As digital technology evolves so does our digital mindset – people increasingly expect seamless and consistent experiences in all aspects of service and product interactions; in short, a fully omni-channel journey. But this doesn’t mean all channels are created equal and nor should we move to a channel-less world. With a clear strategy, rooted in customer needs and business strengths, there is great benefit to be found in embracing the diversity of channels; where creative combinations of the virtual and physical can help brands differentiate themselves and find new areas of competitive advantage.
The term omnichannel appeared on the scene several years ago, dislodging multi-channel as the new strategic MO. Now the benchmark is not simply delivering your service across various channels but providing a consistent and seamless experience wherever your customers interact. However, the goal of omnichannel is now coming under fire from new approaches eager to flex their digitally-pumped muscles. In particular, some argue for a channel-less world where customers don’t care what channel they are in as long as they can do what they want, when and wherever they want. This may involve using two or more channels simultaneously – using a shop’s mobile app while browsing in the store, for example – where notions of channel domains break down and simply become ‘the experience’, however it’s delivered.
I appreciate the sentiment behind this, particularly in how it makes us think about integrated customer experiences rather than the siloes of channel – often reinforced through outdated organisational structures and KPIs. But I think to reject omni-channel just yet misses two important points. Firstly, it ignores the fact that so many organisations are still grappling with implementing the basic structures and tools that enable any form of omni or cross-channel experience, architecting huge changes to data systems, workflows and team structures. So, before we argue over the semantics of what it is let’s recognize the fundamental building blocks that need to be in place to move forward.
Secondly, while people may not talk the same language as system architects and marketeers, we still live in a world of channels, touch points, tangibles or whatever we wish to call it. And we still expect those different channels to do certain things for us; to satisfy emotional needs or social norms. Customers and businesses alike should not place equal importance on all channels. Indeed, businesses that try to standardize channel experience can find themselves with a Sisyphean task, trying to develop and invest in areas where they may not be inherently strong or where their customers don’t need them to be.
I think the value of omnichannel is explained with some basic strategic thinking – understand what your customers need and serve the ones that you are best placed to rather than being everything to everyone. The Value Disciplines model is helpful here. Basically, it identifies three areas of value differentiation; 1) Customer intimacy; 2) Operational excellence; and 3) Product innovation and states that companies should aim to excel in one while maintaining threshold standards in the others – you can’t neglect any of them, but you can be famous for one. Following this principle for channels helps determine where and how you invest. Take the example of Amazon. Their eCommerce business is firmly focused on excelling at ‘Operational efficiency’, making the purchase and fulfillment process as easy and quick as possible for sellers and buyers. But should you want to speak to someone in customer services then good luck! Amazon has taken the view that it does such a good job at delivering want you need that it can afford to invest less in the other areas – its value proposition is strong enough (although product innovation becomes a bigger factor in the hardware and content focused parts of its business).
The point here is that omnichannel is not about opening all channels to services in equal measure. Instead it is about focusing on what you do well and delivering the desired experience in the right channel, depending on your customer profile and needs. This can be applied more generally to how channels perform different functions. For instance, when customers interact with a banking chatbot or even live chat the chances are they’re looking for a quick fix to a point-of-need problem or triage to another service. They are probably not looking for in depth financial advice where because of the trust threshold and personal preference, people will seek help in branch or perhaps over the phone. Of course, you expect seamless handover and continuity across all the touchpoints, but not a channel-less experience.
In an ever-digitized world, it is important to recognise the continued value of physical touchpoints. If we think of omnichannel as delivering a specific customer experience and business strategy then it shifts the focus from ‘let’s get everything online’ to how do we best use our channels, enabled by digital tools. This is important when you consider that ecommerce, while undoubtedly a growing force, still only accounts for less than 20% of total retail sales (US, 2019). And this is not just an older generation channel-shift issue. Recent research indicates that Millennials are more likely to value in-store experiences and seek meaning from brands. The same goes for other services, where physical and human interactions provide the connection and trust people need. In the era of experiences, many companies are looking at how they can satisfy the desire for immediacy and authenticity from real-world interactions with unique, personalize offers.
For some this has led to combining the benefits of a global product and supply chains with a localized product experience – reclaiming a connection and engagement with customers, often missing from a globalized brand. For example, Nike Plus is a hyperlocal store experience in LA where stock reacts every two weeks to the trends and preferences of local customers by using data from the Nike Live app and associated sources. Designed explicitly to appeal to the urban digitally-savvy millennials, the concept store integrates seamlessly with the Nike app to offer enhanced convenience such as ‘curb-side pick-up’ and ‘surprise and delight’ items via app-enabled vending machines. This is a great example of the physical and digital working in concert, leveraging unique strengths to meet specific customer needs.
So, let’s strive for an omnichannel experience that embraces channel diversity, for a little while longer at least. Consequently, companies require a targeted strategy, grounded in deep customer insight, which can realise the value of physical-digital interactions and bring it all together into a unified experience.
At CDP we specialize in creative combinations of physical and digital experiences. We are a multidisciplinary team of strategists, designers, product and software developers, taking omnichannel services from concept to live. Our end-to-end approach maintains a common thread of customer and business needs throughout, shortening development cycles and reducing risk and cost.