With the growing trend of consumers combining their shopping activity across online, brick & mortar and mobile channels, significant discussion has arisen in the retail industry about the need for omnichannel marketing.
What is Omnichannel
While perhaps a single definition doesn't yet exist, one way of thinking about omnichannel marketing is that it is centered around the customer. Historically, multi-channel strategies have tried to ensure brand consistency across channels and optimize performance in each channel based on respective strengths. Multi-channel is more of an inward focused approach.
With omnichannel, when a customer engages in a particular channel, their prior interactions in other channels is known and that knowledge is used to optimize the interaction in the current channel. Omnichannel is a more of a customer focused approach that works alongside the customer as they interact with the retailer.
Taking this one step further, omnichannel should also leverage knowledge of one other huge "channel" - what's going on in the outside world. This includes information like location, weather, traffic and national / local events which can have as much impact on optimizing the customer interaction as anything else.
In order to create maximum value, omnichannel strategies must be directly applied to improving performance of core business objectives. Otherwise, retailers run the risk of implementing a very complex initiative without an end goal in sight. For the marketer, a well executed omnichannel strategy can improve
- Offer optimization
- Conversions / transactions of sales leads
- Customer lifecycle management - recognition of events & milestones
- Customer service - cross channel coordination, surprise & delight tactics, recovery.
Omnichannel implementation requires many capabilities including enterprise data management solutions, predictive analytics and real time decision software. It may also require changes to organizational design and operational processes.
Role of Real Time Decisions in Omnichannel
Real time decisions is critical for a well executed omnichannel strategy. Omnichannel leverages knowledge of prior interactions across channels to optimize the interaction in the current channel. In most cases, the opportunity for the retailer to interact with the customer in the current channel is "now" or real time.
Execution of omnichannel and real time decisions is triggered by an event. An event can be any number of things but is usually initiated by a customer action; examples include
- Customer visits website
- Customer visits brick & mortar store
- Customer engages in a social channel
- Retailer determines geo-location of customer.
A retailer must be able to capture this event and leverage additional data like prior interactions across channels in order to derive intelligence. A wide range of tools from sophisticated predictive analytics like machine learning algorithms to more straight forward business rules engines should be leveraged to derive intelligence. From this intelligence, a decision is determined for the optimal action. The decision must be integrated into a customer facing channel or business process in order to impact the outcome in real time.
The entire process, outlined above, is called real time decisions. As you can see, it is central to enabling the knowledge and coordination of actions across channels. In the next post, we'll talk more about the execution of omnichannel real time decisions.
In the meantime, what do you think? We'd love to hear your thoughts.