ERP Resources: What is Multichannel / Omnichannel capability?

This is the ninth of a series of articles on 'technologies for the coming decade that I am writing in my blog. I intend to cover 21 technologies / ideas. Here is my publishing history.

What is Multichannel?

The word Multichannel refers to the different marketing channels through which the company delivers information and sales promotion to the customer. The channels could be Physical Store, Advertisements, Banner Ads on Social Media, Videos on Social Media, Mobile Phone, Mobile Phone App, Company Website, Emails and even door to door communication.

What is Omnichannel?

Omnichannel refers to the various channels that a customer tracks a specific transaction.

Imagine the following scenario. You are standing in a bus stop. You see a banner ad for the latest gadget and decide to buy it. You access an online store in your mobile phone and place an order. Later you call the customer support over the phone to update the order and change the make of the gadget (you modify the order over the phone). Based on your credentials, the support team picks up your order, updates it while you are holding the phone and sends you a confirmation message on your mobile phone.

You get a delivery message on your email when the item is available in the store nearby. You go to the store and pickup the item. After inspecting and accepting the item, you make payment through a payment gateway.

There is only single transaction, you buying the gadget. You access multiple channels which are marked in bold in the above two paragraphs.

You can expand the above scenario to include more channels. For example, the above customer could be browsing Facebook and saw a digital ad, clicked on the ad to place an order. Or the information could have come through an email. The point is that the new technologies have increase in the number of channels that the customer is exposed to.

One transaction done through multiple channels, this is Omnichannel for you.

How is Omnichannel different from Multichannel sales?

Multichannel is when the company uses different channels to market their products and deliver product information to the customer. In traditional Multichannel scenario, once an order is placed, the order fulfillment and customer payment happens in the same channel. Multichannel has been existent for a long time.

Omnichannel is different. In Omnichannel, customer can conduct different parts of a single transaction cycle in different channels.

Modern technology changes the way both Multichannel and Omnichannel works. It factors in both technology and availability of different devices for customer to access the product.

Omnichannel: Why now?

While Multichannel has been present for a long time, the idea of Omnichannel is relatively new. With the advent of technology and the preference for e-Commerce, the purchasing behaviour of individuals has undergone change. Various studies show that customers use at least two channels to make a purchase on internet. It is also found that customers do not like to repeat their orders and expect the Organization 'take off from where they left off' for every new interaction.

Customer is very happy if the Organization remember their engagement history and unhappy if they have to repeat the same thing to many different employees in the Organization.

Presence of multiple devices and customer demand for better efficiency has acted as a catalyst for Omnichannel selling.

How Multichannel integrates with the Omnichannel?

The diagram below shows the relationship between Multichannel and Omnichannel

The new technologies that will drive Multichannel and Omnichannel

The exploding demand from the customers is the main driver of technology adoption. An average customer is using about five channels on an average including Mobile apps, Youtube, Social Media, Portals, Push Messages, Emails and Store. They expect the information available in all these different channels to be in Sync with each other.

The next driver is personalization. Retail stores are using technology to track the purchase behaviour of individual customers. Creating a customer account has become mandatory for making any purchase. The advent of AI has made personalization easy to adopt. Stores are using technology to drive related purchases ('Customers also bought') and offer spot discounts. It is only a matter of time technologies like facial recognition will help retailers to welcome individual customers.

Cascading effects of technology advances in upstream areas like Supply Chain management is another driver. Retailers are forced to adopt technology just to 'stay in place'.

Yet another driver of technology adoption is advanced analytics. New technologies like AI and ML enable analytics at a granular level. Technologies like IoT and RFID enable retailers to track product life cycle even beyond the point of sale and that information can be used for further personalization by anticipating customer needs.

Chatbots are another technology that is fast picking up. Chatbots help the company to be available to the customer at a 24*7*365 basis and help handle most of the repetitive issues related to the sales.

Finally, we should not miss the most exciting emerging technology, Voice. Alexa, Siri, Cortana and other Voice technologies are poised to revolutionize Multichannel environment. After all, which customer won't be pleased as they enter the retail store and a humanoid robot welcomes you with 'Good Morning Mr.Ram, How can we help you today?'

What are the benefits of Omnichannel?

Customers get a seamless experience. They can place an order online, update the same over the phone and finally pick the material from the nearby mall. This increases customer satisfaction

Transaction errors are reduced since all the channels are integrated.

Omnichannel: Challenges

Getting Omnichannel readiness is not easy. The technology is complicated and is evolving. If majority of your customer use only one channel or two at the max, why spend the money and effort in designing Omnichannel?

Since the customer is using multiple channels, it is difficult to identify the profitability of a specific channel.

References

ERP Resources

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Friday, February 26, 2021

What is Multichannel / Omnichannel capability?

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