What is Impeding Your OmniWhat is Impeding Your OmniWhat is Impeding Your OmniWhat is Impeding Your Omni

by Nasrin Abdolali, Ph.D. and Pat Ferrell

November 1, 2016

As the number of omni-channel businesses continue to increase, two facts are becoming clear: Omni

channel is here to stay, and it is more challenging

originally anticipated. Many omni-

regarding customer satisfaction and internal business alignment.

between perception and reality of what

“We are investing in Omni-Channel, but

expectations,”

“We aren’t realizing the expected return on our Omni

“Despite heavy investment in our systems

access to all necessary tools,”

What is Impeding Your OmniWhat is Impeding Your OmniWhat is Impeding Your OmniWhat is Impeding Your Omni----Channel ROI?Channel ROI?Channel ROI?Channel ROI?

y Nasrin Abdolali, Ph.D. and Pat Ferrell

channel businesses continue to increase, two facts are becoming clear: Omni

channel is here to stay, and it is more challenging to successfully execute than some organizations

-channel companies are still struggling to achieve desired outcomes

regarding customer satisfaction and internal business alignment. Too often, there is a disconnect

what it takes to become truly “omni.”

Channel, but we are still lagging behind our customers

ing the expected return on our Omni-Channel investment.”

investment in our systems, business executives are struggling with

access to all necessary tools,”

1

Channel ROI?Channel ROI?Channel ROI?Channel ROI?

channel businesses continue to increase, two facts are becoming clear: Omni-

some organizations

channel companies are still struggling to achieve desired outcomes

a disconnect

customers’

business executives are struggling with the lack of

2

“We have a single pricing strategy for on-line and store, but it is not getting implemented

properly.”

These are just a few of the concerns expressed by companies that have invested in becoming omni-

channel. They are finding that it takes more—a lot more—than technology to address the requirements

of an omni-channel world.

What Does it Take to Be Seamless?

There are few examples of companies who have mastered all the necessary elements of an omni-

channel business. Truly seamless retailers:

• Deliver a cohesive and engaging brand experience—across all channels

• Execute the right In-store and online service levels

• Offer all the necessary fulfillment options

• Attain consistency of product offering and pricing strategy

• Gain and maintain an accurate view of available inventory

• Build an organizational structure that is ready to be omni-channel

• Leverage new technology and integrate legacy systems

• Sustain and adapt, knowing what is “omni” today will change tomorrow

The key goal of businesses pursuing an omni-channel transformation is to increase customer satisfaction

and loyalty through a differentiated and seamless experience. The handful of companies that are

considered leaders in this area (such as Disney, Macy’s, Neiman-Marcus and Home Depot) have

generated a consistent and enjoyable experience across channels and provided ease and flexibility of

shopping for their customers. Despite using different tools and approaches, there are common

characteristics among these leaders:

1) Early investment in building a technology foundation to support channel integration

2) Extensive use of apps to make the product selection, buying and returns process easier

3) Near-real-time visibility to inventory across all channels

4) Investment in sales training and the use of technology to drive product education, close sales

and address customer needs

5) A cohesive business point of view across the organization – everyone thinks and acts “omni”

Using innovative tools and transformation of the technology infrastructure has been the key focus of the

leaders. Even among these leading companies, however, very few have built an “omni” organization

that is structured to operate effectively across all functions and channels, in all areas, all the time. This

is caused by the lack of a holistic plan for the journey and insufficient attention to the inter-

dependencies required for a successful omni-channel business.

3

What Are the Barriers to Achieving Omni-Channel Benefits?

Many organizations focus on developing their technology infrastructure and capabilities. However,

gaining the full benefit from the investment in this area requires alignment of all the operations and all

the functions around the omni-channel framework. Even for those that have experienced an increase in

customer satisfaction and sales, the benefits may be short-lived if they do not complete the journey.

Customer Experience Improvement: The key promise of an omni-channel approach is creating a

seamless customer experience across channels which will lead to increased sales and a competitive

advantage. Studies show that, for many organizations, fewer than 40% of customers consider their

experience satisfactory. One of the key reasons for this slow progress is the lack of timely business

alignment around the omni-channel approach. Ideally, the business transition occurs prior to or in

parallel with the implementation of the IT strategy.

Lack of proper data and insight integration is another factor hampering improvements in customer

experience. Omni-channel insight requires deploying different approaches, methods, and tools of

analysis, as well as proper analytics, skills and team structure.

Margin Enhancement: This goal is partly achieved by increased sales due to higher customer acquisition

and customer loyalty, and larger spend by each customer. Margin increases is also driven by the

reduced costs realized through improved operating performance, more productive use of resources and

elimination of redundant processes and activities. This cost saving will likely be much harder to achieve

if the business processes and structure are not mature and fully aligned with an omni-channel business

approach.

Improved Production and Inventory Management: Another benefit is an increase in operational

efficiency, including a reduction in overstocks and overproduction and optimized inventory

management, all of which require better demand forecasting capabilities. The absence of proper data

alignment, lack of inclusion of all relevant information and insufficient analytics capabilities and skills

lower the desired level of efficiency that can be achieved in a true omni-channel business environment,

especially when combined with siloed business units.

Sustainable Technological Innovation: In addition to enhancing customer services, deploying omni-

channel technology improves internal communication, increases competitive advantage, enables

companies to reach to a wider audience, and optimizes information integration. The leading omni-

channel retailers invested early in building solid yet flexible technology foundations which allow them to

realize substantial benefits today. It also makes it harder for later entrants to catch up.

Disjointed systems, separation in the platforms across channels, and slow progress in technology

transition prevents companies from taking full advantage of the benefits of the omni-channel

technology while making it more costly for them to adopt future innovations.

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Where Do You Go from Here?

Omni-channel is an agile and evolutionary process, and many organizations experience hurdles and

setbacks that slow their ability to achieve their desired business outcomes. Those challenges can be

minimized with a clear multi-year strategy and a roadmap for implementing changes to traditional

operating methods, organizational structure and capabilities.

As omni-channel capabilities and customer expectations continue to evolve, it is important to assess

your omni-channel maturity level, understand the gaps, update the roadmap and review the

implementation plan. Even if your organization has completed their technology upgrade, a holistic look

at the omni-channel maturity level can uncover opportunities to improve your return on investment and

to keep you ahead of the curve. The benefits of omni-channel are clear, although the path forward can

be harder to see. Timely and proper strategic planning and precise execution of the strategy are the

ultimate drivers of success.

Please send your inquiries to nasrin.abdolali@nasliconsulting.com and pferrell@virasolutions.com .

Dr. Nasrin Abdolali is CEO and Founder of Nasli Consulting, LLC., a U.S. based strategy consulting firm supporting

companies to grow businesses locally and globally. Dr. Abdolali has extensive experience in designing and

implementing Omni-Channel strategies, assessing existing maturity level and developing implementation

roadmaps. Prior to Nasli Consulting, she was a Senior Executive at Accenture, Ernst & Young and IBM.

Pat Ferrell, Director of Business Readiness for Vira Solutions, has leveraged her extensive background in store

management and merchandising to support retail clients undergoing organizational transformations. She

specializes in Business Readiness, Organizational Change Enablement and Education. Prior to joining Vira Solutions,

she was an Associate Principle with Accenture and a Senior Consultant with Sequent Consulting.