- Category: February 2013 - Multichannel-Marketing
Omni-channel goes beyond social networks, email, web and mobile, as it actually includes the entire customer experience, like in-store displays, kiosks, interactive television and set-top boxes as well. It’s essentially anywhere there’s a digital touch point, which is everywhere you look nowadays. As a result, retailers and brands have to reformulate their supply chain strategies to match this paradigm shift. With omni-channel retailing, marketing is made more efficient with offers that are relative to a specific consumer determined by purchase patterns, social network affinities, website visits, loyalty programs, and other data mining techniques.
According to IDC Retail Insights, omni-channel shopping “requires providing an immersive and superior customer experience regardless of channel”. It is very similar to, and an evolution of, multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, bricks-and-mortar, television, catalog, and so on.
All shopping channels work from the same database of products, prices, promotions, etc., thus merchandise and promotions are not channel specific, but rather consistent across all retail channels. The bricks-and-mortar stores become an extension of the supply chain in which purchases may be made in the store, but are researched through other "channels" of communication.
According to IDC, retail leaders have no other choice but drive business model transformations and focus investment decisions around the “new consumer”. To sustain growth going forward, businesses will be looking to leverage the third generation of IT platform in newer and smarter ways, with the objective of addressing specific industry requirements.
"Whether the innovation path is around eCommerce, immersive fitting rooms, interactive displays, mobile or other forms of augmented experiences, the OmniChannel Orchestration & Optimization (O3) platform supports the creation of a longer term strategy that ultimately shifts the IT investment emphasis to revenue generating projects.
“The business benefits will result from synchronized, harmonized process execution, which will lead to better tuning of inventory in real time, improved stock levels, and a differentiating customer experience. That will be one experience that will drive profitable growth for APeJ retailers over the next decade," says Ivano Ortis, Head for International Research, IDC Retail Insights.
IDC expects Retail IT spending in the APeJ region to reach US$16.7 billion this year, which is a 4.4% growth over 2012. It further expects annual growth rates to remain around 4% or more over the next years, with a peak of above 5% by 2015.
Drawing from the latest IDC research, retail end user discussions and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 IT predictions for the Retail Industry in 2013, which IDC believes will have the biggest commercial impact on the APEJ Retail IT market:
Prediction 1: OmniChannel retail maturity in APeJ will move towards converged foundations and immersive precision in 2013
The new archetypes of OmniChannel consumers — digitally connected and instrumented, lifestyle driven, and inspired by unique experiences with their preferred brands simultaneously across all of the available sales channels and customer touch points — require companies to transform their businesses from product-centric and services-centric to new customer experience objectives and performance management strategies.
This is no easy challenge. Achieving the market opportunity requires business model transformations aimed at capturing, and intelligently leveraging, orchestrating and efficiently executing, all of the OmniChannel moments of customer participation into the brand experience.
Prediction 2: OmniChannel transformations will drive platform, real-time intelligent visibility and execution excellence investments
Pivotal to achieve short and long term OmniChannel objectives will be the differentiation of the customer experience built upon:
- OmniChannel Orchestration & Optimization (O3) process and technology platform design principles, which will enable OmniChannel fulfillment, merchandising, commerce and (digital) marketing functions.
- Real-time intelligent visibility - across customers, products, services, inventory, employees, regardless of channel.
- OmniChannel Execution excellence - store and warehouse/DC workforce, order fulfillment, localized assortments planning optimized for space, allocation and replenishment.
Other predictions in IDC’s upcoming report include:
- Retail Big Data will be among the Top 3 investment areas in China;
- A new retail market opens up in India with FDI approval;
- APeJ retailers will invest in customer analytics, merchandising planning, and digital marketing technologies;
- Converged operations across mobile, social, ecommerce and store web based technology will be key;
- APeJ retailers' supply chain focus will shift from scale towards improving customer experience more efficiently;
- APeJ retailers will use smart supply chain technologies (e.g. software, analytics, mobile devices, sensors, RFID, social networks, cloud) to improve the economic and brand strength;
- Vertically integrated retailers in APeJ will invest on PLM (Product Lifecycle Management) software to support geographical expansion opportunities;
- APeJ retailers will address CrowdMobility with mobile platforms, and not just with apps!
So watch out for more insights revealed in the forthcoming report, “IDC Asia/Pacific (excluding Japan) Retail IT 2013 Top 10 Predictions".
You can imagine that real-time data is necessary when moving towards an omni-channel approach, as socially connected consumers move from one channel to another, expecting their stopping point to be "bookmarked", then allowing them to return through a different retail channel to finish the browsing or purchase process, where they had originally left off.
Besides, communications between the IT department, marketing department, and sales staff needs to be as smooth as possible with little confusion about goals and strategies. Of course, a clear and thorough understanding of the customer, or target market, is required to be able to make appropriate decisions about channel integration and usability, too. Not to mention that investing both time and money is crucial, as omni-channel retailers need to be informative, attractive, and always connected to enable channel transparency.