Multichannel and omnichannel (Will Hesketh)
1
Definition What is a multichannel Multi-channel supply networks operate in such a manner than enables the customer to be connected to the product via many different channels (Mimeographs, 2014). “Multichannel retailing is the set of activities involved in selling merchandise or services to consumers through more than one channel” (Levy & Weitz, 2009). Examples of channels: Internet, kiosks, ATMs, call centres, direct marketing, radio, T.V. direct mail, home shopping and catalogues, mobile apps, as well as bricks-and- mortar stores (Nelsin et al, 2006). What is omnichannel Omni comes from the word Omnis means all or universal. This is similar to other categories like, multichannel from the Latin word Multus, meaning multiple or many (Omnichannel, 2014). Omni-channel can be seen as the evolution of multi-channel, concentrating on a more seamless approach to customer experience through various channels e.g. buying online then returning in store (Mimeographs, 2014). The difference The consensus is retailers don’t like to classify themselves as an omnichannel identity, even though they may be one. They say it’s a new word for something that has been done for years ‘evolved multichannel’ (Vento. D, 2014). There is not one set answer for how people define the word, as some merely view omnichannel as how multichannel has evolved with the integration across departments. Will Hesketh C3312206 Mul4channel & omnichannel changes in the UK retail industry Advantages The journal ‘Crafting Integrated Multichannel Retailing Strategies’ reported despite the problems faced, organisations that seek to make this paradigm shift in their approach to customer interaction will be well placed to succeed for many years. It will enable a retailer to: - Access to new markets (Retailers will be able to add non- store channels e.g. Internet, catalogues & mobile phones, enabling retailers with limited stores to increase scope). - Customer satisfaction & loyalty (By using a combination of channels, retailers can better satisfy their customers' needs by exploiting the benefits and overcoming the deficiencies of each channel. Retailers will be accessible 24/7). - Customer Information & data (Firms will be able to track customers shopping habits e.g. online, loyalty cards (Zhang et al, 2010). Challenges 1 - Data integration Cross access of data from numerous channels e.g. can your customer service team find out what the customer bought last week in-store and online. 2 - Understanding consumer behaviour Knowing your customers preferences in all channels e.g. providing ipads in store so customers can access their online ‘wishlist’. 3 - Channel evaluation Understanding the influence of your different channels 4 - Allocation of resources across channels Knowing the different demands in each channel so resources can be allocated accordingly. (Order versus traditional lot size, packing, lead times, uncertainty, returns, physical logistics) 5 - Coordination of channel strategies. Communications between channels enables tailored channel strategies to be implemented. 6 – Cost Adoption requires a heavy investment. Retailers need to analyze: (Technology capability, high-speed telecommunication capacity/access, assess operational difficulties that might occur and price transparency and low switching cost to competitors) (Zhang et al, 2010) Dimensions of omni - channel 1. Omni Channel: Brick2Click (Integration between web and store e.g. if a customer buys something from the web gets customer support in store and vice versa). 2. Omni Channel: Device2Web (Reaching the online-store through various internet connected touch points like mobile, kiosk, tablet, etc.). Smartphone, Table and most interactive devices sales are growing each year, resulting in more potential customers for retailers. 3. Omni Channel: eAve2Web (Electronic avenues) (There are various market places online like GroupOn, eBay, Amazon, Google Products, etc) Customers connect through Internet Avenues and are served directly by a central database, providing a consistent service. E.g. E-bay, provide a central point for all enquires and help resolve problems with the seller. Retailers can promote products and offers through these new intermediaries Product not available & once available can only be collected from in-store Happy returning customer! £££ Unhappy non-returning customer! Customer arrives & ‘checks-in’ store using the stores QR code on app Scans a product and adds to ‘wish list’ Omnichannel Jorney Retailer reminds the customer about their unseen ‘wish list’ via E-mail Customer follows link to their ‘wish list’ Finds product and places order ‘Click & collect’ delivery Retailers sends SMS with collection details After collection asked for feedback via App Responds posting on Facebook & Twitter Loyal customer recommending friends Can’t remember the product he/she looked at online & there’s no WIFI in store Receives an iBeacon message about a sale next door Customer purchases elsewhere and doesn’t get what they intended Multichannel Jorney Posts negative comments online about previous retailer Originally a single channel approach dates back to when retailers were selling from market stalls. Multichannel retailers have been around for over 100 years e.g. delivering on horse & cart. Pic shows Morrison’s first delivery car. The internet was launched, increasing customers access, less stock holding & providing companies new market platforms. Amazon launched as one of the first retailers online, changing the world of retail today. Over 100 barcodes were being used by 1984. It was 5,000 by 1991 and 10,000 two years later. By 1995, the figure was 20,000, Changing retailers understanding of customers and enabled them to market and stock accordingly. Big shift in digital retailers with interactive stores, apps and omni management (Brick2Click). Integration between web and store. Tesco pioneered grocery home shopping, now one of the largest growing channels in retail. A formation of social media platforms were appearing enabling companies to interact with customers and provide after sales support. The adoption in retailers using C&C. Retailers are adopting an omnichannel approach, with an holistic view to their customers. 1800 1900 1960 1980 1997 2006 2010 2014 1995 2012
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Transcript of Multichannel and omnichannel (Will Hesketh)
Definition
What is a multichannel Multi-channel supply networks operate in such a manner than enables the customer to be connected to the product via many different channels (Mimeographs, 2014).
“Multichannel retailing is the set of activities involved in selling merchandise or services to consumers through more than one channel” (Levy & Weitz, 2009). Examples of channels: Internet, kiosks, ATMs, call centres, direct marketing, radio, T.V. direct mail, home shopping and catalogues, mobile apps, as well as bricks-and- mortar stores (Nelsin et al, 2006).
What is omnichannel Omni comes from the word Omnis means all or universal. This is similar to other categories like, multichannel from the Latin word Multus, meaning multiple or many (Omnichannel, 2014).
Omni-channel can be seen as the evolution of multi-channel, concentrating on a more seamless approach to customer experience through various channels e.g. buying online then returning in store (Mimeographs, 2014). The difference The consensus is retailers don’t like to classify themselves as an omnichannel identity, even though they may be one. They say it’s a new word for something that has been done for years ‘evolved multichannel’ (Vento. D, 2014).
There is not one set answer for how people define the word, as some merely view omnichannel as how multichannel has evolved with the integration across departments.
Will Hesketh -‐ C3312206
Mul4channel & omnichannel changes in the UK retail industry
Advantages
The journal ‘Crafting Integrated Multichannel Retailing Strategies’ reported despite the problems faced, organisations that seek to make this paradigm shift in their approach to customer interaction will be well placed to succeed for many years. It will enable a retailer to:
- Access to new markets (Retailers will be able to add non-store channels e.g. Internet, catalogues & mobile phones, enabling retailers with limited stores to increase scope).
- Customer satisfaction & loyalty (By using a combination of channels, retailers can better satisfy their customers' needs by exploiting the benefits and overcoming the deficiencies of each channel. Retailers will be accessible 24/7).
- Customer Information & data (Firms will be able to track customers shopping habits e.g. online, loyalty cards (Zhang et al, 2010).
Challenges 1 - Data integration Cross access of data from numerous channels e.g. can your customer service team find out what the customer bought last week in-store and online.
2 - Understanding consumer behaviour Knowing your customers preferences in all channels e.g. providing ipads in store so customers can access their online ‘wishlist’.
3 - Channel evaluation Understanding the influence of your different channels
4 - Allocation of resources across channels Knowing the different demands in each channel so resources can be allocated accordingly. (Order versus traditional lot size, packing, lead times, uncertainty, returns, physical logistics)
5 - Coordination of channel strategies. Communications between channels enables tailored channel strategies to be implemented.
6 – Cost Adoption requires a heavy investment. Retailers need to analyze: (Technology capability, high-speed telecommunication capacity/access, assess operational difficulties that might occur and price transparency and low switching cost to competitors) (Zhang et al, 2010)
Dimensions of omni- channel 1. Omni Channel: Brick2Click (Integration!between web and store e.g. if a customer!buys something from the web gets customer!support in store and vice versa).!
2. Omni Channel: Device2Web (Reaching the online-store through various internet connected touch points like mobile, kiosk, tablet, etc.).!Smartphone, Table and most interactive devices sales are growing each year, resulting in more potential customers for retailers. !
3. Omni Channel: eAve2Web (Electronic avenues)!(There are various market places online like GroupOn, eBay, Amazon, Google Products, etc) !Customers connect through Internet Avenues and are served directly by a central database, providing a consistent service. E.g. E-bay, provide a central point for all enquires and help resolve problems with the seller. Retailers can promote products and offers through these new intermediaries!
Product not available & once available can only be collected from in-store!
Happy returning customer! £££!
Unhappy non-returning customer!!
Customer arrives & ‘checks-in’ store using the stores QR code on app!
Scans a product and adds to ‘wish list’!Omnichannel!
Jorney!Retailer reminds the customer about their unseen ‘wish list’ via E-mail!
Customer follows link to their ‘wish list’!
Finds product and places order!
‘Click & collect’ delivery!Retailers sends SMS with collection details!
After collection asked for feedback via App!
Responds posting on Facebook & Twitter!
Loyal customer recommending friends!
Can’t remember the product he/she! looked at online & there’s no WIFI in store!
Receives an iBeacon message about a sale next door!
Customer purchases elsewhere and doesn’t get what they intended!
Multichannel! Jorney!
Posts negative comments online about previous retailer!
Originally a single channel approach dates back to when retailers were selling from market stalls.!
Multichannel retailers have been around for over 100 years e.g. delivering on horse & cart. Pic shows Morrison’s first delivery car. !
The internet was launched, increasing customers access, less stock holding & providing companies new market platforms. !
Amazon launched as one of the first retailers online, changing the world of retail today. !
Over 100 barcodes were being used by 1984. It was 5,000 by 1991 and 10,000 two years later. By 1995, the figure was 20,000, Changing retailers understanding of customers and enabled them to market and stock accordingly. !
Big shift in digital retailers with interactive stores, apps and omni management (Brick2Click). Integration between web and store. !
Tesco pioneered grocery home shopping, now one of the largest growing channels in retail. !
A formation of social media platforms were appearing enabling companies to interact with customers and provide after sales support.!
The adoption in retailers using C&C.!
Retailers are adopting an omnichannel approach, with an holistic view to their customers. !
1800! 1900! 1960! 1980! 1997! 2006! 2010! 2014!1995! 2012!
