WHAT IS OMNI-CHANNEL AND WHY SHOULD I CARE?
First, let’s clarify the fact that omni-channel is not synonymous with dot com. Having an omni-channel strategy means a lot more than just getting your products on whatever websites are appropriate for your category.
OMNI-CHANNEL = OMNI-EXPERIENCE.
Omni-channel is the acknowledgement that we now live in a world where the retail environment is permanently changing. The concept of discrete ‘retail channels’ has blurred. How to define the act of shopping and the parameters of marketing have blurred. As Walmart calls it, this is the era of the 'always on consumer.'
New technologies are removing two key barriers that constrained how shoppers have historically behaved:
Access to information: It is faster and easier than ever for shoppers to answer questions and acquire or be exposed to information that influences their purchase decision. This dimension will be the battle over influential content.
Access to product: There are more options than ever to complete the purchase process and take possession of the product. Geographic limitations or barriers no longer determine product availability. This dimension will be the battle over timely and efficient fulfillment.
This retail revolution is built on the backbone of the internet and the anytime, anywhere access of mobile devices. But it involves far more.
Technology is enabling this new reality, but it is really the fact that technology is creating new and better ways to discover and address the needs of different shopper groups. And it is about how shoppers are changing their habits and enjoying the benefits and satisfaction of being better informed and buying better products.
There are several ways companies need to be approaching and preparing for this shift:
From an information standpoint, shoppers can make far more educated decisions: Companies that have relied on ignorance or misinformation or artificial barriers to competition will face significant new challenges. Companies that can produce great content in addition to great products will win big.
Shoppers will not think about retail by channel the way they have in the past: The equities that previously separated channels (EDLP and broad assortment @ mass, convenience @ drug, large sizes @ Club) along with the effort and cost to switch retailers are disappearing.
Many categories will experience meaningful shifts in market share: Companies that develop compelling content and put effort into getting the right products in the right places will steal share from companies that wait and react.
This point is particularly important to categories that aren’t experiencing organic growth. I think categories will initially see a spike in fragmentation and exploration, as small brands (with low awareness and limited marketing budgets) that get the omni-experience right gain significant new exposure. However, many categories may eventually settle into higher levels of loyalty as shoppers establish new habits and shift their attention to the omni-experience of other categories.
Remember that the companies that are first to the party...providing access to the right information and having product available through the right outlets...will enjoy the first-mover advantage, gaining exposure and trial before the category gets saturated by competition. They may also capture a disproportionate amount of new habits or loyalty.
We're helping clients figure out the omni-experience for their categories now. What are you doing to thrive in this omni-channel experience?
Perhaps more importantly, what is your competition doing that will threaten your sales and share? Don't sit back and wait. Whether you can start figuring it out on your own, you ask for our help or you go to another expert in this area, just don't do nothing.