The changing landscape of business
A big change is coming yet again, especially for B2C businesses. Consumers have changed, and so have their demands on businesses. It is clear that businesses which successfully navigate these changing demands will get a strong competitive advantage over their competitors, and capture greater market share and profits. Conversely, those who do not will be left behind and quite possibly fade away. The smartphone revolution has more than affected the mobile phone industry. With it, a new generation has arisen – one that is constantly connected to the Internet.
Such a generation is changing the world of business. Being pampered by instant and increasingly perfect information, they search for information about any product and service they intend to consume before deciding to purchase.
According to Google, 95% of smartphone users use search engines on their phones, 92% seek local information, and 89% take action based on what they find, with 79% using their smartphones to help with shopping. A more recent report from Nielsen finds that 89% of people use smartphones while shopping in a store, with 40% comparing prices on their smartphones while shopping.
Research shows that consumers today are better informed, more selective, more prone to move from one brand to another and less loyal than ever. One clear phenomenon of this is “showrooming”, where shoppers view an item in-store but buy it cheaper online on competitors’ sites such as Amazon and eBay.
Through this, retailers have come to understand that people are always going to compare prices, and have launched their own eCommerce sites or mobile apps to try to capture the increasingly nimble and unloyal customer. To reach customers with a combination of various platforms, such as a physical store, an online store and a mobile shopping app, is to offer multiple channels or what is known as the multi-channel approach. This, however, is just reacting to changing consumer demands and habits, and has its own problems.
For one, these channels often act independently of one another, and the retailer’s knowledge of each channel exists in separate technical and functional silos. Businesses’ understanding of customers are also limited to each channel, and are unable to put all their customer data together in a coherent manner to understand their changing consumers. As an example, in-store associates do not know what customers have been viewing on the online store, and are unable to advise the customer according to their preferences.
To obtain a unified single view of their customers, businesses need to integrate their various channels together, such that all systems across the various channels communicate with one another. Having an integrated channel approach is called an “Omnichannel” approach.
The rise of Omnichannel
Such an approach comes with many benefits. Businesses are able to understand their customers through their interaction across the various channels and touchpoints, and are able to base their decisions on real data and analytics. From that, businesses are better able to serve customers and provide more value, which will spur customer loyalty and increase profits.
For example, Nike integrated their mobile app, Customer Relationship Management (CRM) backend system as well as their in-store point-of-sale (POS) kiosks to capture customer interactions and match it with transaction data. With it, they built detailed customer profiles and pushed irresistible personalised offers to upsell customers through their mobile app, increasing sales by almost 6% with these in-store offers alone. With such customer engagement programmes, Nike has gained 15x ROI.
Wal-Mart was also badly hit by showrooming, and has started to embrace aspects of the Omnichannel approach – it has built on its value offering of convenience by integrating their online store with their physical store. When a customer cannot find an item at their location, Wal-Mart encourages in-store clerks to refer the customer to Walmart.com, where customers can purchase the item and have it delivered to their homes.
Wal-Mart has also discovered that half of their online customers choose to pick up their purchases in the stores, and has created a designated pick-up desk in stores – customers can seamlessly and conveniently pick up their purchases, as compared to slowly picking up their items from the aisles and queuing up to make their purchases at the cashiers.
Clearly, businesses are realising the value of adopting an Omnichannel approach, and are starting to embrace it to meet the changing demands of consumers.
What this means for your business
In the face of changing consumer demands, businesses should not mistake phenomenon such as showrooming as the threat – the real threat is failing to create a differentiated and compelling experience that engages customers. Studies from Columbia Business School and Gallup find that for most consumers, getting the absolute cheapest price is not the highest priority, and that customer engagement is important to drive the eventual sale of a product.
An Omnichannel approach can definitely help a business to successfully understand and engage consumers, and thus drive profits. Here at Balanced Consultancy, we believe in listening to our clients’ needs and building fully-customised solutions from the ground up for each client. This ensures that our solutions are completely tailored to the needs of each business and delivers maximum value to each client.
At Balanced Consultancy, we do not try to fit your business into pre-existing systems; we build the solutions around your needs. Talk to us today to find out more about what we can do for your business.
Call us at +65 64382006 or click here for enquiries.