What’s next after omnichannel retail?


By David Rosen, Technology and Customer Leader, TIBCO Software.

For years before the pandemic, the uber-theme of conferences, pundits’ speeches and media commentary on retail could be summarised in one word – omnichannel.

Selling, marketing and fulfilling across channels became the end game, the sword in the stone and  the golden goal among retailers, even if many fell short of their lofty aims. In this article, I’d like to argue that we need to think differently and to make the modest proposal that, rather than think about omnichannel, we need to think about ‘channel-less retail’ or the ‘everything channel’ in a world where relying on historical data in the past tense may be leading us astray.

Omnichannel rose to prominence because silos and disconnects between discrete channels were getting in the way of browsing, purchasing, upgrading, delivering, and returning. Buyers couldn’t always get access to the channel of their choice, whether that was a customer service representative, an in-store experience or website. 

Omnichannel was a noble pursuit, therefore retailers created multiple entry points because the customer is always right and deserved the chance to choose their preferred channel. But while the channels may have been covered, this masked an underlying mess where inconsistency of look, feel, and experience still reigned and switching between channels was problematic.

What we need in retail is something akin to the serverless computing model in IT where somebody else is looking after the hardware so you can get on with being productive and trying things out without all the provisioning hassle. Or, in non-techie terms, it’s about removing the friction of business infrastructure so retailers can provide the simplest possible processes for buyers to do what they want to do.

Changing times

This is critical today because we all know that the pandemic accelerated digital transformation. If you’re not transforming, then you are falling behind peers that are. During stay-in-place orders and with global supply chains wrecked, organisations realised their capacity to reinvent themselves wasn’t nearly so gated or time-consuming as they had imagined. So, art galleries became virtual, theatres became streaming media entities, and restaurants like Panera Bread became grocery stores and delivery services. 

Of course, channel agility ultimately depends on data agility. In response to the pandemic, Panera was able to continue bringing in revenue while at the same time providing essential goods to its communities. By pivoting its data management system, Panera was able to switch from prepared foods to raw ingredients, so instead of a turkey sandwich with lettuce and tomato, it could sell each component as groceries. 

Thus, Panera Grocery was born. Thanks to it understanding the full spectrum of data complexity and having the capability to manage the intricacies of its supply chain and menu items, Panera now has the agility to quickly pivot to remain resilient in the face of any sudden change.

This ability to flex and adapt won’t end with the dwindling of the pandemic: lessons have been learned and, as with remote working, there will be no going back. 

The buy side has changed too. Buyer expectations have been heightened with more consumers buying online. This has put pressure on retailers to up their games: look, for example, at delivery, which with swelling competition from bricks-and-mortar firms getting more serious on digital has become the factor that can trash and enhance a brand, even if the logistics supplier is a third-party partner. 

It’s no longer enough to cobble together channels and you can’t make an excuse of blaming value chains. The winners in this game offer the smoothest of rides to audiences, putting them in the driver’s seat to mix and match channels throughout their buying journeys. That means the underlying and customer-facing infrastructure has to be slick with customers not even thinking about the potentially multiple channels they use to seek, purchase, amend and receive products.

It’s all about the data

The ability to execute here is centred on data and how retailers collect, curate, manage, and share. That applies to all audiences from the haves, have-nots and also the ‘have yachts’. We all need to resolve issues and find out more, faster, whether that’s adding up loyalty shopper points, buying a best-value train ticket or purchasing an ocean liner.   

Tying up these strands involves driving deeper into customer intimacy and improving work already underway in next-purchase recommendations, buyer journey management, customer segmentation, and more targeted email marketing campaigns and so on.

But here’s the catch: we can no longer rely on previous patterns of behaviour to make calls on what buyers will do next. We have to operate from the thesis that the pandemic changed everything and adapt to a new age of uncertainty. This makes real-time analysis even more important: the past is past and our clues can’t be based largely on historic trends and behavioural patterns. To win, we need to move faster and revise faster than ever before, based on changing streams of data and hard-won experience into changing consumer habits. 

Increasingly, the formula for success will be data analytics combined with domain and niche expertise. The technology ethnographer Tricia Wang notes that many organisations only pay lip service to getting close to customers because they suffer from “reporting overload”, pay too much attention to quantitative data and not enough to qualitative and “thick” data. They also are failing to make sufficient use of tools that can help them, such as AI.  

And while the world (rightly) obsesses over a dearth of data scientists, it’s also essential that we address an absence of critical thinking. That is, we need more objective querying of facts and insights to discover where outliers lie and why global, empirical data may lead us up a dead end. In a globalising retail environment, we need to seek out what goes against trends and figure out why, then adjust our strategies for new countries, new buyers, new tools and new channels such as the metaverse.

As the Greek root of critical (kritikos) suggests, we need to discern more and opine and rely on hunch less. The pandemic has changed retail forever on the sell-side and on the buy-side… and we need to go beyond just obsessing over omnichannel.

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