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There is no doubt about it – according to the pundits, the future of the customer experience is well and truly “omni-channel”.
But just what is this much-talked-about phenomenon? Is it simply a fancy, new, Malcolm Tucker-style name for adopting a multi-channel approach – or is it something more?
According to Jeremy Cox, principal analyst for customer engagement at market researcher Ovum, what it is really about is putting the customer at the heart of everything you do – facilitating the so-called “customer journey” rather than simply doing things in a way that is convenient for the business.
“It’s not just about bolting on additional, siloed channels and hoping for the best,” he says. “It’s about joining them up and orchestrating them to allow for channel-hopping and to ensure that customers get what they’re trying to do done in a way that’s convenient to them.”
This means that no matter how they interact with the business, whether by mobile phone, face-to-face or via your website, every experience must be seamless and consistent so people don’t have to repeat themselves endlessly or end up being passed from pillar to post.
But Pete Trainor, director of human-centred design at Nexus CX, thinks there is more to it than that. “It’s about making the experience personal to each individual as they shape-shift from one channel to the next,” he says. “They’re known everywhere as their data follows them around. So it’s about being clever about the way that data is collected and reused during each interaction, to enhance the customer experience.”
So, after a consumer puts a shopping list together on their mobile phone and walks under a beacon in a supermarket, for example, they might receive help to navigate through the store to make their purchases more quickly, while also having various tailored special offers pushed to them. These offers would be based on their usual shopping habits, garnered from previous interactions with the store.
But as to where the average UK company is in terms of attaining this vision, the majority are still “quite some way from achieving it”, says Ovum’s Cox.
Front and back end
One of the reasons is that, to get it right, the focus must not only be on the front of the organisation, but on the back end, too.
For instance, in order to see the status of an order or pinpoint the exact location of a particular product at any time, fulfilment processes and applications have to be fully integrated. CRM activities also need to be integrated with ERP and supply chain systems in order to provide “visibility into everything that’s going on”, says Cox.
The problem here is that, while in the past “people have promised the earth”, delivering on it has proved much more tricky, not least because of the need for a coherent underlying strategy as well as a lot of time, effort and investment.
“Most organisations are still fragmented and have lots of silos everywhere, which makes it very difficult,” says Cox. “If it’s left to the head of customer service, it’s not going to happen. The CEO has to get in there and create an environment where people work together to make it a reality – and that could include changing the organisational structure.”
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This means that firms at the forefront of such activity tend to operate in fiercely competitive environments, such as high-street retail, financial services and the automotive industry, where the competitive advantage that such a huge shift would bring is more obvious.
But today, most of them are still at the stage of putting foundations in place to try to connect things up.
“Doing the basics is about getting the organisation to work as a coherent system rather than a hotch-potch, and enabling a high degree of collaboration, so that if a customer's query is complex, it can be answered quickly,” says Cox. “But unless companies tackle these basics and act as coherent organisations, it doesn’t matter how much technology they throw at it – it’s simply not going to work.”
Key underpinning technology includes big data systems. Such heavy-duty number-crunching activity, combined with predictive analytics software, makes it possible to gain greater insights into the behaviour of individual customers and types of customer based on their digital footprint, with the aim of personalising their experience.
It also becomes feasible to analyse the more generic behaviours of those not interested in signing up to loyalty cards or registering their mobile phone details to improve their interaction.
“We all have computers in our pockets, so organisations know who and where we are and what we’re doing, and that conversation can now be personalised even in physical environments,” says Nexus CX’s Trainor. “Even five years ago, we couldn’t do this – omni-channel is a recent phenomenon that’s come about because we all have smartphones in our pockets.”
Other useful technology includes social networks to ensure business processes are as “frictionless” and adaptable as possible, says Cox. “When you’re dealing with routine, it’s easy to predict activity and put in place standard ways of doing things. But when things are unpredictable and complex, you need ways to tap into relevant expertise. So enterprise social media technology becomes important, as do tools to enable collaboration in near-real time.”
The internet of things, formerly known as machine-to-machine technology, is, over time, just as likely to play an increasingly significant role in making operations, and the wider supply chain, run more smoothly.
Although there are no standards in place today to ensure such machines can communicate and pass data securely to and from each other, the British Standards Institute is currently working on one. Nexus CX’s Trainor, who is a member of the working group, expects a draft to be available by the middle of next year.
But as Andy Jones, director of customer experience at global commerce service provider Salmon, points out: “There is lots going on, but it tends to be in small pockets. So a lot of people are working on the foundations in preparation for introducing new channels. But at the front end, people are also dabbling with things like virtual and augmented reality, as well as Google Glass, to try it out.”
One of the key challenges here, however, relates to the difficulties in forecasting which user technologies are likely to take off, so many organisations are reluctant to invest too much until trends become clearer.
“You could switch quite a lot of this on tomorrow, but the problem is that it might jar with customers who aren’t used to it, or the technology isn’t quite there yet and needs to mature,” says Trainor. “It’s not that companies are dragging their feet – it’s that they’re moving cautiously to ensure things are done correctly. If they get it wrong, it could cause irreparable harm to their reputation.”
Case study: Marston’s brews CRM with sales data
“Even in pubs, customers are becoming more demanding about things like how they’re served or how they pay,” says Mike McMinn, chief information officer at brewer Marston’s. “So it’s all about trying to facilitate choice and create a seamless and consistent experience, regardless of the customer touchpoint.”
As a result, the company – which is the world’s largest brewer of cask ale and operates a chain of 1,500 pubs – began exploring how to stand out from the crowd about a year ago. At that stage, the decision had been taken to replace its ageing electronic point-of-sale (Epos) system, which was perceived to be “holding the business back”.
The organisation had already introduced Microsoft’s cloud-based Dynamics CRM software a year earlier and was keen to integrate the two to gain a clearer understanding of its customers' likes and dislikes.
“Traditionally in our environment, you don’t really know your customer because it’s typically a cash transaction and so fairly anonymous,” says McMinn.
But Marston’s already had more idea about its customers than most. It owns its own telecoms business, Marston’s Telecoms, which provides Wi-Fi network services across its whole estate and has also been selling them to third parties for the past 18 months. This means the firm already had access to anonymous information, such as how long the average customer stayed and whether they preferred to sit in the bar or the restaurant.
The next step involved working with cloud-based customer engagement software supplier Thunderhead, which embedded code into Marston’s website, pub wifi and outbound marketing emails. Using this code, Thunderhead technology matched the customer interactions with CRM records from nearly 20,000 registered website customers in order to understand their preferences better.
In future, this understanding will be further enhanced when the brewer asks Wi-Fi users to register free of charge at a new portal it is rolling out at a number of trial sites. The aim is to be able to target email-based marketing messages and offers more effectively.
By early next year, McMinn also intends to enhance the amount of information stored in each customer’s CRM record to include not just their personal details, but also their food and drink preferences, complaint history, and so on. “It will allow us to target and focus our marketing on an individual and personal level, which will be a game-changer,” he says.
The next major phase will involve introducing a new cloud-based Epos system from retail specialist PCMS in October 2016, which will take about six months to roll out across the entire pub estate.
Being mobile, it will enable staff to serve customers wherever they want. By means of PCMS’s integration hub, which will integrate the Epos software and CRM applications, employees will also receive feeds about customer preferences and be able to personalise service still more.
“The first stage involved listening and learning and passing information to the CRM system,” says McMinn. “The next step is to keep the flow going and collect data from the Epos system and, where it relates to customer engagement, feed it into the CRM so it’s a two-way thing.”
The final step will be to collate all that information and feed it into the mobile devices used by staff, he says. “It’s a big job.”
As a result, McMinn recommends taking such projects steadily and not “trying to run before you can walk”. He adds: “The potential of this kind of technology, when integrated in this way, is enormous. But if you get too excited and go too fast, you have a very clear opportunity to stumble. So it’s about being patient and learning as you go.”
Case study: Digital transformation at River Island
“Nowadays, customers are really demanding, so our justification in moving to omni-channel is survival,” says Doug Gardiner, chief information officer of women’s fashion chain River Island. “If we didn’t adopt it and move in line with customer demands, we’d go out of business.”
As a result, Gardiner's aim is to “provide customers with a clean journey across all touchpoints” by joining up each channel through which they interact with the business. It also involves “taking the power of digital and bringing it to the store to empower staff”, he adds.
But making such a shift has meant introducing a huge “digital transformation” programme, which will ultimately lead to big changes to the way people work at River Island. The initiative has been going for about a year and is expected to last five years or so, but should start bringing about “massive improvements” in the next two years, says Gardiner.
The business case for the move was first created by reworking the firm’s website and introducing a click-and-collect service in autumn 2013. This service led to a “huge surge in sales” as it encouraged customers to pick up their purchases in-store, which generated lots of upselling and assisted selling opportunities.
“Marketing and e-commerce were getting so much out of our digital channels that it became obvious to everyone that it was the way of the future,” says Gardiner. “It was a catalyst to wake up and see the potential, but it still takes work to convince people that it’s about more than just hiring a few new people or buying a bit of technology – it’s about changing the organisation quite fundamentally.”
It certainly helped that River Island's chief executive was “very supportive”. As for the technological change that the transformation programme has necessitated, “infrastructure is a big piece of it”, says Gardiner.
For example, River Island has so far moved all of its core IT infrastructure to HP’s cloud services, which includes its Oracle eBusiness applications, with the aim of being able to adapt to change more quickly. The company’s web infrastructure, which includes application development, testing and deployment, is also scheduled to follow, but this time to Amazon Web Services.
A new in-store Wi-Fi network has likewise been rolled out to enable staff to take better advantage of their Android-based handhelds, which include specially designed, easy-to-use software to help them deal with customer queries more effectively.
Another big change is the way the technology department of about 100 staff is organised. In the past, there was a core IT team with a digital team “on the perimeter” plus various partners, but this has now been restructured in line with agile principles to bring them all closer to the business.
“We’re bringing the front-end development guys closer to the core IT team, and the back-end guys closer to the brand and customers by re-educating them on digital,” says Gardiner. “It’s a more agile and connected way of working.”
The team is also expected to increase “dramatically” in size over the coming years, he says. Skills will be needed, for instance for the digital development of applications and store systems and to support new back-end systems and middleware in areas such as merchandising to underpin front-end activities.
But Gardiner concludes: “The biggest thing is the organisational change. You have to think about things in a different way and move in a more agile fashion. It’s a big challenge.”