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‘Omnichannel’: the term for selling more

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El Periódico de Cataluña
‘Omnichannel’: the term for selling more
December 2015, articled published originally at El Periódico de Catalunya

 

‘Omnichannel’: the term for selling more

In the world we live in, it is more and more difficult to distinguish between shopping ‘online’ and ‘offline’. These two options work together hand-in-hand until their convergence in a first phase and total union in a second phase. This fusion is called ‘omnichannel’. We must overcome the multichannel mentality.

Omnicanalidad-ElPeriodico

A cafe with atmosphere. Two friends sit before their drinks. Isabel: “Well what I like is shopping online. It’s convenient and practical. You get straight to it.” John replies: “And what about the pleasure of strolling and window-shopping? It’s wonderful to wander without knowing what to buy”. If I were the third person seated at that table, I would respond with that famous refrain: “Who cares?”

The truth is, I see less and less difference between one option and the other. In the world we live in, it is more and more difficult to distinguish between shopping online and offline. The distinction between these two options, initially accepted by all, is heading towards convergence in a first phase and total union in a second phase. While vendors think in channels (the store, telephone, catalog, cell phone, or computer, for example), customers think in barriers. Does anyone know a customer who asks before making a purchase: Am I going to buy this computer in a neighborhood shop in order to later go to a department store to ask how to use it and then make a call to the manufacturer, to their customer service department, if it breaks? Let’s face it, consumers don’t waste time thinking in channels. We dedicate our brain first to our problems, then to the products or services that can solve our problems. After that, as a third step and only if we’re lucky, we might decide to buy a specific brand. That’s usually the sequence.

This total fusion in the way of relating to brands/companies and their customers (dubbed in the commercial world as seamless channels) is called omnichannel, that is, to sell using a variety of channels aiming to give the customer an uninterrupted buying experience, whether buying online (from a computer, cell phone, tablet, e-kiosk, virtual reality device…), by catalog, telephone, in a physical store, or by whatever other sales technology we might think of or invent. Omnichannel therefore involves designing a single process for the customer/potential customer, regardless of the way in which they relate to the selling company.

It’s worth differentiating between the etymology of the word omni, which means all/totality, and multi, which refers to many (but not all). Therefore, an omnichannel strategy means having the same focus for all channels, in contrast to a multichannel view, which is having many strategies for many channels. For example, the idea that we can sell at a different price in different channels will progressively disappear if the offer is exactly the same (it’s another thing if we sell a product in the store with a 24-month guarantee and personalized customer service, and on our website with a 12-month guarantee and no customer service, in which case there is a reason for putting different prices).

Although it seems counter-intuitive, with the option of buying online and picking up at the store, physical sales go up more than online sales

During my years researching and working with companies, trying to understand how they sell and how they can sell more, I’ve discovered that it’s useful to put a series of labels on the different intermediate options that exist between selling exclusively offline or exclusively online.

There are more variations, but I believe those shown in the graph above are the important ones for understanding the situation and, above all, for activating direct action in the correct direction. My first advice: notice that beneath the five options that I propose, the word ‘experiences’ stands out. This is because it is key that in your business you design how you want your customers to perceive you. Don’t leave such a relevant dimension to chance. It seems trivial, but experience has taught me that we are more negligent than would be reasonable. I design ad hoc and implement for companies that request it of me, whether IESE or not, a safari of commercial innovation that I have developed in various cities (Dublin, Warsaw, Istanbul, Barcelona, and Madrid). It’s common to see how many companies continue to have a one-channel mentality or at the most a multichannel mentality, but almost never neither/nor.

I would like to end this reflection by sharing four more recommendations in hopes that they help you to sell more. They are all based on diverse studies that empirically show the ideas I share, irrespective of whether your company works for another company (B2B) or for a final customer (B2C):

  1. Capture versus generation of value. Occasionally, value is generated by one channel and captured by another. That is, let’s not be stingy demanding from digital channels what we don’t from physical channels. Or is it that every time you have a customer in your store we expect him or her to make a commercial transaction? Don’t relationships matter? Two reflections on this point: first, make sure you don’t lose the sale (that is, that you are used as a source of information and the transaction taken to a competitor); second, carefully study attribution models, that is, knowing how to associate a sale with prior commercial activity (a promotion, advertisement…).
  2. More channels, more sales. The more channels you have open to your customers, the easier it is to sell.
  3. Real-time inventory. Ensure that you have your inventory available for sale in real time and visible online, regardless of the channel used. This helps to sell more.
  4. Online purchase and in-store pickup. Incorporate as soon as possible ‘click and collect’, the option that allows your customers to buy online and pick up in the store. Oddly enough, your physical sales will go up more than your online sales, even though this seems counter-intuitive.
Formado en la Escuela Suiza (habla 4 idiomas), Pablo Foncillas licenciado en derecho y MBA del IESE Business School. Actualmente es miembro del claustro del IESE en el departamento comercial. Compagina su vida en el entorno académico y como conferenciante junto con roles directivos y de consultoría en varias industrias desde los años 90. ¿Hablamos? Clica aquí para contactarme por correo electrónico