Towards omni-channel success in four steps

Nowadays, customers no longer think in terms of channels; they want to be able to buy a product whenever they want. The retail landscape is evolving faster than ever. Retailers are increasingly having to reinvent themselves and adapt to the modern consumer. As a result, large, established brands regularly fail. In many cases, this can be traced back to a poor omnichannel strategy. To survive in this retail landscape, a good omnichannel strategy is the new standard.

However, many retailers find it difficult to develop and implement a successful omnichannel strategy. Within franchising, many find this even more complicated because they involve multiple independent entrepreneurs with whom an appropriate cost and revenue allocation must be achieved. Simply put, this shouldn't pose any problems. An omnichannel mix can strengthen both the franchise formula and the franchisee. After all, the entire principle of franchising is based on the mutual allocation of costs, revenue, and work between the franchisor and franchisees.

Koelewijn & Partners has developed a practical tool that provides insight into the potential for improvement within an organization. This tool helps achieve a successful omnichannel approach and is based on the following principles:

1. Put the customer first

The focus shouldn't be on convenience for the central organization or franchisees. Nor should it be on technology, or even on the approach of successful competitors, although it's useful to analyze their strengths and weaknesses. Developing and implementing a successful omnichannel strategy in today's competitive landscape only succeeds if you view your own proposition and that of your competitors through the eyes of the customer.

With the rise of e-commerce, many retailers have simply added an online channel. If online and offline channels simply coexist and don't work together, you won't get beyond multichannel. However, with a multichannel approach, the potential offered by clicks and brick-and-mortar stores will never be realized. People who research online and then make a purchase in-store buy more items on average and generally spend more than when the entire purchasing process takes place online. However, if the entire purchasing process takes place offline, it's questionable whether the customer will find your store or ultimately end up at a competitor.

Therefore, start by mapping out all the possible channels and ways a customer could ideally interact with your organization. In other words, map the diversity of customer journeys. Carefully consider how these purchasing and after-sales processes would ideally work from the customer's perspective. Only when the central organization and the franchisee group have reached agreement on the ideal scenario is it time to determine the practical implementation.

2. Ensure that omnichannel is also embraced by franchisees

Maximum integration of all channels ensures the best results. After step one, it's clear what this means for the customer. Step two, therefore, is to ensure that the people who manage the various channels—the online team, the franchisees, and the store managers—all understand the benefits of the omnichannel proposition for them personally. This can only be achieved if, when a customer uses multiple channels for a purchase, all those responsible for these channels also reap the benefits.

Unfortunately, experience shows that this situation often creates a "chicken-and-egg problem." The head office argues that franchisees contribute nothing to online sales within the existing multi-channel model and therefore shouldn't share in the results. However, the franchisees refuse to do anything to boost online sales and sometimes even actively hinder it, precisely because they don't benefit from it.

It's important to realize that for many concepts, the e-commerce branch will likely never be profitable as a standalone operation. Price transparency is so high online that only the most efficient, low-cost player ultimately survives. In a true omni-channel approach, however, an e-commerce website can be an incredibly valuable marketing tool that differentiates the concept from the competition.

The only way to break this is to determine a model in which the revenues and costs are shared in a fair way, where the additional revenues outweigh the additional costs.

3. Limit your costs

The largest additional costs of e-commerce are generally online marketing costs and returns. A good omnichannel strategy reduces online marketing costs by actively driving traffic from the stores. In addition, just like revenue, omnichannel marketing costs can be shared fairly with franchisees.

The other major expense is "returns." With clothing, it's often said that people use their living rooms as fitting rooms, resulting in a large number of returns. With other items, the challenge also exists: the online experience of a product often doesn't adequately reflect reality. As a result, customers return items when they actually have them in their hands. However, this can be reduced through effective collaboration with stores. For example, by actively encouraging website visitors to try products in-store before purchasing. This guarantees that the items are available, that they can receive expert advice, and that they can take the items home immediately if they meet their expectations. This reduces the risk of returns and potentially significantly improves the customer experience. Win-win!

And if an item does need to be returned, facilitating returns in-store can significantly reduce shipping and handling costs, depending on the product type.

4. Convince all stakeholders that omni-channel can and should be improved.

Contact us for a no-obligation consultation about how your organization can maximize the benefits of various channels. We'd love to talk with you, your colleagues, and franchisees about how you can reap the benefits of the current retail dynamic!