Delivering differentiated customer experience in Omni-channel apparel retail
Conventionally, apparel retailers have segregated their customers into those who shop in-store and those who shop online. However, these differences are blurring as the tech-savvy and personalized experience seeking customer expects a holistic retailing landscape. The shift from traditional apparel retailing approach of 'Brick against Byte' to 'Brick in favour of Byte' has to be rapid and disruptive, rather than gradual and conservative. Thus, the heart of Omni channel retailing lies in the holy matrimony of customer's expectation and retailer's capabilities.
What do the new age Digital customers expect from an Apparel retailer?
From a customer's perspective, Omni channel retailing simply means multiple ways to interact and communicate with retailers across all channels and via all mediums. Thus, the primary expectation from this new-gen experience is 'seamless interaction' across all touch points - pre purchase communication, the purchase experience and post purchase relationship. Findings from a primary dipstick survey, with 100+ participants, conducted by Infosys with one of the leading multi-channel apparel retailer in an emerging market, substantiates the need for inter-connected coexistence of multiple channels.
With most customers preferring in-store apparel buying and hating to wait in billing queues, role of in-store digital technology becomes crucial in delivering value in an Omni-channel environment. Intervention of digital technology, such as digital kiosks, personalized offer based on geo location, virtual trial rooms, mobile POS, digital aisle, payment via digital wallet etc., can replace lifeless store-front windows with vibrant interactive screens, capable of generating recommendations or taking orders and creating engaging avenues that attract customers. It can also give sales representatives nearly infinite information about customers, based on customer's loyalty status and shopping habits, and offer personalized in-store experience. Moreover, customers expect the same brand experience across websites and mobile applications.
While digital interventions and retailer's website enhance online and offline shopping experience, social media enhances both pre and post purchase experience. With increasing number of online as well as offline customers discussing their purchases on social media platforms, the significance of unified brand experience is critical for successful Omni-channel retailing. Unified brand experience is achieved through consistent brand image and gaining insights to customer preference by offering personalized offering.
How can apparel stores deliver a differentiated customer experience?
Today, every retailer aims to get the best of both online and offline world by succeeding in the Omni-channel arena. But only a few have developed the right set of capabilities for a unique customer engagement experience. Considerations on technology, cost of implementation, supply chain and customer service have a big role to play in any retailer's Omni-channel journey. Though, every retailer has a different vision and strategy in building and implementing such capabilities, the underlying principles, depicted in the following sections, can be adapted by all apparel retailers and can further be customized as per retailer's positioning.
This ideal journey spans across Brick & Mortar, Multi-channel and Omni-channel phase and addresses Strategy, People, Process and Technology capabilities to deliver the desired experience to the customer.
1. Formulate the right Strategy
The logical flow into Omni channel retailing starts from strengthening foundation capabilities for Brick & Mortar, followed by venturing into Multi-channel. The cross channel strategy needs a distinguishing identity in consumers' mind. This brand recall capability can be achieved by connecting the dots across in-store, website, mobile, tablets and social media with captivating technology and customizable customer service.
2. Build the right People Skill
The success to Omni channel retailing lies in people skills. Retailers need to ensure a strong change management that aligns their employees to achieve the ultimate goal of customer satisfaction. Planners plan as per customer needs, Buyers buy the right quantity and quality, Logistics team ensures product availability and Marketing team makes the right offering. These core activities are to be well supported by other functions, such as HR, Finance, IT etc.
3. Set the right Process Capabilities
The entire journey of becoming Omni-channel success can be divided into three waves, as depicted in the figure.
Wave 1: Brick & Mortar
Even though online channel is the next frontier for retailers, physical stores will continue to provide the consumers with an experience that allows them to touch and feel products, connect with the brand, and engage with sales associates to provide assistance and information in buying a product. Brick & Mortar customer delight starts by inculcating this theme into company's Vision and Strategy. For example, Macy's customer centric approach, such as localized assortment, superior shopping experience, adaptive online presence etc., laid the bedrock for its Omni channel success. One of the most powerful tools to maximize product satisfaction is Collaborative Planning, Forecasting, and Replenishment. This includes collaborative demand fulfilment, product offering and category management, and product availability through operation efficiency. Once the right product is in place, right set of customers can be targeted at the right time. Thus customer analytics plays a key role in offering Loyalty benefits and targeting right audience through tailored Promotions and CRM programs.
Wave 2: Multi channel
Multi-channel is mostly considered to be a transitional phase prior to Omni channel. Thus the focus here is to build online brand and become the preferred choice for E & M-commerce. For example, Valentino and Stella McCartney use online mediums to give their fans and followers exclusive behind-the-scenes access, offering early glimpses at new designs and giving a flavour of life on the ramp. Though all channels work simultaneously and deliver consistent services, each channel needs to play to its strength. Further, the Dynamic Pricing and Promotions based on channels tends to enhance the 'price-sensitive deal-loving' customers. This is to be accompanied by increasing proportion of Digital Communication as compared to traditional mass media.
Wave 3: Omni channel
Extending into multichannel is easy, however ensuring that customer is at the forefront is challenging. Thus the focus in Omni channel phase is on building a superior integrated customer service platform across channels. For example, Nordstrom has reorganized roles within the store and readjusted performance management to support seamlessness between online and offline touch points. Successful Omni-channel strategy starts by understanding how customer needs and expectations are changing, followed by meeting the demand through a Unified Brand service. Burberry delivers a seamless experience, where the brand look and feel are almost flawlessly consistent across the channels. This experience across channels is personalized with 'My Burberry' preference that follows customers wherever they go. Another challenging aspect is to align the Assortment strategies as per customer behaviour through demand driven inventory or localized assortment. This is to be supported with Flexible Ordering capabilities, such as Ship from Store, Ship to Store, Reserve or Buy Online, Pick up in store, Order In store, Buy Online, Return in store and Same day shipping options, and Flexible Fulfilment capabilities, such as Fulfilment from anywhere and Real-time tracking of order fulfilment. Moreover, it is imperative to consider that no one-size-fits-all approach exists and strategies should be evaluated and tailored to specific retailer and his customer requirements for a Personalized Marketing and Customer Service.
4. Deploy the right Technology
In Omni channel world, each channel's technical limitations is overcome by offering seamless access to alternative solutions. Marketing team needs to collaborate with sales, store operations and IT for superior customer experience. Analytics plays the most import role to ensure effective customer engagement through personalized offers. Macy's improved its email and website marketing campaigns using predictive analytics. Investment in Data Accuracy and Data attribution across channels is critical to support analytics, since incorrect and incomplete product information has always been bad for business, no matter which channel retailer is selling in. Apart from product data, retailers need to know as much about the customers and their behaviour. Big data can be exploited for forecasting and demand sensing outcomes. Data silos can kill Omni-channel success. The right data from each channel needs to be then integrated. Omni-channel retailers must track and unify customer engagement online and in-store. Also, online platforms need to support robust digital systems or interfaces. For example, Macy's launched a shopping tool 'Fashion Director' to enable customers to design their outfit online and engage with their friends through Facebook and Twitter. Other points of engagement include new payment solutions, geo-targeting to offer promotions based on location, image search that allows customers to snap a photo of an article of clothing and look for similar items on sale etc. Thus, the key takeaway is to invest in marketing automation and analytics to use technology to follow the customers' purchasing behavior.
All the above coming together in a holistic roadmap and turned into an action plan would help traditional Brick & Mortar retailers transcend into the realms of Omni-channel.
Resham Anand, Consultant
Aritra Sengupta, Senior Consultant
Nikhil Gupta, Senior Consultant
Subhajit Mazumder, Principal