The Omnichannel Tsunami

Customers in the Digital age have become increasingly mobile and channel agnostic. There is a constant flux from one channel to another—from online to offline and vice versa. Not only this- but customers also expect a seamless and consistent experience without a noticeable disconnect. Organizations trying to catch up with this Omnichannel explosion know that their traditional marketing channels are not always organized to allow a smooth cross-channel transition. They are often segregated in many organizations, where each Marketing channel has its goals and strategies.

Digital Strategy Formulation Cycle

So obviously, these organizations need to craft an Omnichannel Marketing strategy for the Digital age. However, an optimal Omnichannel strategy must also be supported by an aligned product and Supply Chain strategy. The Digital Supply Chain Strategy Formulation is a cycle. Hence, an iterative process and digitalization of Customer Experience, products, and services must happen before you formulate your Digital Supply Chain strategy.

As per the leading Marketing Strategy thought leader Philip Kotler, there are specific strategies that organizations need to pursue for optimal Omnichannel marketing. These strategies and their technology enablers will propel Omnichannel marketing into mainstream practice. The Supply Chain strategy needs to be aligned with these trends to support it. I have listed those strategies below, and for each strategy, I have defined the corresponding Supply Chain strategy, that in my perspective, is needed to support that particular Omnichannel strategy,

Omnichannel Strategies and Corresponding Supply Chain Strategies

Strategy 1- Focusing on Mobile Commerce in the “Now” Economy: As customers become increasingly mobile and connected, time becomes the scarcest resource in their lives. They choose brands that provide the convenience of access and transaction. They expect companies to deliver instant solutions to their needs without the hassles.

Associated Supply Chain strategy: Responsive, flexible, and Segmented – The speed of delivery is often as important as the products and services themselves. In some consumer goods instances, the delivery rate becomes the main product. The Supply Chain network strategy should focus on designing processes and infrastructure supporting multiple delivery types. You need to create a responsive and flexible Supply Chain that is segmented for different channels.

Strategy 2- Bringing “Webrooming” into Offline Channels: In brick-and-mortar stores, customers often face the daunting task of browsing through many choices on the shelves and making a purchase decision. Marketers need to assist customers in discovering and ultimately purchasing their brands amid the clutter and noise within stores.

Associated Supply Chain Strategy: Visibility and Efficiency – With all the convenience online shopping offers, how can you incite customers to visit your brick-and-mortar stores? In my perspective, you need to provide Experience and Efficiency. Experience is about providing them with an in-store experience that matches (for some products) or beats online convenience. Providing customer visibility into merchandise at the stores nearby, with all options, is the starting point and requires real-time visibility into in-store inventory.

The second part of efficiency is about the cost. In this age where customers have an array of options, in addition to the experience, you need to provide an in-store price that makes it worthwhile for customers to make that trip. This can be achieved by building a lean Supply Chain around candidate product groups where a study indicates that customers can be incited to visit a store.

Strategy 3- Bring “Showrooming” into Online Channels: Online channels will likely never completely replace offline channels, specifically for specific product types. Offline shopping is about using the five senses to experience products and services before committing to purchase. Moreover, brick-and-mortar shopping is all about social lifestyle and status; people expect to see and be seen by others when they shop offline. It is also about the human-to-human connections that usually happen in offline channels. To bring the compelling benefits of offline shopping to online media, marketers can adapt “showrooming” techniques.

Associated Supply Chain strategy: Responsiveness, Segmentation, and efficiency – This strategy also works with Marketing Strategy. Store associates pitch customers to get online for products they can’t find in stores, highlighting incentives associated with online buying. But then a responsive, segmented, and efficient Supply Chain needs to ensure that the customer finds the product at a competitive price, and it can get to the customer fast. Separate Supply Chain segments may be required for such demand.

Strategy 4- Optimize Omnichannel Experience with Big-Data Analytics: Both “Showrooming” and “Webrooming” rely heavily on mobile devices (phones and wearables) as the primary interfaces for the customer experience. Tons of data are captured in the process, and marketers can now view a seamless picture of customers navigating across online and offline channels leveraging this data. The rich customer data that marketers can potentially capture include customer demographics, customer journey patterns in offline channels, browsing patterns in online channels, social media activities, product and promotion preferences, and transaction records, among others.

Associated Supply Chain strategy: Integrate Supply Chain analytics capabilities with Marketing Analytics capabilities – This topic can be extensive, and I can write a book about it, but the gist is – Analytics done in Silos currently negates value achieved in one function by creating inefficiencies somewhere else. The practice of analytics needs to develop professionals with domain depth in both Marketing and Supply Chain. We can call them Sales & Operations planning Data Scientists, who cover both domains and understand the mutual interdependence.