Omnichannel - Which route suits?

Omnichannel - Which route suits?

Omnichannel has been a buzzword in mobile retail for a while now, but what does the phrase actually mean? And who is leading the way when it comes to providing a service across many platforms?

 

 

The launch of the iPhone always provides a helpful barometer by which to judge changes in the industry. From the adoption of 3G through to the second-hand market, it’s a good way to test whether a trend has hit the mainstream. So this year, when there was a total lack of queue outside the Apple store – not for lack of interest, but because people had already pre-ordered online – it was a clear indication that the way in which people buy phones has fundamentally changed. The combination of in-store collections, online deliveries and over-the-phone sales revealed a market of multiple routes to purchase.

 

 

Speak to any leading figure in retail today and it won’t be long before the phrases omnichannel or multi-channel come up. Regardless of the sector or the type of retailer, the many different ways customers expect to be able to browse or buy products has become a critical part of the way strategy is shaped.

 

 

Often, a multi-channel approach is characterised as being the way in which a traditional bricks-and-mortar retailer seeks to find new ways to interact with the customers digitally. But this emphasis on providing multiple points of interaction is equally true of online brands, many of whom are looking to establish a high street presence – whether that’s Google with its Carphone Warehouse store-in-stores or Amazon with its click-and-collect points.

 

 

The mobile sector has always had multiple points of interaction with customers. Telephone contact centres, websites and apps have supplemented the in-store experience for retailers, operators and manufacturers alike. Originally, this was on a service basis, but increasingly now it is where purchases take place. The retail store remains a critical part of the customer’s journey to buying a new handset, but critically now, with an omnichannel approach, it may not be where the transaction is completed.

 

Being fit to compete    

Carphone Warehouse as a brand has perhaps the clearest view of how this omnichannel experience functions. The independent retailer is by its very nature the point at which many different mobile services and products converge. Its customers all arrive with different manufacturer and operator preferences, which could all change at any point. Increasingly, however, the retailer is also finding that it’s not just what the customer is purchasing that varies, it’s how they want to complete that purchase as well.

 

 

‘Customers that come to us are comparing, and they are also comparing the ways to buy,’ says Victoria Self, online director at Carphone Warehouse. ‘We know the customer in the mobile industry is on a research journey. This is because it is the most important purchase they make every two to three years. As one of the most important decisions they make, they don’t take it lightly. This leads to an intense period of reflection where they are considering –  “OK I’m ready for an upgrade, what am I going to do?”’

 

 

The retailer recently underwent a major redevelopment of its website to ensure that it could cater for customers who wanted options when it came to the way in which they bought their phone. This was based on an some in-depth customer research about the process they went through to buy a new handset, as Self explains: ‘We embarked on this journey about three years ago, when we were really recognising the multi-channel customer journey.

 

 

‘Our research showed 90% of people are starting their journey online, over an intensive research period. Customers are generally spending around 90 days researching the handset and tariffs. That really drove our thinking on what we would be focusing on.

 

 

‘Of course it was really important to make sure that the checkout worked brilliantly, along with all the ecommerce basics. But we also invested a lot of time in understanding how our customers shop in that 90-day period. They want to research handsets, compare tariffs, compare networks, talk to their friends, read the reviews – all the things that you would normally expect of a mobile journey.

 

 

‘People want to go across all of our channels. If anybody wants to convert online we make that as easy as possible, but actually most people don’t want to convert online, they go into our stores, they give us a ring and have much more of that assisted sale. Obviously we have Pinpoint in store, but assisted sales online and giving the customer multiple options towards an assisted sale is a really important part of that journey too. We had to make it really obvious to our customers which channel they wanted to go through.

 

 

‘We’re not pushing them to convert online, we are saying “OK, you’ve done this bit of research now what channel do you want to go to, do you want to go to store to continue? Or do you want some advice? Give us a ring.”’

 

The personal approach

 

An omnichannel approach only offers an advantage to a retailer if it is bringing them closer to the customer they are trying to serve. Multiple points of access that collect disparate pieces of data are utterly useless. In fact it’s actually counterproductive if the customer interacts with a retailer through different channels and different results are produced from each stage.

 

 

Connecting together, in store, online and telephone data is critical to this; it makes the interaction smooth and gives staff the opportunity to add extras for the consumer. For Robin Phillips, director of Omnichannel and Development at Boots UK, this experience actually goes back to a traditional form of localised retail, when staff knew customers personally and could tailor their service perfectly because of that knowledge.

 

 

‘The perfect omni-channel experience is probably what Jesse Boots’ [Boots founder] had with his first store. He knew his customers by name, he remembered them, what they’d done, what they’d had wrong with them and could then recommend exactly what was right for them.  Essentially, we’re trying to replicate that Jesse Boots experience whenever you touch our brand – whether that’s in one of our stores, on our app or on our website.

 

 

‘It’s about that end-to-end seamless experience. Of course we look at how we can trip out our stores and how we can provide them with kit, that means when a customer comes in to collect an order or purchase a product they’ve seen on social, it’s easy. But as well as building those tools, we know that without the right data they’re absolute useless. So the other thing we work on is the right level of personalisation.

 

 

‘We think about how we can put together rewards in an increasingly compelling way, which reflects the customer as an individual. I like to think of it as “has Boots got a memory of you as a customer?”  – that we know what you want to do whether you’re on your phone or on your tablet and therefore we give you the next best action, the next best experience. We’re investing in our data and analytics platforms to help us to do that better.

 

 

‘In an omni-channel world if you promise your customer something, you’d better do it. Because they’ll remember the one-in-100 times that you didn’t deliver on your promise. So you need to go into this thinking about what your brand means to the customer? What are the promises that I’m going to make? How do I make sure that I never break them? And if I do break them how do I make sure I recover them really well?’

 
 

Phillips firmly believes that an effective multi-channel approach only works if a brand can recognise what its strengths are and use that as the basis to do even more: ‘Omni-channel is about recognising what you’ve already got. So omni-channel for Boots isn’t all about digital, it’s very much about our stores and about our colleagues. We’ve got thousands of trained pharmacists; we’ve got 2,500 points of presence; we’re on every high street; incredibly convenient; we're very close to our customer, and that’s reflected in our omni-channel offer.

 
 

‘Over 75% of our online orders are actually collected in a store – that’s great but it can cause a problem at a peak. So in smaller stores you can have an influx of parcels and for our colleagues there’s the issue of “where do I put all this stuff?” So having an omnichannel approach is thinking about how we help with that.’

 

 

Omni in B2B

 

In many respects, the B2B side of the market has been operating an omnichannel approach for a while now. Dealers in particular try to stand out from directly operator relationships by providing as many access points as possible for the customer.

 

It could be argued that the effective use of customer data and multiple routes to the customer provided by the reseller is even more critical in B2B. This is because it not only provides mobile dealers with greater insight into their customers’ needs, it adds to the number of services they sell to them. This is particularly important in a market where growth often comes from selling more products to your existing base rather than acquiring additional accounts.

 

However, it does also mean that you need to be consistently increasing the technical knowledge of the staff and the range of services for sale. It’s no good offering the customer the chance to have remote access to their phones system by hosting the service in the Cloud, if you don’t have the staff qualified to provide the assistance over the phone should it go wrong.

 

This nearly always requires investment, which can be tricky for mobile dealers; not everyone has the financial leverage of a Carphone Warehouse or a Boots to pivot towards what they believe are the next key customer requirements. However, James Wright, MD of Vodafone dealer Vivio, believes that it’s still worth the risk: ‘We’ve increased the amount of resources needed to support our clients and that’s resulted in more sales. The industry is moving from a service delivery model where you get everything included in one price to a chargeable service model. So we moved into a broader range of services, which helps lessen the pressure on margins – and we have to be putting more business through it. It’s market driven – everyone is trying to integrate everything with everything.

 

‘For our partners, the biggest challenge is the amount of resource it takes to move into new technology and services. That’s been a real driver for us in terms of the investment we make in support services – and we’ve had to change the type of support we’re offering to become more technical. We’ve invested in different types of people and more systems, and have gone through the process of looking outside mobile – and it’s enabling us to win contracts we wouldn’t have been able to win before.

 

 

O2’s multi-channel ambitions

 

Everyone in the mobile market will be well aware of the swing that is occurring from contract-based customer relationships to SIM-free arrangements. The impact of this change in behaviour increases the importance of having a smooth omnichannel business to interact with. The customer is not tied by a contract in the same way, making each interaction across different platforms all the more important.

 

It’s something that O2 is looking to harness both in terms of its consumer-facing business and in the B2B arena, as sales director Ben Dowd explains to Mobile: ‘A high level of SIM-only business does create some challenges because it brings it closer to the commodity end. If you’re offering a wrap of services that includes hardware, digital, IT services and fixed services, then you’ve got a fairly powerful bundle of capabilities that is sustainable. One thing I’m very much in favour of is that many of our partners have got their own products and services. Clearly they’ve got our products and services that they sell, but it’s the wrap of both services that they offer to their customers that makes it a winning formula. If SIM-only is the only gig in town then you’re really going to struggle to drive value’

 

Dowd’s role at the network has changed in recent months, giving him responsibility for sales in both the consumer and business segments of the business. This move has prompted him to propose an even more radical consumer/business cross-channel approach at the operator.

 

This move, if executed correctly, would give O2 a unique route to interact and sell to customers. But Dowd believes firmly that the operator is capable of doing it: ‘When you look at the size and scale of our direct consumer business – and you look at the size and scale of our B2B business both direct and indirect – I think there’s huge potential to leverage business more into consumer and consumer more into business.

 

‘The reality is that all business people in the day are consumers in the evening. I believe that O2 is one of the organisations that can bridge the gap between the consumer and the business. The structure that we’ve got enables us to do that more easily than we ever have done before. I’m not saying it’s going to be easy, but the fact that all of the distribution for business and consumer now sits in one area makes that easier to achieve than ever before.

 

‘Customer insight is critical to our success, and in particular our alignment with marketing in terms of the proposition and the “my O2 story”. It’s particularly important that we execute that correctly and put the strategy into the relevant channels.’

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