SECURING THE LOYALTY
OF OMNICHANNEL
CUSTOMERS
NOVEMBER 2014
Executive summary
Omnichannel strategies are being developed and delivered to respond to continual changes in individual
shopper behaviour. The path to purchase is no longer linear — it has been disrupted by consumer
adoption of new technology and its use, enabling greater peer influence in browsing and buying
behaviour.
Delivering a true omnichannel strategy creates a brand relevant, seamless customer experience across
all paths to purchase that is commercially optimised to improve business performance.
With research1 reinforcing the increased profitability of customers using multiple channels to interact
and transact with a retailer, being able to develop a 360° view of these customers presents a significant
opportunity for large and international retailers to identify the individual characteristics associated with
multichannel engagement and explore how to motivate this behaviour in other customers.
Connecting data across all digital, social and offline touchpoints at individual shopper level throughout
the journey and being able to apply intelligent customer management rules will further move retailers
along their omnichannel journey towards seamless delivery.
Delivering a true omnichannel strategy creates a brand relevant, seamless customer
experience across all paths to purchase that is commercially optimised to improve
business performance.
However what is of strategic importance for commercial success is that retailers have to complement
their approach with an integrated relationship strategy and loyalty proposition, driven by data insights
and facilitated by a cost-effective technology ecosystem. Only then will the true potential for securing
the loyalty and devotion of omnichannel customers be realised, along with the commercial opportunities
for positive brand differentiation, business growth and profitability.
1
Source: Retail Systems Research: Omnichannel 2013: The Long Road to Adoption 2013 Benchmark Report
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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The adoption of omnichannel retailing strategies
Recent advancements in technology have greatly affected
the ways in which consumers shop – they can choose
where, when and how they interact with a brand and expect
retailers to deliver a relevant and seamless experience
between channels.
US and UK retailers are leading the way in developing
and delivering upon their omnichannel strategies,
making it easier and more convenient for customers to
do business with them wherever they are and however
they want to interact.
With retailers appreciating the increased commercial
value of multichannel customers, the race is on to deliver
an integrated omnichannel experience that drives greater
loyalty with this audience to increase revenue and
business growth.
Whilst retailers with physical stores can appear to have an
advantage in adopting an omnichannel approach, Amazon
as an ecommerce pioneer and pure-play online retailer, has
long since been developing their strategy. It launched its
Click and Collect programme to offer a greater range of
offline delivery options in the US back in 2011 with Amazon
Lockers now being available across the country and in key
locations in the UK. More recently, it has been working to
integrate customers’ social interaction via Twitter with their
Amazon account so that products added to their cart can
be purchased later simply by tweeting a link to the Amazon
product using a special hashtag — #amazoncart in the US and
#amazonbasket in the UK.
The starting point is to look at the brand values of a retailer,
whether fun, innovative, trendy, stylish, quality or reliable,
and to design the customer experience to deliver this
consistently across every customer touchpoint in all stages
of the shopper journey.
Retailers are rapidly adapting their businesses and
operational infrastructures to support these changing
customer needs and shopping behaviours, particularly
for the significant proportion of customers using multiple
channels to browse and buy. With a range of journey
permutations and increasingly complex paths to purchase,
retailers want to be present in as many channels as possible
to give customers the ability to interact, socialise and
purchase where and when they want.
Whilst the commitment to offer customers more
choice and flexibility as to how they want to engage with
a retailer is not a new strategy, the priority now is to bring
together and transform all individual aspects of customer
retailing into an ability to deliver an integrated and seamless
omnichannel retail experience. It’s not just about in-store,
online and mobile channels, but combining and optimising
these with offline opportunities including catalogues,
traditional direct mail and personal channels also have the
potential to create a greater emotional connection such
as sales staff and peer to peer recommendations.
Omnichannel strategies make it easier
and more convenient for customers to do
business with a retailer wherever they are
and however they want to interact.
Customer adoption of new technology is continuing
to change the dynamics of a brand relationship. The consumer
is in control of the conversation as well as the purchase
decision and can decide when, where and how to engage
with a brand whilst at the same time expecting a consistent,
relevant and added value experience in return.
Recognising the non-linear network of
paths to purchase are demanding retailers
employ a more holistic data strategy in
order to influence customer behaviour
across all channels.
Understanding this change and recognising the non-linear
network of paths to purchase are demanding that retailers
employ a holistic data strategy in order to influence customer
behaviour across all channels. Retailers have the opportunity
to evaluate how they can enhance brand engagement at
every touchpoint to guarantee their omnichannel strategy
seamlessly integrates with their loyalty strategy and improves
the overall customer experience.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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Developing the omnichannel customer experience
Understanding the key areas of customer frustration
provide important insights on how to deliver an improved
customer experience. Often, common customer service
complaints point to a breakdown and inconsistencies in the
omnichannel experience as customers want and expect
a seamless transition between channels no matter where
or how they are choosing to engage with the retailer.
A conversation should be two-way, open and continuous
regardless of how it started or if it was transferred to
another channel and customers expect any representative
of a retailer to instantly access all the information held about
them and be able to answer and respond intelligently.
Above all, customers want the same service, quality and
personalisation of experience across all channels. Starbucks
Rewards members receive an omnichannel experience
as they have access to a mobile app providing the ability to
check and reload their balance using the phone, website
or in-store. Any profile changes, earned rewards or balance
updates are made automatically in real-time and irrespective
of how payments are made, either with a physical rewards
card or using their phone, the balance will be updated
across all channels.
Above all customers want the same service, quality and
personalisation of experience across all channels.
Analysing omnichannel shopper needs creates a new
dimension in customer understanding. As well as the
customer needs that are traditionally understood by
a brand, retailers have to determine the customer
driversand motivators as they relate to an omnichannel
environment by also considering what value the customers
also are looking for from their social interactions, not
only with the brand but also their own social networks.
From this social dimension new needs arise, displayed as
different steps on the customer journey that are part of
the increasingly complicated paths to purchase for different
audiences. The need for social acceptance drives shoppers
to share items in advance of purchase with their friends.
The need for social status encourages customers to post
their purchases, especially when they are first to have it or
buy something on trend. The need for social audience means
customers are quick to berate brands for poor service on
social media sites.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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5 key expectations of omnichannel customers
1. The mobile experience matters
4. Be consistent and add value
Whilst a significant proportion of omnichannel customers
still buy in stores, mobile is the channel that has the greatest
ability to change the experience, adding value in-store, being
a source of information whilst shopping and being a channel
for delivering contextually-relevant offers and promotions.
A brand relationship is built on a lifetime of added value and
trusted content and yet has the potential to be destroyed
by one poor customer experience. Creating relevancy for a
customer and recognising their brand interactions across
various channels in parallel are the core proposition in driving
omnichannel customer loyalty.
2. Content creates value
The breadth and depth of content available should reflect
the desire of omnichannel customers to quickly scan across
broad categories but then dive in deeply where they want
detail. The content must be relevant to their current situation
for example, location, time of day and even the weather can
change the value perceived in the information being provided.
3. Help them to connect and share
5. Use the data you have for them
Customer expectations of retailers’ data capabilities,
driven by the press coverage of ‘Big Brother’ type scenarios
is well beyond what most legacy infrastructures can maintain.
The ability to assimilate and intelligently use interaction
as well as transactional data from multiple touchpoints
creates the need to review both data strategy and
technology ecosystems.
Packaging content and interactions in a way that customers
can share and advocate to their social network for instant
comment and feedback plays a critical ‘positive affirmation’
step in the new digital purchase process and brings new
customers to the brand.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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Using omnichannel data to create more
profitable customer relationships
Omnichannel strategies enable retailers to take advantage
of adhoc purchases and to maximise their ability to build
relationships and loyalty with customers across all channels.
If retailers know who their customers are, they can influence
basket value and higher margin items through targeted
suggestions and incentivisation whilst also furthering the
brand relationship at both a functional and emotional level.
Using individual channels together to craft a seamless
journey for shoppers means these targeted strategies
are positioned consistently and follow the customer across
touchpoints, creating a more integrated and motivating
brand experience.
For example, if a customer walks past or into a store with
alocation-enabled device, real-time communication of
relevant services, price or reward offers can be sent to
them or to the sales team on the shop floor to drive a
positively better tactical, short term response to marketing
and sales efforts.
Whilst not the most obviously valuable in commercial
terms, retailers must not forget the sales growth opportunity
presented by those consumers who are highly active in social
channels who may or may not be actual customers. They
can still be vital in contributing to brand perception and
loyalty and finding ways to further facilitate peer to peer
communication, which is important given the increasing
influence of customer reviews, blogs and price comparisons
on the purchase decision. Consideration should also be given
as to how to reward interaction behaviour in social channels
as this will amplify levels of engagement and drive advocacy
in these channels.
Adding this rich social activity is a huge opportunity for
retailers, especially those with loyalty programmes. Being
able to connect behaviour in social channels to transactional
shopper data and loyalty initiatives provides immense
value in identifying the overlap in customers with high
commercial value and high social influence. This will lead
to the development of more sophisticated segmentation
and communication strategies in analysing data and
behaviour across multiple channels and touchpoints.
Being able to connect behaviour in social
channels to transactional shopper data
and loyalty initiatives presents significant
opportunities.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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The value of context aware content
With significantly more data being generated before and after
a purchase, retailers need to rethink their content marketing
approach, mimicking the best practice of the ‘born in the web’
online retailers’ expertise in providing bite-sized and even
nibble-sized pieces of hyper-relevant content at the critical
points in the shopper journey.
In this way content itself becomes a value add for customers,
providing a layer of interactivity and also benefit as a reward
for engaging and sharing information with the retailer.
Furthermore this content should be provided in an easily
shareable format and channel so that customers can forward
to their social networks, adding value for them as the referrer
of great content and the brand in terms of wider exposure
to new potential customers.
Providing relevant content, however needs to be in context
of the customer’s current situation, i.e., where they are and
what they are doing as can be tracked from in-store, mobile
location and webbrowsing behaviours for example. By being
context aware, retailers can ensure customers feel value
every time they make contact with their brand. Marketing
will not be viewed as spam but rather valuable information
reflecting their key motivations such as saving them time
and money. For example, somebody checking their loyalty
account balance via a mobile app that also tracked their
geo-location presence as currently in-store could receive
targeted redemption offers, rather than typical price
or purchase promotions.
Providing relevant content needs to be
in context to the customer’s current
situation i.e., where they are and what
they are doing.
For some shops, providing free in-store Wi-Fi may seem
counter-intuitive, as it offers the ability for the customer to
browse for better style or brand alternatives online. On the
surface it may look to promote ‘showrooming’, a problem that
many high street shops have encountered where customers
digitally shop for the best price for products they like whilst
in-store. However, it can also reflect a truly customer-centric
approach being adopted by that retailer.
For example, UK department store John Lewis was quick
to recognise its customers’ omnichannel tendencies and
supported by its ‘never knowingly undersold’ price promise,
was an early provider of free in-store Wi-Fi for registered
customers. To avoid channel and sales conflict between instore and online, John Lewis allocates all online revenue to
the local store in the customer’s area and more recently has
referred to itself as a publisher not just a retailer, reflecting
the importance of providing relevant content and giving
customers the information they need to make an informed
purchase decision.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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Deeper customer engagement needs
an omnichannel data strategy
Unlike twenty years ago, the consumer now holds a fountain
of information in their hands, wherever they go.
They can search online for the best deals, styles or looks,
using a myriad of sources including recommendations and
blogs even while standing in the middle of a shop floor.
If a customer is undecided about a product in-store, they
can easily access alternative products and prices online.
What is most important is how retailers can access and
bring together as many sources of customer interaction data
as possible to create a central database from which they can
determine how individual customers behave as they engage
across various touchpoints. Many retailers still need to fully
integrate their channels and more importantly bring all of that
data together to fully understand the omnichannel purchase
journey and the different routes being taken by shoppers in
making a purchase.
Creating a 360° view of
omnichannel customers
Deciding what information to collect and use however can be
difficult with the now often quoted problem of data volumes
being like ‘drinking from the fire hydrant’.
This is only compounded by the variety of data needed for
true omnichannel customer insight, tracking them across
transactions and also their brand interactions whether within
the brand’s digital domain or beyond it out in the wider web.
Help is at hand however, as the capabilities of data storage
have increased exponentially along with analysis tools and
models. Combined with data sampling techniques these can
help identify the data criteria that indicate a fundamental
difference in customer needs and commercial opportunity
which can then be targeted with specific campaigns. Using
a test and learn approach, this closed loop system once
implemented will improve over time where tangible
results can be tracked and measured.
In this world of 360° customer insight, the approach to
segmentation needs to be orientated around the entire
customer journey, not just transactional purchase behaviour.
Deriving and building customer personas, i.e., profiles of
attitudes and interactions, provide the ability to stay flexible
to customer needs which may change from one channel or
one day to the next if they switch hats in terms of how they
want to engage with a retailer. The time-poor office worker
needing fast help on recommendations before grabbing
something quickly in a lunch break can be the same person
who the night before was enjoying an immersive rich media
experience whilst browsing the brand’s site on a tablet
in front of the TV.
Therefore there are significant opportunities for brand
differentiation, conveying and delivering on a real brand
promise, opportunities to influence the omnichannel
customer’s buyer behaviour at a host of new touchpoints
and also using this audience as a source of bringing new
customers into the brand.
Deriving and building customer personas
provide the ability to stay flexible to
customer needs which may change from
one channel or one day to the next.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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Giving value from the data back
to customers
Recognising the value of customers across their brand
relationship and more recently giving the customer access to
insights from their own data are two examples of how brands
are creating new value for customers from the data they hold.
In September 2013 British Airways launched a
new benefit for the members of Executive Club, their
frequent flyer programme called Lifetime Tier points.
The points never expire and they recognise and reward
loyalty over the lifetime of their customer relationship.
This was followed with a new service called My Flightpath
in March 2014, giving customers access to the data held on
them to illustrate how many miles they’ve flown, how many
times they have been around the world, how much time they
have spent in the air and what cities and countries they have
visited the most.
Recognise the customer value across their
total brand relationship and give them
access to insights from their own data
Similarly in March 2014 the UK retailer Tesco’s CEO Philip
Clarke revealed plans for the supermarket’s new “digital
Clubcard”. This will allow customers to personalise their
loyalty programmes rather than having their options purely
dictated by an algorithm in a way similar to the customisable
element of a video game where members can set their own
goals and targets. “We want Clubcard to be something that
customers really want and value, rather than it just being
a reward for shopping at Tesco,” he said.“If you think about
it as a little helper that helps you get the best of Tesco
wherever you are. If you use Clubcard, we can aggregate your
interactions with us – favourites, usuals – then we can join up
the journey in a way that helps”.
They are also allowing members to share their travel
milestones on social networking sites and recognise
achievements by unlocking stamps when they have reached
certain travel goals.
SECURING THE LOYALTY OF OMNICHANNEL CUSTOMERS
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Technology considerations in the move
to omnichannel
Technology has enabled a new age of retailing in which
customers expect to be able to research and shop wherever
they are, whenever they want, and for retailers to deliver
a seamless and personalised experience in whichever
channels they choose to engage and at whatever point in
their shopping journey or relationship with that brand.
Many retailers are investing in improved functionality to
their websites, improving the platforms for their mobile
sites and apps and developing IT, analytics, marketing and
ecommerce expertise to ensure they can work towards
delivering a seamless experience, whilst giving the customer
maximum choice around how they want to order and the
way in which it can be fulfilled. The omnichannel opportunity
however is to be able to consolidate all customer data about
their preferences, behaviour, interactions and transactions
to better understand customers’ needs and use it to
communicate more intelligently, efficiently and effectively.
Whilst this too has a high level of complexity, it can be
operated semi-independently of the retail systems with
the only connection requirement being data APIs.
The most critical consideration when looking at an
omnichannel customer experience technology ecosystem
is not just how many different channels can be connected
today, but also how easy it is to connect new and emerging
ones in the future.
The omnichannel opportunity is to
consolidate all customer data and use it to
communicate more intelligently, efficiently
and effectively.
In order to meet the demands of the modern shopper,
a connected technology ecosystem is a core element of an
omnichannel strategy. It is important however to distinguish
between a connected transaction, started in one channel
and maybe finished in another versus a connected customer
journey where customer history, needs, privileges and
benefits follow the customer across channels and are applied
at various touchpoints to change the customer experience
from what would have otherwise be received.
Managing the former i.e., omnichannel customer transactions
requires a high level of retail systems alignment. This is
not an easy task as new channels crop up and change.
The latter, omnichannel customer journey however involves
tracking, recognising, rewarding and communicating with
customers based on their previous and current transaction
and interaction data. Therefore the connectivity required
is the ability to flow the relevant customer information
from different channels into a master data management
environment or datamart, apply specific business rules
and send targeted instructions back to the relevant
customer touchpoints.
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Management strategies to drive international
omnichannel results
The omnichannel approach also helps to unlock cross border
opportunities, expand international presence, capturing sales
in new markets in a more agile fashion, using owned or third
party online sites to sell internationally. This importantly
combines well with flagship brand experience stores to
showcase products and act as collection point for a range
of fulfilment options for delivery.
The management of international
customers need a specific relationship
strategy to extend their browsing and
buying behaviour whilst growing and
acquiring customers in new geographies.
The management of international customers needs a
specific relationship strategy if retailers want to continue
to extend their browsing and buying behaviour whilst
growing and acquiring customers in new geographies.
Rather than segment and target audiences, an approach
is to develop customer personas i.e., how they think
and feel when engaging, not just what they buy.
To complement this, strategies need to start with a
brand-down approach, facilitating and empowering all
touchpoints to deliver the desired brand experience. Only
then should retailers start to think about targeted marketing,
using 360° customer data to deliver localised promotional
strategies not only to the right person but at the right time
and via the best channel across the customer journey.
Broader business goals can be facilitated with the
joined up view of customers including management
of strategies, branding and infrastructure, whilst leaving
local markets to determine the fine nuances of customer
communications and promotional targeting as suits their
specific audience opportunity.
ICLP’s experience in working on international and global
customer relationship and loyalty strategies has proven the
importance of being able to look holistically at the customer
journey infrastructure, but still offer a more tailored and
locally relevant engagement and loyalty proposition.
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Summary
Changes in shopper behaviour and the adoption of new technology are changing the face of retailing
today and have made the move towards delivering a seamless, omnichannel customer experience a
mandatory strategy for large or international retailers.
This evolution might involve making small steps initially along the journey in achieving a 360° single
customer view across the current omnichannel customer touchpoints by aggregating all sources of data
and information into a simple datamart. However this provides the platform from which retailers can
start to connect the customer experience, using data throughout the customer journey and incentivising
customers simply to opt-in and self-declare, such as by registering, logging in, showing a physical loyalty
card, downloading a digital code or using a mobile app.
This combination of datamart and customer identification is enough to start driving a relevant
relationship with targeted messaging and personal propositions even if this is not in real-time or near
real-time, simple campaigns and initiative using the data available will make a difference to customer
engagement and increase their commercial value.
Integrating data from external social media channels is typically one of the hardest steps to achieve
but likely to yield valuable insights into levels of activity and influence to be able to make comparisons
and identify changes in individual behaviour across channels. However early success could be possible
in running social media campaigns in parallel to those in other channels, connecting them only in the
datamart and at subsequent analysis stages.
The ultimate aim for any retailer with their omnichannel customer experience is for it to be dynamic,
connected and commercially optimised and behind it sit a customer relationship strategy and value
proposition, driven by data insights and supported by a cost-effective technology ecosystem. However
what is important is that across the organisation, management and staff are committed to delivering an
omnichannel approach to better support shopper needs today and tomorrow, and that they recognise
its strategic and commercial potential for creating greater brand differentiation, business growth,
revenue and profitability
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Winning through omnichannel — 5 key strategies for success
1. Understand customers in this new light.
4. Data as fuel, not just oil.
Consumers are not only defined by their basket or purchase
history but also their needs for interaction, which can vary
from moment to moment. These differing customer personas
need to be mapped and understood to identify shopper needs
at critical stages of the engagement and buying process and
the key data criteria that indicate the persona being adopted.
Driving the customer experience towards increasing
relevancy and added value data needs to be collected,
refined and used to flow communications, offers and content
to customers in a way that recognises them as individuals.
Knowing what interaction data to capture and how to use
contextual insight along with transactional data creates a
true 360 customer view that is powerful when applied to
the customer’s current situation to improve and enhance
their experience.
2. Create value for engagement.
Changing needs means that consumers will look to brands to
do more than just sell. They need to create new experiences
via contextually relevant content and interactive tools as well
as enable other interactions that happen ‘off domain’ in social
and digital channels or wherever customers are which might
not be brand controlled.
3. Connect the dots.
Legacy systems and bespoke solutions may run customer
interactions today but connectivity is critical to be able to
gather, analyse and flow customer information in supporting
a relevant and added value customer experience. Exchanging
data between systems is now far easier but there remains a
need for a master repository housing customer data across
the different customer touchpoints and business rules to
optimise profits.
5. Standing still is not an option.
The rate of customer adoption of new technologies and the
fragmentation of the channels they use to consume media
continues to change the retail landscape. The winners in
the new omnichannel world will be those that can adapt and
change fast and flexibly enough to meet evolving customer
needs that positively impacts commercial performance.
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About ICLP
We drive customer devotion. We give your customers
compelling reasons to engage, spend more and become
loyal advocates - whilst delivering commercial results for
your business.
As a worldwide leader in loyalty marketing and CRM,
ICLP builds loyalty and creates devotion. From acquiring
customers and understanding them as individuals, to creating
relationships that engage, reward and inspire loyalty, we
turn customers into advocates and relationships into profit
– and have done for over 25 years.
We have global experience in B2B and B2C loyalty marketing
in multiple industry sectors including retail, travel, financial
services and technology. Our expertise is underpinned by
the skills and talents of over 600 talented colleagues who
work across our 16 offices for clients in over 170 countries.
With customer data at its heart, together we uncover insights,
determine and deliver tailored experiences that create loyal
customers and improve commercial performance.
ICLP is a Collinson Group company. Collinson Group is
a global leader in influencing customer behaviour to drive
revenue and add value for our clients.
With a unique blend of industry and sector specialists,
the group develops and delivers market-leading products
and services to help build, manage and optimise customer
relationships across four core capabilities: Loyalty, Lifestyle
Benefits, Insurance and Assistance.
© ICLP Worldwide 2015
To find out how we can help you create more loyal and
profitable omnichannel customer relationships, please
contact your local office.
iclployalty.com
A COLLINSON GROUP COMPANY