Omnichannel, Digital in store, Innovation, Digital Transformation
What you will learn in this article
- What is Omnichannel retail in fashion industry? Definition.
- What are the main omnichannel processes?
- How is Omnichannel implemented in fashion and luxury companies
- What skills are required to get a fashion jobs in omnichannel
- The importance of digital marketing and CRM in omnichannel
- The role of customer service in omnichannel
- The role of Social Media in omnichannel
- Omnichannel strategy implementation
Definition of Omnichannel
Omnichannel can be defined as “Governance of cross channels and seamless customer experience that includes communications, services and transactions”Enrico Fantaguzzi, 2015, Brandy
With this definition we are putting the accent on the processes that contribute to the contemporary customer experience. The term governance implies that there is a proactive intent of the brand to control the customer journey even if we now that we cannot determine the customer journey but only ensure that al possible combinations of channels and touch points are correctly manage to provide an experience that meets the customer expectations.
The word seamless implies that the customer shouldn’t be aware of the effort made by the brand to create flawless experience. As we all know that it is extremely complicated to make the online and offline channels talk to each other to pursue not the channel maximisation of revenues, but to maximise the customer satisfaction.
Finally the last part of the definition sets the scope of omnichannel which is not limited to the integration of the sales channels but also the communication channels, i.e. where the customer gets the information about products but also gets assistance after purchase.
The Retail Apocalypse
Bricks and mortar stores have been closing down at a growing rate in the most recent years. Customer preference for convenient online shopping, fostered by free shipping and increasing level of service, have determined a decreased foot traffic in the brick and mortar store. The traditional stores that survive and thrive are the ones that have implemented omnichannel capabilities, online shopping and marketplace solution.
Main omnichannel processes
- Endless Aisle
- Buy Online Pickup In Store (BOPIS or Click and Collect)
- The showrooming
- Buy Online Return In Store (BORIS)
- Pick up points
Omnichannel Customer Journey
The omnichannel customer journey is spans across several channel and it’s usually different from person to person according to the customer preferences in terms of favourite media. Some people will start their journey to brand knowledge from a retail store, some others will start from a social network. It’s the brands responsibility to support the customer in his/her journey.
Omnichannel strategy implementation in 8 steps
In this 8 steps process we highlight the Ideation phase in which the company starts thinking about their own approach to omnichannel, they start to collect some best practices from other brands and start discussing what could bring additional revenues and other benefit to the specific brand. It’s a phase of brainstorming where al the ideas are welcome.
In the steps 2 to 4 the ideas collected during the brainstorming phase are analysed and evaluated for their ability to bring additional revenues to the brand, their feasibility and their cost.
In phase 5 we take the output of the first phases and we go into details of what will be done during the project and what will not be done (out of scope). It is critical for the success of an omnichannel project to control the scope creep which is the addition of features and functionalities that were not approved in the initial phase. This sometimes happens because during a project we see the opportunity do add things on top, but this usually creates higher costs and delays in the project.
In step 6 we implement a pilot project, that usually involves one or two stores to proof the validity of the business assumptions made in the previous steps. Do the technical workflow work? Is the organization responding as expected? Are the client happy with the new services provided? The pilot projects are a cheaper way to proof the validity of a new concept.
In phase 7 we assess the results and define any changes to the model implemented during the pilot project.
In phase 8 the solution, that has now proven to be effective, can be implemented in all the stores. Usually different tier stores will have different omnichannel features. A flagship store may have a richer variety of digital solutions in store, while a small store may have only the essential features such as the Endless Aisle.
The Endless Aisle is probably the easiest Omnichannel process to implement. It requires a few minor changes to your ecommerce website, assuming you have one and you brand is ready to go. The use case is the following: a customer enters the store and asks for a product in a color or size that your store doesn’t have. At that point the Sales Associate offers the customer the possibility to order online the size/color desired by the customer. The Key Success Factors are the order online process should be as easy as possible by reducing the effort of typing in the credit card details adopting a card reader to attach to the iPhone or iPad. The ecommerce transaction made from the store should be correctly attributed to the store and to the sales associate to calculate bonuses and KPIs.
Buy Online Pickup In Store (BOPIS or Click and Collect)
The click and collect model is a “quick win” as it requires basic software integration and small changes in the organization processes. It requires to have integrated the store addresses in the ecommerce platform so the customer can choose whether to deliver a parcel at home or in a store during the check out.
Key Success factors are:
- Widely available network of bricks and mortar stores;
- Creation of a point of collection within the store
- Training of the personnel in the store for click and collect
- Fast execution of the process in store
The showrooming consists of having a physical space (showroom) where to showcase the collection and have all the sizes available in the physical space for the customers to try on. Then the fulfilment is done from a central warehouse.
This omnichannel solution is emerging as a valid solution as alternative business model such as startups. For traditional fashion companies this is a way to add product variations, extend the collection when the store-warehouse is already at full capacity and cannot be loaded with more products.
An interesting business case is Bonobo the american online fashion store that started as a pure online player and then opened several bricks and mortar showrooms where the omnichannel is the underlying business model.
The strengths of this model is its cost effectiveness as it doesn’t required to stock up products in the stores in the main streets of the cities that is known to be very expensive. Plus the variaty of choice for the customer.
Buy Online Return In Store (BORIS)
The Buy Online Return In Store means giving the possibility to a customer who purchased a fashion item online to return it to a brick and mortar store and get a refund from the store.
The winning point is that the customer is entering the store and therefore it’s an opportunity for the sales personnel to try and sell something else to replace the product that is being returned.
Key success factors are
- Quick refund to the customer. The customer expects to have the money refunded immediately or just the few days needed by the credit card circuit to complete the refund.
- Training for the store personnel to use the opportunity to offer an alternative product
Reserve in store
Reserve in store is a variation of Buy Online Pickup In Store where the difference is that the customer doesn’t pay online, but reserves a product from a store with the intention of going in the store, try it and then buy it if the product satisfies the customer.
Key Success Factors:
- The communication between the customer and the store personnel needs to be fast and effective so that the product is reserved immediately after the request. The customer needs to receive confirmation of the availability and be informed of the terms to complete the purchase for example the product will be reserved only for 24 hours, after that the availability could not be ensured.
Omnichannel and Social Media
Omnichannel doesn’t mean only the integration between physical and digital, it’s also the integration of different digital channels such as social network like facebook and instagram. In terms of completing a transaction online on facebook or instagram there is a dependency of the features that are made available by the social network that are in continuous evolution and change. Sometimes the selling features of the social network are available only in some countries or only for selected customers during their initial stages.
The other integration needed with the social networks is the Customer Service, very often customers write on the social network to ask for information about products they have seen or they write to find solutions to a problem they had with the brand or a product.
Digital in store
There are also other ways to integrate the digital and physical, for example the introduction of multimedia communication and selling tools in the stores: digital look books, product training videos, guest wifi services, phone chargers, digital fitting rooms, online booking of in store styling sessions, in store entertainment for non shoppers (partners, children)
Further omnichannel extension
The omnichannel today extends also to the marketplaces and other online channels
There are some very well done examples of Digital in Store one example is the Loro Piana store in Montenapoleone in Milan that features most of the digital in store solutions that we talked bout.
Luisa via Roma is a famous luxury shop in Florence that started its ecommerce by taking phone orders from customers from all over the world.
John Lewis is a british retailer which has implemented the click and collect when this omnichannel process was basically just invented.
The customer Point Of View
In the omnichannel process we need to factor-in the consumer.
It is actually the consumer with its expectations and requests that generated the omnichannel.
Customers expect a high level of service and seamless online-offline experience.
Customer are now used to go online to browse and learn about the brand and its products and then go to the store with specific requests. Sometimes customers enter a store with their mobile phone on hand asking to see and try a specific product.
An interview with a sales assistant or a hands on store manager can provide many insights on the customer expectations and which services should be made available to customers.
Omnichannel Customer Service
The customer service needs to be consistent and seamless across all channels. If a customer contacts the company on Facebook because A, that’s the customer’s favourite channel and the company has an open channel on that social media, the customer service should be able to provide the service on facebook and not redirect the customer to an online form or a telephone line.
The most important impact on the fashion company organization is the necessity of changing the goals for the personnel involved in both ecommerce and brick and mortar retail operations.
There cannot be a successful omnichannel implementation if the goals of the retail team are to maximise revenues of the stores and the goal of the ecommerce team is to maximise the revenues of the ecommerce.
Logistics and administrative issues (coming soon)