Omnichannel Retailing The Survivors Choice blog post image 
Every fifty years or so, commerce is struck by a revolutionary change in mentality. The next critical shift is happening right now. Don’t miss it!
 Long ago, building malls in big cities became possible due to railroads. After motor transport developed, malls and the burgeoning bourgeoisie moved to the suburbs instead. At some point, supermarkets were spreading; then large discount chains took over, etc. Commerce never stands still. Soon we can behold another modern wonder of the world. Dubai Square
, the mall that will break all the current records, should be completed in five years’ time. This will be no ordinary mall but a city with a glass roof, equivalent to the size of 100 football pitches, offering lots of eateries and entertainment options on top of the shops. They say it is inspired by the world’s most fashionable shopping destinations, like London’s Oxford Street, Los Angeles’ Beverly Hills and Paris’ Champs-Élysées. The bar has been set pretty high by property developers who have built the world’s highest tower, Burj Khalifa, and the current biggest mall, Dubai Mall. It will have three storeys for commercial spaces and eateries, alongside little parks with luscious greenery; plus an ice adventure park and a waterpark. But more importantly, Dubai Square will be the world’s first mall to break down the boundaries between shopping and entertainment, as well as between brick-and-mortar shops and e-commerce. Developers assure that it will change the face of retail forever. The newest technology has to seep into every detail of Dubai Square, and it should become the world’s leading omnichannel retail development. The mall offers its customers an integrated shopping experience, smoothly combining traditional shops with digital technology. Personalized mobile apps, fast check-out solutions, radiochips, and mobile payments are used for the shoppers’ convenience. Fashion brands will have specialized fitting rooms with interactive mirrors, artificial intelligence will make personalized suggestions, 3D-printed apparel will be available, etc. Eateries will have 3D-printed food on the menu, among other things, and ordering will be done via apps that will reduce waiting time and suggest personalized menu. 

New era in retail business

What is the reason for undertaking an outrageous project like Dubai Square? Vanity? Well, no. Digital commerce started on the sly with Amazon’s online bookstore is becoming more user-friendly and widely adopted, thus posing an increasing threat to traditional commerce. Results of a study
conducted in the USA with 46,000 participants indicate this change very clearly, and would make any traditional retailer lose their sleep. E-shops have become popular and the smartphone has become an irreplaceable companion for shopping. 73% of the respondents have adopted digital commerce, and the percentage of people who shop only in physical stores has dropped to 20. Smart phones are not only used for downloading promotional coupons, but also for comparing prices and finding information about the products in traditional shops. Now we are done with the longtime retail practice of displaying the products in the shop, and letting people know about it through mass advertising. The new normal is almost every shopper using their mobile phone or tablet in traditional store, and communicating most of the information through social media. The study also shattered the notion that retailers should capitalize on impulse buying to yield a bigger profit. On the contrary, the more apps and digital tools the shopper uses before shopping, the more – up to 10% more – money they spend. Even visiting the website increases the amount spent. Also, shoppers who visit both shop and website are more loyal. This marks the beginning of a new era – the era of omnichannel retailing. 
 

Omnichannel versus multichannel

There are loads of definitions for omnichannel commerce, but BigCommerce.com keeps it simple and clear:
Omnichannel selling is a modern take on sales that focuses on creating a cohesive customer experience in each point of contact between customer and retailer. Whereas, in regular commerce, single channels (such as different shops of a chain and online shop) are not integrated in a way that focuses on customer experience as a whole.
Does omnichannel retailing differ from multichannel retail and if so, how? The difference is actually fundamental. The term
multichannel
is based on the Latin word multus, meaning “multiple”. This means that the products are sold through several channels; in the traditional shop as well as the online shop. These channels might not be interconnected. Multichannel selling might have been innovative 15 years ago, but these days it is a hygiene factor, crucial for survival, and about as basic as electricity and warm water in our homes. The term
omnichannel
is derived from the Latin word omnis, meaning “all” or “universal”. The major difference between omnichannel and multichannel is the level of integration. It is much more than a traditional store’s online shop. It includes channels such as physical locations, e-commerce, mobile applications, and social media. Omnichannel Retailing The Survivors Choice blog post image 

How Mary went shopping

Here to illustrate how this change translates into real life is a scene from Mary’s day. Mary will be going on a holiday tomorrow to the south coast of Spain and is packing her suitcase. She realizes that she has nothing to wear, and decides to do some quick shopping. Five years ago, she would have jumped into her car and rushed to a shopping center. There is no need to do it now. Mary chats with the mall’s account manager/stylist online, telling them what she wants. Shortly after, the desired ensembles appear on the screen of her smart-TV, worn by an avatar that looks just like her. Meanwhile, Mary browses the internet, and sees that some of the selected garments are cheaper in another store. She orders from the other store, and has the stuff delivered to her by a courier the same evening. However, a new outfit catches her eye. She wants to try it on, and drives to the mall. Facial recognition system identifies her; a sales assistant greets her by her name, and shows Mary to the fitting room. Mary likes the outfit. She checks a price comparison app, and – lo and behold – the costume is 30 dollars cheaper in another store! Mary shows the price comparison to the sales assistant, and gets the discount matched. She also wants to buy another blouse to go with it. Mary stands in front of an interactive mirror that allows her to change the colors of the blouse. Blue and pink go together perfectly! Even though she likes the clothes, she wants to know what her stylish friend thinks. Interactive mirror sends the video of Mary wearing the costume and the pink blouse to her friend. Before long, she gets the confirmation she needed: a pair of clapping hands appears on Mary’s screen. Beautiful! Store robot packs the costume, and Mary walks towards the exit. However, the store’s POS software has registered each and every purchase over the years, so they know about her weakness for sunglasses there. Since a new collection has just arrived, the screen displays Mary’s face with a pair of sunglasses on. Meanwhile, Mary’s receives a text message about a 30% discount on those sunglasses for her as a longtime customer. Mary leaves the store with the costume, pink blouse and sunglasses. She spends no time on payment – the POS registers all the purchases, and adds them to her phone bill. That is the picture Bain & Company’s partner Darrell K. Rigby painted in his 2011 HBR article “The Future of Shopping”. He was the first to introduce the omnichannel term in detail, adding that all this was only the beginning. Indeed, most of his predictions have come true. 

Disney’s clever omni-experience

Multichannel marketing means a functional website, Facebook and Twitter accounts, and blog. Cohesive integration turns this entire system an omnichannel – with all the technology and channels interconnected. Creating an omnichannel requires a strong strategy and collaboration between all the divisions of the company. Manufacturer, sales teams, and marketing experiences have to be integrated in order to create a unified system. Aaron Agius from HubSpot describes how the entertainment industry giant Disney – who uses Erply POS systems – has developed their own omnichannel strategy and is one of the pioneers and most skillful users in their field. Firstly, Disney has a mobile-friendly website. Secondly, booking a trip to Disneyland gives you access to the online environment My Disney Experience, where you can create a personal account. The account provides you with a fast pass that comes with a lot of advantages on the trip. For example, you can check the waiting time for your favorite attraction or use the app to find all the sights that interest you in the theme park. You can also use their MagicBand wristband as a room key at the Disney hotel, to order and pay for food, and upload the thousands of photos you took with the Disney characters at the theme park on your account. Of course, the wristband also works as a ticket in the theme park and on tours. When it comes to shops, according to Bain & Company’s partner Darrell K. Rigby, we can no longer talk about digital commerce in its initial meaning, where people were shopping either online or in a regular shop. Commerce in general will become so saturated with technology that it all becomes one big e-commerce. Today, using omnichannel in a store would ideally mean that all the sales assistants are equipped with iPads, to be on top of inventory and give accurate information about the product at all times and complete purchases through a mobile POS. If by chance they don’t have the product that the customer wants, the sales assistant places an order immediately, also determining if it will be delivered to the store or to the customer’s address. Communication between retailer and customer through many different channels (store, computer, mobile phone, kiosks, catalogues, direct mailing, media, et al) is what commerce is becoming. And all these channels have to be interconnected into a convenient and smooth whole. 

New life to old stores

Merchants know how to display the products in a traditional shop to tempt the customer. For instance, knowing how the color of lighting in different departments affects the shopper. However, they rarely know, or even want to know, how to turn sales into omnichannel selling. Life is changing as we speak. New technologies are becoming cheaper, faster and more flexible. E-commerce isn’t the early adapters’ hobby anymore. Those who don’t jump on the omnichannel-logic bandwagon end up bankrupt, as was the case with the book and record retail giant Borders in 2011. It is time for every retailer to ask: If 20% of the sales come from online, how does it affect the sales of the remaining 80%? What should be done differently? Is there any point in opening a brick-and-mortar shop? If there is, then what should it be like? How should I reorganize the other existing shops? The situation seems pretty bad for traditional retailers, but luckily it’s not hopeless. As we saw from Mary’s behavior, she is a client who wants it all at once. She wants an unlimited range of goods with thorough product descriptions, price comparison, and other people’s feedback, i.e. all the things that e-commerce provides. She also wants free home delivery and a convenient return policy, which were an issue in the early days of online shopping. Plus, all this shopping can be conveniently done sitting on a couch at home or – even better – at work. 
 

Where to begin? How to implement changes?

If the old shops want to survive, they have to turn their biggest cost driver – the physical store – into a source of revenue. According to studies, stores and online-channels boost each other. If change of mentality starts with smoothly merging the online and physical shopping environments, then it is just as important to turn the store into something that would lure people out of their homes. Something that is as pleasant as going to the movies or a restaurant. One simple way is turning your shop window into an interactive screen. Even if you cannot afford one, or don’t have the option of putting up an eye-catching screen on the window, you can stick a QR-code on the glass – a passerby can visit the store’s website even if the shop is closed, and do their shopping online. It is also very useful to pick apart your entire business, as Russell L. Ackoff writes in his book Idealized Design: How to Dissolve Tomorrow’s Crisis... Today. The author recalls a similar breaking point in Bell Labs in 1951. When the board asked employees to point out the company’s greatest innovations, they only managed to come up with the coaxial cable and dial phones. Unfortunately, both of these were invented before the year 1900. Then the board asked employees to use their fantasy. They were supposed to try and imagine that the current phone system had crashed, and a new one has to be built from scratch. What would their dream phone be like? The concepts such as a phone with buttons, call forwarding, voicemail, putting calls on hold, conference call, and even cellular phone, actually originate from the ideas they came up with. Why not think the same way at the grocery shop? Great Britain’s chain store Tesco came up with a rather unconventional solution in South Korea like this. Apparently hard-working Koreans didn’t go to the stores because they simply couldn’t find the time. But they had some idle time while waiting for their train at a metro station. So Tesco put up huge posters at the metro stations of shelves with appetizing food on them – fruit and vegetables, sausages, meat, etc. One simply had to scan a code to fill up shopping basket, and the groceries were home delivered at a suitable time. If you’re planning to reorganize your business, you should check out the British company Vodat’s 2018 survey results. According to 1,000 respondents’ answers, seven out of ten shoppers are disappointed in retailers lacking omnichannel mentality, especially when it comes to something as basic as merging the online and physical stores’ loyalty programs. Earning and spending shopping points should be done easily and without a hitch in both channels. The basting stitches should not show. Lack of personalization is also an issue. 65% of shoppers find that their specific demands and shopping history are not taken into consideration enough. They would also like to get the discounts information on their mobile phone when entering the store. 

How to make the changes happen?

Retailers introducing the omnichannel logic have to be prepared for setbacks. Omnichannel mentality requires the visionaries with exuberant ideas and the current personnel integrate, cooperate and compromise. Therefore, those two sides need to be merged somehow. Top consultant Darrell K. Rigby says that, “Managing changes in a store is like sending a satellite into space. If you send it too far, it won’t reach orbit and floats aimlessly in outer space. Then again, failing to give it a sufficient boost, the gravity will bring it back down on the ground again, where it will burn up.” One option would be to implement changes gradually, like Apple did. Apple opened their online shop during the dot-com bubble in 1997. When the company opened retail chain in 2001, they had two completely separate distribution channels. Both aimed to yield the maximum profit, and neither had to worry about any possible conflicts of interest. Over time the collaboration between the two distribution channels deepened. It began with standardizing the product range, as well as collectively launching new products onto the market and pricing them. But customers wanted more. So they updated the return policy – items bought online could now be returned to a physical store, and vice versa – and added the option of putting products on hold in a physical store through the e-shop. When the company revamped the chain in 2011, product information on the iPads was basically the same as on the website, and online shoppers could ask for help and advice from the physical store employees. Currently, the two separate channels form a solid unit. In short, the goal is for digital channels to support the old channels that businesses excel at, not create barriers between them. This means that before implementing omnichannel, you need to take down the barriers within the company, and establish a very thorough understanding of how customers use these channels, and move between them. Also, how the physical store could support the online shop and vice versa.
McKinsey experts Raffaella Bianchi, Michal Cermak and Ondrej Dusek point out three important obstacles
that usually hinder omnichannel mentality. Being afraid of the magnitude of resources needed for implementing omnichannel. The fear that omnichannel strategy requires a huge investment and energy, creating an entirely new IT-platform and a new division within the company. That is not true. Even if the company has loads of money and resources to reorganize current operation in the store tomorrow, it won’t become the “silver bullet”. The most successful companies are those consistently focusing on practices when implementing omnichannel strategy, thus creating collaboration possibilities between different channels and eliminating obstacles. Hindering collaboration. Many organizations have set their sales goals in a way that creates rivalry between their distribution channels, as if they were completely different organizations. Internal competition is even harsher than external, and there is no hope for cooperation in this case. Ignoring versatility among customers. A common notion is that all customers have the same needs and behave the same way. That is not true. Even seemingly similar customers behave very differently in different situations. For example, a survey amongst the customers of North American mobile operators indicated that even if people mostly used digital channels for administrative issues (like changing the billing address), they preferred speaking face-to-face to a specialist, or at least over the phone, when it came to technical problems. In order to send as many customers successfully over the finish line as possible, so to speak, this versatility has to be admitted and considered.
The next step is creating interconnected teams to put the necessary changes into practice. 

How to map the customer’s route?

The best result is achieved by acknowledging how differently clients think and act. For instance, it turns out that mobile company clients gladly go online to change the billing address or for other such things, but in case of technical problems they want the technician to come over or at least call them. Describing different types of customers – or personas – helps in better understanding what kind of service they want. Therefore it is best to begin with creating the personas.


1 Create the personas

Describing the customer’s shopping route sounds scary, but it usually boils down to several basic variations, that help in describing the persona aka type of customer. Once the various types of customers and their behavior is known, the rest of the systematization is done by the POS software, which helps describe the customer better than using demographic indicators. 3-4 personas might fully suffice. Erply suggests a persona classification that is based on the seven dwarfs, a Disney staple, created by the Brothers Grimm. Omnichannel Retailing The Survivors Choice blog post image 
Grumpy

They believe that things that have always been successful will also be successful in the future. It matters to them how things are done and how they work. That doesn’t mean that Grumpy is always opposed to innovation, but it takes them some time to get used to it. And they have to believe in it. They follow the rules, customs and norms; they like to pore over problem solutions, and approach each subject from several angles. When you sell to Grumpy, be sure to offer them a safety guarantee. They want every detail to be in place, and get the maximum. They take their time deciding, but they should not be rushed – they need to come to the decision of purchasing the item once they have completed a thorough analysis in their head. If you pressure them too much, you will lose them as a client. 

Sleepy

Sleepy doesn’t care about the rules, customs or how things usually are. Their slogan is, “What brought us here, won’t take us any further”. They think unconventionally, outside the box, creating their own strategies and solving problems creatively. When selling to Sleepy, you need to be thought-provoking, and make them do things differently. They can also be uncontrollable and unmanageable, so when striking up a conversation, you need to prepare for a long discussion. They seem to convince themselves in the necessity of your product or service. And this is the shortcut to selling something to Sleepy. 

Happy

Here we have a professional who actively uses the mobile phone for both business and pleasure. They read e-mails from customers and colleagues, chats on Skype and Facebook, keeps a calendar, plans a trip and books the flight. In their private life they pay bills, shop, and perhaps use Tinder. Their busy schedule leaves them very little time for shopping, which is why they browse the internet about quality and prices of the product. They prefer shopping online and picking the items up from the store, instead of waiting for the delivery. Selling to Happy is pure joy and a feat of labor, because they usually come to the store with a particular wish and a plan to spend money. When making recommendations or introducing special offers, you need to hit the mark – there is no point in spitballing ideas, because they don’t tolerate waste of time and small talk. 

Doc

They love to have control over things, and solve problems in a decisive and adamant manner. They are results and success-oriented. When dealing with Doc, they can be pushy, exuberant and oftentimes blunt. They are demanding and want things done on their own terms. When selling to Doc, you need to be decisive and venturesome yourself. Don’t worry too much about it when Doc raises their voice or gets impatient – it just means that they are on a roll. And actually they lead themselves to the purchase decision by listening to themselves.

Sneezy

They are cooperative and mindful of others in their own quiet way. Sneezy is diplomatic, helpful, and capable of adapting to anything. They respect everyone around them. When selling to Sneezy, it is important to come to an agreement. Once they have mulled over all the aspects and gotten down to the brass tacks, they are ready to make the purchase. It might take time for Sneezy to decide, because they want to hear other people’s opinions and consider their wishes. When they are stuck with the deciding, all they need is a gentle push. 

Bashful

They prefer shopping online because they are too shy to make eye contact with a sales assistant at a physical shop; want to go unnoticed, and hang on to others’ opinion. Equipped with critical thinking and skepticism, Bashful is reserved, and doesn’t like exaggerating or pushy sales tactics. Bashful needs a moment to get used to things, so give them time to adjust. When selling to Bashful, you have to consider the fact that they prefer written communication to a phone call or talking face to face. You shouldn’t be annoyed when they don’t show emotions and seem indifferent – that’s just how they are. Don’t be overly familiar with them; instead, let them think things over calmly. In fact, any interaction with them leaves a big question mark – they won’t actually know, and you definitely won’t, if you managed to sell them something. 

Dopey


Dopey is a social activist. Young and rarely use their phone for work stuff, but they surely use it to actively communicate with friends and play games. Dopey is a team player. They are on a shoestring budget, and do a thorough research online before shopping. They monitor social networks closely to get the best selection. If the purchase is a success, they will gladly announce it online – and vice versa. When selling to Dopey, avoid technical details. You have to listen to their thoughts and arouse their enthusiasm. Dopey will prattle about anything related to themselves – no matter if it is about work or personal life. Their jabbering about their latest holiday, or the talk show they saw the night before, might be just the thing that results in a sale for you. Keep them in their element and you will succeed.


2 Map the customer’s route

The second goal is to map the persona’s needs and their shopping route, both online and in a brick-and-mortar shop, using the POS software. Try to find the shortcomings. For example, according to one of McKinsey’s analyses, 80% of the customers who entered the bank via an online channel left the application form unfinished. The “work-and-play” type probably gave up because they didn’t have time for this nonsense. They were irritated by the excess amount of blanks to be filled on the digital form, and the bank asking for information they already had (date of birth, address, etc.).


3 Start up the strategy

Customers are often faced with an enormous amount of choices, complicated pricing schematics and rules. Therefore, you need to keep in mind that going from one channel to another should go without a hitch for the customer.The fastest changes can be implemented on digital channels. The changes must involve everything, from how data about shopping history is collected and processed, to the earned bonus points. Those changes need to be dealt with constantly, so that omnichannel mentality would take root in culture as well. Implementing omnichannel logic is too huge for it to be done once, using a consultant, and then forgotten. It is best if the changes are carried out by interconnected teams. This helps avoid the worst part – creating ivory towers between various divisions and distribution channels. Omnichannel strategy expects everyone to have new skills: those in the forefront have to be better at anticipating the customer’s wishes, and map the route; managers who don’t make omnichannel strategy their priority simply cannot work in this company anymore. 

Maintain alertness during personalization

Personalization is important – who wouldn’t like going to a store and having everything picked out for them, according to their preferences, shopping history and lifestyle. Shopping statistics is an invaluable asset. However, in some cases it may cause a delicate situation; like that one time, when a company congratulated a single woman on her approaching wedding, whereas she had no plan of getting married.Sure enough, Target caused the biggest media circus, becoming part of a scandal, due to an exceedingly accurate analysis
of purchase statistics. The company’s brilliant statistician came up with a method for predicting women’s pregnancies, and even the due date, solely based on changes in their shopping behavior. For instances, it is an indicator if a woman, who has always bought ordinary soap, starts buying odorless soap all of a sudden. 25 products were selected that predicted pregnancy rather accurately. However, thanks to a flyer about baby clothes in their mailbox, one schoolgirl’s father found out she was expecting. So it might end up backfiring. In conclusion: Every retailer should realize that digital channels don’t signify the end of traditional commerce, on the contrary – they create new possibilities! Have a happy new omnichannel life!  

Why Omnichannel Retail is a Smart Strategy for Small and Medium Businesses

The way that omnichannel retailing works can be revolutionary for businesses, especially small and medium businesses who have struggled to compete with big name brands online. Here’s what you need to know to turn this new retailing tool into a win for your brand. The statistics show that more than half of all Americans prefer to shop online, which is something that many small and medium businesses have taken advantage of in the past decade. Many, if not most, startups these days do not have a physical storefront to start with, choosing instead to focus on the majority’s preference. However, there is still a large portion of shoppers that prefer to spend in stores, and studies show that even among those who shop mostly online, shoppers spend more money in stores than through digital channels. Additionally, a study by HBR showed that customers who shop with one brand through multiple channels – spend an average of 4% more at every transaction in a store, and 10% more at every online transaction, than single-channel shoppers. And the study further showed that the more channels a customer uses, the more likely they are to spend even more. Finally, the study showed that omnichannel shoppers log almost 23% more return trips to the brand’s channels in a six-month period than single-channel shoppers. As you can see, omnichannel shopping does a few things. First, it allows brands to cater to all shoppers, not just the slim majority. Second, it boosts customer loyalty
and leads to larger transactions. For small and medium businesses, building brand loyalty and gaining repeat customers is one of the most important first steps in scaling a business, and omnichannel retailing can help make that happen.

What you need to know when creating omnichannel?


Choose the right technology

Shop, website and mobile environment cannot be standalone boxes, which they have been for the most part so far. Omnichannel approach is the antipode to a big unpleasant corporation, where everyone sits in their tower and cubicle. A smooth and seamless interchanging has to ensure a good shopping experience in different channels – either in a shop, online or on your mobile phone. In short, those shopping online should get as good an experience as those visiting the physical shop. For example, a brick-and-mortar store can offer home delivery service, same as the online shop. 

Use the phone

According to an IBM survey, shoppers want to use their mobile phones in brick-and-mortar shops as well, to pay the bill or get information about products and discounts. Also, personalized offers are expected.Even if a small shop doesn’t have a specialized mobile app, there are simple ways for creating omnichannel. Three steps for including the smartphone:1st step – web page has to work on the mobile.2nd step – digital discount coupons on the phone (e.g. QR-codes), that can be used in the physical shop.3rd step – go visual! The visuals and logos must be uniform in all the channels, with clear colors and clearly recognizable design. Hire a professional photographer to get good photos. Offer 360-degree visuals with zoomable details of the product.

How to Make Omnichannel Retail Happen

Learning what omnichannel retailing is, and how it can help your small or medium business grow, is one thing. But putting it into action is another. Here are a few real-life examples of how it’s being introduced to customers by big names already:These examples show just one narrow part of each of these brands’ omnichannel strategy. These are the main elements to consider when getting started with your own: