APIs
10
min of reading
May 22, 2017

What REALLY is Omnichannel?

Lucas Tempestini
Global Marketing Manager
Developing Marketing Strategies and Communications throughout a very complex global strategy.
More about the author
O conceito de Omnichannel vai além do que simplesmente estar presente em todos os canais de venda, queremos falar de experiência e integrações.

Omnichannel, multi-channel, crosschannel…

I bet that you have already found these terms sometimes when searching on the Internet. You have even read some things about omnichannel, maybe you already know what it is.

But do you still find this word too mystique to understand how this would apply in a company’s daily routine?

So, let’s answer your doubts in this article! And, if you still don’t know those terms, come with me and in a few minutes, everything will be crystal clear.

Today, we are talking about:

● The meaning and pure concept of omnichannel;

● The difference between multichannel and omnichannel strategies;

● How this concept becomes a real business strategy;

● Why the largest e-commerces in the world have already been applying it for years and will invest more and more in omnichannel;

● How you can start an omnichannel strategy on your e-commerce/retail!

So, here we go!

Most of the times, the concept is related to other very similar terms, such as “multichannel” and “crosschannel”, especially when it is about e-commerce and online sales platform.

But what does all of this mean, after all? And how those concepts differ from each other?

First and foremost, let’s understand the source of all those terms:

1. The “multi” prefix comes from Latin, meaning multiple or several;

2. “Cross” comes from crux, which means something that crosses or traverses;

3. On the other hand, “omni”, in Latin, means everything, universal, something that encompasses all the possibilities and variables.

Similar! So, what’s the difference?

The Omnichannel concept goes beyond being in all the sales or communications channels, which is, normally, what relates to the multi and crosschannel concepts.

Many people will still say (mistakenly) that, to be “omni”, you just need to make your app for smartphone reflect your website’s identity, and make your website reflect the physical store environment.

However, we can’t forget that omni means “EVERYTHING”, and all the purchase process is performed by one entity: the customer.

So, we get to the omnichannel focal point, and that it’s not represented by other concepts: the customer experience. With that in mind, it is easy to realize that it is more than a simple app, website and store standardization.

In fact, it has to do with the customer journey and how all those sales channels make the purchase decision easier to the customer, and simplify the sales process to the merchant.

The fragmentation dilemma

Omnichannel ends up being a concept so powerful that it is not just a brand that makes the customer to purchase or change their mind. The comparison among different stores also leads to the purchase decision!

For example, you can search for the prices of a pair of Nike’s sneakers on Dick’s Sporting Goods website, and save them in your purchase cart, and then visit a shopping mall to compare the prices. Would it be surprising if all the information you have collected from the Internet was useless there?

Either because you hadn’t find the model you wanted or each store offers different conditions, or whatever the reason is, I bet you have already been through this sometimes, and you can give me many other examples of how the online and offline searches experience are different and completely fragmented.

This impairs the purchase experience of Nike’s customer. But because Nike doesn’t sell its products to end users, it is not the responsible, but the stores and resellers are.

Again, we see the relation between omnichannel and the customers purchase experience and journey.

This diagram can help you to understand what the frontier between multichannel and omnichannel is (Its translated right below!):

Omnichannel Strategies


Omnichannel strategies

But why do stories like the one of Nike’s customer happen?

The first and most important point is the customer. Any strategy that aims to work well needs to have the customer as the main focus. And this makes perfect sense, doesn’t it? If you don’t make them happy, they may buy your product once, but they are unlikely to come back.

The idea here is to obtain customer loyalty, not only because of the product quality, price or service provided. All of this is prerequisite for any business to success. The customer has to come back because he/she had a unique experience when buying with you, something that will not happen if he/she buys with your competitor.

Or, it happens in your competitor, the customer will have personal reasons that lead them to consider your e-commerce as the most proper to him/her. After all, every person feels different when it comes to experiences and brands. I will talk more about this consumer profile later.

Another point is that the movement towards an omnichannel model is still a little slow, because it didn’t keep up with the digital revolution brought by Smartphones, Wearables and Smart Devices.

This is even more abstract to the companies!

To make it a little clearer: currently, we spend more time in front of smartphones than of the TV. It’s 147 minutes against 113. And if it happens, why do we still think of the purchase journey in the “traditional” way?

Would you be surprised if you find someone searching for prices on the Internet inside a physical store? I don’t think so!

And what if a channel disturbs the other?

If you are a person who sees the glass half empty (that is, see more problems than opportunities), you may even think this is crazy, and that something like a customer searching for prices in e-commerces while buys at the shopping mall will cause “cannibalization” among your channels.

However, I’m sorry to tell you, but you are probably wrong.

A recent study of UBS has shown that most of the people who buy at Walmart physical stores prefer to buy Online on Amazon.com and not on Walmart.com!

Of course, the experience on Amazon website is better on digital environment.

That is, the experience is already fragmented, so your channels will not be disturbing each other.

Then I keep thinking, why is this experience being fragmented?

CUSTOMER is the focus

Being omni has a lot more to do with customer experience. Not of YOUR or THEIR consumer, but ALL the consumers, in all stores. It has a lot more to do with using all your available channels to bring the best purchase experience to the consumer.

That’s why fragmentation doesn’t really matter, after all.

Amazon tries very hard to sell for you at the first sight. But it knows perfectly well that most of the purchases are not carried out at that moment.

That’s why they invest so hard in remarketing advertisements (those that seem to follow you on multiple websites after you search for some product), they incentive you to create analysis and assessments of products and other tools, so that you carry out the purchase at the second, third or umpteenth time.

And how to do that?

Well, one of the first steps to create an omnichannel strategy is to put yourself in the consumer’s shoes and try to understand how to make their experience better.

You need to know the consumer, right?

Outline an average profile of your customers: do you sell more for men or for women? What is their age group, average income and profession? If you sell more than one category in your store, it is interesting to think about this separately for each of them, or at least for the most important/profitable/with growth potential.

For example, by focusing on the consumer Macy’s developed an awesome omnichannel strategy. At some point, someone analyzed the numbers and realized that at each dollar invested in searches results were other 6 dollars converted into sells at physical stores.

See? Searches on Google -> sells at a bricks & mortar store.

The strategy was to develop the consumer experience, enabling online and offline to work together. As the Vice President of Digital Media & Multicultural Marketing said herself:

“In the end, it is indifferent for us if the customer buys online or offline. We just want them to stick around with Macy’s!”

You can be sure that they are carefully monitoring the purchases journeys of their competitors, to make sure their consumers have unique experiences at Macy’s.

Very good, but only the knowledge of people is still not enough. The next step is to understand how they buy.

Uncovering the purchase journey of your consumer

When you know data about your target audience, you’ll be able to put yourself in their shoes. However, in order to be capable to see improvement points in your experience, it is necessary to know what your purchase journey is.

For example, in my case, I prefer not to interact with many people when buying something. The more digital the steps are during my purchase journey, the better.

But that’s me! Perhaps it is a trend for people who have the same profile as me and buy the same things.

And how is your customer?

In this case, if a store knows my preferences and intends to make my experience better, it just needs to allow me to solve everything seamlessly, without leaving my computer or cellphone, since my initial prices search, until the purchase itself, tracking the delivery and post-sale.

On the other hand, in case of issues with payment or delivery, the stores commonly offer support via telephone or chat at the moment of the purchase. After all, I don’t want to talk to a machine through the telephone, I want a person to solve the problem!

Only if you know the consumer and their purchase journey it will be possible to establish which factors would make him/her buy (or not) again in a certain store.

Numbers are your friends

E-bit/Buscapé has carried out an interesting survey with almost 2 thousand Brazilian virtual consumers (who bought at least once through the Internet).

From this survey, they could get some valuable information to create an omnichannel strategy. Keep up!

For example, did you know that the factor that makes the Brazilian consumer more uncomfortable on online purchase is the high shipping costs? Did you also know that an effective post-sale is a factor that makes a consumer decide or not if he/she will purchase in a certain place?

Yes, these are factors that impair the online purchase experience.

The survey analyzes separately multiple important steps in the consumer journey and shows the factors that most influence, positively and negatively, in its success.

For example, at the delivery step, 63% of the buyers appreciate a good service of orders tracking, while 61% like agile deliveries.

These numbers are examples based on multiple different consumer profiles, that is, they might not match YOUR target audience. Maybe your audience appreciates quality better than speed!

So, the examples I just gave you are a basis for you to take the first step and carry out your own survey. After all, no one but you can understand what your customers want the most.

Integrate your services

If you already know your consumer and how you can improve their purchase journey, you already have in your hands the main pillars to an omnichannel strategy.

But there’s a very important element missing, and the clue comes from the pyramid image above. So far, I’ve been talking about what differs a multichannel strategy from an omnichannel strategy.

What multichannel has, in its basis, it’s the integration among different services. It’s the technology that will maintain the purchase journey of your consumers. That’s why multichannel is below in the pyramid: without it, omnichannel doesn’t work!

So, there are two visions of potential integrations:

1 – Your brand’s services and stores

In the case of physical and virtual stores, some examples of interesting services are the purchase of some product through the virtual store and pick at the closest physical store, in order to save the shipping costs, or even if prices of the two channels are the same, because that way the consumer can carry out their searches at home, and get to the store with the decision taken.

In the case of e-Commerce, that has only virtual stores, integration can be made between mobile application and website. The consumer must be able to start the purchase through the application and finish it through the computer. Or buy everything through a website and use the application to keep track of the delivery.

Integration of your own services (as described in the paragraphs above) is “easy”. You just need to have processes to keep the information up to date in some database, and that all (virtual and physical stores, application, and so on) consume this same base.

In a general way, APIs offer you the ideal characteristics to create this structure.

But I’m not done yet, there’s more!

2 – External services

Of course one of the main factors of Macy’s strategy success is in the integrations between physical stores and e-Commerce, but payment services, orders geolocation, conversation chats at the moment of the purchase, warnings via SMS and others, will create that layer of unique experience to your customer.

But which of these services to choose? Which one to deploy first?

If you did the exercise of the first half of this text, you know the answer: you will be able to answer which APIs to integrate to your e-Commerce only when you truly know your consumer.

And this keeps being the first and more important step!

Your customer, your e-Commerce and the APIs revolution.

We are at APIs Era. All the mentioned integrations and services provided to the audience of success stores and e-Commerces exist in APIs format.

Didn’t you know it?

APIs are growing just like having a website was a luxury, and it became something ordinary, or social networks had their business effectiveness questioned a while ago, and nowadays it doesn’t make sense if a company doesn’t have a webpage on Facebook.

So, recapitulating what we learned today:

The key to a successful omnichannel strategy is to keep focused on the customer, by understanding their characteristics and behavior when buying, and then provide him/her with the best possibilities, with integrated platforms and channels in a transparent, simple and efficient way.

Easy, right?

Of course, I mentioned several complex aspects of an omnichannel strategy. But this is not over! Keep up with us as we’ll keep translating our coolest articles!


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Thanks for reading!