By Radha R, EVP and Head, Digital Business, Mindtree
We know that technology has shifted the balance of power toward the consumer in an unprecedented way. The reason is that information is power, and consumers now have more information than ever before. They can compare products, prices and offers, browse detailed product reviews and ratings, seek advice on social media, and filter their preferences a dozen different ways—all without leaving their house.
As a result, the traditional supply-demand model has flipped. We used to say that supply meets demand, but the new paradigm is that demand discovers supply. When a shopper discovers that she has a particular need, she’s just as likely to turn to an internet-connected device to start her journey as she is to walk into a store or look at a catalog. From there, the number of digital and physical “touch points” she crosses over will often reach double digits before a purchase is made.
Earlier this year, Mindtree spearheaded a global shopper study to find out just how “phy-gital” today’s shoppers are. The results confirmed what we expected; more than half of all shoppers worldwide combine online and in-store experiences in whatever way is most convenient or efficient for them. And they don’t just want the best value, they also want:
- Personalisation – they expect a continuous, connected and contextual experience, be it products or services.
- Collaboration – they expect to have a say in how things are done by giving input and feedback; and they want confirmation that their feedback was received and appreciated.
- 24/7 Content and Commerce – of course, they also expect all of this to be available to them anytime, anywhere, with as little friction as possible.
Unfortunately, while customers have naturally shifted into this new phy-gital shopping paradigm, it has not been as easy for retailers to adapt to the omnichannel challenges. As the retail industry plays catch up, there are three primary areas of focus: omnichannel commerce enablement, omnichannel shopper personalisation, and digital marketing.
In our global shopper study, one of the clearest preferences that crossed all regions—aside from the tendency to mix online and in-store behavior—was the desire for flexible purchases and delivery options; buy anywhere, pick up/deliver anywhere, return anywhere. Another popular request was self-checkout via a mobile device or an in-store kiosk. Clearly, these are omnichannel shoppers expecting an omnichannel experience.
In that regard, having a brick and mortar presence gives traditional retailers an advantage over pure play e-tailers. And one of the biggest challenges lies in keeping their product catalog updated with pricing and promotions, integrating it seamlessly with logistics and fulfillment, all while keeping operational costs down. Managing customer service levels across multiple channels, 24/7, is also a big change for many.
For a successful transformation, retailers need to realize that an omnichannel overhaul isn’t just about transforming front-end customer experience systems. Retailers need to digitise their entire value chain straight to the backend in order to tie all systems together into one integrated landscape. They should do so using an “API first” strategy, which significantly reduces the time to market for front-end development while opening up potential new revenue streams.
Additionally, tying this experience to a strong loyalty program provides value to customers (as savings) and to retailers (in generating useful customer insights); resulting in a win-win situation.
Omnichannel Shopper Personalisation
Our shopper study found what many retailers may find surprising: 80% of shoppers worldwide are willing to share personal information in return for a better shopping experience. This is good news for retailers seeking a 360-degree view of shoppers. By extracting structured data (purchase history, loyalty data) and unstructured data (social media interactions, browsing behaviours), retailers can build a customer dashboard that becomes more refined with every physical and digital interaction.
The goal, of course, is to gain insights from the data that lead to personalised recommendations: presenting customers the right product or promotion at the right time in the right place.
Be it affiliate marketing, referral marketing, segment driven companies, or programmatic marketing, retailers are trying hard to hyper-personalise the customer experience and reach out to millions of users through mobile, web, tablets and other digital channels.
Digital marketing is still in an early stage of maturity for retailers, and it all depends on how accurately customers are mapped and clustered based on the data being gathered by the retailer. In that sense, successful digital marketing is dependent on the success of omnichannel commerce enablement and omnichannel shopper personalisation. As a retailer’s omnichannel core improves, their digital marketing will naturally improve by extension.
Once there, the big challenge is finding the right balance: sending offers at the right frequency to keep customers engaged, but without overwhelming them.
Overall, an omnichannel transformation is a journey that won’t happen overnight or without a lot of effort, however ignoring it is not an option. Retailers need to make this journey to survive, and the sooner the better.