Retailers often make their omnichannel models needlessly complicated and expensive. The problem is they start from the wrong assumptions. In his newest book, retail professor Gino Van Ossel makes a case for pragmatism.
Oneliners and generalisations
It is a title that sparks interest: Retail: Beyond The Digital Hysteria, especially when you know this is coming from an author who published the lauded book Omnichannel In Retail only a few years ago. Is the impact of digitalisation on the retail world overrated after all? Of course it is not, “but the evolutions in retail are mostly talked about in oneliners and generalisations,” Van Ossel states. “On the one hand there are the prophets of doom who think that Amazon and Alibaba will crush everyone and that the war is already lost. On the other hand you have the optimists who claim everything will be alright if you let yourself be inspired by the digital disruptors.”
So what are retailers to do? Not even one out of every five retailers considers itself truly ‘omnichannel’, and for the majority of those omnichannel retailers, it is a loss-making activity. According to Van Ossel, we start from some the wrong assumptions, such as the well-known idea of ‘customer-centricity’. People almost automatically assume that the client should be able to choose from different channels or ‘touchpoints’ at all times, but is that really the case? On the 2018 edition of the RetailDetail Night, the retail expert will be debunking some of those assumptions.
1. Limit choices
“Choice, for example, is not always what is best for the customer. Customer satisfaction is often increased when you make choices for them. Just to give you an example: recently I received an e-mail from McKinsey with an offer to subscribe to their newsletter. I was asked to select from a whole range of options: what sort of messages do you want to receive? At what frequency? About which industries? And so on… It was quite a hassle. That makes me think: just do that for me. Well, shoppers go through precisely the same experience. Omnichannel is often needlessly expensive and complicated.”
“We also often hear that an omnichannel retailer needs an app. Well, Coolblue only launched an app in 2017 for iOS and only in August of this year for Android. That did not keep them from achieving great success. Conversely, Dutch online supermarket Picnic does not have a webshop, only an app. They limit the choices customers need to make: they can not pick how they place an order or how it is delivered: they order through the app and get the delivery from an electric van, within a limited timeframe. That allows Picnic to save costs and offer its customers a unique service.” They have one touchpoint, but it works and it is affordable.
2. Be pragmatic
In short: the digital side of things is definitely important, but it should be approached with pragmatism. “What do you really have to do to stay competitive? Do you need to completely revamp your business model? Probably not. I advocate a systematic approach that looks past the slogans. Put things in the right perspective.”
Think of the catchphrase “convenience is the new loyalty” for example. Is that true? Yes, for anything that serves as a functional step in the customer’s journey – like the check-out. But if your shopping is for fun, it is the experience that counts. Booking.com is a convenience machine, but the trip itself is supposed to be an experience. So ask yourself: what am I selling and which steps in the customer journey are functional? Two years ago there was a lot of talk about the launch of Amazon Go, convenience stores without cash registers. Today we see that both Spar and Albert Heijn are coming up with pragmatic solutions that seem to be working for their audience. Do not get caught up in the frenzy, but make the best choice for your market and your target audience.”
3. Look at the competition
Another good example is the personal styling service that Belgian fashion group FNG has integrated in the new ‘Boutik By Brantano’ store concept. That concept is based on the know-how they acquired as they bought online retailer Suitcase, which they then took to the next level: into the fitting rooms. It is a perfect illustration of how a retailer can look for its own USP instead of making a poor knock-off of Zalon, Zalando‘s personal styling advice service.
Things change quickly, but not too quickly: most companies get a reasonable amount of time to adapt. Even then, they sometimes come late to the party. “Look at speech technology: only now is Google Home available in Dutch, but most companies were simply waiting for it to happen. That is not smart, even though the real impact is still a way off. On the short term you need to look not only at the customer, but also at your competitors and your financial means. That is what I call ‘optichannel’ in retail: look for the smart balance between competitivity, customer orientation and profitability. Take steps that reward the investment. I have constructed my book around that systematic approach.”
Gino Van Ossel will be presenting his new book Retail: Beyond The Digital Hysteria during the afternoon programme Management books 2018 at the RetailDetail Night, 29 November in San Marco Village, Schelle (near Antwerp). During the evening programme the professor will also be giving his traditional tongue-in-cheek overview of the retail year. That makes not one, but two good reasons to quickly book your tickets through this link. You will also find more information on the full programme. See you there?
