insights! #75: omnichannel strategies in e-commerce

Sonja Fuhrmann:

Today we're talking about omnichannel in e-commerce. Joubin, what exactly does omnichannel mean?

Joubin Rahimi:

It's a term that's often mentioned. It's often mentioned. It's also called multichannel or cross channel.

Sonja Fuhrmann:

Is that the same?

Joubin Rahimi:

No, that's actually an evolutionary sequence. We come from the store world, and at some point alongside the store world you also had mail order, like Otto and others. And then a bit later came the internet. Those were separate channels. I still remember MediaMarkt opening internet stores at some point too, or something similar. And if you ordered something there, you couldn't return it in the shop either. They said: you ordered that from the internet, that's something different. And that was simply multichannel. You sold across different channels. Cross-channel is essentially the topic where you say I make sure processes are also woven together across channels, which of course isn't that simple either. Some of you will certainly know this from the past. And what we do today is omnichannel. Omni-channel, because it's not actually about the channel at all. If we think about the customer, putting the customer at the centre, they have their own way they want to buy. And that can be via different channels. Let's take omnichannel as a nice example to shed light on: Deutsche Bahn. When they started awarding points for all the frequent travellers, the frequent train travellers, they know this. I collected the points, and a few years ago, probably about 10 or 15 years ago, I had the fun of checking on the website, asking by phone and via mobile. And I had different customer point balances, I don't know if you've experienced that too. You're also around a lot at-

Sonja Fuhrmann:

Hadn't noticed yet, because when you say that, wow.

Joubin Rahimi:

That was crazy, and then Deutsche Bahn also did a lot to bring that together, because it's actually about having the correct point balance. Eventually it's correct, but there was a time lag. But a user notices when something happens, and then you want it to be correct everywhere immediately.

Sonja Fuhrmann:

Is it better today?

Joubin Rahimi:

At Deutsche Bahn it's much, much better. Well, I'd say better than punctuality. At least something.

Sonja Fuhrmann:

Yes, you probably also buy online across various channels in-store. So why connect these different channels with one another when each already works well on its own? What is the added value?

Joubin Rahimi:

We live in a world where you as a customer have so, so many options. You can switch providers really quickly. Everyone knows that. If I buy something somehow and can't return it in store, for example, then you think: what's that about? It's the same company. Why can't I return it here? Or if I say: I took something with me and have to go back into the branch. Why can't I send it back? Why do I then have to go into the branch again separately? That's not a nice experience. Those still exist today. So one of the discount retailers – and here comes the irony – you can buy it in one shop but can't return it in another shop? They say, it's a different one. It's not a franchise business. And that's not thought through from the customer's perspective. And it's so important that nowadays we put the customer's process at the centre, not the company with its processes.

Sonja Fuhrmann:

So more convenience for customer through omnichannel? Is omnichannel the key close to customer's heart? What potential do you see in it?

Joubin Rahimi:

I think that's the hygiene factor for the new retail. And that applies regardless of B2C or B2B. Because what do we expect? We simply want things to run properly. As a buyer, I just want it to work well. And if, as a buyer, I then have to understand that certain things don't work via a particular channel, that's not good. Current example, not classic e-commerce this time, but banking. Deutsche Bank acquired Postbank, and the software was then rewritten onto Deutsche Bank's software. Functions that were previously possible were no longer possible, and things you could do on the app were then no longer possible on the app at all, only on desktop. You have to understand that, and it leads to frustration. Frustration leads to negative reviews, and nowadays we post those far, far faster than a good experience. That's roughly a factor of 1:20, and that's why it's hugely important to think about this fundamentally differently.

Sonja Fuhrmann:

Satisfied customers make good customers.

Joubin Rahimi:

Total.

Sonja Fuhrmann:

How do companies benefit from omnichannel?

Joubin Rahimi:

Sustainability. On one hand, customers who have good customer experiences and go through them efficiently also cause – let me put it bluntly – less effort. And the driver of effort at companies is all the manual processes. If I have those under control across all these channels, because we humans don't think in channels and don't want to either, then I simply save a lot of money while gaining comfort for the end customer at the same time. That's a must-have for me. And if company decision-makers and leaders say: I don't need that. Then that might be true for a certain time. We have one or two customers in our roster who have such exclusive products that it still works, but at some point it won't work any more.

Sonja Fuhrmann:

Sounds like real added value, for entrepreneurs too. Which new technologies will genuinely and sustainably transform omnichannel retail and drive it forward?

Joubin Rahimi:

If you think, for example, of loyalty cards, of the link to a self-checkout, or I'd just like to highlight DECATHLON. So upfront, DECATHLON is not our customer. I don't want to take credit that isn't ours, but DECATHLON still does it really well and does it really nicely. Firstly, they have a completely different culture. They say, whatever is invented in terms of processes, technologies in one country, others should use too. So they say, it's not us at head office dictating everything and knowing best. I think that's fundamentally a mindset that makes what I'm about to describe possible at all. You have a DECATHLON app, you have a loyalty card, it's relatively quick, easy access, you browse online. I think that's the most typical case when you go to DECATHLON. Do they have the bike, do they have basketballs, clothing, whatever, you put a few things in the basket already, then you go into the shop and can't find something, or have a question, or want to add something. And the advisor can then tell you directly: okay, let me scan your loyalty card, and there they have your basket. And then they can fill the basket and then say: do you want to check out now? We'll send everything to your home. Or do you take everything with you and use the self-checkout. And that's just great. Really convenient. So if I simply say: okay, actually I don't want to sort it out myself right now. I've got all this. Put that on there for me, I'll settle up with you, or I'll do it together at the till and get it delivered.

Sonja Fuhrmann:

Clever.

Joubin Rahimi:

Also great.

Sonja Fuhrmann:

Yes. How do you see the future of omnichannel?

Joubin Rahimi:

Will be even faster, even more flexible and even more integrated. And from my point of view, it's the Asians who are opening the door to the future here, because they live it much, much more. It's much more mobile, because you can then use mobile in-store, or on the way, on the go. We often have short impulses and then you want that sorted somehow too. This goes as far as, when you have an impulse on Instagram, you say: I'll buy now. That means, this isn't really omnichannel. For a customer, it's not omnichannel, it's just Instagram. But if I'm there as a retailer and say, I target my audience cleverly with certain topics and have great thoughts and ideas around that, I can sell incredibly fast through that. From my point of view, that's already No Line, which is simply a different way of thinking altogether.

Sonja Fuhrmann:

Thank you very much for the conversation, Joubin.

Joubin Rahimi:

Thanks Sonja.

Sonja Fuhrmann:

And thank you for your interest.

Joubin Rahimi:

Please do write to us how you live omnichannel, what good experiences you've had and what bad ones too. Let community share in your pool of experience so we can all learn from it. Thanks.