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26th October, 2015

Why the Omni-channel swap shop won’t stop

“Omni-channel” is about the buzziest of buzzwords at the moment. As customers we are waltzing  between digital and physical worlds as we attempt to get a bargain, get inspiration, de-risk our decisions or simply have some fun. Do we wake up in the morning and decide “today, I’m going to be Omni-channel!” We decided to ask customers if they felt very Omni-channel today – and the resounding answer was “what’s Omni-channel?”  That’s the first lesson, we might obsess about channels but customers don’t. They have goals, and they see brands not channels – that’s it!

So why do we choose the channels we do? 

Our behaviour as customers seems to be dictated by a number of factors: convenience, risk, control, choice, time, trust, the quest for a bargain and instant vs. delayed gratification. These are all things that steer us either towards the high street or into the digital realm.

The customers we interviewed as part of our ‘Omni-channel Swap Shop’ study confirmed the perception that things are cheaper online – although the high street discounters are also good at creating this belief – so bargain hunting is very common in the digital space as prices can be more transparent.

As long as we have some idea of what we want, it is also easier to search in the digital space. But it is far easier to try on a pair of trousers or squeeze an orange in store (which is why digital ranked high in people’s preferences in most categories apart from apparel and grocery, where the “try” street still dominated).

Risk can also drive us to the high street – never more so than on occasions like Christmas where there is an immovable deadline and, possibly, a lack of inspiration (Googling “what does Dad want for Christmas?” probably won’t work, unfortunately).

Our channel preferences are also strongly influenced by our underlying motivational goal.

Positively motivated customers – we call them ‘visionaries’ – will tend to use more channels because they are willing to devote time, energy and effort into their goal.  They are more likely to view fun and enjoyment as a key aspect to customer experience. They are also often paranoid and risk averse – if they’ve bought things on line, they are more likely to suffer ‘parcel paranoia’ (the state of perpetual worry about whether their treasured parcel will arrive in one piece).

Visionaries can easily flip into a negatively motivated state – ‘customers in crisis’. These are far more difficult to deal with digitally as they are more likely to seek out human channels – the contact centre or the store. They are often angry, frustrated and unreasonable – and more likely to have a cathartic rant on Twitter if they can’t easily hand their problem over to a person who isn’t just lovely but can also actually help.

However, mid-point between positive and negative goals is the ‘utilitarian’ customer. Utilitarians typically don’t want “wow” experiences, they just want quick, convenient and easy journeys to their goal. These are the ones that like the control of ‘click-and-collect’ and relish online shopping because it is far more preferable than attempting to supermarket shop whilst controlling their children.

 

What does this mean for retailers?

The trouble is that most traditional retailers are channel and goal blind.  Just like in Vegas, what happens in the physical store stays in the physical store and the same applies to the digital space.

There are also many inherent challenges in integrating the digital channel into the traditional physical environment. It means having aligned strategic goals which allows consumers to be in control of how they shop whilst the organisation has a single view of them (when they let you), whatever channel they happen to be in.

Using technologies that help consumers find things in physical spaces that they have already viewed online could cut out the whole experience of running up and down aisles. To that end there is already much discussion around the role of technologies like beacons, digital signage and Li-Fi (a way of transmitting data without interference using LEDs in dense environments like stores) helping declutter customer journeys and accelerate consumers to their goal.

With the growth of digital channels outpacing the growth of physical one, retailers will need to give their customers more compelling reasons to go in to their stores and branches. Technologies are often deployed in store with a cost-cutting mentality rather than a mission to improve customer experience. The danger of this is that it can cause too much of a focus on price and convenience. This only strengthens the advantages of digital channels.

Physical experiences should be optimised to make things easy for customers and reduce effort. But they also need to be pleasurable, engaging and fun to make them memorable. Service expectations are typically higher in the physical store, so front line staff need to be enabled, informed and empowered to create these experiences.

Digital experiences don’t have to be solitary and impersonal – they can also encourage two way engagement. Research on technologies like virtual fitting rooms, has shown that increasing interactivity (where appropriate), can reduce perceived risks and generate stronger purchase intentions than a more passive, catalogue approach. It can also potentially reduce costs as the risk of purchasing ‘unsuitable’ items is lowered.

Whatever we do with technology, we need to enhance customer experiences and journeys from the customer’s point of view, not the channel’s point of view.

The Omni-channel swap shop won’t stop!

 

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