Omnichannel is one of those topics that is mostly connected to retail, but is really intertwined with multiple digital transformation efforts.
The high level storyline is that omnichannel refers to retailers who need to cultivate multiple touch points to combat Amazon. Brick and mortar retailers are closing stores and going bankrupt at a clip not seen since the 2008 financial crisis.
It's easy to blame Amazon for the retail crisis. Too easy. The reality is retailers forgot about innovating, customer experience and using data well. All you need to do is look at the latest batch of earnings from Macy's, Kohl's and Nordstrom to see that the retail struggle is very real.
But here's the rub: Omnichannel is for consumer product goods companies as well as clothing manufacturers. Every company that feeds into the retail system needs to think through omnichannel. After all, these brands--think Nike, Under Armour--are also developing their direct to consumer businesses. Suppliers now look more like retailers.
With that backdrop it's worth noting 5 things about Omnichannel. Here's the walkthrough:
- It's the data stupid. The idea that consumers will engage with companies via multiple channels is interesting. But without data serving as the glue the omnichannel dream goes down in flames. That's why loyalty programs are so critical. Enterprises need to be able to know what and how people buy and engage with them. Amazon didn't win the retail war as much as it did the data war. Amazon knows its customers better.
- Omnichannel is part of a broader strategy. You've inevitably seen this chart from some company. It's a company at the center of multiple screens. These screens represent consumer touch points. The problem is omnichannel is more than just projecting the same approach to different devices. What's the value prop. What service are you providing. Are you helpful or annoying. A customer first mentality will translate everywhere. Amazon Prime is about omnichannel--it's about the touch points and a broader plan.
- Omnichannel won't save a struggling business. Inevitably I'll do a story on a retailer who has surging e-commerce and a plan to offset brick and mortar. The issue is that omnichannel won't offset physical sales declines fast enough. If you're expecting omnichannel to save your butt now it's too late.
- And you're late because you're saddled with legacy infrastructure. Yes, big companies like Walmart can invest in e-commerce, acquire firms like Jet.com and connect systems. Most of us will struggle to connect old systems to the new. Integration isn't easy and the pressure is on. Omnichannel and integrating infrastructure go together.
- Omnichannel affects every company. Retail is just an obvious example. But think about customer service. Think about B2b. Think about media. Think about consumer goods. Think about apparel. Think about farm equipment, autos and anything else you can. Ultimately the lessons from omnichannel apply to every company that sells something.
ZDNet Monday Morning Opener
The Monday Morning Opener is our opening salvo for the week in tech. Since we run a global site, this editorial publishes on Monday at 8:00am AEST in Sydney, Australia, which is 6:00pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.
Previously on Monday Morning Opener: