Omni-channel: what it means and how it impacts on logistics
Nowadays we are more and more accustomed to using different platforms before making a purchase: we try a dress in a physical point of sale and then decide to buy it online, or look for the products through the smartphone, read the reviews and then buy them directly in the store.
With the growing impact of mobile apps and digital touchpoint on shopping behavior, customers have more channels to find and buy products. This translates into more opportunities for marketers to connect with and engage such customers. But it also means a great deal more complexity for successful marketing execution. Customers continue to drive omni-channel experiences. They want interactions on one channel (or device) to carry over to their next interaction channel. Customers don’t necessarily look for the “same” experience on different channels, but they do expect and demand consistency and highly personalized experiences across all channels.
In Italy, 60% of the population aged 14 and over use Internet at least on one occasion during the purchase process. In essence, what does omni-channel mean? How does it impact brands and logistics? It is the topic of this article.
What is Omni-channel?
Once upon a time there was talk of multi-channel: the ability of a brand to guarantee more communication channels, integrating them into an activity that is as consistent as possible with its marketing policies. In marketing and technology you often know that something is still new when you can’t find one unanimous way to spell it. Ecommerce, eCommerce, e-commerce – remember those days? Omni comes from the word Omnis which can mean all or universal. This is in comparison to other categories out there, like “multichannel”, from the Latin word Multiuse, meaning multiple or many and from cross channel, derived from the Latin word Crux, meaning to go across. The way that many are explaining omnichannel today is: ‘cross channel being done well’.
These days we tend to overcome this concept in favor of the Omnichannel: given the increasingly customer-centric market (as highlighted also in the article "Distribution Logistics: how to respond to the modern needs of customers"), Brands feel the need to be present in all the different touchpoint which the consumer has access, during his purchase path, offering a continuous experience between online and offline. Omnichannel is about true continuity of your experience. But what’s key is that it extends beyond a single brand’s universe. The ability to have a continuous experience across brands, across format and across devices that is completely bespoke – that is the promise of a new way of thinking and marketing that has been long unnoticed.
A practical example? Nespresso. Those who choose this brand know that they can order products online: through the mobile application, by telephone, or even in physical boutiques. As for the service, there are no differences between the different channels: this means that there are no borders between the traditional store and the online store. The company interacts with the consumer following the same principles and objectives both online and offline, and allows the customer to live a harmonious experience, due precisely to the omni-channel policy. The company leverages all its digital channels to release specific content, reinforcing its brand perfectly. Hiring George Clooney as a high-profile brand ambassador for its commercial, ‘Nespresso, what else?’, filled with subtle humor was a master move. Nespresso has created a single efficient view of its customers across all channels and systems, leveraging the power of the Cloud with its modern customer engagement platform. It handles the complete customer journey, connecting all its internal data with all its external data across every touch. According to the Digitalist Magazine, ‘It encompasses customers who engage via the website, via mobile, at an airport vending machine, or those who plan to meet George Clooney in a flagship store’. And it is into big data, personalizing and enabling real insights about its customer behavior and intentions. They managed to create an emotional connection with their customers, and everyone can now serve a premium coffee at home.
What does it mean to be omni-channel for the logistics sector?
Consumer buying behavior is changing drastically with growing adoption of the Internet, smartphones, and handheld devices worldwide, especially in Asia. The surge in Internet sales and in consumers using different channels to evaluate products, order, pay, collect, and return their purchases has driven companies to investigate the omni-channel approach.
With the omni-channel, companies must review how they interact with their customers, rethinking their business model that must integrate all communication channels. In an omni-channel approach, the physical store becomes an essential element that must be rethought as a consequence of digital channels. In fact, the "click & collect" purchase method is increasingly frequent, an action that allows you to purchase products online, benefiting from the convenience and greater assortment, then withdrawing them to a physical point and avoiding shipping costs and possible delays in delivery.
The best suppliers of logistics services, to meet the new needs of the stores, must be able to offer personalized, flexible and rapid services, which meet the greater liquidity and fragmentation of the purchasing process by offering a coherent experience. Logistics and supply chains are the backbone of every omni-channel strategy. They are the key enablers to consistently and cost-effectively deliver personalized service and flexible fulfillment. And they enable retailers to achieve cross-channel inventory visibility and optimization (crucial to the success of omni-channel implementation) and meet customer expectations, generating higher satisfaction and loyalty.
The organizational model of a brand, as we wrote earlier, increasingly follows the "customer-centric" principle: to satisfy the modern consumer it is necessary to invest in flexible and innovative technologies and find a collaborative formula among the physical retail functions, online and logistic service. Omni-channel customer engagement continues beyond the store via online channels. These are designed to build relationships with customers and influence their opinions and purchase decisions, especially for those customers who prefer to do their shopping outside brick-and- mortar stores.
In conclusion, omni-channel means going beyond the existence of different sales channels: the buying experience, although fragmented by the many possibilities, needs to become harmonious and uniform. Omni-channel is here to stay. Companies that enable consumers to find, buy, receive, and return goods most conveniently and at the lowest cost are being rewarded with increased customer loyalty, revenue growth, differentiation, and profitability. This, from the logistics side, means you need to consider how your customers would like to work, and then commit to enhancing and personalizing the customer experience by setting up different circuits to be activated depending on the needs of the consumer and depending on the reference touchpoint.
In addition to the omni-channel, what are the disruptive trends that are changing the logistics world? To find out, click the image below and find out by reading our report.
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