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Omni-Channel Value Spaces

Posted by Vince Cavasin at 11:46 PM

Space-small.jpgWhen I talk to clients and colleagues about the notion of omni-channel, our conversations invariably focus on end customers. This makes sense, because of course any marketing or commerce strategy (omni-channel or not) should have customer value at its core. Value creation for the seller/marketer is a secondary but nearly inevitable effect of doing customer experience right. For an excellent and eye-opening study of the correlation between customer experience and company value, check out the Watermark Consulting 2013 Customer Experience ROI Study.

Customer value was the underlying theme of my omni-channel blogs here and here, but in this blog I want to dig a little deeper into how omni-channel operations can create value beyond the often obvious value they create for customers. The immersive, "channel irrelevant" environment that is (according to me in the aforementioned blogs, anyway) the goal of omni-channel interactions is one that can be applied to any stakeholder group--customers, employees, partners, whoever. And while most commentators focus on omni-channel commerce interactions, the omni-channel philosophy is encompassing enough to include virtually any kind of interaction: transactions (e.g. commerce), communications (e.g. marketing), coordination & collaboration (e.g. workflow).

At Infosys, we frame up omni-channel value spaces in terms of Customer, Employee, and Enterprise. These lend themselves very nicely to being organized in a simple Venn diagram:

VennDiagram.pngDespite its simplicity, the Venn diagram is a perfect framework for evaluating these three value spaces because beyond illustrating the spaces themselves, it illustrates their intersections--which, as it turns out, are where some of the greatest opportunities exist.

Let's look first at the primary value spaces:

  • Customer: Omni-Channel customer interactions are far and away the most intuitive and talked about of the three spaces, and the main focus of my previous omni-channel blogs. The customer value space is concerned, perhaps obviously, with creating value for customers by improving some aspect of their experience. In the omni-channel commerce world, perhaps the most foundational customer-value-enhancing capability is BAFARA--Buy Anywhere, Fulfill from Anywhere, Return Anywhere. Pioneering retailers have been building out this capability for several years, with recent examples including the same-day delivery services being rolled out by eBay, Amazon, and Google--with eBay's service promising 1-hour delivery and also encompassing returns. The customer value created by such initiatives is clear: customers get the online retailers' greater assortment breadth (and often better pricing), AND get the stuff they want when and where they want it. That's greater selection AND greater convenience--two variables that in yesterday's commerce business models were often inversely related.
  • Employee: This value space focuses on employee productivity. A great example of this is Intel's multi-platform initiative, which aspires to make employee applications available across a broad range of Bring Your Own (BYO) devices--eventually supporting emerging input methods such as touch, voice, and even gesture. This initiative provides employees value by giving them full control over the devices they use, and the cutting-edge interfaces will (at least eventually) allow employees to get more done in less time.
  • Enterprise: Value for the enterprise is primarily manifested in asset optimization. This almost invariably has customer and/or employee benefits as well, since the assets being optimized in an omni-channel context are typically being optimized in the service of customers or employees. These assets can range from traditional physical assets like inventory, shelf space, and devices to digital assets like customer data, brand assets, and content assets. For example, the Intel multi-platform initiative, in addition to its employee benefits, creates value by better leveraging existing device assets. For a digital example, check out how Diageo's Digital Marketing Platform is providing massive enterprise value through cross-channel leverage of digital brand assets--while at the same time providing employee value by increasing productivity.

Of course, when we contemplate omni-channel strategy we want to create as much value in as many spaces as possible, so the most interesting value space in our framework is where all three circles come together--where value is synergistically created for all three groups by a single capability.

The best example I can think of to illustrate this omni-channel value triple play comes from perhaps the most accomplished omni-channel pioneer, Nordstrom. Since they started their cross-channel journey in 2005, Nordstrom has built an entire business and technology ecosystem around omni-channel, all the elements of which facilitate not only an industry-leading customer experience and the associated value, but significant employee and enterprise value as well.

The latest addition to Nordstrom's omni-channel ecosystem is their Mobile Point Of Sale (MPOS) device, which these days can be seen in use by employees in virtually any Nordstrom store. The MPOS device is fully integrated with Nordstrom's commerce and inventory systems, allowing store associates to use it to not only find inventory (say, the size and color shirt you are looking for that's not available in the store you are shopping in) anywhere in any Nordstrom DC or store, but to then order that inventory to be delivered wherever the customer wants it--and to process payment and complete the transaction. All without ever leaving the customer's side or having to mess with a cash register.

This creates value at the intersection of our three spaces:

  • For the customer, he or she has access to literally every item in Nordstrom's aggregate inventory, and the experience of interacting with the associate--who may be an oft-visited personal shopper--is never interrupted.
  • For the employee, not only is their relationship with the customer deeply reinforced, but not having to go back and forth to a register makes them more productive AND allows them to focus more on cross-sell and up-sell, which creates more value for the enterprise.
  • For the enterprise, in addition to the above-mentioned potential for increased AOV, inventory assets anywhere in the network can now be used to fulfill demand wherever it exists, increasing velocity and contributing to markdown avoidance.

Using the omni-channel value space framework is a powerful way to think about the full impact of omni-channel investments, to ensure you're designing and measuring the full impact of their value, and to ultimately quantify that value in a more detailed business case that can be used to prioritize those investments based on your strategic goals.

Which value space are you focused on? I'd love to hear your thoughts, especially as they relate to omni-channel strategies in the less-frequently-discussed employee and enterprise spaces.

Space image source: NASA


@Vince, thanks for elevating this point, that omni-channel can serve ANY stakeholder that wants to use multiple interfaces to interact with the business. In fact, even though it's kind of clunky, I usually use the term "stakeholder" instead of "customer" to make this point.

Where do you put value chain partners? I work with a lot of B2B clients, and massive inefficiency exists around firms with several kinds of "business partners"; in B2B, many alliance partners work in the field, where they rely on mobile devices. I haven't seen stats on this, but I wonder how big the efficiency gain would be.

Cheers, Chris

that's a nice solution by u guys.

Its a cyclic process to fulfill the requirements of everyone beyond the production through this activites

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Cool solution!Props to you and your team!

Great Post! Thank you for the wonderful insights on omni-channel presence in the world of digital marketing. I was tracking this skill on MyTechLogy for long time.

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