Beyond Omni-channel: Customer Experience Networks are the next challenge for retail

The traditional Omni-Channel

 Omnichannel Retail is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.

“I want us to stop talking about digital and physical retail as if they’re two separate things. The customer doesn’t think of it that way, and we can’t either. Customers just want us to solve their everyday problems with an easy, seamless shopping experience.”

Doug McMillon, CEO of Walmart

Failure to adopt a multi-channel strategy with On Line shops, Web to Shop and diversify with new products, would have severe impact on a retail organization:

  • Customer attrition: Digital media is driving prices to their lowest threshold. Customers can now easily compare prices and products on Internet and mobile before they go shopping
  • Loss of customer and brand loyalty
  • Threat to business survival

Sally’s Omnichannel journey:

Here is a traditional customer journey that illustrates the Omni-channel experience:

  • Sally searches on the web what type of lawn mower she would like, the price range and the customer ratings and reviews.
  • Visits her DIY store to purchase a lawn mower.
  • Leaves without buying. Her favorite mower wasn’t on the shelf.
  • A few days later, as sunshine is back and the lawn gets too thick, she decides to buy, but it’s rush hour and she isn’t inclined to go back to that store.
  • Sally opens up her browser, gets to the shop’s page. She does not have to search because the shop’s cookies are still there to provide the direct suggestion.
  • Sally buys, and asks that she picks up the mower in the store.
  • The following day, on her way back from office, she picks up the mower.

The DIY retailer happens to be even very advanced. They have also built a shopping companion app for Sally. The app was able to geo-localize Sally, especially when she is in the store or in a competitor’s one. Sally is able to receive:

  • Flash promotions (when in the aisle, when at a competitors store)
  • Engaging content, for liking and sharing on social media
  • Loyalty points (per purchase, per store visit)
  • Scan product barcode to obtain info (price, material, contents, origin, pictures, videos, explanations etc.)
  • Mobile payment
  • Cross-sell proposals
  • Product localisation (nearest store, mall maps, ailes map for large stores)

For the DIY retailer, the experience they provide Sally with was once a real competitive advantage. Hardly 3 years since they implemented their omni-channel strategy, it has become a must-have cost to remain in business, but by no means what brings cutting-edge value.

To cite “The Retail Transformation” report from the Deloitte Center for the Edge, “technological advances and public policy liberalization are contributing to new flows of information, knowledge, and resources. As a result, retailers face new pressures:

  • Lowered barriers to market entry are bringing in many new small players and fragmenting the retail landscape.
  • Online marketplaces are transcending geographic proximity and expanding market demand for highly specific offerings.
  • Technologies such as on-demand fulfillment are changing how and where retailers hold inventory.
  • New retail models are arising out of new technologies and new ways to connect with consumers.

Amid all this change, the retail value chain is unbundling, and even remapping. To compete effectively, traditional retailers should reimagine how they create and capture value, thinking past omnichannel positioning to examine, and find the best uses for, their assets.

Beyond Omni-channel

Traditionally, organizations have adopted an omnichannel approach to unify the customer experience, but this is often not sufficient or successful in delivering ROI. Omnichannel only cares about and manages the customer-enterprise interaction. This is important of course, but going forward, and in order to better serve the customer, organizations need to further tap into their entire ecosystem of employees, suppliers, partners, external data sources and services – what Axway calls customer experience networks – whether the customer is in a B2B or B2C industry.

Unlike omnichannel, a CX network is focused outside-in, combining data from everywhere with contextual intelligence to create a unique ecosystem for each individual customer as they go about their daily lives. A shopper’s ecosystem becomes one that combines retailers, product manufacturers, banks, consumer ratings providers, sales tax collectors and social media app developers.

See previous article on CX Networks.

Sally’s CX Network

In our traditional omnichannel story above, Sally interacted with her retailer. From the retail organization perspective, the customer experience they provided Sally is in reality an enterprise-centric customer experience, not a customer-centric customer experience. Sally no longer sees herself nowadays in a privileged contact with a store. She sees herself at the center of a myriad of services that come from everywhere, and converge together to help her decide, choose, buy, pick-up and use the product that best responds to her needs in a specific situation.

Sally is now connected to more than one retailer, she connects to gardening, DIY, and health websites who provide advice on best products. She connects to customer ratings, to product catalogs, to comparative sites. She can ask for the environmental characteristics of the product, check it on the manufacturer’s catalog, and so on. Sally not only receives data, she also provides it. Directly via reviews, social networks, customer relationship interactions. And indirectly via the connected objects she possesses.

What’s even more important, Sally provides data to her retailer without knowing. She has recently been in contact with a real estate agency to purchase a house in Sussex County, and this event in the life of Sally, as many other life events, happens to be of particular interest to her DIY retailer, because they can then anticipate her need for wall paint, wood flooring, and a lawn mower.

Sally’s retailer knows that, now, in this digital age, the customer experience is ecosystem-driven, where customers are in the middle of a myriad of interactions, being consumers as well as producers in these new expanded ecosystems. A real “customer centric” customer experience puts the customer at the heart of a network of interactions.

Sally’s retailer has successfully built a platform that connects a large part of the retail ecosystem organizations – suppliers to the Nth level, customers and potential customers, logistics providers, weather forecasting data, government statistics, dealerships, distributors, real-estate agencies, local farmers and so on. The immediate value to each one of these players will be the access to an up-to-date directory of all, with business addresses as well as technical addresses for B2B connectivity.  Add to this accessibility to supply chain events that would allow end-to-end visibility and provide anticipated alerts. Any party can also leverage historical data, on returns and usage for example, and combine this with government sources on average wealth per region, to anticipate on future purchase behaviors.

The retailer can also invite members to collaborate on the capabilities of the new products customers want to see, increasingly use social media to be seen as inclusive by audiences, and leverage mobile technology to provide customers with a seamless experience across all touch points, both online and offline.

Just before Sally moved to her new house, she was pleasantly surprised that her retailer proposed her advice on wall paint and lawn mowers, and of course accompanied her all the way to the purchase, and beyond, because she received proposals from qualified gardeners and craftsmen to help her out.

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