Omnichannel: the time is NOW

(Complete version of this blog is on medium - https://t.co/4q6jOFPnnZ )

Omnichannel is intrinsic to retail. This thought has been debated for the last few quarters in India, and only been accepted (albeit grudgingly) by few. Both sides (pure-play online and traditional brick-and-mortar players) are fiercely protecting their business models rather than than embracing the reality.

So what is the reality?

Google’s philosophy, “Focus on the user and all else will follow” makes the answer very clear. If the user can move simultaneously across channels, then so must be the retail experience.

Hence a successful Omnichannel strategy has to be not just multiple channels being available to the customer, but a seamless integration of all channels to provide a “frictionless” shopping experience. Customers expect every interaction with a brand/retailer to be integrated through their journey of discovery, research, purchase and support.

Disney seems to have got it right

Retailers could take a leaf out of Disney’s playbook. The My Disney Experience (for Walt Disney World Florida theme park) takes customer experience to a different level.

It starts with the website, which is optimized across all devices, but that is only the beginning. Then, it invites guests to book in-park dining reservations and plan FastPass experiences. FastPass allows park guests to skip lines for three attractions per day. With the smartphone app, guests can monitor and alter their Fastpass choices, check attraction wait times etc. on the go.

While these sound simple innovations, Disney has built on these interconnections to create new experiences moments before, during, and after the main event. This helps build anticipation, create personalization, increase likelihood of conversion, upselling and in the best case create habit or loyalty.

Their MagicBand program is a personalized wristband embedded with short-range RFID and long range Bluetooth technologies. It’s an opt-in system giving guests control over how much information they would like to share. As guests become more comfortable (build trust), they share more. The more information guests share, the more customized theme park experience they receive. During the trip, MagicBand is the bus pass, Hotel room key, Mobile payment device, Park admission ticket and Ride reservation system. The Magicband is integrated with the FastPass and PhotoPass. The park experience feels “frictionless” with the use of MagicBands, My Experience apps and FastPass. The best parts of the Disney park experience are made better via subtle digital enhancement. And it doesn’t stop when you leave. After the trip, there’s the follow-up?—?Thank you messages, emailed photos from rides, invitations to share on Facebook and reminders of upcoming events.

But we are “different”…

Skeptics may say that it works for Disney, not for us. Hence it is noteworthy to mention that some retailers have done a great job in providing an Omnichannel experience.

1. Williams Sonoma (WSM)

At the top is WSM (Brands: Williams Sonoma, Pottery Barn, West Elm), which has embraced Omni-channel boldly. While Digital is today 50% of their sales, it also has made a strong impact on the instore performance. The WSM-Deloitte stats speak for themselves:

And the icing on the cake is? EBIT for Digital segment for WSM is 24%!

2. Restoration Hardware (RH)

RH (luxury furniture retailer) is is one of the most successful adapters of omnichannel retailing. RH uses its stores as brand showrooms. These stores serve as product testing hubs for customers while they browse the company’s online catalogs. Less than 10% of the company’s products are displayed in stores. The balance of the inventory is available online and in physical catalogs.

3. Luxury fashion: Burberry, Coach, Chanel

No story is complete without looking at Chinese data. Here, some luxury brands have integrated Omnichannel to attract the Chinese millennials. 

Burberry’s digital partnerships include Snapchat Discover, Apple Music, Instagram and WeChat. It uses WeChat to keep consumers informed about new arrivals, trending products, and further link them back to Burberry’s official website. Users can have a 360-degree view of Burberry’s catwalk extravaganza by moving their mobile.

3. Like Burberry, Chanel uses WeChat as a content marketing platform. Where Burberry and Chanel use WeChat mainly for content marketing and customer service, Coach makes big play in product promotions and loyalty programs.

4. Several others have started putting in serious efforts…

• Omnichannel fulfillment and order taking: For Pier 1 imports, about 36% of all its online sales were picked up in-store and about 31% of e-commerce orders were placed at a store’s PC.
• Bringing VR to stores: Ikea has opened a “pop-up” showroom in downtown Toronto. It is focussed on kitchen concept and has only 50 products. However,there are no handbaskets or carts. Instead, when consumers enter the pop-up shop, a staff member hands them a wooden spoon with a RFID chip embedded in it, explains the store concept and provides instructions on how to shop. If a shopper wants to purchase an item on display, she taps the spoon to a sensor on the shelf, and it is added to her order. The digital elements extend the physical store into the virtual world, too. Donning a VR headset, a consumer can view kitchen set designs as if she were in them and shop by tapping the spoon.
• Smart inventory management: Home Depot stocks about 35,000 SKUs in stores. But the online assortment is about a million

Digital first players are also going the Omnichannel way

It is well known that several players such as Warby Parker, Bonobos, Birchbox , Tie Bar and even Amazon are opening stores. While the logic for opening stores for marketing, creating “trust”, initiate first time purchasers etc. has been well accepted now, several of these stores have turned profitable for the companies. Bonobos hit the nail on the head with this strategy and has over 20 “Guideshops” today and over $100 Mn in Revenue.

So when will Indian players make serious efforts towards Omnichannel? This will require not just massive technological change but also cultural change. Hopefully, sooner rather than disappear…

(All views are personal)