How often have we heard this statement – “Retail business models must evolve to meet the changing engagement and purchase behaviours of customers.”
Almost every consulting report, slide share presentation or keynote on retail innovation starts with some iteration of this sentence, however what does this actually mean. Let’s look at the statement “engagement and purchase behaviours of customers” – it’s got two main elements to it, one is the engagement part , and the second, the purchase behaviour. Taken separately, we can start to explore just how these two aspects can affect the simple act of buying something.
The engagement part
Engagement, in our case, simply means getting ones attention and maintaining it in order to complete a task or series of tasks. In order to maximise engagement, the offering must align with needs, goals and desires of the customer while minimising causes of dissatisfaction. In simple words – Customers are happy and engaged when the content of the engagement aligns with what they want, when they want it, and with a level of desirability that peaks their interest, without them having to work too hard to get it.
The purchase part
Purchase behaviours are different to engagement – whereas engagement requires a customer to like what’s happening, purchase behaviours don’t always require this to be the case. A customer may purchase something simply because they need to. The purchase behaviour changes depending on the nature of the buying decision – whether it is High Involvement or Low Involvement.
There are a number of external and internal factors affecting the engagement between customers and retailers, however in this article I wanted to focus on the two aspects which are most interesting to myself and I’m sure, most retailers who are exploring new ways to drive engagement, increase sales, margin and channel exposure for themselves or their tenants. These dimensions are the Customer and Technology, and explore how technology should be leveraged to drive increased engagement based on customer demand.
The core of this article is based on a study and presentation by Thomas O’Connor of Gartner research, that was presented at the 2018 Gartner Symposium. The presentation struck home with me as I could see how, with the clients that Omnyfy services, the opportunities presented by this paradigm would be well placed to drive significant immediate wins and long-term strategies.
In this presentation by Thomas O’Connor, retail customers can be segmented across a continuum from Compliant to Controlling.
A Compliant customer according to the research presentation was one who expects their engagements with retail experiences to be straightforward, seamless and predictable. They don’t have expectations of hyper personalisation or expect, or in fact want, bespoke experiences. Their needs are primarily around efficiency and repeatable process.
A Controlling customer on the other hand is one with very high expectations of personalised experiences and who want to spend time and effort with their purchase process (high involvement, information buying) and are heavily dependent on the selling organisation to understand their needs and deliver bespoke products or services to meet them. Looking at the Technology dimension we have a similar continuum from Transactional, technology that delivers operational and delivery efficiencies through to Transformational, technologies that drive personalisation, intelligent recommendations and new ways of engagement and collaboration.
The intersection of Customer needs with technology
Where things get interesting for Retail CMO’s and Retail marketers who are managing technology transformation projects, is when the two dimensions intersect. We start to see four distinct quadrants emerge, depending on the needs of the customer and the requirement demands they place on retailers.
The areas of this chart that should be driving Retail technology managers are the “Invisibility” and “Elasticity” quadrants – this is where the future of retail and buying lies. It’s not to say that Speed and Strength isn’t important – it’s what’s being done today, with various levels of scale, capability and success. However to truly innovate and create deep engagement and a sense of “well that was great!” …we need to look at creating experiences that transcend base expectations and do it so well that the customer doesn’t even notice. It’s just better.
What does Invisibility mean?
Well, to us at Omnyfy, this is the quadrant that offers the most immediate value to innovative retailers looking to deliver transformation projects for their organisations without having to “break-the-bank” or utilise technologies that could turn out to be just fads with limited take up from end consumers.
Invisibility is about leveraging technology that creates completely seamless interactions for customers regardless of channel or interface – delivering a consistent, engaging user experience while utilising the same pipes, systems and processes that the organisation possesses today.
Elasticity, not as its own quadrant, but more, well – elastic
In our analysis of the report and our experience in retail shopping and understanding how consumers engage with different brands, personalisation isn’t necessarily a stand alone need for customer – it’s not discrete, rather it is applicable depending more on the type of purchase that is in consideration.
For example, a Compliant customer – one who just wants their shopping to be straightforward, simple and efficient may do so for basic products, or what we call “Low involvement – Utilitarian” products, such as grocery goods or basic clothing. The same customer may transform into a Controlling customer when they’re purchasing an expensive product such as durables, cars, watches, laptops, phones or luxury goods – where personalisation, sales input, research, comparison and a bespoke experience becomes essential.
Taking this into consideration, we see aspects of the “Elasticity” quadrant merge into the Invisibility quadrant – it’s about leveraging technology that works in the background to deliver personalised experiences when needed.
Platforms to power change
So what does this mean for Retailers undertaking transformation projects or looking to implement technology that delivers seamless engagement for their customers? Well, the presentation talks about a lot of different technologies such as AI, Augmented Reality, IoT etc. which is certainly applicable – but also requires significant RnD, testing, experimentation and investment to begin to see returns.
We see things differently, it all starts with the right platform – a platform that forms the foundation of engagement across channels, interfaces and experiences, centralising key data and off-loading services via API architecture. It doesn’t matter what sources of inputs or outputs you’re using – whether it is ERP for product data, Bluetooth LE for-traffic monitoring or OMS for delivery, the core orchestration across the board is managed by a omni-channel platforms that enable these engagements and transactions to take place.
A case study in “Invisible technology“
In a recent project that we delivered for Australia Post, Omnyfy implemented our omni-channel, multi-vendor marketplace platform as the central orchestrating hub to deliver a seamless, integrated eCommerce solution for customers to purchase products in-store, online and via mobile for instant delivery overseas. The entire solution, titled Australia Post China Direct was designed and implemented to create a unified shopping experience, enabling customers who created added product to their shopping cart at home, to simple walk into a store, login to their account and pull through their entire cart, and ship the lot from in-store while also adding their own products to their parcels.
Customers could pay using any payment of their choice including WeChat, AliPay and Credit Card – delivering maximum flexibility and meeting the demands of the target customer, without a need for them to change their shopping habits.
The solution also delivered Infinite Aisle capabilities for in-store purchases, enabling Australia Post to instantly route carts purchased in-store, to their central warehouses for direct fulfillment, allowing stores to minimise inventory and maximise shelf-space for fast moving, high demand items.
Omnyfy’s marketplace solution also remembers shopping behaviour, recommends products and retains past store information for customers.
In addition, smart shopping logic and boxing algorithms take away the pain of sorting products for both store staff and customers – making it a breeze to purchase and ship products to multiple customers overseas in a single transaction.
It just works, customers simply do what they do, across channels and the platform simple facilitates these actions without being overwhelming or stressful – this is truly invisible technology at work.