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Omni-channel Strategies Require Better Analytics, Integration

My 14-year-old son spends a lot of time shopping for stuff online. His least favorite part of online shopping is waiting for his purchases to arrive at our door. Because of this, he often uses functions that allow him to see if the merchandise he wants is available in a local store, then nags me to take him there. (Thanks, retailers!)

A growing number of companies are offering these kinds of interactions between online and offline channels as part of an omni-channel strategy, one that is designed to give consumers a consistently good shopping experience, no matter which channels they opt to use (Web, in-store, call center or mobile). Other examples of this include getting receipts via email instead of at the point of purchase and ordering merchandise online and having it shipped to a store for pick-up.

Ambitious Omni-Channel Strategies

In one of the most ambitious examples yet of an omni-channel strategy, Starbucks last month introduced an app that allows customers to place orders and pre-pay on their smartphones so they can forgo checkout when picking up drinks at a nearby store.

These kinds of strategies are becoming necessary as consumers increasingly mix-and-match channels when making a purchase. Shoppers' habit of using their smartphones while in-store has led to the creation of apps that lets them compare prices with other retailers by simply scanning item barcodes, for example.

According to a recent survey by SAP, nearly three-quarters of retailers say a multi-channel approach has resulted in increased sales, while 64 percent cite enhanced customer loyalty or acquisition. Simply increasing the number of channels is not the key to competitive advantage, however.

From Omni-Channel to Unified Commerce

Instead, successful retailers will strive to better integrate channels and use data collected via multiple channels to improve overall customer experience and develop more targeted marketing efforts geared to specific channels. The goal, said Mark Osborn, global lead for SAP's consumer products industry marketing division, is to develop segmentation strategies to define key channels for the customers they want to reach and engage.

Some retailers are already moving beyond omni-channel, to offer what Boston Retail Group calls a unified commerce model. Real-time and contextual marketing efforts, customer-based pricing and product availability across all channels and locations are some of the key features of a unified commerce strategy, said Ken Morris, a principal at Boston Retail Partners, in a recent interview with Enterprise Apps Today.

"If I need a size 11 brown boot and you only have a size 10, you can tell me where that boot is and deliver it to my house, maybe the same day," he said.

Moving Towards a Centralized Infrastructure

To offer this kind of a model, Morris said retailers must move toward a more centralized infrastructure. Rather than ripping and replacing legacy gear, he said many retailers will instead use layers of middleware to provide a customer experience that seems to be based upon a common platform, even though many platforms are in use. Ultimately, as current infrastructures depreciate, Morris expects most retailers to use the cloud to centralize their operations.

Of course, retailers are not the only ones seeking to offer their customers an omni-channel experience. David Wallace, global financial services manager for SAS, told attendees at a recent banking industry trade show that one way to kickstart an omni-channel initiative is to create a decision hub that drives not just marketing campaigns, but customer service activities and more.

"It determines the minimum and maximum that you will spend to service a customer in each channel, the best moment in time to communicate with the customer and the best interaction with the customer at the best moment in time," Wallace said.

eSecurity Planet
Ann All is the editor of Enterprise Apps Today and eSecurity Planet. She has covered business and technology for more than a decade, writing about everything from business intelligence to virtualization.

This article was originally published on January 15, 2015

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