseat. 

Successful retailers have learned that customer engagement is as important as operational readiness when it comes to developing an omni-channel retail model. Indeed, a balance of product and operational readiness with an engaged and individuated omni-channel customer success strategy are now needed to maximize profitability. 

Retailers are now realizing that a data-first approach to understanding their business gives them a substantial competitive advantage. One way that retailers have attempted to bridge the gap between customer expectations and experiences is to collect data to construct a 360-degree profile of the buyer. This holistic view of the customer across multiple channels is the winning formula to understanding the buying journey, market trends, and predictive insights about the customer’s future purchasing behavior. 

Historically, retailers have operated in silos with very little departmental interaction and coordination. With a clear reporting and analytics strategy implemented at every step of the retail process, retailers can orchestrate and execute activities based on operational insights and customer preferences. Only once there is a deeper understanding of what the customer is buying and why can there be opportunities for kaizen – or continuous improvement – in the areas of marketing, merchandising, sales, operations and supply chain. 

The key to driving a successful customer experience is for retailers to leverage all channels and customer touch points to augment sales to develop a more sophisticated picture of customer demand. Retailers need to manage the consumer’s journey in-store, online, and from mobile applications to create a personalized and continuous shopping experience. The more channels that a consumer uses, the more they spend with the retailer and the greater chance of building the consumer’s trust and loyalty. 

Just consider that a recent study of 500 retailers found a 5 percent to 10 percent increase in customer conversion when they enabled their customers to receive online or mobile coupons in-store and reserve store inventory online. And while retailers have access to unprecedented amounts of data from multiple channels, they have no clearer insights into their customers’ changing buying patterns. In fact, only 8 percent of retailers in the survey reported that they have a holistic view of their customer base.

To better understand the intersection among customers, products, and channels, retailers should adopt high-performing data analytics to help derive meaningful insights from their complex datasets. With a more holistic and informative view, retailers will be better equipped to offer streamlined buying processes and personalized customer services. Further, they also need a detailed understanding of the customer’s buying journey both online and in-store. Tracking how a customer conducts online product research, selection, and payment leads to better execution across all channels. The difficulty lies in understanding exactly where in the buying journey and from what sources the retailer should collect and analyze data.

Top performing omni-channel retailers have found customer engagement is not a mere stitching up of offline and online connectedness of inventory, returns, price and promotions. Rather, customer engagement is the process of understanding one’s customers and seamlessly adding consistently high levels of value throughout their buying journey. A retailer’s ability to deliver connected, seamless, and personalized store and digital experiences directly impacts customer loyalty, satisfaction, and sales. 

Retailers today that utilize modern business intelligence (BI) and enterprise performance management (EPM) solutions that triangulate every piece of data have a leg up on their competitors because they are more aware of customer behavior, more responsive to customers’ needs, and more effective at making informed business decisions to increase the bottom line. The current adoption of advanced analytics techniques – end-to-end BI platforms and predictive customer analytics – is limited to only 1 in 3 retailers. To successfully meet customers’ rapidly changing expectations, retailers need to move beyond just ensuring product availability to employing more responsive designs, connected experiences, consistent branding, data insights, and integrated business planning and budgeting at the back-end.

In the age of Big Data where the consumer demands and even expects a personalized, seamless, and integrated experience, retailers are finding it difficult to differentiate themselves based on traditional factors such as price, promotions, and product mix alone. A retailer’s ability to excel at integrating customer insights into key decision-making processes is limited by its low maturity of analytics across business functions and an inability to deliver in-context business analytics at scale.

It is vital to strike a balance between operational and customer engagement-centric retail approaches not only via people, process, and technology, but also via a dedicated focus on KPIs and metrics to measure strategic execution. By adopting a best-in-class EPM platform, retailers can leverage a combination of metrics and KPIs that showcase the business impact of a customer’s experience with all channel touch points.

Jim Perry is Director, Enterprise Performance Management Practice at Infor.