How Macy’s Designs Its Omni-Channel Shopping Experience
From inside-out to outside-in
Over the last 15 years customer touch points have multiplied. Companies who were once single channel focused have developed into multi-, cross- or even omni-channel players. In this blog post we will focus on omni-channel experiences. According to an IDC Retail Insights report omni-channel users engage a lot more with a brand than single-, multi- or cross-channel consumers. Before looking at how Macy’s designed its omni-channel shopping experience, let’s look at the differences between all channel experiences.
Difference between channel concepts
- Single Channel
A typical single channel store is your neighborhood bakery. Customers come by to buy bread, cake, and buns on a regular basis. Small bakeries usually don’t have a website or catalogue. Many one-channel shops still exist today simply because of their business model: there is no need to expand into other channels.
Going shopping is more and more a multi-channel driven process. A lot of retailers do not only have a store, but a website and printed catalogue also. Customers experience the brand through these three channels. In most cases, every channel within a multi-channel setup represents a single business unit within an organization. Sean Van Tyne, Co-Author of the book “The Customer Experience Revolution” states that these units usually do not collaborate sufficiently with each other. Because of that, the brand experience is not consistent and hence, it is harder for potential customers to remember the brand.
Most companies are aware of the issues a multi-channel approach entails and have moved on to a cross-channel concept. Their focus now lies on creating a consistent brand experience across all channels. Every business unit works with the same brand design and tone of voice. But apart from being more consistent than a multi-channel design, cross-channel is still an inside-outside approach: the focus lies on how the company sees its brand and how it should be marketed.
This leads us to the last step of the Customer Experience Evolution: the omni-channel experience. Instead of applying an inside-out approach to a brand and how it is presented to customers, omni-channel companies think outside-in. They base their work on one simple question:
“How do our customers experience our brand across all our channels?”
These companies know that omni-channel shoppers move seamlessly across channels. A potential customer receives a catalogue by mail, maybe goes to the mobile website or store after, calls the customer service or downloads an App. Any company that understands this behavior can design a customer experience strategy in line with omni-channel experiences.
Best practice example: Macy’s
Macy’s core target group are middle-class women between 16 and 34 who prefer quality products at reasonable prices. They are either busy at work or out with friends and always have their mobile device at hand. They are active on Facebook, Twitter, YouTube and a dozen other social media sites. They are smart and sophisticated. According to Terry Lundgren, President at Macy’s, his company is not concerned about which channels customers use to buy:
“We want that a customer is able to interact with Macy’s no matter where she is or how she shops. It makes no difference to us whether she buys something in our store or online, or whether she is shopping from her desktop computer or her Android Phone or iPad.”
Lundgren is aware of the fact, that customers shift and drift between various channels. But this doesn’t mean that omni-channel buying behavior is not controllable:
“We have a whole series of strategies in place to drive our store customer to the web, and our online customers to the stores. We strive to have a 360-degree view of the customer. “
Macy’s strategists don’t think about how to project their brand onto their customers, but create a persona and try to see their brand through the customer’s eyes. Omni-channel shopping requires an immersive and superior customer experience regardless of the channel, as well as sales concepts that are customer-centric and not specific to one channel only.
Designing an Omni-Channel Shopping Experience
To design an Omni-Channel Shopping Experience communication between Marketing, Sales and IT needs to be as smooth as possible with little confusion about goals and strategies. Only if all business units work hand-in-hand, the company will be able to create an omni-channel shopping experience. As the Macy’s example shows, a clear and thorough understanding of the customer and target market is key to be able to determine, develop, and deliver the brand promise.
For creating an omni-channel strategy companies also have to take omni-channel contexts of use into account and identify where it can degrade meaning to a customer. The different ways a customer moves between various channels have to be modeled and predicted – starting at a digital channel to a physical space as a store, for example. Customers often go back and forth between and across channels over an undefined time period.
Tips for designing an omni-channel shopping experience
Sean Van Tyne points out the following tips for designing an omni-channel shopping experience:
- Follow your customers: wherever your customers experience your brand.
- Observe how your customers interact with your channels (website, products, services, people, etc.) and learn about the context of use they are in.
- See how your customers interact with your products and services to understand user experience gaps and opportunities for innovation.
- Follow the whole engagement cycle: don’t just focus on a single channel. Analyze the entire process.
Companies designing for an Omni-Channel Experience have a market advantage. In the end, it’s all about increasing revenue and reducing costs. Creating an omni-channel experience helps to achieve that.
In order to track channel switching, you need sophisticated software, which allows to combine and analyze web analytics and behavioral data and lets you conduct user and customer experience research.
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