interbrand design forum newsletter: the cross-channel dilemma

8/4/2019 Interbrand Design Forum Newsletter: The Cross-Channel Dilemma

http://slidepdf.com/reader/full/interbrand-design-forum-newsletter-the-cross-channel-dilemma 1/4

A Retail Publication

Ideations

Issue 3 • 2011

(continued on back

One of the hottest discussions in retail

currently whirls around expectations

versus reality. The fact that although

customers expect a seamless experience

across all a brand’s channels, the majority

of companies have not mastered

such delivery.

A recent survey by Edge Research found

that while 85 percent of consumers say

they expect a seamless brand experience

across all channels. Only 1 in 10 retailers

feel they currently excel at cross-channel

execution, with 6 out of 10 retailers

unable to provide cross-channel order

history. The majority of consumers, 87

percent, expect retailers to be able to

track an order via any channel, yet only

46 percent of retailers oer this capability.

Although the majority of retail brands arekeenly aware that the integration of their

channels is a dominant issue in need of

attention, the question is where to begin.

Each channel typically runs on a dierent

application and/or is managed by a

separate division. As siloed entities, each

is vulnerable to operational ineciency as

plans and actions occur in isolation, and

divisions compete for scarce resources.

failing to relearn how to organize, direct an

measure the business around the custome

This approach helps to keep those shopper

on our brand’s path to purchase.

Shoppers need to be the beginning, middle

and end of a retailer’s digital strategy—a

world view that dramatically increases the

likelihood of impacting the overall brand

experience in a more meaningful way.

“Start with a clear denition of not just who

the shopper is, but what the retail brand

wants to do with them strategically; for

example, delight current shoppers while

attracting and engaging new shoppers,”

says Nixon. “Without such insight,

businesses can only arrive at competitive

advantages through guess work. Does you

app really have relevance in the store? Doe

a QR code do any thing of value or is it just adesperate gimmick?”

It’s better to spend resources on nding

out how consumers interact with the

retail brand and what unlocks value for

customers. Doing so allows for optimizatio

of resources, eort and consideration acro

the system—a new ability to drive brand

dierentiation through value and thus

engage customer loyalty. Having that

“Siloed channels mean lost opportunities.

They put customer relationships at risk,”

says Dave Nixon, Executive Director of

Digital Strategy at Interbrand Design

Forum. “Separate people, products,

databases and processes may all be

working to drive consumer behavior—

but they’re competing with one another.”

“If you think the answer is in nding

or creating a converged platform that

will allow customer visibility, inventory

visibility and navigation across channels,

you’d be right. But that’s the second step

not the rst. The rst step is putting

the shopper at the center of the brand’s

universe, through a cohesive digital

strategy,” says Nixon.

It’s hard to say which can be a more

daunting change—enterprise systemsor true customer centricity. For many

companies entrenched in a legacy culture

that’s operations-centric, constantly

rushing to keep pace with digital

innovation rather than consumer behavior,

the customer-centricity could indeed

seem the more challenging. However,

according to Nixon, the danger of falling

behind doesn’t come from failure to oer

a killer app or Facebook page, but from

The Cross-Channel Dilemma



Retail Observations

As retailers around the world catch up

with the curve of new technologies

and consumer behaviors, we are being

treated to some truly exciting new

shopping experiences.

Tesco Homeplus, for example, recently

did something phenomenal. Something

that points to the future of retail. The

U.K.-based grocer opened temporary

virtual supermarkets in subway stationsin South Korea. Knowing that Seoul’s over-

worked and over-stressed citizens have

little time to spare, Homeplus came to

the rescue by installing full-size images of

their store shelves in the subway platform,

with QR codes on the merchandise for

mobile shopping. The grocery orders were

delivered the same evening.

The fact that the number of Homeplus

customers increased by 76 percent

and its online sales by 130 percent

speaks volumes about the importance

of delivering the brand through new

channels. The retailer is well on its way

to achieving its goal of becoming Seoul’s

number one grocer—without building

more stores!

Tesco’s bold move into m-commerce

is clear evidence that the store as we

traditionally think of it is becoming, if not

obsolete, at least woefully out of date.

Even the word “store” feels a bit moss-

grown, implying a xed set of stockpiled

items waiting for a shopper to come

pick them up.

There is no longer a one -shot, all-or-nothing

sales approach driven by promotion. Retail,

like social media, is now about engagement.

Engagement is about content and context

addressing unmet needs, which is some-

thing people enjoy and share.

Retail’s version of content starts with the

store personality and radiates outward

to myriad touchpoints: e-commerce,

m-commerce, f-commerce (Facebook),

s-commerce (social) and v-commerce

(video). Fashion apparel brands such as

French Connection allow transactions via

their YouTube channel. Express has its entire

line on Facebook. Mobile sites like Starbucks

and Zappos have full checkout capability via

smartphone. (Which leads me to conclude

that the terms “cash register” and “cash

wrap” will soon be pensioned o as well.)

Consumers think of retail brands as entities

with values, moods and emotions as well as

commercial, social and educational aspects.

These aspects are powerful engagers when

expressed in the shopping experience. If I

were to pick the one matter most urgent for

all retailers to address—because it would

have a powerful impact on business—it

would be the state of your current brand

experience and your entire architecture of

brand delivery, both real and virtual. Consi

how clear your message, how eectively yo

connect, how imaginative your methods.

There exists a great deal of pressure to deliv

your experience in more and dierent ways

the same pressure that led Tesco Homeplu

to create a virtual store in a subway station

People continuously move between

virtual and real worlds. In their minds,

the store has evolved into a uid idea that

today’s ability to shop at any time

from anywhere.

And yet, given the opportunity to shop

anywhere, people prefer the store where

the vast majority of transactions still take

place. Despite predictions that the Interne

would isolate people, since a broadband

connection would be all they’d ever need, o

digital presences have increased our desire

to socialize physically, to experience things

rst hand.

Brick and mortar is feeling the benet.

While e-commerce has naturally taken a

great share of overall retail, Internet usage

strongly and positively correlates with

physical store sales. Virtual encounters lea

to physical outcomes.

As the act of shopping continues to be

redened, it’s vital you should rethink

your brand experience and all the elements

of its delivery. The most exciting retailers o

today have a burning desire to engage and

serve the customer through creativity and

connectivity, both in the store and

in the cloud.

Great Retail is Defnedby a Great Experience

Bruce Dybvad

Need inspiration? Innovative retail id

abound in our 2011 State of the Indus

Report. Snap this QR code or visit

www.interbranddesignorum.com/

category/retail-innovation for inspir



Path to PurchaseTrumps Touchpoint by Rhonda Hiatt

Rhonda is responsible for

strategy and consumer

research methodologies as

well as building the business

models and field templates

that impact a project’s design

development and business

decisions. She has an MBA in

International Business and

travels the world in pursuit

of solutions that fit clients’

diverse needs. While she

enjoys intellectual and creative

challenges, she also relishes

team collaboration and the

free flow of ideas that lead to

inspired solutions.

Guest Feature

Rhonda HiattSenior Consultant,

Strategy & Research

Interbrand Design Forum

The notion of shopper/customer centricity

has nally reached the tipping point.

Business are beginning to make the

organizational changes necessary to

deliver the kind of shopping experience

that drives value.

However, even as they center themselves

on the idea of the shopper, businesses

still need to shed themselves of old,

counter-productive methods. The most

problematic is the belief that we need to

slice, dice and segment the marketplace

to death for customer insights. We

assume if we know x, y and z about

a shopper we should communicate

with them in a specic way. As a result,

rightly intentioned eorts to simplify

retail experiences have only added

more complexity. That’s because we’re

concentrating on making each individual

shopper touchpoint as eective aspossible, rather than starting with the big

picture—the path to purchase.

The path to purchase is comprised of

thousands of individual touchpoints—

some that belong to your brand, and many

that don’t. It’s important to remember

that shoppers don’t look at brands the

way we do. They experience your brand

when and where they want to or wherever

they encounter it—along with all the

other brands that might be present at that

moment in time. And the value they nd

in your touchpoint varies based on where

they are in the path.

So how do you ensure that your brand

is delivering across the big picture?

Dialogue with your shoppers and

customers. Today it’s not just about

understanding people, but working

with them to unlock the opportunity for

collaborative value creation.

Collaborative value creation is the notion

that in order for a brand to grow, all

parties impacted by the brand must have

a say in the direc tion of the brand. To do

this we must identify the web of inter-

relationships that exist and be able to

optimize those relationships to create

that win-win-win scenario that we seek.

When shoppers and consumers feel they

have a voice in your brand, it will reach

new heights.

The most striking example of a brand that

has achieved incredible growth through

this approach is TV’s American Idol, a brand

that is completely dependent upon a core

group of consumers to not just grow, but

to make the brand. Ten-plus years later

we have seen Idol grow into a national

phenomenon boasting voter turnout

that rivals presidential elections. Leading

global retail brands are successfullyengaging their audiences across the

path to purchase through collaborative

value creation.

First and foremost is a brand that has

gured out how to jointly create value

with its consumers, Spain’s Zara. Zara’s

business model is designed to have a

pulse on the local market of each store.

(Almost 1400 stores in 77 countries!)

In keeping close account of the tastes

and trends of their customer base, each

store customizes its assortment to meet

shopper desires, which is done with

unprecedented speed. This collaboration

across the shoppers, the stores,

operations and the corporate brand has

allowed for this company to explode in the

fast fashion market and demand respect

as a top global brand.

Canada’s Lululemon engages its shoppers

in product development at the moment

(continued on back)

Because shoppers experience brands as part

of a much bigger picture.



A Retail Publication by

7575 Paragon Road, Dayton, Ohio 45459

P +1 937 439 4400

F +1 937 439 4340

[email protected]

Bruce Dybvad, CEO

Jill Davis, Editor

Garrett Rice, Design/Production

©2011

Ideations

For more information or to be placed on our mailing list, visit our website: www.interbranddesignforum.com

and complete the contact form. Reprints of articles or excerpts without the express written permission of

Interbrand Design Forum is prohibited. Ideations will print 4 issues in 2011. Subscriptions: $125 annually in

the U.S.; $150 elsewhere.

cohesive digital strategy across the

enterprise touchpoints will allow the

individual business units to work toward a

common goal, and out of their individual

silos as well.

Touchpoints have eelings, too.

The channel discussion, however, isn’t

just about discrete digital touchpoints. It

includes those that are human: call centers,

store associates and the installation/service

channels. These touchpoints often play

a major role in many a customer service

nightmare, from irksome return procedures

to botched home installations. They too

must be integrated for the delivery of a

great experience.

“Right now when you walk into a store,

you’re a complete stranger, despite the

fact that you may have shopped thereforever, and somewhere the retailer has

tons of history about your transactions,”

says Nixon. “Doesn’t that seem weird in

this day and age? Why doesn’t every store

associate have a access to this data through

a mobile platform with your history and

the store’s inventory? Why is the store less

adept at suggestive selling? While this might

not make sense in the mass category, it

certainly does in high touch retail. It’s not

just the channels we think of as related to

e-commerce, human channels, plus the

catalog channel, need shopper insight andintegration, too.”

Increasingly, every channel plays a role in

making the sale, or almost as importantly

losing the sale. Understanding the shopper’s

media habits, shopping patterns, attitudes,

usages and their version of a success criteria

can drive the kind of innovation eorts both

in digital and physical touchpoints that

will enable retailers to live up to the

shopper’s expectations.

While planning and execution of a digital

strategy across channels should start

at the beginning: with the customer, of

course it’s not that simple. As one retailpundit said, retailing used to be like chess.

Now it’s like three dimensional chess, very

complex. Just as information systems do

have to be run in a way that’s both discrete

yet woven into the big picture, dierent

customers have dierent views of a brand

and dierent preferences for engagement.

Merchants need to understand it all, and

keep up with it as it evolves. The reward

is that in doing so, they will be able to

inuence and in some cases change

shopping behavior to their advantage.

Consumers are leveraging the web, mobileand the store to take care of their shopping

needs. No matter where the customer

nds the brand, they expect it to do what

they want it to do.

“This is a moment in time when the

company that can deliver the seamless

‘omnichannel’ experience has the

competitive edge,” says Nixon. “I’ve heard

it said, and I agree, that there should really

be just one cart. But that’s not possible

without deep customer insight and

behavioral understanding. If you can’tdeal with the cultural, organizational

and process of a consumer-centric cross-

channel approach, you need some outside

expertise to overcome those barriers.

Otherwise you’ll continue to have the kind

of uncoordinated experiences that put

customer relationships at risk.”

of purchase via a chalkboard in the tting

room for customer comments on t, color

and selection. They use the feedback to giv

the consumers exactly what they want in

product and design.

So, how to they manage it? There are three

principles that drive collaborative valuecreation. First, understand the path to

purchase. Second, increase collaboration.

Third, empower people.

The path to purchase is entirely about

context. It’s about understanding that

shoppers are inundated with messages and

points of engagement from brands at every

moment. Understanding context helps

you identify where your brand has the best

opportunity to break through the noise.

Next, organizations must amplify

collaboration both internally and externallWhen you collaborate with people externa

you get a view of the context in which your

brand competes for attention. You learn

what makes a specic brand stand out

and why. And nally, you will understand

what consumers need from the brand to

feel connection. Internal collaboration is

critical to ensure that touchpoints aren’t

being developed in isolation of the context

which they will live.

When all is said and done, it’s about

empowering people. The consumers and

shoppers who engage with your brand

have a say in the experience. Employees

are empowered to make decisions that

can deliver the branded experience quickly

eciently and seamlessly—the very

denition of customer centricity.

The Cross-Channel Dilemma Path to Purchase

Want to be greener? Have IDEATIONS sent to your email. Send your address to

[email protected].

Brand Strategy | Shopper Sciences | Retail Design | Digital | Documentation and Rollout

interbrand design forum newsletter: the cross-channel dilemma

Documents