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Analysis

Why are retailers still talking about channels in 2018?

When it comes to retail, there are two conflicting media narratives. One contends that physical retail is collapsing with an onslaught of reports about retailers shuttering stores and the death of shopping malls. The other argues that physical retail experiences are more important than ever.

What these conflicting accounts completely ignore is the reality that channels are far less important than experiences in 2018. Instead of focusing on where the customer would prefer to interact – online or in-store – brands need to think about how they can provide a compelling customer experience everywhere regardless of any particular touchpoint. This might seem intuitive to anyone who has been following marketing technology trends over the past few years, but nevertheless continues to fall by the wayside for many large brands.

Given the rise of Amazon’s massive ecommerce platform, this discrepancy isn’t a big surprise. Many brands are rushing to thwart the threat of Amazon’s dominance by increasing their digital presence and shifting resources from physical locations. Others, like Victoria’s Secret, are doubling down on stores and calling the rise of digital a fad. In both instances they miss the point. Amazon isn’t dominant because they’re a digital platform, if that was the case then all ecommerce platforms would be reaching similar success. Amazon is dominant because they provide a superior customer experience, not because they own any given channel.

Even Amazon realises that their digital presence isn’t the end-all-be-all. To see this, look no further than their recent move into the retail world  with the acquisition of Whole Foods and their opening of other physical locations. The company recognises that in order to provide the ultimate customer experience, you have to meet customers where they want to be met. Sometimes this is on their front porch via ecommerce, and sometimes it’s at a store or physical location where they can interact with a human. For Victoria’s Secret the experience they want to be remembered for with their customers is a personal and physical one centered on their store network, if this is how their brand will win the hearts and minds of customers, then this is the right decision.

Taking it a step further, brands need to stop differentiating between channels in the first place. Why do digital and physical retail experiences need different strategies? The simple answer is that they don’t. Digital experiences are better when they can seamlessly transfer to in person and good customer experience will always require a physical branch because some retail experiences, like buying shoes, benefit from having a physical experience.

On the flip side, some retail experiences like trying on clothes in a fitting room can benefit from a digital addition. Smart mirrors that let customers easily compare outfits already exist today. There’s other technology that allows customers to easily request a different size using a touchscreen in the fitting room. Taking this to the next level, imagine a world where you enter a store, scan some sort of token from your mobile device and the store customises your shopping experience accordingly.

An example would be if the retailer remembers past purchases you’ve made, both in store and online, and syncs them to a smart mirror – so you can see how the new pants you’re trying on look with the shirt you bought a few weeks before.

Many retailers try to connect the physical and digital currently, but only do so when checking out. When a store clerk asks a customer for their email, the company is trying to track the customer across channels. The issue is that this only benefits the retailer’s marketing efforts and does not enhance the customer experience. Checking in at the beginning of an in-store experience would be much more effective for this purpose for most customers.

Ultimately, while all of the aforementioned retail technologies can help provide a better customer experience, it’s not the type of technology that’s important – it’s the data it provides. Most retail technology will struggle to deliver a superior experience if it doesn’t have the customer data to back it up. For every customer that visits an ecommerce site or walks into a store, retailers need to ask themselves if they know who the customer is and if they have any past data about them. Data has become a bit of a controversial topic of late, but if retailers gather and leverage data to provide a better customer experience that provides additional value to customers, the majority of customers won’t mind.

Retailers should stop focusing on which channel provides the most value and instead worry about creating the best unified experience, regardless of the channel. The physical vs. digital debate in retail is a bit of a moot point in light of this realisation. If retailers can migrate the same anticipatory experiences they’ve developed online to the physical channels and leverage customer data with the intent of helping customers shop smarter and easier, they’ll be better off and have more satisfied and loyal customers. Simply put, the customer experience provided trumps the channel it’s delivered by.


Mark Smith is the CEO of Kitewheel, a cloud-based ‘Customer Journey Hub’ designed for innovative businesses looking to move in step with the modern digital consumer.

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