September 1, 2013
By John Stelzer,

Looking Beyond Multichannel

More and more retailers are moving from multichannel to cross-channel operations, bridging siloed systems to give the consumer a seamless brand experience. But those who have experienced the benefits of cross-channel have come to recognize an even greater goal to be achieved—omnichannel—in which the retailer operates in a holistic, merged-channel manner throughout the enterprise to optimize both the customer's brand experience and the retailer's operational execution.

The most pivotal elements of omnichannel service are knowing and understanding the customer completely and consistently executing across all points of brand interaction. Together, these elements ensure the kind of personalized brand experience that creates competitive differentiation for your customer and operational efficiency for you.

To fully know and understand your customer, you must be able to view her brand experience holistically to establish the kind of brand relationship that creates trust, strengthens loyalty, and promotes brand advocacy. This necessitates having the ability to recognize her at every touch point. This means that the many ways your customer is known at one touch point must be correlated across all of them, so that you can view her brand interactions in their entirety.

With this information in hand, you can begin to monitor and analyze all of her brand interactions to better understand her interests, her objectives, how she responds to particular communications, what she's saying about her brand experiences with you, etc. You can tailor your interactions with her and personalize her brand experience. In this way, you create brand intimacy, build brand loyalty, and promote brand advocacy as well.

An omnichannel approach requires that you coordinate your interactions with your customer so that collectively they create a continuous dialogue that is not segmented by channel or communication type. The content and timing of offers and other marketing interactions must reflect—and adjust to—the customer's entire brand relationship and all of her most recent brand interactions, whether they've been online, in-store, or anywhere else.

But knowing the customer, demonstrating that you understand her, and creating a rewarding brand experience is still not enough. You must also deliver on the brand promise that you made when she completed her purchase. In fact, the postpurchase experience turns out to be the most important phase in the overall brand experience. A 2012 IBM Smarter Commerce Consumer Advocacy Study of 1,200 U.S. multichannel shoppers showed that 64 percent considered the postpurchase phase most important for forming their lasting impression of a retailer (versus only 36 percent for the prepurchase phase).

Therefore, a key role of omnichannel in guaranteeing consistent execution during the postpurchase phase is to enable intelligent sourcing to ensure in-stock availability and optimal inventory utilization. This is coupled with flexible independent fulfillment, including reverse fulfillment to accommodate returns. This delivers on the brand promise for your customer while maximizing efficiency and cost reduction for you. These two essential capabilities take advantage of the holistic inventory, order, and shipment visibility that omnichannel provides to enable improved order management during the entire order life cycle and up-to-date reporting to the customer on the status of her order at every stage.

Omnichannel enables consistent sans-channel execution without the channel-based constraints that result from information being developed in silos. It ensures enterprise-wide agility and responsiveness to create an engaging personalized brand experience. And it allows you to demonstrate to your customer that you know her, understand her, and can serve her when, where, and how she chooses to engage with you. In short, omnichannel takes the myriad threads of brand interaction and weaves them into the seamless fabric that is your customer's total brand experience...an experience that creates the kind of brand relationship that engenders trust, deepens loyalty, and inspires brand advocacy.

John Stelzer is the worldwide industry lead for IBM Retail Smarter Commerce, where he is responsible for defining retail vertical strategy and messaging.