Omnichannel: retail pipe dream or achievable ideal? To some, it’s the former, requiring technology and staffing investments that are simply not an option — especially given the turbulent economic climate over the past several years. But for others, enabling an omnichannel environment is priority number one, the holy grail of retail that allows companies to better understand and serve their customers across each and any of the channels these shoppers use.
And with retail channels proliferating — read: store, kiosk, social, mobile — it’s becoming increasingly critical to know who your customers are, how they shop and, most important, what they want. “Consumers are forcing retailers and consumer market enterprises to usher change in retail commerce and point-of-service (POS),” says Sahir Anand, vice president and research group director, Aberdeen Group
. “Mobile and tablet shopping is already beginning to address a unique consumer-centricity opportunity.”
Mobile drives demand for omnichannel
Aberdeen data shows that 61 percent of retailers are struggling to come to terms with both the improved functionality and usability of mobile devices among consumers, with smartphones and tablets that enable online shopping and access to detailed product data while in store, and sharing information quickly and easily via social networks.
In 2011, Aberdeen found that retailers noted customers’ high adoption of mobile devices as their second-highest business pressure. “Online, including social media, and mobile are seeing the greatest growth as a percentage of cross-channel sales,” says Anand.
Indeed, a quick look at last year’s holiday shopping stats, as reported on MobileCommerceDaily.com, indicates that consumers’ use of smartphones and tablets for shopping is quickly reaching critical mass. According to Google, 65 percent of mobile users said they used their device to locate a brick-and-mortar retailer to complete an in-store purchase. Retrevo, a consumer electronics review website, reports that 43 percent of mobile shoppers have downloaded a retail app. One third of consumers expressed interest in signing up for a mobile loyalty program, says Hipcricket, a mobile advertising firm. And PayPal, which processes a whopping $10,000 per minute in mobile payments, revealed that 67 percent of consumers intended to purchase holiday gifts on their handheld device. What’s more, IBM CoreMetrics, an online analytics firm, found that mobile retail traffic skyrocketed 200 percent in 2011.
Those numbers will get any executive’s blood flowing, but providing an optimal mobile shopping experience demands planning and seamless integration. “To work effectively, mobile and tablet retailing needs to be integrated with online, call center and in-store retailing from a standpoint of product information, promotions, pricing and customer fulfillment,” says Anand. “Channel unification involves creating the 360-degree customer experience but also involves managing inventory and data."
Moreover, consumers’ insatiable demand for a constant supply of new and exciting fashion only complicates things further. “Apparel retailers must align customer touch points, customer orders, and fulfillment processes due to short product lifecycles and faster inventory turn requirements,” Anand explains.
Because the technology and business processes in a multichannel retail environment generally are disconnected, executives should implement service-oriented architecture, open architecture and other standards-based integration technology to reduce the lack of connectivity between customer-facing and back-end retail channels within two or more channels. “While apparel retailers are battling hard to keep up with the consumer’s changing channel preferences and affinities, Aberdeen data has shown that these retailers can lead with systems and business process integration in the channels so that they integrate all cross-channel customer touch points from product data, orders and fulfillment,” Anand adds.
From a strategy perspective, the key is to establish an executive job role that’s responsible for cross-channel brand management. And that’s precisely what Lucky Brand Jeans
did when it overhauled its staff 18 months ago, says Charlie Cole, vice president of online marketing for the manufacturer and retailer, who also joined the company during that critical transformational period.
Getting Lucky online
Founded in Vernon, Calif., in 1990, Lucky Brand Jeans became a subsidiary of Liz Claiborne — recently rebranded as Fifth & Pacific
— in 1999. The denim brand drew from the culture of sunny southern California to inspire the cool-kid, laid-back, rocker vibe of its premium jeans, which retail for about $100 on average. The company later diversified its offerings and now sells sportswear, outerwear and even apparel for children through its e-commerce website, 140-plus branded stores and department stores, including Nordstrom and Bloomingdale’s. Lucky Brand offers new products 12 times per year, according to Cole.
For the vice president of online marketing, analytics play a critical part in Cole’s role with Lucky Brand. The company uses IBM CoreMetrics
software to track and manage all of its web data. Cole maintains that the brand's online activities drive offline customer behavior, though Lucky Brand's ecommerce site shows perfectly healthy conversion rates. The company does about $30 million in business online, compared to $250 million for the brick-and-mortar stores.
But the way retailers usually track touch point attribution may be a factor in why online conversion rates are — or seem — higher. Says Cole, “If someone opens an email but doesn't click, the attribution shouldn't stop there.” That is, the customer may have opened the email on her smartphone and then logged onto the retail website on her laptop or desktop computer. Or perhaps seeing that email prompted the shopper to stop by a brick-and-mortar store on her way home from the office.
This is why it is so critical to capture as much customer data as possible at the point of sale. “When you ask for a consumer's email address in store, one, we can mark what those users bought, and two, we can attach an email to the purchase, explains Cole. “There’s a causal correlation from online and offline channels relating to each other.”
With that knowledge in hand, retailers can best market to a customer based on her prior shopping behavior.
Caveat: of course, marrying online and offline systems isn’t cheap, adds Cole. “The disadvantages are only becoming more macro,” he says, citing privacy laws passed last year in California that prohibit retailers from capturing certain information — such as a zip code — at the point of sale. "That changed the game with database marketing in California."
Although Lucky Brand has developed mobile websites, it has yet to roll out mobile apps, which Cole says are coming by the end of the first quarter this year. The company will start moving toward push notifications from the apps. Cole says three elements will factor into these pushes: 1) Is the consumer within 10 miles of a Lucky Brand store? 2) Has this user made a purchase within the past 12 months? and 3) What did they buy? The trick, says Cole, is to “layer on other points of logic” to best serve and influence each individual customer.
Getting customers to opt into the mobile channel unlocks a wealth of potential. “It's the ultimate virtual circle: I know who you are in store, can link back to your email address, and also have the address that you logged in with in the mobile app,” Cole says. “How can I figure out if you're in my Facebook and Twitter feeds?”
But if that user is engaging at that high a level with your brand, proceed with thoughtfulness, if not exactly caution. “You don't want to send promotions via all of those channels on the same day,” explains Cole.
Jessica Binns is a freelance writer based in Washington, D.C.