May 6, 2013
Talking heads love to prognosticate about how disruptive technologies will reinvent retail, but actually implementing these omnichannel initiatives is as much about tried-and-true organizational principles as it is about innovative technology.
After speaking with countless retailers, I have compiled a few of the fundamental issues that confront retailers when adopting omnichannel strategies.
Where does the buck stop?
Retailers already recognize the need to create cross-functional groups to help eliminate channel conflict.
It is one thing to reorganize a reporting structure, but quite another to ensure that the organization embraces the new structure.
Ensuring that teams actually collaborate requires a more fundamental alignment of culture and incentives. To do that, I would recommend considering:
How you define success?
If store-ops, ecommerce, mobile, and marketing teams are not measured by common yardstick they cannot be expected to cooperate effectively.
Retailers need to set key performance indicators (KPI’s) that cut across department and channel barriers so that employees’ incentives achieve a common goal.
One C-level executive I spoke with summarized his perspective this: “Ultimately, the only success metric I care about is overall sales.” His entire organization from IT to marketing is measured based on overall sales.
That single-minded focus helps create a cooperative culture.
Do not forget the dollars and sense
The path to purchase is more complex than ever. Customers might browse in-store, read reviews in a mobile application, but purchase online.
Retailers cannot afford channel conflict.
Sales associates cannot be afraid of losing a commission if a customer purchases on a different channel.
Even if you cannot yet accurately attribute every transaction, err on the side of the associate. This will create a culture that encourages customers to transact in whichever channel they prefer.
More data does not mean a better customer experience
Walking the halls at the eTail West conference in February, retailers faced an overwhelming number of vendors each touting similar big data buzzwords such as “analytics, personalization, etc …”
Before buying any technology, retailers should ask themselves: How can this data make the customer experience better?
If the answer is not obvious, the data is not helpful. In all likelihood, it is a distraction.
You cannot expect store associates to be data scientists. Do not distract store associates with graphs and charts while a customer is in the changing room.
Seek out solutions that offer actionable recommendations in real time while customers are still browsing.
I DO NOT pretend that these issues are easily resolved.
Building an agile organization capable of adapting to customer’s preferences across multiple channels is no small challenge.
But any retailer who wants to successfully implement an omnichannel initiative needs to carefully consider these challenges.