APPLYING OMNI-CHANNEL TO THE BRAND EXPERIENCESetting Priorities to Meet Consumer Expectations
John Stelzer; IBM
© 2014 IBM Corporation
Establishing our terms
The scope of omni-channel retailing
Consumer expectations and Retail implications
Insiders’ view of omni-channel:
Agenda
Troy BrownEVP, E-Commerce and Omni-ChannelZumiez
Ratnakar LavuEVP, Digital InnovationKohl's Department Stores
Multi-Channel = Multiple marketing, selling, and fulfillment channels
Store Create Order Check StatusCancel Order
Initiate/Track Return
Schedule DeliveryChange Order Pickup
Research Product
Create Order Check StatusCancel Order
Initiate/Track Return
Schedule Delivery or PickupChange Order
Schedule Store Pickup
Research ProductMobile
Create Order Check StatusCancel Order
Schedule Delivery or PickupChange Order
Schedule Store Pickup
Research ProductWeb/Social
Initiate/Track Return
Call Center Create Order Check StatusCancel Order
Initiate/Track Return
Schedule Delivery or PickupChange Order
Schedule Store Pickup
Research Product
Often siloed channels operating independently
© 2014 IBM Corporation
Cross-Channel = Enabling the consumer to shop/buy/track/receive/ return purchases via any combination of channels
Store Create Order Check StatusCancel Order
Initiate/Track Return
Schedule DeliveryChange Order Pickup
Research Product
Create Order Check StatusCancel Order
Initiate/Track Return
Schedule Delivery or PickupChange Order
Schedule Store Pickup
Research ProductMobile
Create Order Check StatusCancel Order
Schedule Delivery or PickupChange Order
Schedule Store Pickup
Research ProductWeb/Social
Initiate/Track Return
Call Center Create Order Check StatusCancel Order
Initiate/Track Return
Schedule Delivery or PickupChange Order
Schedule Store Pickup
Research Product
May just be a customer-facing façade that’s not supported by seamless backend processes
© 2014 IBM Corporation
Omni-Channel = Seamless, end-to-end brand experience delivered consistently across all points and channels of brand interaction
Brand Interaction
Contact Center StoreSocial MobileWeb Delivery/
ServiceMarketing
Post-PurchasePurchasePre-Purchase
Supported by integrated backend processes © 2014 IBM Corporation
Consumers have come to expect seamless omni-channel Retail execution
Source: “Cross-Channel Brand Interaction: Consumer Preferences,” IBM
85%“Expect a seamless experience across all channels for
a retailer”
81%Important to deliver a “consistent brand experience
across all points of interaction”
© 2014 IBM Corporation
© 2014 IBM Corporation
Omni-channel is important for fostering brand advocacy
92%Delivers a positive overall experience regardless of the
combination of channels
82%Delivers a consistent brand experience across all
points of interaction
Source: IBV U.S. Consumer Study; IBM
Q: How important is each of the following retail capabilities for motivating advocacy?
© 2014 IBM Corporation
Top 10 Retail abilities consumers consider most important for choosing one retailer over another
1. Pricing is consistent between online and in-store2. * Offers the ability to locate an out-of-stock item at an in-stock location and have it
shipped to my home3. * I can track order/shipment/delivery status for online purchases via any combination of
channels4. * Offers in-store return of online/mobile purchases5. Assortment is consistent between online and in-store6. Online coupons are redeemable in the store & in-store coupons are redeemable online7. Loyalty program benefits are available online and in-store8. Offers ability to tap a credit card in store to pay for items9. * Offers in-store pickup of online/mobile purchases10. I am able to track my customer service issues across channels
Requires “omni-channel” capabilities* Classic “cross-channel” capabilitiesNon-omni-channel capability
Source: IBV Consumer Study, “Greater expectations: What consumers want from omni-channel”; IBM
© 2014 IBM Corporation
But, the “brand experience” extends beyond the purchase
Post-PurchasePurchasePre-Purchase
The Brand Experience
• E.g., receiving promotions, ads, and other marketing offers; conducting product research; receiving pre-purchase customer assistance, etc.
• E.g., in-store, online, mobile,call center, etc. checkout/ payment
• E.g., shipped right product, on-time delivery, installation,customer support, problem resolution, in-store pickup/ return processes, etc.
As opposed to the Retail perspective of “pre-sale, sale, and post-sale”
© 2014 IBM Corporation
Brand experiences mold the brand relationship
Post-PurchasePurchasePre-Purchase
Brand Experiences
Your CompanyCompetitors Elsewhere
Brand Expectations
MetExceeded Unmet
The Brand Relationship
AdvocacyTrust/Loyalty Spend
Satisfaction/Disappointment
Consistency/Inconsistency
© 2014 IBM Corporation
The Purchase and Post-Purchase experiences have much greater impact on the relationship with the customer
Source: IBV U.S. Consumer Study; IBM
Q: Which portion of your overall experience with a retailer has the greatest potential to damageyour relationship with that retailer?
16%
38%
46%
Potential To Damage
Pre-purchase
Purchase
Post-Purchase
Post-PurchasePurchasePre-Purchase
© 2014 IBM Corporation
And, the post-purchase phase of the brand experience is crucialWhich is more important in forming your lasting impression of a retailer?
Source: IBV U.S. Consumer Study; IBM
Post-PurchasePurchasePre-Purchase
© 2014 IBM Corporation
A large majority of consumers consider the Post-Purchase brand experience important for fostering advocacy
Post-PurchasePurchasePre-Purchase
Source: IBV U.S. Consumer Study; IBM
Q: How important is a positive post-purchase experience in determining whether or not you would recommend a retailer to other people? [Very Important/Important]
74%Consider a positive post-purchase experience important
for recommending a retailer to other people
86%Of consumers 13-19 years old consider it important
© 2014 IBM Corporation
The Post-Purchase phase is where most consumers have seen their loyalty damaged by a poor experience
Post-PurchasePurchasePre-Purchase
Source: IBV U.S. Consumer Study; IBM
Q: If you've ever had your loyalty to a retailer damaged by a poor experience, what part of the poor experience most damaged your loyalty to that retailer?
0% 5% 10% 15% 20% 25% 30% 35% 40%
Post-Purchase
Purchase
Pre-Purchase
37%
31%
11%
© 2014 IBM Corporation
Loyalty can be a fragile commodity
Source: IBV U.S. Consumer Study; IBM
Q: Thinking of a retailer that has lost your loyalty, approximately how many poor experiences did it take before you began shopping at their competitor(s)?
0%
5%
10%
15%
20%
25%
30%
35%
40%
1 2 3 4 5 No retailer'slost my loyalty
24%
36%
13%
3% 1%
22%
# of Poor Experiences Before Loyalty Was Lost
60%
© 2014 IBM Corporation
A positive Post-Purchase experience can recover from a bad pre-purchase experience
Post-PurchasePurchasePre-Purchase
Source: IBV U.S. Consumer Study; IBM
Q: How likely is it for a retailer to able to 'recover' from a bad pre-purchase experience by delivering a positive post-purchase experience?
52%Likely to very likely to be able to recover with a positive post-purchase
experience
67%Of consumers 13-19 years old consider it likely to very likely to recover
with a positive post-purchase experience
© 2014 IBM Corporation
Key Takeaways
© 2014 IBM Corporation
Key Omni-Channel Takeaways
• Omni-Channel spans all points of interaction, all channels, and all phases of the brand experience
• Consumers expect an omni-channel brand experience and will select one retailer over another based on their ability to deliver that experience seamlessly and consistently
• The Post-Purchase phase has the greatest positive or negative impact on the brand relationship
• No one company is doing everything in omni-channel, yet …although many are aggressively pursuing it
• There’s no one starting point or evolutionary path that’s “right” for every company
© 2014 IBM Corporation
Key Hint: View the brand experience (at every touchpoint) through the eyes of the consumer
Is it seamless; is it consistent; is it relevant to her; and does it strengthen the brand relationship?
© 2014 IBM Corporation
Establishing our terms
The scope of omni-channel retailing
Consumer expectations and Retail implications
Insiders’ view of omni-channel:
Agenda
Troy BrownEVP, E-Commerce and Omni-ChannelZumiez
Ratnakar LavuEVP, Digital InnovationKohl's Department Stores
© 2014 IBM Corporation
Establishing our terms
The scope of omni-channel retailing
Consumer expectations and Retail implications
Insiders’ view of omni-channel:
Agenda
Troy BrownEVP, E-Commerce and Omni-ChannelZumiez
Ratnakar LavuEVP, Digital InnovationKohl's Department Stores
Thank you.