Omnichannel is dead, long live Contextual Omnipresence!

About 2 years ago, my job title suddenly turned into “Omnichannel Expert”. As soon as I switched into this new role, I conducted quite a bit of research to find out what this mystical word was all about (and I’m not talking about the “expert” part).

Let’s start with a simple challenge; ask any regular customer to explain the word “omnichannel”. I’m confident that you’ll get a “shrug?” or a “meh!” at best, as most customers won’t have a clue. If I ask you to explain an “omnichannel” strategy, you would probably realize that customers really don’t care how the channels – or business siloes – function accordingly.

Omnichannel is dead!

Once upon a time, long before mankind spoke of an omnichannel strategy… we lived in a multichannel world. In these days, the retail sector was already active in multiple channels (physical stores, catalogs, e-commerce), but the channels operated in parallel with the occasional cross references between the siloed channels.

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In order to connect with customers across the different channels, and follow them along their path to purchase, the omnichannel strategy emerged. As any hype, this term was quickly engulfed under a tsunami of buzz phrases: seamless integration, frictionless commerce, channel agnosticism, etc.

The research and advisory consultants firmly pitched this strategy for its potential: increased sales and higher profitability. But one doesn’t have to be a genius to figure out that interconnecting all processes, in all available channels, is possibly an expensive Utopian endeavor for most companies.

In the purest sense, omnichannel is actually a myth. A lot of people are talking about this strategy, but nobody is really doing it… at least not end-to-end. This shouldn’t be a surprise, jumping from one channel to another, in the middle of a process, is not something customers really do. In fact, they don’t even care about channels.

20180218-04The customer cares about experiences, about solutions, about shopping with easy and simplicity. As a customer, you would like to…

  • easily browse for, and find products.
  • get your products when you want, and how you want them.
  • decide if you would like to pick up your products in the store, or have them delivered at home.

We should accordingly stop the “channel” obsession, and realize there is no benefit from a strategy where customers can switch channels at any point in their journey. In essence, customers don’t shop omnichannel… they just shop.

The goal of companies should be to chase relevance and differentiation. It strikes me that a lot of companies continue to focus on the process, and forget all about the content. If you are trying to be everywhere, you end up being nowhere:

  • no compelling offers
  • undifferentiating products
  • less than remarkable customer service
  • lack of focus, and no prioritization
  • uncompetitive pricing

In order to truly master “omnichannel”, companies would need a meticulously sequenced roadmap of digital marketing and channel integration initiatives. This would all need to be routed in a deep understanding of customer behavior and underlying economics.

The smart retailers have integrated their channels, and their channel offerings. If you step into a physical store, the building (including stock) are obviously limited by the available physical space. The introduction of an instore kiosk, allows retailers to break the limits of the real world, and extend the physical shelve space using their available digital channels. If a customer orders a product using the kiosk, next day delivery would enable them to pick it up in the store, or deliver it onto their doorstep. I ask you, is this an “omnichannel” strategy?

20180218-06As people struggle with the omnichannel definition, the first alternative strategies are popping-up. The latest trend is a shift to an “omnidigital” strategy. This highlights the rapid rise of a new segment of customers, dubbed “omnidigital”. The consumers that use mobile apps or laptops, but prefer not to use brick and mortar stores or call centers altogether. If you think about it, it might even be better to change the word “omnichannel” into “unified commerce” or “on demand commerce”.

As a final point of criticism, the omnichannel model starts from the paradigm that the customer dictates the channel. In this digital age, this seems like a very reactive paradigm.

Long live Contextual Omnipresence!

20180218-05We have arrived in a world where the boundaries between “channels” is blurring: online, offline, mobile, e-commerce, m-commerce, brick and mortar. The customers are becoming more and more digital, and they are even introducing new behaviors:

  • Showrooming. Customers view products in-store, compare options and details, and then search for the product online because it is cheaper to buy online then at the physical store. These consumers want to see and touch before they buy, however they are still online shoppers, and so for them stores become showrooms.
  • Webrooming (or reverse showrooming). Customers do all the research online, and then decide when and in which store to go purchase the product. And guess what, the majority of us showroom.

The mantra “mobile first” should actually read “customer first”, as (mobile) customers aren’t abandoning online or brick and mortar. It’s true that the majority of retail purchases starts online, but digitally influenced store sales are still bigger then online sales. The challenge in this new digital day and age, is to use all the avenues seamlessly and in line with the behavior of the customer. The customer experience should be personalized, and flawlessly integrated into their lives.

20180218-07In order to make this strategy concrete, let me share a personal example. In the summer in 2014, I started a new consultancy assignment at KBC in Leuven.

At the end of my first week (only 5 days into my new routine), I stepped onto the parking lot and Google proactively suggested the most appropriate way to drive home (and prevent any traffic jams).

The search giant detected my new context, and proactively sent me a message on my mobile device.

The technology is available to move to a “contextual omnipresence” strategy: based on the context of the customer, connect using the most appropriate channel. Let’s dissect this new strategy:

  • Contextual (or “context awareness”); trying to detect changes in the environment of the customer, or making assumptions about the customers’ current situation.
    • In essence, context is any information that can be used to characterize the situation of a customer: activity (process or task), device, elevation, identity, location, temperature, role, time, etc.
    • The context aims to address the challenge to tap into the customers moment of need, and this exactly at the right time.
  • Omnipresence (or “ubiquitous computing”); appearing anytime and everywhere in the life of the customer.
    • The goal of an omnipresence strategy is to break down the separate channels.

Let me give you a few addition examples. I’ll use banks because they’re easy to understand and everybody gets this:

  • As I’m using the ATM, the bank advisor proactively walks-up to me to provide me the new bank card that was awaiting to be picked-up.
  • The ATM has swallowed my card, and the bank informs me immediately. This could be done using a real time push notification, an automated phone call… or someone at the bank might even be able to catch me before I drive off the parking lot.
  • I’m travelling abroad, and the bank asks me to enable my credit card for international transactions. The bank might additionally inform me of local currency rates and specific habits (for example how much to tip at restaurants).
  • I have insufficient funds on my current account, and – in order to prevent awkward moments at the cashier – the mobile app proposes to transfer some money from my savings account. As the algorithms get to know my behavior in these situations, it might even automatically start to top-up my current account (and inform me accordingly).
  • This month, my local fitness club sent a double invoice. The analytical algorithms detect this abnormal transaction, and informs me accordingly. In future, it might even inform the supplier and solve this situation automagically.

20180218-08The “contextual omnipresence” strategy shifts customers to a proactive service; providing a timely relevant service based on the situation of the customer, and personalized for the customer.

Conclusion.

The reactive “omnichannel” strategy is outdated; it’s no longer sufficient to connect with customers across the different channels, and follow them along their path to purchase.

It’s time for a proactive contextual omnipresence” strategy; based on the context of the customer, connect using the most appropriate channel… and provide a timely relevant service, entirely personalized for the customer.

After reading this, you might be wondering if my name card now reflects the eloquent “Contextual Omnipresence Expert” job title. No! In the first place, the “expert” label sets an uncomfortable expectation level that undermines any tactics of being the underdog in my work. And more importantly, I’ve settled with the umbrella term “Innovation Manager” since last year, and this title fits like a glove.



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