Customer Experience Best Practice: From Digital to Omni-channel A Customer Experience Excellence Centre Briefing Note
This briefing note looks at the differences between UK and US companies in the digital and Omni-channel space. Key take outs are:
- Channel thinking is being replaced by “modes of engagement” thinking
- A new organisation design is emerging to support this new mind-set – the transversal organisation
- Innovation is starting “outside-in”, solving customer problems by harnessing real time data
One of the key findings from our recent US CEE study was the different approach being taken by leading US firms in developing their digital and Omni-channel strategies, when compared to their UK counterparts.
At the heart of the difference is a customer experience best practice mind-set which leads to a very different point of departure when developing digital and off-line capabilities.
The US has an “outside in” view that starts with “how can we create value for our customers, what customer problems need solving?” and then “what modes of engagement will create that value?” It is an integrated approach from the start. It starts with the customer need in mind, a right to left approach.
The UK mind-set sees digital as something separate with its own objectives that are somehow separate from the organisation mainstream. It asks “how do we reduce costs and increase efficiencies with new technologies?” It starts from ‘where we are now’ with a left to right approach.
This has led to a somewhat convoluted development path for UK companies:
Few, if any, UK organisations are in the true Omni-channel space. Those that are, such as M&S and John Lewis, have had to change their organisational model to get there. Reintegrating their digital functions into the mainline business to get past silo boundaries and channel thinking.
The digital director role was a short lived role in the US, if it existed at all. The emerging model is a transversal organisation where each mode of engagement (social, mobile, on-line physical, telephony) are all represented in every customer touching decision. It recognises that the approach to each mode may be different (e.g. Facebook is a relationship medium, Twitter a content medium), but each plays a role in an integrated whole that solves problems for customers.
US Best Practice
Our study identified the following as Omni-channel leaders:
- Best Buy
- C. Penny
Apple has carefully created the enablers to a true Omni-channel strategy. The pioneer of “modes of engagement” thinking they equip the customers with all of the moving parts necessary to choose how, when and where they want to interact.
iPhones have long been equipped with the necessary technology to deliver a true Omni-channel personalised experience. Well in advance of the support infrastructure. NFC (Near Frequency Communications), iBeacon and Apple Pay are all available now.
iBeacon is a fast growing application. iPhones have, in fact, been local iBeacons since the iPhone 4. The technology recognises when a particular iPhone is nearby and triggers personal content to the phone for example information on an exhibit or an artwork in a museum or gallery, personal offers when near a particular shop or information on a delay to your flight when at an airport.
NFC enables local recognition and data passing between a phone and a third party e.g. a till.
Show rooming as a concept outside of automotive started with the Apple store. An environment to excite, educate and resolve however you then choose to purchase products.
Apple Pay uses your iTunes account and the above technologies to turn your phone into a mobile wallet.
Nordstrom is determined to be the world’s top Omni-channel retailer. It has invested over $1bn in recent years in building its Omni-channel infrastructure:
- Nordstrom recently made it possible to instantly buy items featured on Instagram.
- Staff also merchandise stores using input from its Pinterest page. Items that are popular on the social media site are featured more prominently on the sales floor.
- Nordstrom has also aggressively invested in e-commerce, investing in men’s brands Bonobos and Trunk Club and its own flash-sale site, Hautelook. Highly personalised and sophisticated approaches to different customer segments.
- They have recently launched “kerb-side collect” where you order remotely and the product is available for you to collect from outside the store one hour later.
- Mobile checkout means you do not need to queue for a till.
- They use a “flash mob” approach to rapid digital innovation for example their sunglasses app took five days to develop and launch.
Macy’s is a 150-year-old department store with a deep connection to its core audience: women aged 25–54. Today that customer shops online, offline and everywhere, so Macy’s has adapted its inventory, marketing and internal team structure to let her research, buy and collect her purchases where and when she wants.
“The bottom line is, we’re indifferent to whether she converts in the store or online. We just want her to shop with Macy’s”.
In-store inventory is exposed via mobile devices so the shopper can check on her mobile before she enters the store, whether her desired product is in stock in the right size and colour.
They have changed their organisation structure integrating digital with the business – a single budget, and a single focus to deliver the best Omni-channel experience for their customer.
An interesting insight into how retailers are adopting Omni-channel to deliver customer experience best practice. In our next post, we will take a closer look at the financial services industry to determine which brands are leading in their approach to providing an Omni-channel solution.
For more customer experience insight from KPMG Nunwood visit the CEM blog.
Author: David Conway