Omni-Channel Marketing :Expectation, Execution,Growth & Challenge

Zhao Chen

Abstract： With rapid Internet growing， most of consumers shift from store to web shopping and sharply increase of smartphone and tablets， ‘Direct-to-Consumer business has grown rapidly.  Currently， The technological advancement becomes the key components to retain and win new customers so retailers should be able to recognize the Omni-channel shopper and review the strategy to stay ahead. The earlier  Retail Outlook Survey from KPMG LLP reveals that 70% of retail executives have adopted Omni-channel strategies to respond to todays online and mobile consumer. The consumers are becoming demanding and expect a tailored， personal shopping experience through Omni-channel to shop anywhere at any time. Thus， they usually own multiple connected devices and go online multiple times a day from multiple locations and they are thorough in seeking the shopping goods with right price plus flexible delivery options. To put it briefly： buying available desired product with the right size and colors but regardless of the channel being used.

Key words：Internet;Direct-to-Consumer business

In this paper I will focus on Omni-channel， and the points from some of the persuasive speech topics during the New York seminar with the relevant research and studies undertaken， which covers Omni-Channel with market readiness through mobility and social media， Developments in the online marketplace. Besides， I will also discuss some of the challenges that Omni-channel is facing now with further research questions， plus my point of view discusses options and solutions based on literature study， research and survey with casual interview to some of my friends located in U.S， Hong Kong and Mainland China. One of the observations from the study and research is that most of the participants in the survey and interviewees thought that Search Engine with Mobile Friendly.could still be the mostly and widely being used to look for the product details through smartphone after view the product through display. Besides， they also expect more mobile payment solutions improvement with a more integrated， customer-oriented supply chain.

In general， nowadays consumers are seeking a true 360-degree approach to retailing with integration of channels. Hence， how to work on operational efficiency and technology investments to execute a full-direction Omni-Channel strategy by integrating mobile with physical presence （brick-and-mortar stores）， could be challenging to retailers， while offering the opportunities for growth.

1 Literature review

Over the past years many analysts believed the future of shopping to be purely mobile and tablet-based， retailers also realize that social media is a key channel for Omni-channel experience. According to Forbes， with 31% of female U.S online consumers having made a purchase based on a Twitter recommendation， 45% of smartphone owners are making purchases using a mobile device every month. （CMO Council，2015） many retailers are planning to spend even more in the next year on social media budgets. Thus， a seamless marketing message across this channel is key. The marketers always rely on consumer insights at the basis for their sales and marketing strategies. But in the meantime， the challenge to marketers becomes obvious as the popularity of digital technologies has created a fast-growing e-commerce channel， it also makes it much easier for consumers to conduct research and obtain the product information with price that influences their buying decisions. Recently， mobile device has grown rapidly and fundamentally altering the path-to-purchase by allowing consumers to easily obtain pricing and product information whenever and wherever they want.  Besides， Consumers demand a consistent shopping experience with one delivery， regardless of the channel through which the order is placed.

2 Multi-Channel VS Omni-Channel

Based on Wikipedia， Multichannel retailing or Omni-Channel retailing is the use of a variety of channels in a customer's shopping experience including research before a purchase. Which includes retail stores， online stores， mobile stores， mobile app stores， telephone sales and any other method of transacting with a customer. Transacting includes browsing， buying， returning as well as pre-sale and after-sale service.

However， the difference between Multichannel and Omni-channel has been redefined with in-depth discussion by many studies and analyses. Mr. James Rhee， the CEO of Ashley Stewart， he gave a clear definition to E-Commerce and M-Commerce during the seminar. He mentioned that in U.S， formerly the traditional businesses were mainly offering and taking orders via Internet and through distance selling. For the last 15 years， the three key dimensions of retail presence have been defined as physical stores （offline）， mail or telephone order via call centers （catalog）， and web stores （online）. Each channel may be managed separately， with it's own demand forecasts， promotions， and even price adjustments. These traditional methods produce a great amount of out-of-stocks， carrying costs， lost sales， and unnecessary markdowns every year. More recently， the effect of the fourth method， the ‘mobile usage is also affecting shopping behavior across channels， especially in the search phase before doing a purchase.

Regardless of the on-demand nature of a channel， or the ability to touch and immediately take home your purchase – all these channels share certain criteria that the consumer expects. They all blend in a seamless， Omni-channel consumer experience.  （Euro-Commerce： Policy Guidance）. Differently， Omnichannel could be an addition with customer channel migration to the online channel on customer purchase behavior and customer loyalty.

Within the literature of  ‘Introduction to the Special Issue on Multi-Channel Retailing by Peter C. Verhoef， Multi-channel customer management is defined as the design， deployment， and evaluation of channels to enhance customer value through effective customer development. Therefore the channels are considered as customer contact points and the customer interact. By emphasizing interacting in their definition， they specifically limit the domain to channels providing two-way communication， excluding traditional one-way mass-communication channels， such as TV （advertising）. Previous studies have mainly considered offline channels （stores）， online channels （i.e.， Web store）， and traditional direct marketing channels， such as catalogs.

Omnichannel retailing is a development of multi-channel marketing that sees brands providing seamless experiences through online， mobile， social and marketing media. It is the use of all physical channels （offline） and digital channels （online） which offers a seamless， innovative and unified customer experience. Omni comes from the Latin "omni" which means "every/all" and channels refers to the method in which consumers interact with the company， it can mean all or universal. The way that many are explaining Omni-channel today is： ‘cross channel being done well. Examples are that the mobile app should match the design of the website which should reflect the look and feel inside the store. Omni is the best way for a customer to perceive everything is to allow them to own their data and experience， then give them the ability to use it as a guideline of every future experience. Simple example here： Im shopping for hand bags， going online and look for the things I like with saving them in my cart. I leave the website and go to the physical shops. Its about an investment of time in research offline and online is an experience with some tools to make it more coordinated， the vast majority of the population likes to browse and compare to see what else is out there.

Omni-Channel allowed retailers to gather more data about their supply chain， and make better decisions. mobile and social have enabled customers to not only quickly switch between channels， but actually use channels simultaneously. In an Omni Channel， the entire retail organization works in collaboration： From merchandise planning， to assortment planning， purchasing， allocation， replenishment， and to promotions， price optimization， and event management. Similar to what we have seen with the online channel development， researchers have investigated the effect of the use of mobile channels and specifically mobile apps on performance. An important additional change is that the different channels become blurred as the natural borders between channels begin to disappear.

Generally， the multi-channel world mainly considers retail channels， the Omni-channel world is more focus on the interaction between channels and brands and is not only broadening the scope of channels， but also integrating consideration of customer-brand-retail channel interactions.

3 Discussion and findings：

There is a concern about the impact of online channel adoption on subsequent purchase behavior. after all， in-store communications still have a particularly strong effect on brand preference （Don E. schultz ）Hence， e-toilers are looking at various options to establish a physical presence. The challenge is to find a seamless solution for both the customer experience and internal processes.

4 The marketing challenge for Omni-channel

This is the main discussed subject that most of the speakers talked over the seminar during the New York trip. No doubt， Omni-channel provides new convenience， however， both retoilers and e-toilers are facing challenges within the key areas that significantly impact the organizations performance is how to increase effectiveness and optimize conversion rates through multiple channels， while providing a personalized shopping experience. Shopping in a store is unlikely to fade out in the near future， it still has the advantages which online shopping lacks in， e.g. No shipping delays， no return due to wrong size， instant gratification， etc. thus， in Omni-channel retailing， a retailer need to work toward a 360-degree view of its customers purchases across all channels （differently， in multi-channel theyre just offering customers a selection of channels to choose between）.

Among the New York seminar speakers， both Jade Huang， the founder of StyleSage and April Uchitel， the Chief Brand Officer of SPRING， have emphasized the challenges that the main areas requiring specific attention， and pointed out that personalization ranked as the number-one priority that marketers will invest to optimize the Omni-channel marketing strategy. As consumers always demand about stock availability and delivery， no matter they are on a computer or on a mobile device， the same service for satisfaction is always required， thus， some of the E-toilers add up a physical presence even temporary pop-up stores， to respond to the speedily changing marketplace and the growing customer demands. Conversely， for Retailers， It also appears to be necessary by increasing their digital presence， as it means to be available at anytime anywhere with immediate approach for consumers.

5 The innovative approach examples：

An example of a really innovative approach to gathering customer information at the point of purchase is Alibabas recent unveils Omni-Channel retailing plans for 2015 11.11 Global shopping festival： Consumers can access to products， prices， services， delivery options and membership benefits online as well as the participating brands physical stores. “Omni-Channel retailing is one of the key initiatives for this years 11.11 festival in achieving the full integration of digital and physical commerce. ” said Jeff Zhang， President of China Retail Marketplaces as Alibaba Group （by BusinessWire）. “Alibaba Group is dedicated to working with brands and retailers to facilitate their transition from traditional to Omni-channel retailing”， e.g. Alibaba and Suning entered into an agreement to build on each others strength in e-commerce， logistics and related business through join Omni-channel initiatives.  On Optimal delivery service， by synching up brands physical stores and offline service centers with their Tmall shops， consumers are allowed to either pick up the merchandise at nearby stores or retailer warehouse after making online purchases .

6  Conclusion：

In an Omni-channel world， a consumer-centric focus is critical. For e-tailers， to provide the customers a seamless experience across the physical and digital worlds is vital. additionally， leverage the ability to communicate with Omni-channel shoppers by understanding how to best deliver digital information by mobile devices （i.e. Apps）; besides， to measure consumer behavior across all touch points and provide management with a deep and unified understanding of consumer choice， to link online and offline exposure across all platforms  buying.  Generally， todays consumers expect to be entertained， informed and engaged. the use of digital displays are certainly an increasingly effective way of extending the online experience to the store， Bain & Company also points out the importance of the in-store experience being as a part of the integrated strategy. However the growth of online and mobile information and commerce has become a challenges for retailers when maintaining a physical presence.

References：

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