Read anything about retail, attend a conference, get pitched by a consultant, evaluate a new software product, and chances are you hear “omni-channel” mentioned early and often.
So with geniuses like me throwing the term around ad nauseam, let’s get specific about what is probably wrong with your current strategy and what you need to do to go from meaningless words to remarkable action.
- Focusing on semantics rather than strategy. I’m often asked what’s the difference between “multi-channel” and “omni-channel” and my answer is typically: “Not much and who cares.” The point is having a strategy that reflects how customers shop today. The point is designing a value proposition that fights and wins in an increasingly blurred channel world. The point is delivering a compelling customer experience day in and day out. Call it whatever the hell you want. It’s what you do that matters.
- An appalling lack of customer insight. If you are blessed with a killer offering and virtually no competition, go straight to #3. But if you don’t work at Apple or Google, chances are you need an actionable customer segmentation. Chances are you need far better insight around consumer behavior. Chances are you need to be able to differentiate your target customers by needs and value. If you don’t have the data to treat different customers differently, you are at a huge disadvantage.
- Your mileage may vary. On one side, you have pundits screaming that if you aren’t “omni-channel” today you will be out of business tomorrow. On the other side, there are those that find that sentiment preposterous; just look at Amazon, they don’t have retail stores and they are doing fine. The truth is that every brand’s situation is different. An omni-channel strategy as an abstract concept is useless. An omni-channel strategy that reflects the reality of YOUR consumers, YOUR competition and YOUR current and future capabilities is all that matters. You aren’t Amazon. You aren’t Nordstrom. You aren’t Macy’s. Take what you like from some of the leaders and leave the rest.
- Screwed up metrics. Ask a retailer about their “same store sales” and “gross margin rates” and “sales per square foot” and the growth in their brick and mortar stores compared with e-commerce sales and you are inundated with data and commentary. Ask them about growth in key customer segments, segment profitability, traffic conversion or retention rates, cross-channel browsing behavior and the like, and you are probably met with silence or meaningless babble. What gets measured gets done. But if you are focused on the wrong data you are going to do the wrong things.
- A dumb organization structure with dopey incentives. Most of the time I was at Neiman Marcus our then CEO would get on analyst calls and talk about our “compelling multi-channel strategy.” We included similar words in our annual reports and investor presentations. In reality, we were organized by channel, had no meaningful truly customer-centric efforts and all the top executives had incentives to maximize their own fiefdoms. Silos belong on farms. If are serious about “omni-channel’ you need to set a structure that reflects customers first, and channels and/or products, second. You need to pay your people on those things that truly advance key customer segment growth, engagement, loyalty and advocacy over the long-term.
- Confusing the vehicle with the destination. Yes, the web can be a sales channel, but for most retailers it is mostly a tool. Having a social media or mobile strategy is critical, but only as a means to your customer growth strategy ends. If you don’t know where you are going, any road will get you there.
- Failure to ship. The era of months of intensive market planning, controlled testing and the big reveal are over. In case you haven’t noticed, things move a lot faster today, communication channels are increasingly blurred, and customer desires are far less predictable. Trial and error works far better than spectacular planning and flawless execution. Better to ship often and fix it in the mix.
- Neglecting relevance. Retailers are great at talking to themselves. And passing to where the receiver used to be. And wallowing in me-too-ism. And going big and easy, rather than small and challenging. Treat different customers differently. Make it relevant. Extra points for remarkable.