Challenges and opportunities of the omnichannel world

Today’s omni-channel world has consumers engaging in multiple channels in various ways, and creates new challenges for retailers. As keynote speaker at the Clicktale 2017 kickoff, Joe Megibow, former President of Joyus, SVP/Chief Digital Officer at American Eagle Outfitters, and executive level omni-channel retail expert, discussed the changes and challenges facing e-retailers.

In the second of a three-part series on his insights into the changing world of e-commerce, Joe discusses how omnichannel retail is about more than just giving customers more choice of where to shop.

Why has the growth of mobile spurred a switch from siloed online and brick-and-mortar approaches to omnichannel strategies?

The very definition of mobile is that the consumer is out and about. That gives the retailer more ability to influence where the actual transaction occurs.

For retailers, there are big differences in the incentives and economics of various retail channels:

  • A typical mobile commerce site might convert somewhere between 1 and 3%
  • Conversion rates for mall-based retailers are typically closer to 25%
  • While most retailers don’t look at it this way, as much as 70% or 80% of people visit their site online before heading into a brick and mortar store. This means that digital represents the majority of engagements.

By getting a consumer to walk into my store, I have a much higher probability of closing a sale versus getting them to convert on my mobile site.

This creates interesting dilemmas. When I was at American Eagle Outfitters, we had two buttons of equal weight in the mobile app. One was the traditional “add to basket”; the other, “find in store”, which enabled the consumer to see if the product was available at a store, and then ask the store to hold it for them. But this second button actually hurt mobile conversion in the traditional sense. It drove people out of the app without purchasing. If you were just optimizing the channel, you would never keep that second button.

This was a strategic decision to give potential customers another option to engage in another channel. What they saw on their mobile device might inspire them and ultimately motivate them to go to the store to purchase. Even if only a small percentage of visitors to the mobile site actually entered a brick-and-mortar store to pick up the item they reserved, the probability of conversion and that they would purchase additional items once they got there are so high that it is worth risking the mobile conversion.

This is the omnichannel approach. Instead of looking at things inside-out, from a channel point of view, we needed to view things outside-in, from a customer’s point of view. To the customer, they are just engaging with the brand. They didn’t abandon mobile. They continued their engagement that started in mobile, and ended in a store. Ideally it is a seamless continuum, a seamless brand experience. Omnichannel done right is the elimination of channel conflict or channel friction.

This sounds good in theory, but how do you bridge retailer omnichannel information gaps to see if it’s really working?

Unfortunately, it’s really hard to measure effectively. Tracking a customer across devices and channels has actually gotten harder, not easier. It comes down to a combination of strategies and technologies.

The best is to give the consumer a reason to self-identify. If the customer is willing to raise their hand and say, “Hi, it’s me,” then everything is relatively easy to measure. This can be done through loyalty programs, incentive programs, social commerce, and social sharing, anything that offers the consumer an incentive to engage.

Another way to get consumers to opt in to self-identify is through permission-based marketing. If I can get them to sign up for emails and they choose to click through on the email, I see who they are. In the store, I can encourage them to opt-in to identification by offering to email the receipt or inviting them to sign up for a loyalty program or a credit card, if offered.

Now I have ways to connect the touch points through known interaction mechanisms and I can understand the performance of marketing spend. It also allows for much more intelligent CRM, e.g., I can give them offers online that are unique to them and much more relevant. And if they use a unique offer in a store, I have a way to tie it back to them.

I've been really excited to see some of the ways that Clicktale can take massive amounts of customer behavioral data, and not just focus on rolling up obvious aggregation like counts of sessions and events and behaviors, but make sense of things that can help give us insight into omnichannel intent and behavior such as:

On complex sites, these can become very powerful signals for understanding how consumers are engaging and what that means for me as a retailer.

How do you see omnichannel retail evolving?

Where I see the most interesting evolution is that finally, more and more retailers are getting into the fundamentals of a consistent, continuous customer experience. Call it a ubiquity of experience, cross-channel, cross-device, same content, same consumer knowledge - if I start something here, I should be able to finish it over there.

This is something that is not as shiny as sexy new technologies, but it really matters to consumers. As e-commerce has grown so much, retailers are recognizing how strategically important it is to focus on some very simple things to service customer needs - make it easy to find what I want, and make sure that you know me, whatever channel I'm going through. I think that's what we're going to see more of in an effective way in the coming years.

Did you miss our first post about Joe Megibow’s insights into the changing world of e-commerce? Discover his 3 essential steps to creating a great retail experience now. And be sure to check out the final post in the series, where he discusses the blurring boundaries between brick-and-mortar and e-retail

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