How to build an omnichannel business: Connecting front, middle & back offices

Olga Annenko data integration, digital transformation, tech trends 0 Comments

How to create an omnichannel business

Most of the times when you search for omnichannel best practices and how-to’s, you come across dozens and dozens of articles about omnichannel sales, omnichannel marketing, omnichannel experience… which are, no doubt, important topics.

But I would argue that they are, metaphorically speaking, merely the end result and not the cause. In other words, it’s not where one should start their initiatives towards an omnichannel strategy.

In order to enable omnichannel anything in the first place, it is necessary to realize that it requires a shift in the organization itself. I had an honour of interviewing Duncan Avis, Customer Enterprise Lead at Global KPMG Connected, on this matter, and I believe you will find his insights particularly interesting.

Additionally, it is important to have the right technology in place, and further down below I will dive into some specifics about it as well.

But first… What IS omnichannel?

Omnichannel has become one of those buzzwords that no one knows for sure how to spell correctly and everyone interprets slightly differently. What you call “omnichannel” and in what context you use it basically depends on your background.

After going through dozens of definitions, I think I know at least what ‘omnichannel’ in the retail industry means. It means – to put it very simply -, addressing customers through various multiple channels that organically exchange information with each other. Or in other words, work as one.

In fact, in the Shopify’s blog article “Omni-Channel vs Multi-Channel: What is the Difference and Why Does It Matter?“, I found a brilliant and very illustrative example of how it should ideally look like. It is quite an entertaining and recommendable read.

Omni-channel_vs_Multi-channel_Blog_Shopify

Source of the image: Shopify blog

This very same article also perfectly illustrates why having an omnichannel business is so important: By aligning all their communication channels, retailers can better upsell and cross-sell their customers, let alone cleverly entice them into finally order all that stuff that has been piling up in their online shopping cart.

Omnichannel business: Magic wand or wishful thinking?

While the definition of omnichannel might come across as a blurry one in comparison to that of multichannel, the opinions about this concept can be clearly polarizing.

Some retailers and experts believe that building an omnichannel business is now the only way to keep up with customers’ high expectations and constantly changing buying behaviour. As Colleen Drummond, Principal at KPMG, puts it in this video:

…one of the phenomena that we’re seeing is that our best experience are becoming our expectations.

Others say that those companies who try to become an omnichannel business will either go bankrupt or at least suffer a severe setback because omnichannel is a myth.

There is, of course, also a wide spectrum of opinions in between. For example, this German-speaking author of the article “Omnichannel = No, thank you?” on LinkedIn warns that omnichannel will require an insane amount of resources investment, which make it for most companies not worth it.

According to him, “experience has shown” (he doesn’t specify whose experience, though) that the “relatively few genuine omnichannel customers” are by far outweighed by the “many customers who prefer to buy through one channel.”

Personally I, looking at it from a consumer’s perspective, think that omnichannel works, I believe that the hypothetical demand for an omnichannel experience is high, but I have also noticed that not many companies are successful at it. Duncan Avis from KPMG believes that they have figured out why this is so.

It is not about offering ‘omnichannel’, but rather being ‘omnichannel’ to the core

It is important to mention first that according to Duncan (and KPMG), omnichannel as a concept is not reserved solely for the retail industry, but rather for any sector that is dealing with consumers. “(…) consumers don’t change their behaviour just because they are dealing with a retailer or a telco provider or a bank; their expectation is to be treated by each of those equally,” says Duncan. Yet to set the tone for this part of the article, let’s look at omnichannel from a retailer’s perspective.

Omnichannel in retail

Photo by Igor Ovsyannykov on Unsplash

Earlier this year, KPMG ran an extensive study across US, UK, Canada, China, Australia and Germany, asking C-suits, vice-presidents and senior directors about omnichannel: their plans, their strategies, their experience so far. The results are sobering, to say the least. While 75% named omnichannel as their top strategic priority and many a man indicated their intent to invest heavily into getting this off the ground, about 70% admitted that the results they have seen so far were not quite the ones they had expected.

Duncan concludes that the likely reason why the majority of companies are dissatisfied with their current results lies in the fact that they have been investing a lot of resources in the front office – e.g. sales, marketing -, while largely ignoring the middle and the back offices. “What we came back from the study with was that organizations that are investing in all [three] are twice as likely to be successful to meet their customers’ expectations, one or more of their omni business objectives, and one or more of their omni return on investment objectives.”

To sum it up – companies need not only offer omnichannel experience to their customers, but become an omnichannel business to the core.

So, omnichannel is not just about being everywhere where the customer is. It also means profound changes at the organizational level. According to the results of the KPMG study, this involves being successful at eight core capabilities, namely:

  • Product, pricing & customer strategy
  • Experience centricity
  • Responsive supply chain
  • Partnerships, alliances & vendor management
  • Advanced data & analytics
  • Technology, architecture and enablement
  • Seamless commerce
  • Organizational alignment and people capacity

If you want to learn about each capability in more detail, I can highly recommend you download the KPMG paper ‘Are you writing the right checks to win consumers?’. In the next article, I want to focus on what might be the right technology to support at the very least some of these eight capabilities.

Stay tuned.

In the meantime, you can check out our other article on four business-critical issues in retail and how they can be solved with smart data integration.


About the Author

Olga Annenko

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Olga Annenko is a tech enthusiast and marketing professional. She loves to write about data and application integration, API economy, cloud technology, and how all that can be combined to drive companies' digital transformation.


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