MARKET | Mar 26, 2019

The Customer Journey in omnichannel retailing

What data must be analyzed to accompany the customer’s purchase experience between physical and digital channels?

The relationship between the company and its customers or between an organization and its stakeholders is constantly evolving and the logics of engagement and interaction must be constantly updated. There is no longer a distinction between physical touch points and digital channels, users undergo a customer experience across the board. This concept is inescapable particularly during the sales process, since the company comes into contact with the consumer in different ways and on several occasions.

From multichannel to omnichannel

It is essential to move from a multichannel logic to an omnichannel one, that is, from a system which technically governs the various contact channels to a system which manages them in a coordinated and synergistic manner. The lack of experiential continuity compromises the relationship with the final customer and this obliges companies to make investments destined to frequently renew their own Supply Chain.

According to the Omnichannel Customer Experience Observatory of the Politecnico di Milano, omnichanneling is considered one of the fundamental strategic directions by 63% of Italian companies. There are now 31.7 million (60% of the population over the age of 14) Italians who use Internet during one or more phases of their purchasing process and who therefore expect to live integrated experiences at the various points of contact: point of sale, website, ecommerce, social networks, contact center, advertising…

Today, the omnichannel consumer is very confident in the information he/she is able to retrieve online: 84% of buyers considers Internet a main source of information concerning the product to buy and 81% finds Internet is the most effective method to compare prices. It is for this reason as well that it is important to build a relationship with the customer which is of value, going beyond logics based on mere price competition.

 

Customer Journey between physical and digital channels

The definition of Customer Journey is fundamental, that is, the journey the customer undertakes during his/her relationship with a company, which includes both online and offline stages. A story that starts when the customer looks for goods or services from a company in order to satisfy a need and ends up with a purchase.

The difficulty for companies is that of following the user, correlating data which originate from extremely different sources. The contacts take place in subsequent phases and each single step must be used and exploited, without having to restart the process every time. The user is identified through the various components of the profile, with information which is often stratified through loyalty systems.

At the point of sale, interactions take place thanks to:

  • Store locators and stock visibility to identify available stores and stocks
  • Personal Digital Assistant and Mobile POS which support sales staff in assisting the customer in the best possible way
  • Useful kiosks to allow self-service and personalized access to product information
  • QR code which allows the customer to access a variety of detailed information on the product by scanning it with his/her device
  • Digital Signage, multiscreen applications used to communicate a schedule of customizable and modifiable contents based on the type of store, time of day and brand objectives
  • Location-based services and Beacon technologies, services provided taking advantage of the customer’s proximity
  • Clienteling technologies which help the sales staff to assist the customer in a personalized and real-time mode thanks to the access, via mobile, to a CRM system.

Typically, each company builds its own contact architecture by adding the most innovative online touch points to its physical ones:

  • mobile app
  • social media
  • web advertising
  • ecommerce website
  • campaign management (SMS, email, instant messaging)
  • chatbot.

The importance of data

Omnichannel retailing has challenged the more linear and traditional analysis models. The ability to process and exploit the large quantity of data generated by users, stored in different information systems (CRM, cash / transaction systems, ERP, PIM…), is crucial.

The data collection, analysis and processing phases play a fundamental role in defining the Customer Journey. However, the real challenge is the subsequent use of this information, including taking into consideration the regulatory framework.

The data collected by the companies generate a unique view of the customer and are of various types:

  • first-party data, owned by the company, which include information on user navigation and behavior
  • second-party data, acquired from supply chain partners, which share them with the company as part of a collaboration agreement
  • third-party data, purchased from external data providers (mainly socio-demographic, geolocal or geo-behavioral data).

Data can be further categorized as:

  • structured (organized in diagrams and tables) or unstructured (filed without an ordered method, not manageable on traditional relational databases)
  • individual (attributable to a specific user) or aggregate (stemming from an overall analysis of a group of customers)
  • declared by the user him/herself or deduced from his/her behavior (collected, for example, through analytics tools)
  • historical or updated in real time.

Data Analysis and GDPR

The volumes and types of data which companies may have available are continuously increasing thanks to the digitalization process of the interaction processes and of the relationship in general with the external context. Analyzes can be carried out not only from a medium-long period perspective, but also in order to be able to “personalize” the relationship with one’s customers in real time. Nevertheless, many companies still carry out this activity in the traditional way, using mainly internal company data and limiting the analysis to clustering activities aimed at planning promotional campaigns. The availability of larger quantities of data enables more sophisticated analyzes but is not a sufficient condition. Being equipped with the appropriate technologies and above all the necessary analysis and interpretation skills of so-called Big Data is equally important.

The growth of data production and exploitation, often sensitive and personal, on the web has also prompted a rapid evolution of the regulatory aspects on the subject. It is very important to know and comply with all the directives which regulate holding and managing the information acquired from users.

In this context, a fundamental step on data protection was taken with the GDPR, General Data Protection Regulation – EU Regulation 2016/679, which came into force on 25 May 2016; it is an immediately applicable act throughout the European Union without the need for national transposition laws, which (after two years granted to the organizations to adapt) became fully effective on 25 May 2018. This regulation intends to guarantee the free circulation of personal data, to strengthen the protection of the rights and freedoms of citizens and residents in the European Union, both within and beyond its borders.

Gianluca Polegri