The omnichannel has been a key driver for all businesses as they connect and integrate each of their customer-facing systems. As enterprises look towards their futures, how are next-generation omnichannel services being created and deployed?
Developing the omnichannel for their businesses had been a clear focus pre-pandemic. Connecting each customer touchpoint to create an integrated journey spoke volumes about how customer relationships had evolved. Today, post-pandemic, another shift is taking place: the omnichannel as we know it has once again evolved, as businesses support the changing attitudes and demands being placed upon them by their customers and commercial partners.
A clear driver seen over the last two years has been the expansion of online sales. Indeed, according to the ONS, retail online sales in 2020 alone grew by 46% A year later, Mintel reported this figure had jumped to 53% The internet has always been a key component of the omnichannel, but this consumer behaviour illustrates how businesses must put their digital channels front and centre of their enterprises.
Simon Moriarty, Director of Mintel Trends, EMEA, comments: “E-Commerce and online transactions have the potential to become, and remain, the norm. Thus, brands are encouraged to innovate digital capabilities in anticipation of consumers’ needs and, crucially, to expertly bridge the gap between the online and offline worlds to offer a more reliable and consistent experience.”
Speaking to Silicon UK, Orla Power, marketing director at Luzern – a leading European managed E-commerce platform provider explained: “Adapting to this new competitive omnichannel landscape requires agility, strong partnerships, and a clear strategy to turn opportunities into sustainable, profitable long-term growth. Where many fall down is what I refer to as “the messy execution end” i.e., having everything in place to get the product in stock, ready for purchase, at the right price and delivered into the hands of the consumer, flawlessly.”
The omnichannel has continued to evolve as business relationships have also changed. The past two years, however, have witnessed massive shifts in customer relationships and how they communicate and buy from the companies they covet.
Joining the dots
The pre-pandemic omnichannel had connected traditional customer touchpoints. In the digital space, social media networks had become increasingly important for marketers. The expansion of social commerce is a clear trend that is shaping today’s omnichannel.
For example, according to Meta, “Simply by being on Instagram, brands can make a positive impression on potential shoppers. People surveyed say they perceive brands on Instagram as popular (78%), creative (77%), entertaining (76%) and relevant (74%). Those top associations stayed relatively consistent across the globe, with a few differences, like in Japan, where people put informative as their second most-perceived quality.” Social marketing, in general, is expected to grow by a CAGR of 31% by 2025.
Many businesses are also considering how they can move their existing e-commerce platforms toward the marketplace model. Marketplaces such as Amazon and eBay were the big winners during the pandemic. Research from Marketplace Pulse, concluded that in 2021, Amazon generated $390 billion GMV (Gross Merchandise Volume) through third-party sales. Enterprises that have vibrant marketplaces are exploring how marketplaces could be how their businesses move their omnichannel forward.
Consumer behaviour and how this is supported across next-generation omnichannel and marketplaces is a critical component of the development strategies businesses must develop at speed. Click and collect is now worth a staggering £9.6 billion in 2022 alone according to Globaldata. Speed and convenience are important factors here, but so is ESG and how this is supported by the companies consumers buy from.
Physical stores and the high street, in general, have also been moving through change. The pandemic accelerated these changes, which some have forecasted will re-draw the physical retail landscape. Stores will not disappear but morph into a different service connecting with the next generation omnichannel. As we have already seen, the huge popularity of click-and-collect shows no sign of slowing its growth as consumers continue to want convenience and the ability to personalise their shopping journeys.
Mel Tymm, warehouse and logistics expert and Industry Principal at eCommerce solutions providers Naveo Commerce explained to Silicon UK: “As the face of the high street continues to change, we may start seeing a combination of retailer functions under one roof. That is a local site from which both online and offline orders are made, and shoppers can click and collect, all while automation and co-bots streamline processes. This is already happening in other parts of the world, such as China’s Freshippo supermarket. Commercial spaces are evolving to keep pace with the demands from customers and the fast-moving FMCG (Fast-Moving Consumer Goods) market. Grocers must therefore be agile with how they adopt trend and embrace technologies for omni-channel to get as much value out of their retail and warehouse estate as possible.”
With James Manderson, SVP, Customer Success, Braze also commented that once again, customers are shaping how the omnichannel is developing: “The best results come when brands can truly listen to customers and engage with them in a meaningful way. That’s why it’s important to have the right technology in place to engage customers respectfully in a coordinated way with relevant offers and information on the right channels, at the right time. A customer engagement platform allows you to listen, understand and connect with customers from a single place, which will be crucial as the next generation of omnichannel won’t just focus on reaching customers through any channel, but rather through the right channel.”
Tech and communications
The architecture of the new omnichannel is fast coming into focus driven by the behaviour of consumers and their demand for connected and personalised shopping experiences. Those enterprises that can deliver integrated purchasing experiences, will lead their market sectors.
Adopting an integrated approach to digital tools and services will deliver the experiences shoppers want. The supply chain is transforming as the pandemic laid bare its fragile nature. Connecting neo supply chains to the customer-facing applications whether online or in-store is the current challenge facing businesses.
Dave Huntoon, Managing Director at Intalytics, part of the Kalibrate Group, says: “We’re seeing IT infrastructure change already and the demand for appropriate personnel to make this happen is enormous from a hiring perspective. Some companies have paid two-three times their normal salary to get digitally-savvy talent into the business. With shoppers becoming more demanding, businesses must find a way to make their infrastructure painless, seamless, and easy for consumers to buy.”
Deloitte concluded in their future consumer report concluded: “The epidemic has forced retailers to reach new heights in channel integration. They had to diagnose their omnichannel capabilities and develop roadmaps for new situations – the first step for businesses seeking to achieve omnichannel transformation.”
Orla Power, marketing director at Luzern concluded: “Executing an eCommerce go-to-market strategy to ensure a seamless customer experience is still the number one challenge for brands. Amazon has set the shoppers’ expectations on this. However, many brands still struggle with creating a seamless shopping journey. You can have the best, most creative and expensive ads in the world but if the price point is not what it seemed can have unexpected shipping charges, has slow shipping, or even ends before it begins with the dreaded “out of stock” message, then brands can say good-bye not just to that sale, but to that shopper.”
With Elissa Quinby, Global Director of Retail Insights, Quantum Metric advising: “There are a set of challenges that come with setting up a true omnichannel experience, from measuring the entire consumer journey, and understanding influence in final purchasing, to ensuring that the supply chain does what’s needed. In the end, however, this all comes back to one main challenge – that of getting different internal silos and functions to work together smoothly. Such silos can usually work separately to one degree or another, but for omnichannel, there’s a clear and underlying need to destroy the walls that create these silos and for all teams to see the same picture and the role they play in it.”
As businesses enter their post-pandemic period of development, the omnichannel that they had been developing needs a radical rethink. Customer behaviour has changed. The drivers challenging businesses to change such as ESG are also influencing how connected services are created, deployed, and expanded. The future of the commerce is certainly more connectivity that will continue to encompass physical retail space which themselves will also transform. Business strategies that can consider all of these components as an integrated whole, will become leading post-pandemic brands.
Thomas Kasemir, Chief Product Officer at Productsup.
Thomas Kasemir is Chief Product Officer for Productsup, the company empowering commerce. He oversees Productsup’s product vision and strategy, as well as leads the global engineering and product management teams. Kasemir has spent more than 20 years in the technology industry, holding senior product roles at various software companies like IBM, Heiler Software, and Informatica.
How is the omnichannel developing right now?
“The omnichannel is a term that has been around for decades, stretching back to the 90s. However, the omnichannel of the past is almost unrecognisable when compared to today’s commerce landscape.
“New channels are being added almost daily, and the proliferation of meta-marketplaces, social commerce, and the high street are skyrocketing. Today’s shoppers also expect hybrid experiences – a blend of physical, digital, and virtual shopping.
“However, to support the nuanced experiences that consumers want, maintaining control of enormous amounts of product information is essential. Otherwise, retailers will find themselves in a state of “commerce anarchy.” However, this is no easy task given the extraordinary complexity of the retail space and needs the right tech to support it.”
What are the challenges businesses face building a post-pandemic omnichannel?
“Post-pandemic shopping means the high street is open again, and brick-and-mortar shopping is picking back up. Meanwhile, E-commerce isn’t slowing down either. To balance inventory, meet consumer expectations, and drive sales, retailers need to facilitate multidirectional flows of product information offline and online. For example, tools like local inventory ads or AR and VR can help intersect these different shopping experiences.
“Successfully managing product information across this huge variety of touchpoints at scale is essential – yet most are failing to keep up with the constant emergence of new channels. The chaos of managing an overload of complex product data flows is creating total commerce anarchy where product descriptions are incomplete, prices are incorrect, or out-of-stock items are listed as available.
“To succeed, product information needs to be interpreted and integrated constantly to give consumers the exact information they want in the channel that best suits their needs.”
How can technology help businesses create next-generation omnichannel services?
“It is essential retailers look at smart solutions that enable them to have complete control of their product information value chains (PIVCs) across all channels. A PIVC is a path that product data takes as it moves between sellers and buyers and across channels. Controlling PIVCs will help brands immediately adapt to new channels in the quickly approaching metaverse before competitors can gain a foothold.
“One such strategy that can help businesses better manage the flow of data across PIVCs is a mature product-to-consumer (P2C) model. P2C management is defined as a systematic approach to controlling, directing, and maximising a commerce ecosystem. There are several software platforms that can help facilitate this, but businesses need to ensure that any tech solution is easily scalable and manageable to aid company growth, build market share, and support brand authenticity.
“A holistic P2C management strategy will reduce the amount of mismatched product information, making maintaining brand authenticity across multiple channels a far easier task.”
What are the critical elements of connecting physical retail spaces, digital channels and now the Metaverse together?
“Consumers now conduct various parts of their shopping journey across all three of these dimensions – they may discover a product on Instagram, research it using an online store, and then go into a physical store to buy it. All these shopping destinations must complement each other to bring consumers to the point of purchase.
“When shopping online, for instance, it’s important to offer convenient ways for people to pick up items in store. Similarly, when shopping in a physical store, it’s essential to make it as easy as possible for people to order a product online if there isn’t in-store availability.
“What’s most important is that consumers have the same experience across all of these mediums. The product information, customer service, and every other element of the buying experience all need to be consistent and high-quality. This can be achieved by looking at the entire product journey from end-to-end between suppliers and buyers, rather than relying on a siloed management approach. Collecting this data allows product information to be updated in real-time and tailored for specific channels, which ultimately optimises and maximises each element of the commerce ecosystem.”
How is consumer experience shaping next-generation omnichannel?
“Today’s shoppers want hybrid experiences – physical, digital, and virtual. Globally, research shows respondents were more likely to make a purchase if their shopping experience includes a mobile app that provides more product information while shopping in-store (47%), as well as virtual and augmented reality while shopping online (42%).
“Brands and retailers need to deliver nuanced experiences tailored to consumers wherever they shop. Consumers aren’t distracted by “greenwashing,” and they expect the metaverse to be as good as real life. These expectations can’t be met unless product information is managed with a strong P2C strategy.
“One bad online interaction can cost a sale and drive your customer straight to your competitors. Having a clear P2C strategy in place will allow complete control over PIVCs to ensure companies are providing a unified customer experience at every consumer touchpoint – all while maintaining their authenticity.”
How will a business’s IT infrastructure need to change to support the new omnichannel?
“It all comes down to simplicity and the ability to process large volumes of data. If you look at most companies’ current tech stacks, they consist of systems that run independently from each other and address individual problems. Condensing tech stacks and leveraging automation can significantly reduce the time it takes to onboard products to new channels to expand your omnichannel presence.
“IT infrastructure also needs to be able to source data from an unlimited number of suppliers, and then have the bandwidth to allow for easy reorganising and packaging of that data to eventually export it to various channels. Looking ahead to the metaverse, IT infrastructure will need to be agile enough to keep up with high-speed internet and fast-evolving innovation. “