Top Challenges of Omnichannel Strategy

Sep 03, 2019, 20 views

Times have evolved. Consumers no longer have a mono channel relationship with brands. Currently the sale happens in a cycle of interactions between various channels and points of contact, such as getting information on social networks, searching the web, going to the physical store and finalizing the request in the call center or online. In addition, the "neo consumer" hopes to have a unique experience with the brand, not with the channel anymore.

Retail needs to adapt to this new consumer behavior, for this we separate important points to define an omnichannel strategy.

1. TOP DOWN / BOTTOM UP
A channel integration strategy is a complex project for any company. It requires an integrated effort and structural changes throughout the organization. A restructuring of this size requires direction and support from top management, which should be prepared for future challenges and changes in culture. No Omni-Channel project will have strength if run by a department, without the full support of top management. Likewise, no such significant change can be made without full support from the company base, areas such as sales, marketing, IT, procurement, and accounting should be involved in this transition process. Having motivated and committed people is key in this process.

In addition to technological changes to integrate all systems, the strategy should aim to place the consumer as a central point in the company's vision. This change often requires changing organizational structures or organizational culture, which is often embedded in DNA, rooted in departments in the way it operates.

2. FISCAL ORGANIZATION
For a successful strategy, integration between channels is necessary. For example, for reverse logistics, exchanges, guarantees and collaboration between channels, it is very important that the company has organized its legal and tax structure so that this flow is possible. Some companies organized their online operation as a new company and invoice the application in this new CNPJ. When you try to receive an order from online at your physical store, this tax issue can make the process much more complex.

3. COMMERCIAL
3.1 Commissioning

Most companies with physical stores are organized with aggressive commissioning models for their sellers. An integrated strategy can generate a kind of war if this model does not evolve. As long as a physical store seller sees an online sale as a "lost" order to him, his collaboration will never be complete. There are extreme cases where the channels denigrate each other to try and win the sale.

Some companies work commissioning on the customer's life cycle, so customer acquisition (usually the first purchase) is tied to the channel / vendor they've conquered. Obviously, this is a dispute between the channels, because the reward is not always fair. A telesales that does an excellent job of consultative sale, but in the end the consumer decides to go to the physical store, order the product and close the sale in 1 minute. This will take the commission to the physical store seller. There have been reports of vendor squabbles simply because one has spoken to the other's customer. Nothing less Omni than that!

This part of the plan is very complex, but the focus should be to organize a model that puts all the efforts of all channels to improve the customer's buying journey as this will result in a greater number of global sales for the company. Everyone needs to understand that "losing" a sale to another channel is much better than losing the sale to a competitor.

3.2 Trade policies

Some companies practice modalities of different installments by channel. Generally the web is a more competitive environment and the installment in many times is almost a must. However, physical stores have different policies, especially in cases where competition is less. With a unified vision, it will be necessary to organize and standardize these forms of payment and installment payment. You no longer expect to receive a discount online only. Likewise, the consumer does not expect to have different prices or discounts depending on how he comes in contact with the brand.

3.3 Commercial planning

One of the points of a business plan is to carry out the forecast of purchases. In an integrated scenario, where it is possible to have collaboration between channels and distributed stock, how to carry out this planning? As a shoe sales manager, of the running line, can you know how many pairs to order being now that he must anticipate reverse, trade and sales that are not performed on your channel?

In this new scenario, much more planning and help is needed from more complex sales forecasting models. Certainly this is a new area and without much historical data, because the changes will happen gradually. The important thing is to observe trends and calibrate the business planning model with the new variables found along the way. It is a continuous improvement process.

4. VISIBILITY OF STOCK
One of the great benefits of channel integration, its inventory visibility and the ability to sell inventory from other distribution centers or physical stores. This facility is great for the client but, as a rule, causes some side effects. Imagine the scenario of a launch, a product with few units and high margin. All sellers want to maximize their sales and their commissions, but integrated selling can cause a stock from one physical store to be sold by another channel, reducing the margin chance of sellers. In addition, this greater integration requires information in real time, to have a greater reliability of the information, since it is a very volatile data. Many stores have business models that make it difficult for them, such as a supermarket or shoe store, where much of the stock may be in the possession of consumers, but they have not yet written down or generated inventory. After all this real-time integration is resolved, when possible, we still have a logistical challenge, which requires predicting transfer routes, scheduling, cutoff points, freight costs, etc.

5. HOW THE REVERSE IS INTEGRATED
For a modern consumer, it is necessary that all the channels and points of contact of a store must be available for him to exchange or return a product. By law the Consumer Defense Code allows for repentance in certain cases, or even trigger a guarantee of a product. How to allow this reverse to be performed in an integrated manner? If you bought online, you traded in the physical store. If purchased on physical, triggered the reverse from online for the warranty.

This all requires a systems apparatus, tax and trained personnel so that it flows with excellence and does not wear out the relationship with the customer. As long as the company does not have maturity in these processes, you should avoid divulging and using this as a marketing argument, because if the integration is bad in practice, it will be worse than not having the integration. The tip is not to promise something that you can not perform with excellence.

6. HOW YOUR SYSTEMS ARE INTEGRATED
It takes a great deal of integration between all systems for a multi-channel strategy to work. Moreover, it is necessary to arrive at the single source of truth, which is where information and corporate rules originate. For example, how do you make multiple systems understand the same promotion or kit defined by marketing? One must think of the "small" definition: buying 2 units of the XYZ product should generate a freebie. This promotion is advertised on TV, Social Networks, should reflect in the communication of physical stores, be the rule in store POS, e-commerce, telemarketing, ERP, etc. On how many systems should this rule be replicated? Does everyone accept this concept of toast? Everything should be orchestrated to act as a synchronized clock.

Generally a large retail is made up of systems from different vendors such as ERP, WMS, E-commerce Platform, Call Center, POS, Mobile, etc. Integration between these systems is usually performed and maintained by third parties / internal staff, with connectors and integration flows. It is not surprising that it is a complex area that requires a lot of communication and political strength to jointly develop the roadmap of legacy products and systems. In this part of the Omni strategy there is the greatest gap between vision and the ability to execute companies. It is common for each supplier's solutions to have different concepts, validation rules and discrepancies. Making everyone dance at the same pace can be a much bigger challenge than you think.

Here it is necessary to mature systems, suppliers and keep in mind the impact that the strategy has on the technical fabric of the operation. It is not possible to do everything at the same time, it is necessary to draw up a planning that contemplates each step, each change and choice so that the expected final result is reached.

7. HOW YOU IDENTIFY YOUR CUSTOMERS IN PHYSICAL MEDIA
A major challenge of physical retailing is identifying your customers. When entering a store, one can have a history of years of shopping, preferences and a number of recommendations for a particular profile profile. However, if the store does not know who the customer is, all that information collected in years of shopping, e-commerce navigation, social commenting can not be used.

Obviously it is not possible to ask the customer for a login and password or CPF whenever the same enters a physical store. For this new technologies are emerging. They range from applications on smartphones to help in the physical store experience (and hence customer identification), GPS usage, check-in, iBeacons (which are Bluetooth-connected presence devices and can recognize smartphones that own the technology), and until facial recognition generated by cameras scattered around the stores.

Certainly we will have a world of innovations with these technologies, especially in the part of promotions and coupons driven by physical presence. Do not just imagine the obvious coupon that beeps on your cell phone when it passes in front of a store, but rather the store understanding your taste and knowing where you are in the store and delivering recommendations, content and promotions tailored to you according to your interest, at that very moment in a contextualized display for your best experience.

With new science such as Big Data, it is possible to analyze large volumes of data generated by users, allowing the store to better understand and understand the consumer's buying journey. Information generated in the physical store, such as purchased products, iBeacons enabled, can generate insights for recommendations from an online storefront when that same consumer changes channels, keeping the experience unique and consistent.

8. HOW TO KEEP PREFERENCES BETWEEN CONTACT POINTS
Channel integration brings the retailer the opportunity to maintain preferences at any point of contact. Imagine an international network, where the customer when registering on the site chooses the language as Portuguese. When entering a physical store on the same network, in another country, it identifies in a kiosk and it already delivers the content in its language. This may be a simple example, but we can use this concept for preferences such as heart team, biotype, goal, etc. Every little detail is important to conquer and maintain a good relationship with your customers.

9. HOW TO COORDINATE MARKETING EFFORTS BETWEEN CHANNELS
In an integrated and more complex scenario, how do you define which medium to focus your marketing efforts? In addition to permeating many channels, the new reality hinders the appropriation of marketing investment, since it makes the calculation of ROI much more complex. Many online purchases generate future sales in the physical. How to measure and interconnect that investment in Adwords click generated an online consumer who spent $ 100 on an order but in the next few weeks spent $ 500 on physical stores? For this new marketing it is necessary to develop models of appropriation, where the media collaborate, in a certain way, with the intention to buy. You see an ad on TV, search the web, click on adwords, go to the store, comment on facebook, receive a newsletter with a coupon and then buy online. Should the coupon receive all the credit? Certainly not. All contacts with the brand were important during the journey. Now it is up to each company to define and learn how to appropriate this influence of each media in this process, so you can judge which investments have the most return. If the company does not evolve this model, it can make the mistake of judging erroneously results, cutting media that apparently do not bring results, but that have great weight of influence in the decision process of purchase.

10. HOW TO ORGANIZE ALL THESE EFFORTS
Every Omnichannel strategy is for profit. Of course, for that to happen it is necessary to build something beneficial for the consumer. We seek loyalty, repurchase, word of mouth marketing and revenue generation. Knowing how to identify the return on investment is vital to know if we are moving in the right direction, but often that return will be in the medium to long term. For this reason, planning with milestones and achievements that validate that we are heading in the right direction is important.

It is necessary to know how to divide in steps, seeking to simplify the model, generating incremental evolutions. Look for simple and quick wins, such as visual communication on packaging, banners in physical stores pointing to online, etc.

 

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