The Importance of Communication in an Omni-channel World

by Paul Murphy for Internet Retailing

The brave new world of omni-channel is a boon for consumers, but is extremely challenging for retailers to deliver. Communication is key. Paul Murphy, Head of Commercial Development, OpenMarket outlines how mobile is the key to keeping that relationship alive.
The death of the High Street has been greatly overstated, but long gone are the days where you and I would head there on a Saturday afternoon to buy birthday gifts, a new work shirt or the all-important screws for the shelf you’ve avoided putting up for weeks. We do our shopping whenever we want and wherever we want, whether that’s in-store, online, via mobile or some mixture of the three. Driven by an increasingly tech-savvy consumer-base, omni-channel retailing has become a reality, delivering a new world of convenience. For the consumer at least.

This brave new world brings with it a new challenge: how do retailers maintain control over their brands and guarantee a high quality customer experience?

E-commerce – which is set to grow by 18.6% in the next year to £156.67 billion in the UK alone – has enabled shops to sell to a wider audience but also placed greater emphasis on providing a seamless experience from browsing to payment, to delivery and in certain cases returns. There are many more ‘moving parts’ to shopping nowadays, meaning that putting products into the hands of customers can be much harder. As more goods are bought online, greater importance is being placed on delivery with missed or late deliveries making headlines every Christmas and Thanksgiving. In fact, earlier this year UPS announced its intention to add a surcharge to deliveries over the holiday period in response to what it called the ‘unpredictability’ of online shopping habits.

These missed deliveries not only cost companies financially – in the region of £6.50 each time – but harm the retailer’s brand too. Shopping online means ‘convenience’, but if the customer spends all their time saved chasing missed or late parcels, where is that convenience? Retailers need customer experience to be consistently high from the moment an item is bought until the moment it is received, with delivery being a crucial part of that. Making sure that the customer is aware when their parcel is due to arrive, providing the option to reschedule delivery at their leisure and arranging collections when necessary ensures a much better experience for the customer. At the same time, letting customers know in good time when their parcel is delayed is much more preferable to waiting in all day for a delivery that doesn’t come.

A similar problem lies with one of the biggest developments in retail over the last year: ‘Click & Collect’ services. The service has become something of a phenomenon of late with John Lewis, seeing it overtake home delivery over Christmas, making up 56% of the company’s online sales. This has been a great success in getting shoppers back in store, increasing the chance of making additional sales. It’s great for consumers too, allowing them to pick up their shopping from a store of their choice at their own convenience. The important thing to remember here is convenience. Retailers don’t want customers sat waiting for their items becoming frustrated while staff search through warehouses. Once in store and ready to collect their items, retailers need to make sure customers are able to browse comfortably while they wait for their shopping to be ready.

Effective communication from retailers – and third-party logistics companies where relevant – is the key to mitigating these challenges. As simple as this may sound, it isn’t. An omni-channel retail landscape, by its nature, offers a variety of ways retailers can interact with their customers and vice-versa. Choosing the right one of these is half the battle.

This requires an understanding of the modern shopper: time-starved and always connected. In the examples outlined earlier – home delivery and ‘Click & Collect’ – communication needs to be prompt, reliable and direct. Email is an unobtrusive, low-cost option and is ideally suited to non-time sensitive applications such as order confirmations, where the customer can open messages in their own time. For delivery alerts, however, they run the risk of being missed. Similarly, a ‘Click & Collect’ shopper is unlikely to check their email as they browse a store while they wait for their item to be ready. In fact, email open rates for the retail sector currently are 23.6%, making them too unreliable for this application.

By comparison, SMS has an open rate of over 95% and is available on virtually every mobile handset in circulation (mobile phone penetration of the UK adult population was at 92% last year), making it a much more appropriate option in the relative urgency of these situations. For shoppers who are on the move – which is particularly relevant to ‘Click & Collect’ – text messaging is the most effective way of communicating status updates. Likewise, for home delivery situations, text messages are far less likely to be missed, resulting in fewer missed deliveries which cost the retailer and infuriate the customer.

As more of the retail process and experience move out of the traditional confines of the ‘bricks-and-mortar’ store, timely and relevant communication will be fundamental to ensuring that customer and brand experience is consistent. With omni-channel, customer demands require retailer interactions to be more efficient and reliable than ever.