Pure unicorn dust

Do you know companies that say they are all about growth and innovation, yet completely lack any semblance of a process or a modicum of dedicated funding and resources to support these efforts? Do they even possess a culture that not only celebrates taking risk, but that actually knows how to fail better?

Have you heard brands’ espouse a commitment to omni-channel and seamless integration that still operate with silo-ed organizations, silo-ed customer data, silo-ed systems and channel-driven, rather than customer-focused, metrics?

Perhaps you have a friend or a loved one who say they are full of love and compassion and who constantly speaks of making big changes in their life, but has yet to put any of it into practice?

When was the last time something worth doing spontaneously emerged at your organization? When the last time a major transformation happened without an all-in commitment from leadership and a willingness to take on the status quo? When was the last time you’ve made a big change in your life merely through talking about it?

Intentions are great. Concrete plans are better. But the work that matters is in the doing, in taking the plunge, in taking head-on the things that scare us, in making a ruckus.

Yes, it might not work. Sure, you could look stupid or reckless. And, there is a pretty good chance you’re going to piss some people off along your journey. That’s probably a clue that you’re on the right track.

Get out of the stands and into the arena. Anything else is just really good imagination.

Focused ubiquity

It’s an omni-channel world we’re told, where consumers are shopping anytime, anywhere, anyway. Rarely separated from their smart devices, our customers are one search or one click or, very soon, one buy button away from transacting wherever they happen to be. If we aren’t a ubiquitous presence anywhere and everywhere we not only risk losing out on that sale, we are likely at the start of a sad, inexorable march to the retail graveyard.

The staunch proponents of all things omni-channel have advanced a narrative that argues that every brand needs to sell in every possible channel, that millions must be invested to become seamless and integrated (whatever that means) as fast as possible and that unless a retailer is everywhere, it really is nowhere.

At one level it’s hard to argue with the thrust of this argument. It’s also hard to ignore the fact that the most fervent omni-channel advocates have financial interests in convincing retail brands to adopt their way of thinking.

There is no question that we have seen–and continue to witness–powerful shifts in consumer behavior. More and more, the blended channel is the only channel. The moments that matter in most consumers’ decision journeys are becoming profoundly different and that requires virtually every brand to fundamentally re-think how they engage with their customers.

There is also no question that a blind quest to be seamlessly integrated in all aspects of the enterprise is mostly a license to waste money. Chasing the bright and shiny objects of social media, all things mobile or “bringing the digital experience to your store” is more often a distraction in search of a strategy. The future of omni-channel will not be evenly distributed and that means that one-size-fits-all strategies will not work.

What retail brands need is focused ubiquity. It’s great to adopt an “anytime, anywhere, anyway” rallying cry and to pray to the god of seamless integration. But once you say the right things at your Board or industry analyst meeting it’s time to drop the platitudes and make a plan.

A focused ubiquity strategy requires the following:

Adopt a “treat different customers differently” mindset. Some customers are more equal than others. Omni-channel investments need to be prioritized against a clear view of the needs and wants of your most valuable customers and prospects. If you lack sufficient customer insight, get to work on that before you throw big money and time at complicated IT projects and process re-design work.

Identify the “moments that matter.” Just as all customers aren’t equal, all customer interactions aren’t either. Relationships start, grow and stop in a myriad of ways and your mileage will vary when it comes to where the ultimate leverage is.

Understand digital’s impact on brick & mortar sales. Stop thinking about e-commerce as a sales channel and start thinking about how all digital channels drive physical stores sales (and vice versa). I’ve yet to work with a retailer who hasn’t under-estimated the interplay between digital and physical sales, and few had a good handle on the most damaging sources of customer experience friction.

Conduct a friction audit. Armed with a clearer sense of how your brand’s actions drive awareness, acquisition, growth, retention and advocacy among critical customer cohorts, understand where friction in the customer experience arises, estimate the cost of this friction and build a prioritized road-map to address the most critical elements.

Develop an amplification strategy. The friction audit mostly focuses efforts to stem customer defection and improve conversion rates. It doesn’t necessarily create long-term competitive advantage. To do that–again, armed with a clear sense of “who’s if for?”–you need to create amplification points. These elements of your value proposition are the places where your brand can be truly remarkable–remarkable in the sense of clear competitive differentiation, intense customer relevance and the willingness of your best customers to spread the word.

It often seems like human nature to try to be all things to all people, at least until we hit a point of utter exhaustion and/or the money runs out. This is the danger inherent in a “get omni-channel fast” strategy that so many retailer brands have seemed to adopt.

Adopting a focused ubiquity strategy acknowledges the anytime, anywhere, anyway world we find ourselves in. It also accepts the reality that few, if any, brands have the financial capacity or the human resources to do everything well at once.

At the intersection of choice and friction

As retail consumers, let’s stop and think about the choices we had a decade or so ago.

With few exceptions, almost all products were purchased from a physical store during limited store hours. For the most part, we selected from what was in-stock; custom orders were generally time-consuming and expensive. If we wanted to shop for alternatives we had to get in our car, walk to another store in the mall or, if we lived in a small town, drive many miles to explore the competition. It was pretty much the same drill if we wanted to check prices. Product reviews came from neighbors and friends, if we were lucky, or from sales people, if we weren’t.

Until fairly recently, many of our shopping experiences were laden with friction, primarily driven by scarcity of choice. Sometimes we had decent alternatives. Many times we did not. Often we had to settle for good enough.

Today, if anything, we are overwhelmed by choices. At a macro-level, consumers are experiencing less and less friction all the time as selection expands, prices decline, access becomes easier and information is abundant. Technology is enabling retailers to root out the so-called pain points in the customer experience. Fierce competition is unlocking more and more value for consumers.

But for many retail brands, this can be quite problematic. Mediocrity in the customer experience is now laid bare. Uncompetitive pricing, stale merchandise, out-of-stocks, long call-center hold times and the like, have gone from mere customer annoyances to the reasons customers are bailing in droves to the competition.

It amazes me that so few retailers truly understand what drives customer loyalty and how they stack up against the evolving competition.

It stuns me that so many brands remain clueless about the sources of friction in the shopping experience, particularly among their most profitable customers.

Blather on all you want about omni-channel this and omni-channel that. But if you don’t really understand what’s going on for your customers at the intersection of choice and friction, chances are you’re wasting your time.

Send in the clones

How’s this for an idea?

Let’s sell products that are pretty much identical to everything else that’s already out there in the market.

And then let’s employ advertising that is virtually indistinguishable from our competition.

Every week we’ll have big sales–and if you’re really crafty, you can use our coupons to save even more!

Sign-up to be on our email list and we’ll give you 10% off your next purchase. And then, just about every day, we’ll send you an email highlighting some of our me-too products while also reminding you how much you can save.

Be a good customer and we’ll throw in free shipping. Oh, you hardly ever buy from us? No worries, you get free shipping too!

We’re all omni-channel and what not, so of course we’ll have e-commerce. And our site will look like every other site. We want you to feel comfortable.

Oh, you didn’t buy just now when you were on our website? That’s cool, we’ll just keep serving up ads on Facebook and everywhere else you go on the internet. Hope you don’t mind the little interruption.

And, after we do all this and we don’t get the sales we want, we’ll just launch a “loyalty” program that–wait for it–rewards you with gift cards so you save even more!

As silly as this sounds, it’s the play book for many retailers. They continue to swim in a sea of sameness. Most often, their default mode is to compete on price because, faced with a paucity of actual difference, it’s the only thing that seems to drive sales.

Unfortunately, the fact is most categories aren’t growing faster than the rate of inflation. The fact is most consumers have more choices than they can possibly sort through and make sense of. The fact is share of attention is the new battleground. The fact is almost all price wars end badly. The fact is any real growth needs to come from stealing share.

Imitation may be the sincerest form of flattery. And it may seem safe.

Yet the fact is it is just the opposite.

seth

What if omni-channel is too expensive?

There are some who say that all brands must become “omni-channel” as quickly as possible. They’re wrong.

There are those who say that this whole omni-channel frenzy is a bunch of hype perpetuated in the selfish interests of service providers peddling their own solutions. Well, there is definitely an element of truth contained within that view, but they’re mostly wrong too.

Still others suggest that becoming “omni-channel” merely adds a lot of cost and complexity while not demonstrably moving the dial on sales and profits. For them, when it comes to embracing all things omni-channel, the rent is just too damn high.

The stark reality, supported by reams of data, is that consumers are using more and more channels to go through their decision journey. But, importantly, this is not the same as all customers using every possible channel with equal importance and frequency.

Another powerful set of facts concerns the growing consumer expectations that brands offer a seamless experience across all channels. This doesn’t, however, mean that all integration efforts are equally weighted. Your mileage will vary.

Lastly, there is a constant, unrelenting deployment of new technology that lowers the cost of service, innovates some aspect of the customer experience or both. Much of this disruption comes from start-ups not burdened by legacy systems and the often paralyzing decision-making processes of industry incumbents. The pace of change, just in the areas of digital marketing and mobile applications, that allows for a more cohesive customer experience, is hard to ignore.

One obvious problem is that there is no universally accepted, actionable definition of omni-channel. And the vagueness of what we mean when we lift up the term, often mantra-like, tends to obfuscate more than it illuminates.

If we are to move beyond buzz-word bingo and terminology that merely sounds good in industry conferences and press releases, we are called to lay out a strategy and system of customer-centricity, which is, after all, the whole point of “becoming omni-channel” for most brands in the first place.

To do so, requires three key things:

  1. An actionable customer segmentation–who, exactly, are we doing this for, how will we treat different customers differently and what do get when we win?
  2. A frictionless commerce plan–prioritized against our most important customers and designed to eliminate the most clear and impactful points of pain or to create opportunities for competitive advantage.
  3. An amplification strategy. What are we doing to be truly remarkable and to give our best brand advocates a customer megaphone?

If we think about our omni-channel strategy more precisely, along the lines I’ve suggested, then it’s not a silver bullet, it’s not merely hype, nor is it too expensive.

In fact, not embracing it may be the most expensive choice of all.

Pretending it’s new

When some leaders wake up to reality, when they slowly start to notice that things are in fact meaningfully different from how they were before, we often witness a self-absorbed, I’ve just found Jesus and I need to tell you all about it, kind of thing take over.

“Consumers who shop multiple channels are more valuable than single channel customers” they breathlessly announce at conferences.

“Stop thinking about e-commerce as a channel” becomes the title of a newly released white-paper.

“We need to differentiate ourselves on experience” the CEO implores a group of assembled executives.

Suddenly everything is about “seamless”and “omni-channel” and “the single view of the customer.”  Their sentences start to include a disquieting use of “integration”, “customer-centric” and “relevance.” Investor presentations and annual reports turn into games of buzz-word bingo.

I hate to drag you out of your pink cloud, but just because you took a long time to notice, doesn’t mean it’s a recent phenomenon. Responding energetically to a totally foreseeable crisis does not make you a great leader.

Pretending it’s new may prop up our ego or cast ourselves in a better light. Better late than never, huh?

Pretending it’s new may buy ourselves some time with a less than savvy Board. What they don’t know can’t hurt them, right?

Much of what passes for insight today has in fact been known for years if only we had taken the time to become aware, confront its import and accept the implications. It’s not new and we shouldn’t pretend it is. Of course, neither is this.

Now obviously we can’t go back and fix all the should of’s and could have’s.

But we can ask ourselves what of potential importance might we be missing right now?

We can go into understanding what our fear causes us to avoid.

We can accept that often our pretending creates the illusion of keeping us safe.

Digital first retail

Many traditional retailers are already living in a “digital first” world. If your brand isn’t quite there yet, it’s likely only a matter of time–a short time.

Digital first means that even if the customer ultimately buys in a brick & mortar location, their journey starts online.

Digital first means that the primary way prospective customers learn about your brand is through your website, social media or online peer-to-peer reviews.

Digital first means whether the customer comes to your store for a particular transaction or not is determined by how well your online or mobile presence meets their needs in a highly relevant and compelling way.

Digital first means that holding on to the customer relationships that matter is largely determined by how well your digital tools eliminate customer experience friction and are rooted in a treat different customers differently philosophy.

Digital first means that the way your customers activate their passion for your company and become true brand ambassadors is primarily by sharing their remarkable experiences via their smartphones, tablets and other digital devices.

Digital first retail profoundly changes the way we engage customers, the way we deploy technology and the way we re-envision the physical store experience. It causes us to break down our silo-ed thinking and organizations to put the customer at the center of everything we do.

It’s not easy.

It’s not inexpensive.

It’s not without risk.

But frankly we have no other choice but to embrace it and get on with it.

And I’d hurry if I were you.