How to optimise your omnichannel approach? › wp-content › uploads › 2018 › ... · Lemon, K. and Verhoef, P, “Understanding Customer Experience Throughout the Customer Journey”,

How to optimise your omnichannel

approach?

Dr. Els Breugelmans

SMA

8 oktober 2018

Wie

• Els Breugelmans

• Hoofddocent KU Leuven (@Antwerpen)

• Faculteit Economie en Bedrijfswetenschappen

• Onderzoekseenheid Marketing Management

• Onderzoeksexpertise in Retail Management

o Online & multi-channel aankoopgedrag

o Getrouwheidskaarten

o Retailer-producent relaties

• Academisch onderzoek van bedrijfsrelevante

onderzoeksvragen

• [email protected]@ElsBreugelmans

mailto:[email protected]

Jullie verwachtingen vandaag?

Agenda

• Digitale (r)evolutie

• Wijzigingen in retailpraktijken

• Aankoopgedrag & customer journey – theorie

• Impact van digitale (r)evoluties op aankoopgedrag –

academische literatuur

• Uitdagingen en opportuniteiten voor ‘traditionele’ (vaak

fysieke) retailers

• Examples & Cases

Digitale (r)evolutie

Waar koopt u schoenen?

In het verleden…

Traditionele retail

(brick-and-mortar)

Kopen

Offline

Orienta

tie

Offlin

e

Supply chain

http://content.time.com/time/magazine/0,9263,7601980720,

00.html

Shaky start – dot-com bubble

(failures in the beginning)

But one thing for sure…

Internet & digital society is here to stay

Digital changes in the market

“Always on”

“Personalized”

Digital changes in the market – facts

http://www.nusport.nl/column/2491888/wes-twittert-ditisweldeechtetoch.html

Radio → 50 miljoen gebruikers (38 jaar)

TV → 50 miljoen gebruikers (13 jaar)

Internet → 50 miljoen gebruikers (4 jaar)

Facebook → 100 miljoen gebruikers (9 maanden)

96% van de Generatie Y (jongeren geboren na 1981) gebruikt social

media

><

=

E-commerce = big

In-store = huge

FMCG (Belgium) = 1-2%

(growing 10x faster online

than offline)

Meer dan 50% van de US offline retail sales zal beïnvloed worden door

het web op korte termijn

88% van consumenten zoekt online maar koopt in een fysieke winkel

(webrooming)

94% van de totale US retail verkopen gebeurt nog steeds in de fysieke

winkel

When is a purchase online vs. offline?

What is impact of digital (r)evolution for

your sector/business?

What is impact of digital (r)evolution for

your sector/business?

Changes in

retail practices

Changes in

shopping behavior

Wijzigingen in

retailpraktijken

Impact of digital era on retail practices

New Commerce / Business

models

New communication &

information possibilities

New technological possibilities

New commerce / Business models

New business models (e-commerce)

Pure players


Traditional retail

(brick-and-mortar)

Online retail

(pure-play)

Buy

Offline Online

Orienta

tion

Onlin

e

O

fflin

e


New business models (e-commerce)

New companies (tech giants)


Supply chain

Platforms

(cybermediation)


Samenbrengen verenigingen &

sympathisanten: Geld

inzamelen voor je vereniging of

goede doel zonder dat het je

moeite of één eurocent extra

kost

Wij inspireren jou om nieuwe plekken te ontdekken. Kies bij ons uit een dagelijks wisselende selectie reizen, samengesteld door ons team van reisliefhebbers en lokale experts.

Cybermediation = new entrants that function as intermediaries

…


Supply chain

Cutting out the

middlemen

(disintermediation)


MANUFACTURER RETAILER

New communication & information

possibilities

Personalized customer

experience

New technological possibilities

Make purchase decisions Communicate

Focus

Aankoopgedrag & customer

journey – theorie

Customer journey

• A series of touchpoints or interactions between the

customer and the service provider

Rawson, A., Duncan, E, & Jones, C. (2013), “The Truth About Customer Experience”, Harvard

Business Review, 91 (9), 90-98.

Customer journey

• The many critical moments when customers interact with

the organization and its offerings on their way to purchase

and after

o Path-to-purchase

o Consumption

Rawson, A., Duncan, E, & Jones, C., “The Truth About Customer Experience”, Harvard Business

Review, 91 (9), 90-98.

How does the customer journey for your

customer look like?

Customer journey

• The many critical moments when customers interact with

the organization and its offerings on their way to purchase

and after

o Path-to-purchase

o Consumption

Rawson, A., Duncan, E, & Jones, C., “The Truth About Customer Experience”, Harvard Business

Review, 91 (9), 90-98.

Path-to-purchase (1)

Problem recognition

Information search

Evaluation of options

Product choice

Post-purchase evaluation

Orientation

Asseal (1998), Consumer Behavior



Extended problem

solvingLimited problem solving

Habitual decision

making

Level of involvement

Perceived risk

Information processing


Problem recognition

Information search


Product choice


Orientation

Extended problem

solving

Limited problem

solving

Habitual decision

making



Problem recognition

Information search


Product choice


Orientation

Path-to-purchase (5)Problem

recognition in channel A

Information search in channel A

Evaluation of options in channel A

Product choice in channel A

Post-purchase

evaluation in channel A

Orientation of channel A

Search attributes of channel A

Purchase attributes

of channel A Post-purchase

attributes of channel A

Problem recognition in

channel B

Information search in channel B

Evaluation of options in channel B

Product choice in channel B

Post-purchase

evaluation in channel B

Orientation of channel B

Search attributes of channel B

Purchase attributes

of channel B Post-purchase

attributes of channel B

(A = offline)

(B = online)

Verhoef, P., S. Neslin and B. Vroomen, “Multichannel Customer Management: Understanding the Research-Shopper

Phenomenon”, International Journal of Research in Marketing, 24 (2), 129-148.

Types of touchpoints

Brand-owned Partner-owned

Customer-

owned

Social/external

/independent

…

…

…

…

Lemon, K. and Verhoef, P, “Understanding Customer Experience Throughout the Customer Journey”,

Journal of Marketing, 80 (November), 69-96

Customer journey

Explosion of touchpoints

→

Complex customer journeys

Heightened importance of

customer experience



Multi-dimensional construct that involves:• Cognitive• Emotional• Behavioral• Sensorial• Social responses to a firm’s offerings during the customer’s entire purchase journey

Iterative / Dynamic & individual-specific



How does the customer journey for your

customer look like?

Impact van digitale (r)evolutie

op aankoopgedrag

How did purchase behavior change?

Academic insights

Impact of digital?

Where we buy

if we go online?

How we buy? How physical

stores keep on

playing a role?

Example 1: Change in how we buy

• Research-shopper phenomenon: the tendency of

customers to use one channel for search and another for

purchase

Verhoef, P., S. Neslin and B. Vroomen, “Multichannel Customer Management: Understanding the Research-Shopper

Phenomenon”, International Journal of Research in Marketing, 24 (2), 129-148.

Method:

Survey among 396

Dutch consumers (Loans, vacations,

books, computer,

clothing, and electronic

appliances)

Traditional retail

(brick-and-mortar)

Online retail

(pure-play)

Offline OnlineO

rie

nta

tion

Onlin

e

O

fflin

e

Buy

Showrooming

(omni-channel)

Webrooming

(omni-channel)



• Attribute-based decision making

o Attribute perceptions → attitudes → behavior

o One channel excels on search attributes, another on

purchase attributes

• Lack of channel lock-in

o High search attitudes do not translate in high purchase

attitudes

o Ease of “walking away” on the Internet

• Cross-channel synergy (complementarity of channels)

o Economic benefits

o Smart shopper feelings


What is the intention to use channel x for activity y

Search Purchase

Store 81% 84%

Internet 64% 13%

Catalog 47% 3%

How many channels were used in orientation stage?

27% used one channel

48% used two channels

25% used three channels

How many respondents engaged in research shopping: 76%

(research shopping: use of multiple channels for search and/or use of

multiple channels for search-purchase)




• 26.3% engaged in showrooming

o Most “popular” categories: clothing, shoes

• Finding a lower price online is not the only

reason for deciding to engage in

showrooming.

• Expecting to find a higher quality products

online and perceiving long waiting times for

getting help in offline stores are other reasons

for showrooming.

• Availability of in-store sales personnel!

Gensler, S., S. Neslin and P. Verhoef, “The Showrooming Phenomenon: It’s More than Just About Price”,

Journal of Interactive Marketing, 38, 29-43.

Method:

Survey among 556

US consumers (Clothing, shoes,

sporting equipment,

furniture, toys/games,

kitchen

supplies/appliances,

computers, TVs, audio

products and cameras)

Example 2: Change in where to buy• When go online,

o Which online store do consumers choose?

• First online purchase: most preferred chain

• Once they gain experience: compare different chains

on assortment → switch to competitors

o Do they merely shift purchases from offline to

online channel (cannibalization) or do they

expand purchases (expansion)

• Indications of SoW expansion (attract purchases of

competitive chains)

• SoW expansion varies across consumers and chains

K. Melis, K. Campo, E. Breugelmans and L. Lamey “The Impact of the Multi-channel Retail Mix on Online Store Choice: Does

Online Experience Matter”, Journal of Retailing, 91 (2), 272-288.

K. Melis, K. Campo, L. Lamey and E. Breugelmans “A Bigger Slice of the Multichannel Grocery Pie: When does Consumers’

Online Channel Use Expand Retailers’ Share of Wallet?”, Journal of Retailing, 92 (3), 268-286.

Method:

Grocery shopping

data of 3,000+ UK

multichannel

shoppers

(Four supermarkets

offered an online

shopping venue)

Example 2: Change in where to buy

• We find evidence of short-run business-

stealing effects of direct-to-consumer sales on

retail sales

• No long-run, lasting effect

• However, a sizeable share of retailers seems

to benefit from direct channel (larger

assortments, more brand expertise, online

presence)

M. Van Crombrugge, E. Breugelmans, K. Cleeren “Catching Friendly Fire: How Retailer Strength Influences the

Competitiveness of a Manufacturer Online Direct Channel on the Retailer Network”

Method:

Sales data of a

major player in the

toy industry (online

webshop, retailer

sales) for Belgium,

the Netherlands &

France

Example 2: Change in where to buy

• Again, evidence of business-stealing (retailers

loose sales after the direct channel entry)

• Retailers increase prices & lower assortment after

the entry

o Protection & punishment

• Substantial variation across retailers & categories

o Financial & organizational power

o Distinction from online channel

o Competitive setting

M. Van Crombrugge, E. Breugelmans, K. Cleeren “Catching Friendly Fire: How Retailer Strength Influences the

Competitiveness of a Manufacturer Online Direct Channel on the Retailer Network”

Method:

Entry of first online

direct channel in

Belgian SDA market

Sales data, price

level and

assortment size of

all retailers where

brand was sold

Example 3: Role of physical stores?

• Impact of a store opening for

fashion and home furnishing

retailer on existing sales

through catalogs and the

Internet.

Avery, J., T. Steenburgh, J.A. Deighton and M. Caravella “Adding Bricks to Clicks: On the Role of Physical Stores in

a World of Online Shopping”, GfK Marketing Intelligence Review.


• Over time, catalog and Internet channel increasingly

benefited from the presence of the new brick-and-mortar

store


• Few signs of cannibalization, many signs of synergy

o Physical stores act as billboard for the brand

o Increased brand awareness

o Support brand image

• Recommendation for an integrated channel approach

o Highlight cross-channel benefits (pick up, return

products)

o Communicate about all shopping channels

o Leverage cross-channel promotions

Uitdagingen en opportuniteiten

voor ‘traditionele’ (vaak fysieke)

retailers

E-commerce destroys physical stores?

Destructieve concurrentie

Challenges for retailers – scenario 1


3D printer

Products Services

“Virtuele bril laat toe bestemming te ontdekken voor u boekt”

De Standaard, 18/11/2015


Physical retailers conquer the online market

Incrementele concurrentie


Physical retailers need to adapt ‘old’ value proposition

Disruptive concurrentie

(Radicale) evoluties in de Retailing

“Retail zoals we die eeuwenlang gekend hebben, is dood.

Economische, demografische en technologische

ontwikkelingen hebben haar overbodig gemaakt.”

“We zitten vandaag in een overgangsperiode waarin retail

volledig wordt hertekend.”

Jorg Snoeck & Pauline Neerman, “The Future of Shopping”

Omni-channel retail strategy

http://manageyourmedia.eu/services/cross-channel-communication-strategy/

Multi-channel vs. Omni-channelChannel focus

Interactive channels only

All customer touchpoints (interactive and mass-

communication channels)Channel scope

Retail channels only

&

Retail channels, mobile channels, mass communication

&

Customer Relationship Management focus

Customer-Retail channel Customer-Retail channel-Brand

Multi-channel vs. Omni-channelChannel scope

Separate channels (no overlap) Integrated channels (seamless experience)

Channel Management

Per channel Cross-channel

Firm objective

Channel-level e.g., sales per

channel, experience per channel

Company-level, e.g., total sales, overall

customer experience

Customer experience

management

Verhoef, P., P.K. Kannan and J.J. Inman, “From

Multi-Channel Retailing to Omni-Channel

Retailing: Introduction to the Special Issue on

Multi-Channel Retailing”, Journal of Retailing,

91 (2), 174-181

Omni-channel definition

“The synergetic management of

the numerous available

channels and customer touchpoints,

in such a way that

the customer experience across channels and

the performance over channels

is optimized.”

(aka Phygital of onlife)

Verhoef, P., P.K. Kannan and J.J. Inman, “From Multi-Channel Retailing to Omni-Channel Retailing: Introduction to

the Special Issue on Multi-Channel Retailing”, Journal of Retailing, 91 (2), 174-181

http://www.economist.com/node/3810230, The Economist, March 31st 2005

“This new

consumer power is

changing the way

the world shops.”

http://www.economist.com/node/3810230

Or not?

Cases & examples

Omni-channel retail strategy – examples

• Move physical channel online

• Implement website that meets standard of pure players

• Get rid of online disadvantages

• Logistics

• Convenience > speed

• Product choice → Return policy


• Exploit offline presence

• Turn physical stores from a liability into an asset

• Make a visit exciting, entertaining, emotionally engaging

• and/or ultra-convenient and efficient


• Bring Internet to the physical world

o Digital experience should match store experience

o No technology because of technology, technology as

useful resource

https://youtu.be/Fg0Wn26q95k?t=85


• Become customer-centric in your thinking

Case

Case

Case

VRT

Case

Wrap up

Wrap up

• Digital (r)evolutions have changed retail practices &

consumer behavior

• Companies need to reflect on their current way of business

o Customer-centric thinking (customer journey)

o Focus on customer experience

o Omni-channel strategy

• Company >> Channel

• Physical stores can play an important role

• Ultra-convenient OR experience-driven

• Lots of uncertainty

References

References• Assael, H. (1998), Consumer Behavior and Marketing Action, 6th Edition.

Cincinatti, Ohio: South Western College Publishing.

• Avery, J., T. Steenburgh, J.A. Deighton and M. Caravella (2013), “Adding

Bricks to Clicks: On the Role of Physical Stores in a World of Online

Shopping”, GfK Marketing Intelligence Review.

• Gensler, S., S. Neslin and P. Verhoef (2017), “The Showrooming

Phenomenon: It’s More than Just About Price”, Journal of Interactive

Marketing, 38, 29-43.

• Lemon, K. and Verhoef, P (2016), “Understanding Customer Experience

Throughout the Customer Journey”, Journal of Marketing, 80 (November), 69-

96

• Melis, K., K. Campo, E. Breugelmans and L. Lamey (2015), “Multi-channel

Grocery Shopping: The Dynamic Impact of Online Shopping Experience on

Online Store Choice”, Journal of Retailing, 91 (2), 272-288.

• Melis, K., K. Campo, L. Lamey and E. Breugelmans (2015), “A Bigger Slice of

the Multichannel Grocery Pie: When does Consumers’ Online Channel Use

Expand Retailers’ Share of Wallet?”, Journal of Retailing, 92 (3), 268-286.

References

• Rawson, A., Duncan, E, & Jones, C. (2013), “The Truth About Customer

Experience”, Harvard Business Review, 91 (9), 90-98.

• Snoeck, J., P. Neerman (2017), “The Future of Shopping”, Uitgevery Lannoo,

Tielt

• Van Crombrugge, M., E. Breugelmans, K. Cleeren “Catching Friendly Fire:

How Retailer Strength Influences the Competitiveness of a Manufacturer

Online Direct Channel on the Retailer Network”

• Van Crombrugge, M., E. Breugelmans, K. Cleeren and S. Neslin “The Impact

of Manufacturer Online Direct Channel Entry on the Level and Volatility of

Retailer Sales and Price“

• Van Ossel, G. (2014), “Omnichannel in Retail”, Uitgeverij Lannoo, Tielt

• Verhoef, Peter C., P.K. Kannan, and Jeffrey J. Inman (2015), “From Multi-

Channel Retailing to Omni-Channel Retailing: Introduction to the Special Issue

on Multi-Channel Retailing,” Journal of Retailing, 91 (2), 174-181.

• Verhoef, P., S. Neslin and B. Vroomen (2007), “Multichannel Customer

Management: Understanding the Research-Shopper Phenomenon”,

International Journal of Research in Marketing, 24 (2), 129-148.

Contact Details

• Els Breugelmans

• [email protected]

• LinkedIn

• Twitter

o Els Breugelmans

mailto:[email protected]

Advantages for consumers

ONLINE

* Rich product information

* Customer reviews and

tips

* Editorial content and

advice

* Social engagement and

two-way dialogue

* Broadest selection

* Convenient and fast

checkout

* Price comparison and

special deals

* Convenience of anything,

anytime, anywhere access

…

OFFLINE

* Edited assortment

* Shopping as an event and

an experience

* Ability to test, try on, or

experience products

* Personal help from caring

associates

* Convenient returns

* Instant access to products

* Help with initial setup or

ongoing repairs

* Instant gratification of all

senses

…http://www.emarketer.com/Article/Heres-Why-Purchasers-Still-

Prefer-Brick-and-Mortar/1012128?ecid=SOC1001

Advantages for consumers

ONLINE

* Rich product information

* Customer reviews and

tips

* Editorial content and

advice

* Social engagement and

two-way dialogue

* Broadest selection

* Convenient and fast

checkout

* Price comparison and

special deals

* Convenience of anything,

anytime, anywhere access

…

OFFLINE

* Edited assortment

* Shopping as an event and

an experience

* Ability to test, try on, or

experience products

* Personal help from caring

associates

* Convenient returns

* Instant access to products

* Help with initial setup or

ongoing repairs

* Instant gratification of all

senses

…http://www.emarketer.com/Article/Heres-Why-Purchasers-Still-

Prefer-Brick-and-Mortar/1012128?ecid=SOC1001

Documents

How to optimise your omnichannel approach? › wp-content › uploads › 2018 › ... · Lemon, K. and Verhoef, P, “Understanding Customer Experience Throughout the Customer Journey”,