With the explosion of consumer technology options, digital transformation has upended retail more so than any other industry. From the retailer’s perspective, every device, every app, every digital interaction is an opportunity to communicate a brand, to present a value proposition, and most importantly, to drive home a sale.
Perhaps the most important lesson these retailers learned from the dot.com explosion of the 1990s is that the web was first and foremost a marketing channel – a way of connecting seller to buyer. With this realization, retailers now had the appropriate context for extending multichannel retail strategies. After all, catalog, call center, and in-store were familiar, tried-and-true retail channels, and the web simply added one more. (See this article I wrote back in 2001 for some insight into the multichannel strategy of the day.)
Today, digital is the word we use for the pandemonium of technology-centric marketing channels, as mobile apps, social media, and the Internet of Things (IoT) explode the number and variety of possible ways for reaching increasingly jaded and digital-weary customers. In such a noisy environment, now-traditional multichannel strategies – offering the ability for individual consumers to switch from one channel to another – no longer satisfy the behavior or preferences of most consumers.
Instead, customers want omnichannel marketing from the companies they interact with. Today’s consumers are fed up with disconnected multichannel strategies. Instead, people are visiting stores with their phone in hand, comparison shopping as they stroll through the mall, a practice known as showrooming. They are also watching television clutching their iPads, live tweeting their favorite shows. As technology channels proliferate, opportunities to use them in concert become the norm.
As our devices continue their inexorable march to greater variety and maturity, customer preferences represent the cutting edge, driving enterprises to accelerate their digital transformation initiatives to offer unified omnichannel interactions. However, this transformation goes well beyond retail, and even beyond B2C to the B2B world, as consumerization of enterprise technology takes hold in office buildings, factories, supply chains, and logistics networks around the globe.
Breaking down the Marketing Channel
The Wikipedia definition of marketing channel lumps it in with sales and distribution channels at the business strategy level. In this context, franchising (say by a fast food or hotel chain) is a marketing channel, as are selling through distributors or value-added resellers (VARs). Generally speaking, however, that’s not the meaning of channel we’re talking about in this Cortex. Instead, we’re focusing more on the customer touchpoint – the mechanism for interaction with the customer.
In retail, traditional channels include in-store, catalog, and phone sales – and then add the web for a standard multichannel marketing strategy. Note that even before the web hit the scene, there were occasions where customers interacted with companies via two or more channels at once: for example, ordering from a print catalog via phone instead of mailing in the order, or bringing a catalog to a store to comparison shop. Such channel combinations are now rolled into today’s definition of omnichannel.
Social media have also shifted the definition of a marketing channel, as companies treat each social media app as a separate channel in its own right. The result: companies must now hammer out Twitter strategies and Facebook strategies and Pinterest strategies and so on and so on, forever trying to keep up with an increasingly fickle and skeptical audience. And woe to the company who confuses one social media channel with another, as treating Pinterest as though it were Twitter (or vice-versa) is a surefire way to alienate your customers.
In fact, treating multiple related channels as though they were a single channel is not just a rookie mistake, as the playing field continues to change at a rapid pace. Do you have one mobile channel strategy? Or do you need several, one for each app your customers might use to interact with you? Do you have one chat strategy, or a separate Facebook chat vs. web chat strategy? Is your Facebook chat strategy different for mobile and web? Is it different from your Facebook app strategy? And even if you manage to answer all these questions, what about that new social media app that is going to be all the rage next year?
Next, add the IoT to the mix. Do you need an Apple Watch channel strategy? How about a Nest thermostat channel strategy? Again, don’t make the mistake of lumping these together in a way that doesn’t take into account the different preferences and expectations of your audience – they may be willing to get fitness alerts from a smart watch but not from a thermostat.
In the end, this combined fragmentation and proliferation of marketing channels waters down the entire notion of a strategy. After all, strategies are meant to be long-term plans for achieving the goals of the organization. The finer you slice your channel strategies, the less in touch with your overall business strategy you become.
This need for a unified channel strategy in the face of such proliferation of technology-based options is the motivating force behind omnichannel marketing strategies. Remember, the digital story always begins with customer preferences and behavior, and customers don’t want fragmented channel strategies from the companies they interact with. An omnichannel strategy reflects this fact, pulling together individual channels into a coherent whole, taking into account the fundamental differences among channels while simultaneously recognizing the customer-driven priority to present a single, unified channel.
Omnichannel Beyond Retail
Consumers are driving digital transformation to be sure, but that doesn’t mean that only B2C companies are subject to such transformation. Remember that in the end, we are all consumers, and the public at large to which we all belong demands increasingly seamless, high performance interactions with the companies we deal with, regardless of whether we are at home or at work, or whether we are shopping for something or conducting some other kind of business interaction.
Media companies are perhaps neck-and-neck with retail in their adoption of omnichannel strategies, as increasingly common two-screen viewing behavior would suggest. Today, the proliferation of media choices is exploding, as streaming video increasingly takes place away from the television, and content separates from the media that deliver it.
Healthcare is another omnichannel success story – or at least, story in progress. Physicians and other healthcare professionals now have a wide range of digital choices, from smartphones to tablet-based apps to an increasing variety of digital-enabled medical devices. It shouldn’t matter whether the doctor is at her desk, in a hospital room, or viewing the output of a CAT scan – she should have a single, patient-focused view that unifies all channels. In other words, patient-centered care should be thought of as an example of an omnichannel strategy.
Furthermore, the democratization of technology and the corresponding consumerization of enterprise IT are driving omnichannel strategies within enterprises of all sorts, as app stores and bring-your-own-device (BYOD) initiatives upend traditional approaches for delivering technology capabilities to employees. We expect companies to present a unified, high-performance, omnichannel experience to us regardless of whether we are in the role of employee or consumer. Furthermore, as millennials hit the workforce, they will settle for nothing less.
The Intellyx Take – The Most Important Channel of All
We may use channels for marketing, sales, product distribution, or delivery of services – but even with this expanding diversity, the common element across all channels is always communication. As in human communication. The more technology we layer onto the digital experience and the more we automate interactions with people, the greater the customer need and desire for true, person-to-person interaction.
The most important channel, of course, is face-to-face. Whether it be interactions with a sales clerk, or with your physician, or even with the fellow who delivers your packages, face-to-face interactions are the way even the largest organizations humanize their relationships with customers. Remember, the digital story today is about customer behavior and preferences. Sometimes we want automated, self-service interactions to be sure – but we always want the option of human interaction.
Every omnichannel strategy, therefore, must reflect this fundamental principle. As you list all the individual channels you must support, never forget to include the one that may not involve any technology at all. A simple handshake, smile, and respectful conversation trumps the most high tech technology channel every time.
Intellyx advises companies on their digital transformation initiatives and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Robert Couse-Baker.
