From Multi-Channel to Cross-Channel to Omni-Channel

While multi-channel retail has been around for decades with companies that had call centers, store fronts and catalogs, it was not until the rise of e-commerce that the actual concept started to take on a life of its own and a paradigm shift started to occur. Conceptually multi-channel retailing made sense—giving the customer the option to shop within various retail formats. However, a multi-channel mindset often created silos within retail organizations and for the customer because of disparate data and systems, varying levels of strategic importance assigned to each channel and channel-specific organizational structures. As retail technology evolved and e-commerce became a more meaningful channel with sizable results, progressive retailers started to realize that the tides could be lifted when channels worked together to reach the same customer.

As a result, the multi-channel paradigm started to evolve to a cross-channel retail mindset—one channel acting as a pivot point to drive customers to another—where progressive retailers understood the value of a more seamless customer experience between multiple channels to grow share of wallet, brand awareness, customer retention and brand loyalty. Think of it like a friendly game of ping-pong game where channels could volley the customer back and forth, sometimes winning the sale and sometimes giving it up to the other channel but helping them along the way.

Enter Omni-Channel Retail

Over the last few years, we have seen the paradigm evolve even further to that of omni-channel retail. This shift has largely, but not entirely, been driven by the rise of mobile technology, social media and the concept of big data.

  • While mobile is a channel, platform and pipe, it is far more than this. Mobile is an “extension of our being”. Mobile has driven people to adopt entirely new ways of operating in and maneuvering through the world—changing rituals, behaviors, methods of communication and likely even the patterns in our brain.
  • Social media gives consumers more than a voice or an online social network. It has given them power—the power of influence. It has also turned individuals into marketers of their personal brands, which is partially made up of the brands, retailers, styles, activities, interests, products, etc. that they love.
  • Big data provides retailers a 3D view of their customer. Before the web, cash register data was pretty big. Now add to that retailers social media, mobile and e-commerce data. Boy, that’s a lot of data. There are now many good solutions, tools and services at varying price points to consolidate, provide access to and make sense of big data, truly allowing retailers to have a single and multi-dimensional view of their customers.

What does omni-channel really mean?

The retail paradigm continues to shift and it is important for all retailers, even pure-plays, to think with an omni-channel mindset—this does not mean adopting every-channel but the right channels for its customers. However, mobile is one channel, as well as a platform, pipe and “extension of our being”, every retailer must consider.

Consumers truly have become a “powerful target audience of one”. They shop when, how, where and with whom they want. And, no two consumers will have exactly the same shopping and purchase journey. This fast moving, always-on, free-wheeling, empowered and unique consumer is, on one hand, more elusive, and on the other, more accessible. And, they are definitely in more control than ever before. They want and, frankly, are coming to expect a seamless, accessible and frictionless experience from retailers.

Some will say that omni-channel is really about being customer-centric and some will talk about it from a channel perspective. I think it is both and then some. As you think about the paradigm shift to omni-channel, I recommend you view the world from all perspectives: consumers (current, future and lost customers), competition, substitutes, partners, other key stakeholders, employees, marketing and operations. And, please always keep your eye on where technology is today and where it is headed because there is no doubt that that it has been a key driver behind retail’s evolution in the last 15 or so years— if Apple and Google have their way, consumers will be shopping on their wrists and eyes too.

What’s a retailer to do?

That’s a loaded question. Why? Because becoming an omni-channel retailer is no small feat as it requires a paradigm shift throughout the entire organization starting at the top. Omni-channel retail is more like playing pinball since consumers are a little more chaotic and harder to control. The consumer will zip around the retail playing field and you will never be sure where they will land but if your flippers are not ready they will go somewhere you may not want them to go and you could lose revenue and brand loyalty. However, if you get visionary and strategic in your maneuvers and work hard to build skill with a dedicated practice, I am confident you can rack up the points with them.

In our next blog post, we will provide some ideas and thoughts about what a retailer can do to shift to an omni-channel mindset.