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THE POWER OF OMNICHANNEL IN ONLINE RETAILAn IMRG report, supported by Criteo, identifying what constitutes intelligent omnichannel outcomes from the perspective of the customer.

A report researched & compiled by IMRG, supported by

Survey data compiled by:

32

Today’s shopper is a complex individual.

Their multi-channel path to purchase means it’s not enough for retailers simply to have a presence across key touchpoints. Having a mobile-enabled website, a high-functioning app alongside a strong physical presence, for example, is great but if these channels operate in silos it is a wasted opportunity. In these times of disruptive transformation across the retail industry, forward-thinking brands and retailers understand that data is key to helping them better understand shoppers. Formulating a single, seamless experience for the shopper who wants to grab any device and pick up a shopping trip right where they left off is the modern commerce marketer’s imperative.

This report examines the DNA of omnichannel shopping today and the role of data in uncovering actionable insights and driving the customer experience forwards.

John GillanManaging Director, UK and Northern Europe

FOREWORD - CRITEO

FRAGMENTED CUSTOMERS / INTEGRATED EXPERIENCES

It’s no secret that the average shopper has fragmented somewhat over the past decade or so.

They have shown themselves to be comfortable adapting to the latest technology during this period, with the proliferation of connected devices enabling them to access retail sites using the option of highest convenience to the context of their interaction.

That might be a desktop, laptop, tablet, smartphone, console, smart TV; they might go direct to site or arrive through affiliate channels or email; engage through social media, review platforms, apps.

This report looks at how shoppers use all the options available to them, what influences their path to purchase and investigates the impact and opportunity of rising data volumes for brands and retailers alike.

Andy MulcahyStrategy and Insight Director, IMRG

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The problem for retailers – who clearly want to be able to understand and tie together the various engagements a customer can have with them – is that the expectation of having web access anywhere, anytime has been set. Shoppers may use the device of most convenience, but there are many of them and many contexts for use. And they expect experiences across them to be seamless.

Gaining a holistic understanding of shoppers that is cross-device, cross-channel and accurate is not straightforward. The good news is that modern technology enables data on shopper activity to be tracked and managed – through elements such as CRM, machine learning and big data, offering the potential for highly personalised outputs. Tying it all together is the challenge, but getting the approach to omnichannel right from the perspective of a retailer is not just about gaining and cross-referencing as much data as possible, but identifying what would represent a good outcome from the perspective of a customer in a given context and working out how to use the available data to achieve it.

Chart 2 Q: ‘Do you find you get a consistent experience when you engage with retailers through various means (in-store, online, smartphone, tablet etc)’

As part of this report we commissioned Toluna to run a survey of 1,000 UK individuals to understand how they rate the experiences they currently get when shopping. As chart 2 shows, 47% of respondents felt they ‘usually’ get a consistent experience when engaging with retailers through the various available channels. However, there is clearly still room for improvement with 30% saying only ‘sometimes’ and 11% ‘not often’.

Where are retailers with achieving omnichannel? • 72% say they are actively pursuing cross-channel audience recognition as a key business priority

• Only 9% consistently recognise customers across all their media channels

• 78% said they’re regularly able to identify individuals across at least “some” of their addressable marketing channels

Data compiled from telephone and online surveys of more than 100 marketers and service providers2

2 Winterberry Group (supported by DMA, Acxiom, Criteo and SG 360), From Theory to Practice: A Roadmap to “Omnichannel” Activation, 2016

Sometimes: 29.85%

Not O�en: 10.95%

Hardly Ever: 3.28% Always: 9.15%

Usually: 46.77%

A PROFILE OF THE MODERN CUSTOMER

A typical profile for the modern retail customer might look something like image 1 – an individual immersed in technology and able to dip into whatever they want, when they want, through whatever device they want.

Chart 1 – Share of sales by device, Christmas week 2016 1

1 IMRG Daily Benchmark, December 2016

Chart 1 plots device usage over the Christmas week. During 19-22 December (Mon-Wed – when people are at work still), desktop accounts for the highest share of sales on retail sites. Then on 24-25 December, smartphones take the greatest share – as people are often visiting family, it is the only device they have available.

desktop

tablet

smartphone

Image 1 – An artist’s impression of the modern shopper

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Image 2 - Split of visits by marketing method, Q1 20176

Looking at the division of traffic (image 2), it’s perhaps tempting to interpret that retailers should spend all their time focusing on search engines and email. Yet, in reality, it has become increasingly apparent to marketers that all available channels can play a potentially important role in the omnichannel mix, particularly when considered in combination – it is simply a matter of identifying which to focus on to bring most benefit and how to deploy them in support of the use cases for which they can be most effective.

Omnichannel in practice – tying online and offline together Decathlon S.A.’s flagship store in Singapore uses radio-frequency identification (RFID) to automatically identify products, track and send them directly to a shopper’s virtual basket so no scanning is required at checkout. All customers, whether online or in-store, are automatically signed up to their online loyalty program, which then enables Decathlon to track customers as they move across channels and devices.

Chart 4 - Q: Where do you do most of your shopping currently?

Finally, of course, there is the role of physical stores to consider. The highest share (53%) of respondents to our Toluna survey said that they do most of their shopping in high street stores (chart 4), with ‘online generally’ on 31%. Whether this is true or reflects what they think rather than do is a moot point, but either way it illustrates the enduring importance of the physical side of retail, in shoppers’ minds at least – choosing where to focus attention on tying up the experiences shoppers get has to produce results that are consistent and meaningful from their perspective to be judged a genuine success.

6 IMRG Capgemini Quarterly Benchmark, Q1 2017

Smart TVs: 0.5%

Apps: 0.4%

Smartphone: 5.47%

Tablet: 2.89%

Desktop: 6.67%

Online generally: 31.34%

High street shop: 52.74%

These figures have altered in Q2 2017

1.5% 2.0% 3.2% 5.7% 14.4% 21.0% 21.4% 28.1%Social Display Affiliate

NaturalDirectPaidEmailOther

THE NEED TO TIE THE VARIOUS AREAS OF DATA TOGETHER

As chart 3 and table 1 illustrate, shopper usage of the various devices available can shift at rapid pace from one year to the next. Often this is displacement activity – so around 2013 tablets started to account for a notable portion of online retail traffic, but over the past 18 months to two years, the tablet users have migrated over to smartphones.

Chart 3 - The share of visits and sales going through mobile devices (tablets and smartphones), Q1 2010/11 – Q1 2017/183

What this data doesn’t show is how these devices are used in combination – where people have access to all three ‘main’ device types (desktop, tablet, smartphone), it is likely they use all three though not necessarily for the same purpose or purchase journey. Indeed, data from Criteo suggests that, 29% of desktop sales are preceded by a click on a mobile device4.

Device 2013 2014 2015 2016

Total (all devices) 17% 14% 10% 16%

Tablet 131% 36% 25% 6.8%

Smartphone 176% 52% 92% 79%

Table 1 – Year-on-year sales growth for various devices, 2013-16 5

The device through which shoppers arrive at a site is only one part of the overall picture – the channel through which they arrive is a key element of attribution, though even that only gives the ‘last click’ rather than the full journey.

3 IMRG Capgemini Quarterly Benchmark, Q1 20174 Criteo Global Commerce Review, UK, Q3 2017 5 IMRG Capgemini Sales Index, Jan 2017

Q1 1

0/11

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Percentage of visits and sales via mobile devices

percentage of sales via mobile percentage of visits via mobile

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1 1

1/12

Q2

11/1

2

Q3

11/1

2

Q4

11/1

2

Q1 1

2/13

Q2

12/1

3

Q3

12/1

3

Q4

12/1

3

Q1 1

3/14

Q2

13/1

4

Q3

13/1

4

Q4

13/1

4

Q1 1

4/15

Q2

14/1

5

Q3

14/1

5

Q4

14/1

5

Q1 1

5/16

Q2

15/1

6

Q3

15/1

6

Q4

15/1

6

Q1 1

6/17

Q2

16/1

7

Q3

16/1

7

Q4

16/1

7

Q1 1

7/18

98

Chart 6 - Q: What would you think retailers should focus on to improve the experience you get when shopping?

As part of the Toluna survey for this report, we asked what areas they thought retailers should focus on to improve their experience (chart 6) and the majority of responses were related to just doing good retail (greater range of products – 30%, removing hassle – 23%) and convenience (more delivery options – 16%, easy returns – 15%). As technical as enabling great omnichannel experiences may be behind the scenes, it’s the basics that still matter to shoppers – what improves things for them.

What represents a good outcome then? Considering it from the customer perspective, here are four aspirations.

Being relevant rather than accurateUltimately, the purpose of omnichannel is to provide relevant information and experiences. Relevance is different from accuracy – constantly marketing size seven shoes to someone because you have data on their shoe size may be technically accurate, but if they’ve not actually expressed interest in it, it’s also potentially irrelevant. That’s not to say that approach doesn’t make some logical sense, but that relevance should be measured by response – if how you are using their data does enhance their experience in some way, it should become apparent.

It’s the difference between doing something because you have the data to do it, and doing something because it places the overall customer experience at the centre of your activity.

Wowing the customerIt’s important that experiences give the customer a positive reaction to how you have used data on them – generating a ‘wow’ factor in terms of how you have tied disparate strands of information together from multiple sources to produce clever outcomes. This may be overt (‘you searched for this previously, as your birthday is coming up and it’s seasonally-relevant, here is a 10% discount offer completely unique to you’) or subtle by increasing relevance and convenience in various areas (‘you bought from this store, we will automatically suggest click and collect to that store as the default fulfilment option for future purchases’).

Remember though that attempting to wow a customer can actually result in them thinking the experience is a bit weird, intrusive or confusing if not managed intelligently. Used correctly though data can be in an incredibly powerful tool, enabling truly personalised shopper communication that can positively influence the bottom line.

Faster site speed: 9.05%

Greater range of products: 30.25%

Removing hassle: 22.79%

More delivery options : 15.82%

Easy returns: 15.42%

Mobile experience: 2.19%

Post-purchase support : 4.48%OUTCOMES BY USING DATA INTELLIGENTLY

So – how do you develop a strategy for tying together experiences across channels?

There is no universal answer – much depends on proposition, what the brand represents and the promise made to customers. If there is one approach that could be applicable to all however, it would be considering the quality of the customer experience at every stage of engagement. True omnichannel operations are only possible if an individual is recognised as one and treated as such – it goes hand-in-hand with personalisation.

Brands and retailers realise that data holds the key to delivering a more personalised shopping experience, something that could have a major impact on the bottom line. Companies know that customer data is a strategic resource — 42% of global marketers believe that it is significant, critical or foundational to their business. This is because, in the modern world, data is king. If retail was once primarily face-to-face, it is now faceless by definition – thousands, even millions of customers interacting through screens and yet, somewhat ironically, that actually makes greater personalisation more possible than could ever be the case without digital.

The ability to personalise the customer experience is a balancing act and retailers need to focus on using data in a way which enhances shopping. As this chart shows, the minority of respondents to a previous IMRG / Toluna survey (18%) did not want retailers to store information on them – most are content to reap the rewards of smart retail data usage, as long as it’s used in their interests.

Chart 5 - Q: How do you believe retailers should use information they store on you (eg from past purchases or site browsing behaviour)?

People today expect a seamless shopping experience without feeling like retailers are capturing too much personally identifiable information on them. In order to support seamless experiences across all the ways in which they can engage, execution has to be intelligent involving a number of different elements – including CRM, big data management, machine learning and personalised marketing. If the outcomes are positive for them – which is to say, the experience is good and works in their interests – they are more inclined to allow themselves to be identified by logging in or tracked in some way (see chart 5).

Show me relevant products and

content automatically

Remember my preferences(delivery address,

payment card details)so I don’t have to type

them in again

Send me o�ers that are relevant to me

They should only keep the bare minimum

I do not want them to store information on me

27.49% / 276

38.45% / 386

43.53% / 437

34.96% / 351

18.33% / 184

ABOUT CRITEO

Criteo (NASDAQ: CRTO), the leader in commerce marketing, is building the highest performing and open commerce marketing ecosystem to drive profits and sales for retailers and brands.

2,700 Criteo team members partner with 16,000 customers and thousands of publishers across the globe to deliver performance at scale by connecting shoppers to the things they need and love. Designed for commerce, Criteo Commerce Marketing Ecosystem sees over $550 billion in annual commerce sales data.

For more information, please visit www.criteo.com

Being up-front Customer data is key to uncovering actionable insights and driving the business forward. The easiest way to tie together a user’s behaviour across multiple channels and devices is if they log in or identify themselves in some way – perhaps via a loyalty card. Can honesty be a good policy here? Thinking in an omnichannel way, encouraging users to log in at various stages of engagement (without interrupting a possible purchase too much) with the justification being that it enables you to structure relevant experiences for them based around their preferences.

Obviously if you are successful in getting someone to identify themselves, ensuring you deliver on any promise made is paramount.

Making offline digitally relevantTying up high street behaviour with online remains one of the biggest challenges for omnichannel. Click and collect has provided a notable bridge between the two, but much of the journey that a shopper may have taken in the lead-up to a purchase made in store remains unknown for many. Again reward and loyalty programmes can work here as they provide a logical reason for someone to identify themselves.

In-store tech can also play a role. Encouraging shoppers to log in to an in-store tablet or similar device to access relevant information, play games or activate personalised offers for example. With more touchpoints providing data across offline and online shopping journeys, retailers and brands can better target people who are most likely to make purchases.

OMNICHANNEL IS ABOUT THE CUSTOMER

Achieving omnichannel operations is not a straightforward process. In truth, it requires a focus from across all areas of the business to remove data siloes and use data intelligently.

Success is dependent on tying the various and potentially disparate strands of available information together, which flows right through marketing, customer services, logistics and all other departments. It is as much about having the right internal processes in place as it is having the clever systems.

Ultimately omnichannel is about the customer, so when working on strategies it’s always worth putting yourself in the customer’s position – what would you want to happen in a given situation?

ABOUT IMRG

For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of e-retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry.

We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indexes provide in-depth intelligence on online sales, mobile sales, delivery trends and over 60 additional KPIs.

Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally.

For more information please visit www.imrg.org

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Published November 2017

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A report researched and compiled by IMRG, supported by