Retail and CPG companies have been aiming to solve the “X-Channel” conundrum for quite some time in order to best serve their supply chains while also focusing on meeting changing customer needs. Several decades ago it started primarily with “Multi-Channel”, transitioned to “Omni-Channel”, and in recent years has evolved into a more complex and holistic “Seamless Customer Engagement” to place the individual customer at the center of the value chain. In today’s digital world, improving customer engagement is a strategic imperative for many retailers, driven by a number of technological, economic and societal changes. It’s also an imperative to stay relevant in today’s digital society. With all these approaches, basic concepts of having the right product, in the right amount, at the right place, at the right time, and for the right price, continue to hold true. And don’t lose sight regarding customer returns, as this continues to be a strong point in how the customer perceives who the best company to shop with is.
The continued focus to win the customer and keep the customers now forces companies to obtain more personalized data, perform deeper analytics (Big Data), distribute the product the way the customer wants, and (re)develop personalized programs to retain and grow their customer base (think loyalty programs). Seamless Customer Engagement drives the overall consumer value chain, which contains multiple mechanisms addressing Insights Driven Business, Seamless Commerce, and the Consumer Driven (Demand Driven).Supply Chain
X- Channel Origins – Multi, then Omni
It seems back in the mid-late 90’s, customer expectations started to grow with the need for immediate gratification as the amount of information became more available via the internet (remember Al Gore?). As customers began obtaining product information via the internet, they desired a way to capture that product as quickly as possible at the best price, time, etc. This directive opened up the need for companies to develop multi-channel supply chain capabilities to be competitive and to fulfil those customer’s needs via different distribution strategies (think online ordering vs. brink & mortar). Cross-Channel merged with Multi-Channel to further support the creation of a somewhat integrated customer experience, but make no mistake, Multi-Channel applied a limited number of distinct distribution channels that at this point best served the supply chain processes, not necessarily the specific customer.
Omni-Channel expansion began in the early 2000’s and is considered the integration of all physical and digital channels to provide the ultimate customer experience (“Omnis” is Latin for “every/all”). BestBuy was an early adopter of Omni-Channel in order to compete with Walmart, to provide their customers with both an in-store and online capability, including post-sales support. Omni-Channel also introduced a more robust set of technologies to create predictive analytics around the supply chain so that better decisions could be made with forecasting, trends and interdependencies of each channel. Just to be clear, unless all channels are completely integrated and aligned, it is not a true Omni-Channel network. Most companies are still investing in Omni-Channel and trying to get it right, while some are still considering if this is what is really required to meet their customer’s needs, resulting in an enhanced Multi-Channel decision. Some of those that lead in the Omni-Channel challenge are companies like Disney, Starbucks, REI, and Bank of America. Along with these companies, these are also others that are evolving the Omni-Channel directive to incorporate the next big thing; Seamless Customer Engagement.
Enter the new imperative: Seamless Customer Engagement
Seamless Customer Engagement (SCE) is attempting to further integrate Omni-Channel with data from CRM and customer loyalty to provide a more “personalized” customer experience. In the past, these three key elements of customer engagement however have often been done in isolation. By utilizing the new wave of CRM technology for gathering, enhancing, and mining data customers provide, it is allowing companies to understand customer behaviors and preferences better than ever before. This in turn enables them to gleam new insights to drive decision making capabilities to enhance the customer experience to gain more customer loyalty and better enhance incentive programs. By bringing these three areas of capabilities under a unified strategy and set of capabilities, companies can offer a SCE proposition, which will further set them apart in the crowded consumer market.
Remember, customers are people you deal with and personalization is the key to SCE success. Customers today experience product information from various sources, whether it be the company’s website, Instagram, social media, email promotional placements, or promotions on other’s websites, etc. Customers also require product acquisition via multiple channels (ship to, home delivery, pick up in store – including return capabilities), and regardless of channel, they expect a customer experience that is efficient, effective, and smoothly coordinated (seamless) to meet their needs via any digital entry point. The customer also expects the same branding across all digital access points (look and feel, information availability, etc.) and quick transactions which are repeatable. SCE places the consumer at the center of value driven networks as opposed to previous industry driven networks – this is a very complex change companies are taking grasp of and trying to get ahead of to better serve and personalize needs for customers.
Moving from a typical industry driven value chain to a consumer driven value network is where the dividends start to take place.
For SCE to become actionable, customer engagement needs to depart from disparate, non-integrated capabilities. The focus should be on the three following principles:
- Allowing customers to seamlessly shop Any Time, Any Where, and on Any Device – Seamless Omni-Channel experiences
- Understanding customer behaviors and interactions to satisfy their wants and needs – personalized and contextual interactions
- Providing customers with incentives, which can drive retention and brand affinity – timely and relevant incentives
The operational challenge is simply put, ‘be easy to do business with’. Easier said than done, and a major challenge, as the number of channels complexity continues to expand while the focus to ensure personalized experiences are integrated. SCE is very complex to orchestrate; human collaboration, automated processes, digital analytics, social intelligence, and operational processes must all come together seamlessly to be fully effective, but if you can pull it off, the benefits can be enormous.
Seamless Customer Engagement
As mentioned previously, SCE is a very big and complicated imperative for companies to take on and solve, to achieve desired results from. With a company-wide strategy, appropriate technology, and process redesign taking a front seat for this transition, not to forget the potential change of corporate culture and capable skill sets, the journey has a great chance of succeeding. To create “personalization”, Big Data and highly evolved analytics are critical in creating customer profiles to reimagine the manufacturing, marketing and supply chain inefficiencies that currently exist, are critical to make this an effective and seamless experience for customers.
It is recommend that companies look at SCE as more of a journey (iterative approach), by developing a strategy and roadmap quickly to get started down the path. As this journey begins and evolves, companies will learn much more about their company and customers and will need to be flexible to navigate as new learnings are discovered along the way. A future pivot point should be expected as the journey evolves to meet ever changing customer expectations, new technology, and capabilities of the organization. As the journey continues to center the customer at the core of the value chain, opportunities to provide the customer of today, and the future, can be realized.
Seamless Customer Engagement is becoming the achievement goal and proposed standard for Retail and CPG companies so get ready now, start planning, begin the journey, or get left behind. Since customers expect a more personalized venue and no longer purchase products from just one channel or digital entry point, they will continue to provide the direction companies need to take to serve them in the customer-centric environment. The evolution of how companies use SCE to reach and serve individual customers is vitally important to keep pace in the market and outplay their competitors – and to create loyal customers, grow market share, and prosper profitably along the way.