Omnichannel: The "omni-opportunity" for business growth

Kristina: In fact, we've been talking about omnichannel in the industry for a while now and it's not really a buzzword anymore. In everyday life, however, I often find that not every omnichannel approach really meets the requirements 100 percent.

But why is the topic currently on everyone's lips? The pandemic and the various lockdowns of the past two years have served as a catalyst for digitalization in the retail sector. I still remember how we at Louis Vuitton had to close almost all of our stores in Germany from one day to the next in March 2020 - something almost unimaginable at the time. Nevertheless, both we as retailers and our customers had to get used to this "new normal".

What remained were the customers, who enjoyed the convenience associated with this digitalization progress during the lockdowns and now have a greater need than ever for a hybrid shopping experience.

Frank: The topic of omnichannel is omnipresent, without question. You've already mentioned it, Kristina: since 2020, many companies have been in the situation of having to consider and analyze which channels and what content they use to convince their customers to purchase goods and services. Before coronavirus, this was actively ensured by sales staff at points of sale, for example. However, since purchasing behavior has changed significantly towards online shopping, companies have been forced to react and take measures. Because, this much is clear, this trend, which has certainly been fueled by the pandemic, is here to stay. And it's absolutely true: looking back, customers have taken a liking to online shopping. They enjoy the convenience and the "always-on" shopping experience. Customers of all ages interact with the brands. However, they do so on different channels. The number of channels has doubled compared to 2016. And each channel offers a different experience for each type of shopper - from Instagram and TikTok to online stores.

Frank: Omnichannel is often seen as a solution for B2C business models. This is probably only because we are very familiar with B2C business, as we are in contact with it virtually every day. However, it is also - or perhaps especially - very relevant for B2B companies. Omnichannel is more effective in the B2B context than traditional sales models alone. More than 90 percent of B2B companies say in a McKinsey study that their go-to-market model is as effective or more effective than before the pandemic began. And 31 percent believe their model is "much more effective" when it comes to reaching and serving customers; compared to nine percent who said the same two years ago - that's a threefold increase. Therefore, omnichannel is an "omni-opportunity" that makes companies' jobs easier and enables greater sales growth.

Kristina: I couldn't agree more. Basically, an omnichannel strategy is worthwhile for any long-term thinking company that wants to place its customers even more at the center of its corporate value creation. However, the question that every company has to ask itself in this regard is whether it should always be an omnichannel approach straight away or whether a preliminary stage might also fulfill initial requirements and needs. Sometimes a really well-implemented multichannel or cross-channel strategy can already achieve initial success.

In principle, the company's strategic direction is largely dependent on the company's target group with its individual expectations and needs, as well as the products and services on offer.

Kristina: In my personal experience, too many companies cling too tightly to established structures and processes within their organization and at the same time to system landscapes that have been in place for decades. Both make it difficult for employees, who are ultimately in direct contact with the customer, to create the "seamless customer experience" that customers expect today. For the customer, who shops both online and offline and interacts with the company via various channels, there are no different channels. They perceive everything together as an individual customer experience. In my opinion, companies should therefore not impose their internal complexities on their customers. In the end, only one can lose.

Frank: In my view, all companies first need to think deeply about who their customers actually are. How do they operate? What challenges and objectives do they have? On which channels are they active? What do they respond to? It not only helps to understand and know who the "target groups" are, but also to really develop an understanding of the ideal type of customer. With this outside-in view, you then have to deduce what the necessary touchpoints and channels are. Do customers prefer to buy online or do they seek advice locally? Which channels do they use to make purchases and where do they see your advertising? Companies should concentrate on a few important channels, especially at the beginning. Rome wasn't built in a day, so it's important to take an outside-in view of omnichannel requirements and then gradually implement them "inside". And never the other way around!

Kristina: In a few key words, I would say that the perfect omnichannel customer journey is characterized by consistency across all channels. It meets all of the customer's requirements and needs in terms of individual flexibility, convenience, information requirements and personalized content and offers.

When discussing the customer experience in my previous job, I always invited my colleagues to place a test order on our website to experience this part of the journey for themselves or to test a specific service from start to finish. True to the motto "Put Yourself in Your Customer's Shoes", this experience can be amazingly insightful and inspire subsequent exchanges.

For me, there are basically two very clear no-goes. Number one is neglecting certain touchpoints when creating an omnichannel customer journey map because we think, for example, that it has no relevance for the customer. Number two is related to this and is aimed at a lack of knowledge of the target group and its needs. Both of these factors lead to a gap in expectations between the customer and the company.

Frank: In short, the optimal omnichannel customer journey must create the maximum customer experience for the respective customer. This should be proven by relevant KPIs such as the Customer Satisfaction Score. At the same time, you also need to monitor the churn rate in order to determine how a corresponding journey should be perceived.

Frank: The omnichannel strategy must be triggered, supported and promoted top-down. Communication is a decisive success factor here. A successful omnichannel strategy requires a rethink within the company. How do employees perceive innovations and changes and can they move away from the silo mentality that is often found? Such challenges sometimes entail high implementation costs and must be accompanied by good change management in order to communicate the new requirements to employees. It is important to integrate all departments involved inside and outside the company as quickly as possible and get them to work together so that the approach is also supported from the bottom up.

Kristina: I agree: to a certain extent, both are necessary. An omnichannel strategy decision must always be supported by all levels of a company. Even if a strategic project is probably initiated top-down in the majority of cases, it is all the more important in the omnichannel context not to leave out the areas that are in direct contact with customers in the next step bottom-up.

In my previous professional experience, I quickly learned how important it is to involve the operational business areas in particular in the development of new services. If colleagues from these areas are involved right from the start, they can point out potential stumbling blocks at an early stage. Participation also creates acceptance.

Frank: My clear opinion here is that customers have learned to appreciate online channels during the pandemic and Corona has acted as an accelerator here. This cherished behavior will also be reflected in the future for physical stores. What does that mean exactly? In my view, the number of physical stores for a brand will decrease. The stores that remain will change their appearance. We will see more and more so-called flagship stores or experience temples, where customers are offered true shopping experiences. Here, for example, you can test the next novel at a bookseller and have a coffee prepared by a barista on the side. Or you can test cosmetics directly with a trained make-up artist and receive instructions.

Kristina: As a former e-commerce manager in luxury fashion retail, I am also convinced that the way in which customers will experience the store as a physical touchpoint will change over the next five to ten years. However, the relevance of the store for the customer will not change and I don't see the store having to give way completely to online retail. On the contrary: we are even seeing some pure online players conquering our pedestrian zones with new store concepts.

However, changing consumer needs in the future as well as technological trends and innovations will ensure that the appearance of stores will change - even outside of luxury fashion retail. I fully agree with Frank. This is also accompanied by a new requirement profile for the sales consultant of the future.

Kristina: I confess that I used to always look at HUGO BOSS in the German market (with a slightly envious look) because I think they have perfectly dovetailed their online and offline business. As a visitor to the online store, for example, I can check availability in a store near me directly on every product page. But what really impressed me when it was launched was the option for me as a customer to make an appointment to collect my order directly from the store when checking out with Click & Collect. For me, this is the perfect online-offline bridge. Of course, I had to "test" it myself and was not disappointed. I really have to say: well done, HUGO BOSS!

Frank: From my point of view, DOUGLAS has mastered the omnichannel challenge very well. They managed to build a sustainable online business at the start of the pandemic and offer services that maximized customer satisfaction. Thanks to this strong online business, DOUGLAS was able to maintain its sales in 2021 despite the months of coronavirus-related store closures. The increase in online sales of almost 50 percent in 2021 compared to the previous year compensated for the pandemic-related decline in store sales of around 19 percent on a like-for-like basis.

During this time, DOUGLAS has also already converted its physical stores into Experience Temples, which probably leave nothing to be desired for the relevant target group. A clear winner for me!