Article

Kresten Bergsøe
Kresten Bergsøe 27 May 2016

The Omnichannel illusion

Omnichannel is a marketing strategy that aims to recognize every individual customer whether they’re shopping online, offline, or both - and deliver a consistent progressive and fluent marketing experiences across all touch points. Creating that ever-evolving customer profile is the holy grail of an omnichannel strategy and one of the hardest to execute. Read how to get started and the most important question any business considering investing in omnichannel marketing should ask themselves.

Omnichannel is a marketing strategy that aims to recognize every individual customer whether they’re shopping online, offline, or both - and deliver a consistent progressive and fluent marketing experiences across all touch points. To do so, marketers must stitch together a complete profile of each consumer and carry that consistent identity across all channels both online and off.

Creating that ever-evolving customer profile is the holy grail of an omnichannel strategy and one of the hardest to execute. According to Deloitte, only 40 percent of retailers report the ability to accurately identify their customers across all channels. And from fieldwork - this number seems highly exaggerated.

More than ever, today’s shopper begins by researching a product, whether they intend to purchase it online or off - the majority of the purchase decision is being done digitally and according to Google, 42 percent of in-store consumers research their purchases online. This behavior drives consumers back and forth across different digital channels and devices and over the digital/in-store divide. Everything from online search, site visits to a local store to digitally check in-store inventory.

As customers hop from device to device and in and out of stores, the complications of cross device tracking becomes apparent. A persistent ID that knits together all the data the business is able to collect about their customer and distill it into a single profile is the key challenge - problem is, a persistent ID does not exist.

Tech providers offer solutions that create and maintain persistent IDs by algorithmic consolidation of device profiles based on user behavior, location and device fingerprints. The good new is the reach of these technologies - covering a large percentage of the internet population. The bad is that these solutions are predictive - they are inherently inaccurate. The opportunity to consolidate wrong profiles and make wrong assumptions is acute. For a more solid consolidation you would need a key like login. Platform providers like Google and Facebook that require authentication across consumer devices have the strongest position to generate a persistent and reliable key. However they are all “walled gardens” and they do not make their keys accessible to others than themselves.

So that leaves the businesses with their 1’st party data - the customer interactions they have on their own digital and offline channels and the data they can collect and consolidate here.

The single most important question any business considering investing in omnichannel marketing can ask themselves is this:

How many % of our interactions can we tie to a unique key
and what channels are we able to support with this key?

The inability to carry identity seamlessly across to a physical location, or even across to other devices and digital platforms, is a huge missed opportunity as consumers expect integrated channel independent experiences and service in an increasingly connected world.

But fact is that the most marketeers are doomed to spend vast budgets and internal resources on platform integration and implementing communication targeting only a very small fraction of their customers/prospects.

On a typical website you would be able to recognize less than 2% of your visitors if you use a login. So whenever the customer shifts device you would in fact be multiplying the conversion rates. 2% of 2% is simply a very very small number. This mechanism is the same across digital and offline channels and devices - you multiply the percentage you are able to recognize. So as the digital channels continue to proliferate and the number of devices (personal and shared) continue to grow - this problem just accelerate and frame omnichannel more like a platonic ideal than a practical reality.

Only a small fraction of businesses (14 percent according to L2) claim the ability to track customers across channels and act on the data they glean from those interactions. But still brands are investing in consulting, technology and marketing initiatives toward achieving a functional model - a true dilemma.

But what to do then?

Well, a simple approach would be to focus on a partial omnichannel experience. Invest in the few channels with the most interactions (typically web, mobile and email) and spend time and money to build a strong incentive for consumers to identify themselves here. Many experiment with social logins as they are easily implemented - but seems to forget the consumers incentive to actually use these logins. Logins that are only valuable for the businesses will always be a losing proposition. So spend time on what’s in it for the consumer to use your login or install your mobile application. That will minimize the tech investment and move money and time to where they actually matter and generate results: the content that constitute the customer experience.

 

Kresten Bergsøe
Monoloop

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