Analyzing The

CONSUMER
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OMNICHANNEL

Creating Omnichannel Strategies That Resonate With Todays Empowered Consumers

New shopping channels and advanced technology solutions have greatly impacted consumers shopping behaviors and interactions with brands and retailers. In fact, recent research from the IBM Institute for Business Value spotlighted the central role of technology in consumers new researching and decision-making process: 86% of respondents indicated that they use some type of technology when they shop. The worldwide survey of more than 28,000 consumers, titled: Winning Over the Empowered Consumer: Why Trust Matters, also revealed that 85% believe they can save time shopping by using social media recommendations to help them make purchasing decisions. Retail industry analysts have coined these empowered, tech-savvy shoppers as omnichannel. But while these consumers are using more channels than ever before, they also are using more devices during the researching, browsing and consideration phases of their buying journeys. In fact, the IBM consumer survey pinpointed that nearly 25% of shoppers use three or more technologies while shopping. Retailers shouldnt just think about their customers going to web, to mobile, to social, to store, said Larry Freed, President and CEO of ForeSee Results, in an interview with Retail TouchPoints. In order to succeed, they should think about how their consumers are using different technological devices at specific times, and for what reasons. To ensure customer engagement and loyalty in the age of the hyper-connected, alwayson consumer, everything from inventory, to pricing, offers and messaging, must be consistent across touchpoints and relevant to each consumers unique wants and needs. Omnichannel consumers require seamlessness and synchronicity, explained Jonathan Levitt, CMO of OpinionLab, a voice of the customer and feedback solution provider. They are going to bounce back-and-forth between channels in a non-linear fashion and retailers simply have to be prepared for that.

Retailers shouldnt just think about their customers going to web, to mobile, to social, to store. In order to succeed, they should think about how their consumers are using different technological devices at specific times, and for what reasons.
- Larry Freed ForeSee Results

Transitioning To An Omnichannel Retail Organization

Best-in-class retailers are revising their organizational structures in an effort to ensure a seamless transition to omnichannel operations. Heidi Chapnick, CEO of Channalysis, shared a six-step methodology the company leverages to help retailers successfully develop and implement their strategies from the ground-up. Chapnicks six steps to omnichannel strategy include:

1. Obtain executive engagement. Executives must understand the business-wide need to integrate all sales and communication channels. If that message doesnt come down from the CEO and trickle to other areas of the business, retailers are going to have those siloed workforces. 2. Complete a needs assessment and receive lessons in the science of ROI. Retailers must conduct internal and external landscape analysis, followed by a full assessment of the as is and the needs to be environment from an analytic and a skill set perspective. From there, retailers can prioritize their strategies and investments. 3. IT engagement modeling, in which businesses connect with the IT team to understand top priorities for omnichannel success. This always is key in pushing omni objectives to the forefront and creates more disclosure between the IT side of the business and other departments. 4. Focus on business and project planning in a phased approach. Retailers also must focus on winning employee engagement to ensure an efficient deployment in all areas of operation. 5. Develop marketing plans that reflect a holistic approach and an integrated theme across all channels. 6. Customer centricity and care, driven by a 360-degree view of each shopper.

The Current State Of Omnichannel Strategies

More retailers are acknowledging the need to analyze and address the omnichannel consumer. But overall, many organizations are not evolving their internal businesses to keep pace, according to Chapnick. C-level executives are saying omnichannel and using it in their vocabulary, but they really dont know how to truly achieve omnichannel, Chapnick said. They dont realize that they need to change their infrastructure and get the right skill sets in place to obtain a single, cohesive view of all content and commerce across all channels. However, research uncovered by Aberdeen Group in the report, titled: 2012 Omni-Channel Retail Experience indicated that retail leaders are taking the following strategic actions to provide similar brand experiences across all channels: Ensure product availability across all channels (50%); Develop an omnichannel marketing and promotions plan (31%); and Establish omnichannel performance metrics (25%). Confirming the need for more consistent retail experiences, Freed added: It is no longer efficient to leverage disparate prices, products and policies. I dont think you can draw those lines around channels anymore because it alters the customer experience. And since consumers have more control, satisfaction with the experiences they have ultimately is going to drive the decisions they make. Having that consistency builds trust, which is so important.
- Heidi Chapnick Channalysis

C-level executives are saying omnichannel and using it in their vocabulary, but they really dont know how to truly achieve omnichannel. They dont realize that they need to change their infrastructure and get the right skill sets in place to obtain a single, cohesive view of all content and commerce across all channels.

Cutting-Edge Retailers Revise The C-Suite To Address Consumer Trends

Macys and Saks are making omnichannel an integral part of their business strategies by creating C-level titles and entire departments specifically for their efforts. On Jan. 28, 2013, Macys announced the appointment of Robert B. Harrison as Chief Omnichannel Officer. The title was created to make the former EVP for Omnichannel Strategy a key component of the C-level suite. In his new role, Harrison will manage the development of strategies that will integrate the companys stores, online and mobile activities. Additionally, Harrison will take on responsibility for systems and technology, logistics and related operating functions, according to a company press release. Saks Inc. also has reassigned senior managers to omnichannel titles. For example, Ron Frasch, President and Chief Merchant at Saks, now is more directly involved in overseeing the omnichannel merchandising strategy. We have to change how we do business, said Stephen I. Sadove, Chairman and Chief Executive Officer of Saks, in an interview with WWD. The world has been moving forward toward an omnichannel environment where customers want to shop anytime, anywhere. You want to look holistically at your business. The article also reported that Keith Campbell, SVP of Merchandise Planning for Saks, has been named Group SVP for Merchandise Planning and will lead the omnichannel vision for merchandise planning and allocation to maximize inventory across channels and drive profitable volume growth. Macys and Saks are organizations that have changed their infrastructure to align with the growth of omnichannel retail. Others in the marketplace should follow suit, Chapnick advised, either by putting a leader in the C-level suite with an omni title, or at the very least, all C-level executives need to be aligned and engaged from a philosophical and budgetary perspective.

Leading Retailers Embrace New Solutions To Drive Omnichannel Success

Today it is commonplace for hyper-connected consumers to use multiple channels and technologies to browse and buy. Consumer research from Google confirmed this transition to omnichannel processes: 90% of survey respondents said they consulted multiple screens sequentially to accomplish tasks, while 98% said they moved between devices in the same day. Retailers are acknowledging the ever-presence of these omnichannel consumers, and their overall impact on the bottom line. A study released by Retail Systems Research (RSR), titled: Omni-Channel 2012: Cross-Channel Comes Of Age, revealed that 38% of retailers believe cross-channel shoppers are significantly more profitable than singlechannel shoppers. The study noted that 79% of retailers believe that it is important for consumers to be able to complete their shopping transactions through their channel of choice, in order to maximize customer loyalty. Additionally, 79% thought it was imperative that they create a single brand identity across channels. To enable more unified and fluid retail experiences across digital and physical channels, best-in-class retailers increasingly are investing in new solutions that target specific channels and industries, for e-Commerce sites, brick-and-mortar stores, and even for mobile devices and social media.

38% of retailers believe cross-channel shoppers are significantly more profitable than singlechannel shoppers.
- Retail Systems Research (RSR)

Loehmanns Connects Online And In-Store Channels

Since its inception in 1921, Loehmanns has strived to make shoppers feel they are receiving one-of-akind deals on designer goods. To keep pace with competitors and better connect with omnichannel consumers, the merchant sought to enable seamless experiences between the web, mobile and all 40 brick-and-mortar locations nationwide. Loehmanns successfully made this transition by

Omnichannel doesnt live in one place within our organization. We work across teams to deliver the Loehmanns brand experience that our customers expect.
- Dan Sackrowitz Loehmanns

replacing complex legacy systems with an online storefront that aligned seamlessly with the brick-and-mortar business. The new web site was launched in partnership with ShopVisible, a cloud-based e-Commerce solution provider. Our consumers love Loehmanns because we provide access to great fashions at discount prices, no matter what channels they use to shop with us, said Dan Sackrowitz, VP of e-Commerce at Loehmanns, in an interview with Retail TouchPoints. So in essence, all our consumers virtually are omnichannel, and expect the same positive and seamless experiences from our brand. To enable compelling omnichannel customer interactions, the Loehmanns e-Commerce site now features mobile and social commerce tools and capabilities, and enables flexible delivery and return options. Additionally, the CRM system is fully integrated with the e-Commerce site, which allows Loehmanns Insider Club loyalty program members to access the same benefits in-store and online. Consistent communication and coordination are essential in keeping omnichannel strategies up-to-date across the organization, Sackrowitz noted. Ongoing collaboration helps team members ensure we give our shoppers what they want across all touch points. Omnichannel doesnt live in one place within our organization. We work across teams to deliver the Loehmanns brand experience that our customers expect.

Canadian Tire Revises Internal Processes To Meet Omnichannel Expectations

Canadian Tire also strived to connect the dots across digital and physical touch points and in turn, create more compelling and relevant brand experiences. The big box retailer, which has been in business for more than 90 years, currently is working toward improving collaboration across mobile, social, online and in-store technologies such as selfserve kiosks, according to Rosie Riolino-Serpa, AVP of Digital at Canadian Tire. Were focusing on many different components

Our goal is to connect all data points to create cohesive customer profiles and enable those more relevant marketing messages and offers. We want to show customers that we know the life theyre living and are here to help them in any way.
- Rosie Riolino-Serpa Canadian Tire

to improve the omnichannel experience, but were not going to introduce a new strategy until its very relevant to customers, Riolino-Serpa said in an interview with Retail TouchPoints. If an approach is not consistent across all the touch points then we wont pursue it. Riolino-Serpa added that because Canadian Tire has so many different divisions, the company has to focus on corporate alignment and collaboration to guarantee all content and campaigns are consistent across all digital channels and brick-and-mortar locations. To that end, company team members meet regularly either bi-weekly or monthly to ensure we have ongoing communication around omnichannel initiatives, she explained. For example, we need to verify that all employees are trained to respond to questions and concerns they receive across the call center, social media and email. Moreover, Canadian Tire collects and analyzes data across channels to streamline understanding of target customers, the products/services theyre seeking across channels and most importantly, deliver more relevant messages across channels based on those browsing and buying behaviors. Our goal is to connect all data points to create cohesive customer profiles and enable those more relevant marketing messages and offers, Riolino-Serpa said. We want to show customers that we know the life theyre living and are here to help them in any way. For example, one area of Canada can be snowing while another area is sunny, so we consistently have to ask ourselves how to market to all these geographic areas effectively across all channels.

In addition to better personalizing offers and content distributed online and via mobile, Canadian Tire is honing in on integrating technology into brick-andmortar environments to make customer interactions more information rich and rewarding. For example, the retailer is considering how consumers mobile devices, social media and in-store kiosks can add extra value to the in-store shopping journey. Right now were focusing on the customer experience and how digital will empower consumers to make more educated decisions in stores, RiolinoSerpa stated. QR codes also will be another area of

Aeropostale doesnt really look at strategies as omnichannel, but rather, customer first. We focus on catering to customers needs rather than having our shoppers follow us.
- Anthony McLoughlin Aeropostale

interest and investment, largely because they are effective gateways for consumers to obtain more detailed product information, as well as peer ratings/reviews.

Aeropostale Integrates Digital Content And The Brick-AndMortar Store

Loehmanns and Canadian Tire are focusing on internal processes and implementing new technology to adapt to omnichannel trends. In a different approach, retailers such as Aeropostale have honed in on customer-centricity as the core of omnichannel business decisions, and are harnessing digital tools and tactics to complement new engagement and marketing trends. Aeropostale team members arent fazed by buzzwords such as omnichannel, according to Anthony McLoughlin, past Senior Director of Interactive Marketing at Aeropostale, largely because the organization already is tightly integrated across departments. (At press time, McLoughlin had taken a position at bebe as VP of Interactive Marketing.) Aeropostale doesnt really look at strategies as omnichannel, but rather, customer first, McLoughlin said, noting that the retailers target audience is the teen market. We focus on catering to customers needs rather than having our shoppers follow us. Currently, mobile is a central part of Aeropostale engagement strategies; as many as 60% of all brand emails currently are opened and read on mobile devices, McLoughlin reported. Moreover, approximately 8% of all Aeropostale online sales and 30% of traffic derive from smartphones, while 7% of online sales and traffic come from tablets.

To continuously evaluate and determine the most effective features and capabilities to include in the mobile strategy, Aeropostale team members collect qualitative and quantitative insights and analyze consumer data extensively. We rely heavily on customer surveys, questionnaires and focus groups to better understand, right from their mouths, what our shoppers are expecting, McLoughlin said. This process helps us define the brand and scope of the strategy. For example, when it comes to mobile, everyone in the organization has an opinion, but in order to make concrete decisions, we always go back to what the teens are telling us. As a result of data gathered, Aeropostale is focusing on refining the current iPhone app, releasing an Android app and developing web and app strategies for tablets. In another example, Aeropostale successfully listened and responded to shoppers by developing a new concept store, which was unveiled at the Roosevelt Field Mall in Garden City, Long Island, on Oct. 19, 2012. The brick-and-mortar location incorporates four self-serve, iPad kiosks strategically placed throughout the store. Shoppers can use these devices to build their own outfits then email creations to friends, family and themselves. The devices also can be used to browse and buy on the mobile-optimized e-Commerce site, scan in-store bar codes to learn more about items, read reviews and receive complementary product recommendations. We want to be a part of the conversations our target audience has online, via mobile devices and in stores, McLoughlin said in a previous interview with Retail TouchPoints. We also want to create relevant brand experiences for our customers: thats the vision at the core of this concept. To have that pertinent and emotional impact on teens, we needed to create a strategy and use technology that allows them to engage with us on their terms. Were not just using tactics to drive sales; were using strategies that are consumer-centric to drive engagement and eventually create brand ambassadors. Due to the success of the Roosevelt Field Mall location, Aeropostale is expanding the strategy to more stores, McLoughlin explained. Now with more than 1,000 stores nationwide, the retailer will participate in a sizable rollout. Were working on a complete store redesign, with the tablet kiosk concept as a key component. Up to one-third of our stores may have this technology, but right now, were determining what locations will be most sensible from an implementation standpoint.

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Staying Focused On The Customer Experience

Because shoppers now have instant access to product descriptions, prices and other information vital to the browsing and buying journey, they are becoming less loyal to brands. This means that an effective omnichannel strategy now is paramount to success. Consumers are going to gravitate to the organizations that keep catering to them, personalizing the shopping experience and provide them a service based on their need of the moment, McLoughlin said. What shoppers want is choice, service and convenience, and they want to engage in shopping in the same way the rest of their life is being engaged using technology to make their lives effortless and provide the perception that they are smart and on the zeitgeist of what is happening. Sackrowitz concluded: Shoppers may be interacting with brands on new platforms, but they still expect the same positive browsing and buying journeys from brands that they always have demanded. As marketers, we need to make sure we remain focused on putting the customer experience first, whether or not we use the word omnichannel.

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About Retail TouchPoints

Retail TouchPoints is an online publishing network for retail
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executives, with content focused on optimizing the customer experience across all channels. The Retail TouchPoints network is comprised of a weekly newsletter, special reports, web seminars, exclusive benchmark research, an insightful editorial blog, and a content-rich web site featuring daily news updates and multi-media interviews at www.retailtouchpoints.com. The Retail TouchPoints team also interacts with social media communities via Facebook, Twitter and LinkedIn.

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