The term Omnichannel which has been pushed by Forrester and Gartner in the last few years can be viewed as yet another buzzword and item on the latter’s hype cycle. The showcases with augmented reality and other fancy technologies certainly can give this impression. However, at its core we agree that the topic is worth the attention. Having said that, we should take a step back and look at the reasons. Here is why.
Experience is the product
Remember when you purchased a new computer at the turn of the Millennium? Your purchasing decision came down to comparing and studying product specifications. How large your hard disk was, was an essential question especially as at this time digital media started to gain a more important role. Nowadays, you’ve got entire music catalogues available at the tip of your finger and stream them from the web. Those funny videos you forwarded, now sit on YouTube and all you have to do is send the link. Somehow the size of your hard disk is only important in specific use cases as more and more data is stored in the cloud. It just works and the experience is more convenient.
(source: Pewaukee Economics)
In their 1998 Harvard Business Review article “Welcome to the Experience Economy” B. Joseph Pine and James H. Gilmore already illustrated how the four-stage evolution in their model moves everything from commodities to an experience. While this article is a few years old its message has stood the test of time. Just look at Starbucks or other coffee shops. Coffee has come a long way from buying them as humble beans, grinding and brewing them at home to becoming an experience when ordering and drinking a mug of the brew in a comfortable armchair in the aforementioned outlet. While the Starbucks example is often used to illustrate the experience economy let’s take a look at another example: music.
You might argue that this progression of value is tangible with physical products but less so with digital. When Apple introduced the iPod, music you had to digitise your CD collection or get it from other means. Then the Cupertino based company introduced iTunes and you could purchase all the music you wanted with one click. The convenience grew. Then Spotify and other streaming services entered the market and changed your expectation of music. Everything you wanted to listen to was legally available. In many cases the switch from pay per song or album to a subscription based model has increased the fraction of disposable income spent on music. As with Starbucks it’s not because people want to spend more but the perceived experience is better and more convenient.
The sales funnel is dead
The good old marketing textbook staple A.I.D.A. (attention, interest, desire and action) and the sales funnel have been significantly disrupted with the Internet. A 2015 study by Sirius Decisions found that 67% of the buyer’s journey is now digital which reduces time for seller engagement. The market power now lies with the customer. Hence customers no longer act linear in their buyer’s journey as they used to. Do you?
The A.I.D.A model intends that prospects have to be pushed through the sales funnel. In comparison the life cycle approach doesn’t automatically assume that a purchase equates to loyalty. It has to be earned by good customer experience in a world where the market power is with the customer. Therefore, adapting to the customer life cycle view and putting the customer in the driver seat is essential in this digitally transforming world.
Your company has to deliver on every touchpoint
Back in the day when visiting a brick and mortar store and accepting that the product range on display was the entire option of purchasable goods has long gone. If you were adventurous, you might have called ahead and asked for a product being reserved or ordered it to the store so you could pick it up once it arrived. However, you always noticed that this wasn’t the way things were done and the sales person was really uncomfortable with this. Then the internet came and somehow the procedure changed and ordering online and picking it up in the store was possible but the experience was comparable to the last example. Over time this experience got a lot better and nowadays this transaction is really common. But as soon as new channels appear the initial experience will remind you of the brick and mortar experience. With every new channel the number of processes increases (i.e. “buy online, send to third party and return in store”, “get advice via social media, order later in the mobile app and pick up in the closest outlet the same day”). From a user’s point of view there is no logical reason why this shouldn’t be possible. If your company has bespoken retail stores and your website does not reach those standards, do not expect your customers to be understanding.
For your potential customer it doesn’t matter that your digital department is not as mature as your brick and mortar department. Either it works or it doesn’t. 24/7/365 is not a phone number but a customer’s expectation since we live in a globalized Experience Economy. Any deviation of the mean will lead to customers looking for another supplier.
Ignore all fancy examples when thinking about your omnichannel needs and take the view of your customer. Accept that omnichannel needs long term commitment and support. Reaching a high maturity cannot be achieved with a single project and must be an ongoing process. Omnichannel, like the term or not, is the logical evolution of digital maturity and a customer-first mind-set that bridges the gap to the physical world. Ignoring it outright will only lead to a catch up game in the future.
In the following blog posts we’ll be diving deeper in to the topic and look at the dimensions: strategy, organization/processes and technology.
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