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- customers also expect a seamless and consistent experience without a noticeable disconnect. Organizations that are trying to catch-up with this OmniChannel explosion are well aware that their traditional marketing channels are not always organized to allow a smooth cross-channel transition. In fact, they are often segregated in many organizations, where each Marketing channel has their own sets of goals and strategies.
Digital Strategy formulation Cycle
So obviously these organizations need to craft a OmniChannel Marketing strategy for the Digital age. However, an optimal OmniChannel strategy also needs to be supported by an aligned product and Supply Chain strategy, as shown in the illustration below. The Digital Supply Chain Strategy Formulation is a cycle and hence an iterative process, as shown in the representation below [Adapted from a research paper by Seth and Ramanan 2016].
As you can see in the illustration above, Digitalization of Customer Experience and products and services needs to happen before you can formulate your Digital Supply Chain strategy .
As per the leading Marketing Strategy thought leader Philip Kotler, there are certain strategies that organizations need to pursue for optimal OmniChannel marketing. These strategies and their technology enablers will propel Omnichannel marketing into mainstream practice and in order to be able to support it, Supply Chain strategy needs to be aligned with these trends. 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 fact, in some consumer goods instances, speed of delivery itself becomes the main product. The Supply Chain network strategy here should be focused on designing processes and infrastructure that can support multiple delivery types. You need to design 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 a multitude of choices on the shelves and making a purchase decision. Marketers need to assist customers to discover and ultimately purchase their brands amid the clutter and noise within stores.
Image credit: Patch.com
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 two aspects: Experience and Efficiency. Experience is about providing them 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 a 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 a in-store price that makes it worthwhile for customer 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 most likely never completely replace offline channels, specifically for certain 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 to be seen by other people 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 channels, marketers can adapt “showrooming” techniques
Image credit : Inc42
Associated Supply Chain strategy : Responsiveness, Segmentation and efficiency – This strategy also works in tandem 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 customer finds the product, at a competitive price and it can get to the customer fast. Separate Supply Chain segments may be needed for such demand.
Strategy 4- Optimizie Omnichannel Experience with Big-Data Analytics: Both “Showrooming” and “Webrooming” rely heavily on mobile devices (phones and wearables) as the main interfaces for the customer experience. Tons of data is captured in the process and marketers are now able to 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.
Image credit : MAPR
Associated Supply Chain strategy : Integrate Supply Chain analytics capabilities with Marketing Analytics capabilities – This topic can be extensive in itself and I can actually write a book about but the gist is – Analytics done in Silos currently negates value achieved in one function by creating inefficiencies somewhere else. The practice of analytics really needs to develop analytics professionals who have 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.
This list of Marketing strategies that I have addressed in this article is not comprehensive. Other experts may have additional opinions but the gist is that your Marketing and Supply Chain strategy need to be closely interlinked in order to optimize the customer experience and delivery.