Magazine Article | April 19, 2017

7 Ways To Optimize Omni-Channel Engagement

By Mila D’antonio, Principal Analyst, Customer Engagement, Ovum

Technology plays a strategic role in a retailer’s ongoing effort to engage the customer.

It’s no secret: The retail landscape is a rocky one of late, with announcements of store closures occurring on a regular basis. With mall stalwarts such as Macy’s, JCPenney, and Sears continuing to shrink this year, and furthermore others such as The Limited shutting down completely, retailers left standing are looking for a lifeline.

Forward-thinking retailers are investing in the technologies and strategies to enable seamless and tailored omni-channel engagement with their customers that will help them to compete, survive, and evolve with consumers’ rapidly changing expectations. Here are seven ways retailers can optimize omni-channel engagement:

1. Create Unique Customer IDs
The ability to recognize the customer hinges on properly identifying, authenticating, and matching him to a personal profile. Without a single data stream that merges behaviors from both traditional and digital channels, retailers can’t truly anticipate and respond to customers’ needs along their journeys. Such comprehensive understanding requires complete cross-channel (traditional and digital) and cross-device integration, as well as the merging of key pieces of unstructured data from those channels.

In a perfect world, customer engagement leaders can tap a one-size-fits-all solution to integrate Big Data into their strategies. But because each customer journey is unique and engagement has been siloed, such a solution has yet to exist. The most effective means of delivering seamless cross-channel communication comes from fi rst understanding customers’ behaviors as they move across traditional and digital channels. Enterprises that successfully create unique customer profiles that contain consolidated data based on all interactions from offline and online touch points, devices, and from existing systems — including CRM, content management, marketing automation, and e-commerce — gain an accurate representation of customers’ journeys and therefore a holistic understanding of customers’ behaviors. Such unique profiles build the foundation for unique IDs to cross-reference attributes and tie them to individuals. They will help to paint a clear picture of how customers interact with a business before, during, and after they make purchases, as well as help leaders understand their individual needs.

2. Turn Stores Into Distribution Centers
As the need to bridge the physical and digital divide becomes more urgent, a growing number of retailers are offering the option for customers to buy online and pick up in-store, a process often referred to as “click-and-collect.”

An increasing number of stores are jumping on board with this trend. Target announced in February that it would invest more than $7 billion over the next three years to better position the company for the “new era” of retail. One of the goals in the plan is to reimagine the locations as distribution centers for online orders.

On paper this growing trend seems appealing, but as frustrated shoppers from the 2016 holiday shopping season demonstrated, the process is still currently aspirational. Those who took to social media to complain about the inability of associates to locate the inventory, long lines, and confusion over where to pick up items in stores, revealed overarching flaws in this process.

"In insights-driven organizations, IT collaborates with nontechnical key decision makers to ensure they have the capabilities and access to data to make knowledge-based decisions anytime and anywhere."

The potential opportunities to drive more traffic to stores and leverage in-store inventory will increase if retailers work out the kinks. They must improve inventory, close the knowledge gaps that seem to exist with in-store associates and the supply chain, and alert customers in real time through the channel of their choice, as well as with the help of beacons and sensors when they arrive in the stores. Mapping out the customer journey to better understand the steps a customer takes from order placement to in-store pickup, and removing any obstacles in that path, will help retailers create a seamless and natural click-to-collect path and ultimately earn their loyalty.

3. Get Creative With Beacons
Beacons, devices that send messages to smartphones and track customers in stores through Bluetooth low-energy technology, provide ample opportunities for retailers to better understand the context in the steps along the nonlinear customer journey and then bridge the gap between a person’s digital and physical shopping experience.

Retailers have long been reluctant to deploy beacon technology because of its requirements for shoppers to enable Bluetooth on their smartphones while in stores. But because of the increase in wearable devices, smart home technology, and VR usage in stores, such concerns may become a thing of the past.

More retailers are jumping on board; Tesco launched its MyStore concept, which involves an app that allows customers to create a shopping list at home. When they’re in the store, they click a button to tell them the precise location of these products. Because their data is stored centrally, it creates a cross-channel view of customers, which affords Tesco the ability to tailor experiences along customers’ individual journeys from the digital realm to physical stores.

4. Blend Traditional And Digital Enterprise Engagement Roles
With customers’ expectations for a seamless experience rising, it is more critical than ever to ensure employees are working in concert to make sure that an enterprise’s marketing and messaging is consistent across all channels, regardless if the channel used is digital or traditional. Some companies are taking the monumental steps to integrate their digital and traditional roles and functions within departments and sometimes across customer-facing roles throughout the enterprise. This helps to alleviate internal silos that often stall true omni-channel engagement from happening. For instance, multiple marketing managers, for example, assigned to individual channels, creates a disjointed marketing presence.

In this integrated role-based format, it’s vital to make sure employees who are performing newly merged functions that span what used to be separate areas of the enterprise understand why it’s critical to integrate traditional and digital channels and data to ensure efficient and effective customer engagement. This involves a well-orchestrated communications plan with continuous opportunities to promote awareness and education.

Communicating benefits generated from the solutions through internal case studies on an ongoing basis is also important in gaining traction with an integrated offline and online channel strategy. Organizations that supply employees and managers with the technology and processes to help them deliver such objectives will ultimately start to see positive results tied to customer satisfaction, loyalty, and the bottom line.

Best Western, for example, hired an outreach officer who works across multiple platforms and departments to connect with people to understand what they do. Since starting in his new role, he has developed a communication plan that links all the stakeholders in the organization and has identified the processes that impact different groups and what they need to know to adjust to certain changes.

5. Become An Insights-Driven Culture
At their core, insights-driven enterprises focus on closing the knowledge gaps that exist in their organizations. They deliver on common governance, policies, and procedures that address data challenges and help to adopt a common approach to change management challenges regarding data integration.

Enterprises that operate on an insights-driven model run activities that support master data sources within the enterprise. In insights-driven organizations, IT collaborates with nontechnical key decision makers to ensure they have the capabilities and access to data to make knowledge-based decisions anytime and anywhere.

Ovum believes the creation of an insights-first culture hinges on having a thorough understanding of how departments within the enterprise function. Only then will the enterprise come together to repair the disconnect of complete data delivery throughout by building entire teams and committees to work toward the goal of enterprise-wide information governance.

6. Invest In Augmented And Virtual Reality (AR And VR)
Virtual and augmented reality have the potential to change the retail landscape as we know it. Both are already disrupting the retail space in a big way and may help retailers successfully blend the in-store and online experience.

Lowe’s, for example, is helping customers envision what an installed product such as a refrigerator would look like in their home by creating a remodeled virtual space for customers to explore.

According to Apple CEO Tim Cook, augmented reality should encourage, not replace, human contact. Applying human contact to AR and VR scenarios will enable associates to browse inventory through digital devices, increase sales by allowing customers to try before they buy (both online and in-stores), and connect offline marketing to online stores through augmented catalogs to close the purchasing loop.

7. Let The Internet Of Things Guide You To Better Customer Experiences
CES 2017 saw an increase in the launch of new connected household items such as mirrors, hairbrushes, beds, pillows, pans, and trash cans. In fact, Ovum forecasts that there will be 15.3 billion consumer devices in use by 2021 connected via the Internet of Things, and the benefits of this relatively new technological capability are still unfolding.

Connected devices and wearables allow companies to create hyper-personalized moments that empower customers, give them autonomy over their own data, and can engage in ways that invite customers into the stores. In return, the data gathered from these connected experiences provides a clear directive for companies on how to improve the customer experience.

Samsung’s Family Hub smart refrigerator, for example, allows users to connect to their local grocer to place orders, access recipes, or gain an inside view of the refrigerator from their phones, among other things. As Samsung demonstrates, IoT turns any object into a bountiful source of information about its customers’ behaviors and preferences. Retailers that can quickly figure out how to leverage the new breed of data from connected devices will gain the ability to track activities, identify choices, and evaluate outcomes, ultimately adopting a new level of proactivity that hasn’t previously been available in single-channel environments. In the long term, they will find a new way to understand customers’ individual behaviors, link that data throughout the enterprise, and gain competitive advantage in this new era of retail.