Omni-Channel Commerce Starts by Optimizing Individual Channels First

Posted on July 12, 2014

I’ve been fortunate to be involved in Retail demand generation in the 1990s and into the 2000’s as e-Commerce exploded onto the scene. That perspective includes multi-language, multi-currency (think pre-Euro) and multi-country regulatory requirements working with brands selling through leading retailers such as Sam’s Club, Best Buy, Dixon’s (UK), Tesco (UK), Carrefour (France), MediaMarkt (Germany), and many others.

In those days, the goal was to create an online experience that could match the in-store experience. You might call it a channel parity approach whereby a “seamless experience” was the goal. However, by the end of the 2000’s it became clear as mobile device usage exploded that the game had changed and the emergence of true channel integration surfaced (ordering, fulfillment/pickup, returns from any brand channel touch point). This “omni-channel” buzzword has been every retailer’s goal and logistics initiatives such as “ship-from-store” are evolving rapidly.

From my perspective, all of this is good for the consumer.

However, before we get too excited about this omni-channel future where I can order something online, receive it at my doorstep, and then return it in-store there are still some basic operations issues to overcome. Recently, my wife and I visited a Pottery Barn retail store in an upscale outdoor mall to purchase 3-4 new bath towels. Once in the store, we noticed a display that announced up to 40% off select bath towels and accessories so we asked the store representative which bath towels were part of the sale. For the next 15-20 minutes the store associate was checking price tags to determine which towels qualified for the sale. If you take a look at the iPhone picture I took of the in-store display, it should have been pretty straightforward right? I mean, if you have towels and accessories on a table with a 40% sale sign, then any reasonable person would conclude those are the towels and accessories on sale, right?

Not so fast – that would have been too easy. It turns out that none of the towels on the actual display table next to the sale messaging were actually on sale. In fact, the sales associate could not find any bath towel SKUs on sale despite three separate displays indicating otherwise. After a store manager got involved and agreed to deduct a random discount from two of the towels my wife purchased, I chuckled and mentioned to the sales associate that I felt bad she invested so much time with us for what should have been a five minute sale. And that story is why I buy everything online – including cars, luxury goods, etc. I simply don’t extract anything meaningful from driving to a retail store, finding parking, talking to sales associates that know less about the product than I do (from online research), or where the in-store merchandising experience actually contributes to helping me find and buy the right product.

I am not trying to pick on Pottery Barn because if you are reading this post you’ve probably experienced similar frustrations at many retailers we all know (and used to love). However, the point is that just like the rush of companies to pursue big data strategies, get the basic “blocking and tackling” (such as departmental analytics) right before thinking you can plan and execute a big data strategy.

There are retailers getting omni-channel right and more will in the future. However, before jumping on the omni-channel bandwagon it is really important to map what it takes to deliver a truly channel agnostic customer experience. The basic functions such as product mark downs, SKU management, promotions, merchandising and displays, etc. will need to be coordinated for consistent experience delivery.

The point of this post is to encourage retailers to become intentional about truly auditing their individual channel customer experiences and optimizing them first before combining them for cross-channel experience delivery.

The key to getting to “point B” in any strategy is a sober understanding of where you are starting (point A) so that the path you create connects the dots.

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