Retailers have traditionally thought in terms of distribution channels and have structured their internal systems and metrics around them. But that channel-centric thinking is at odds with how customers actually engage with retailers. For example, customers may start their journey online, then venture into the store to see, touch and try on product, only to order it via their mobile device while still in the store or online after they return home. Retailers need to think differently in a marketplace where channels don\’t matter, only the customer does. She is the POS, wherever she is.
DeAnn Campbell, director of retail strategy and development at Harbor Retail, proposes a different way to think beyond omnichannel recognizing that it limits retailers operating in the dynamically shifting world of retail. \”Omnichannel is no longer descriptive of what is happening in retail today. Omnichannel implies a sameness between channels and that is not really the case,\” she says. \”It is more productive to encourage things to be different yet harmonized with the brand story so that the customer will play each note in the retail experience. That is what we call Harmonic Retail.\” https://www.harborretail.com/
She credits her musical background and a \”shower moment\” with coining the Harmonic Retail term, which Harbor has trademarked. But it is an apt description of the ways retailers need to think differently about how they engage customers along their path to purchase.
Think of operations like an orchestra. Instead of all the instruments playing the same note, each part of the customer journey plays a harmonized melody suited to the range and timbre of each instrument. In other words, rather than each touchpoint along the customer\’s journey playing notes in unison, they should harmonize in a special way unique to the range and possibilities of each step along the way.
Orchestrating the Customer Experience
Harmonic Retail describes the next evolutionary step in retail. It is \”a shift beyond converged commerce where online and offline experiences don\’t just integrate, but they interact, enrich and react to one another to create a living, harmonized brand expression throughout the customer journey,\” according to Campbell.
The problem with omnichannel retail is that it is on the retailer\’s terms and forces the customer along predetermined paths to purchase that are conveniently aligned with the organizational structure and metrics. \”You have your e-commerce team running the e-commerce site and tracking their key performance indicators. You have the store retail team doing the same thing. Each group is measured on their channel\’s success,\” Campbell says. \”Retailers need to merge those two KPIs together so it becomes one KIP – the lifetime customer value.\”
Harmonic Retail flips the traditional retail model, which starts in the store with e-commerce cobbled onto it. The new model is grounded on e-commerce and the retailer\’s digital presence, with the store a possible, but not necessary component. \”Truth be told, the main channel in retail is now the e-commerce channel. The store is but one of several mediums that support the e-commerce business,\” Campbell affirms. All brand touchpoints must support the customer regardless of how they choose to engage, like the brick-and-mortar store, mobile apps, email, social media, print advertising and others.
\”No matter where the customer starts on their journey, the brand story is woven throughout,\” Campbell explains. And today retailers have many alternative choices for how they engage, including pop-ups, vending machines, kiosks, mobile, big experiential and flagship stores and fulfillment centers. \”All of these need to harmonize the brand experience and be aligned with the local market.\”
With a client list that includes Nordstrom, West Elm, Starbucks, Best Buy and Nebraska Furniture Mart, Campbell shares examples drawn from her research and experience with Target and Ulta to show how retailers implement the concept of Harmonic Retail so that the many pieces of the retail experience are orchestrated to enhance customer engagement.
- Target Understands Context Drives the Customer Journey
While many retailers focus on content as the driver of the customer-retail interaction, be it product content or the content in brand marketing and messages, Campbell says that the main driver of the customer journey is the context, the environment and setting in which the customer and their needs manifest.
Target understands how context is more important than content. To that end, Target is rolling out a wide range of contextual formats in order to deliver content to the customer. These formats include a new urban store concept, vending formats, curbside pick-up, at-home delivery through Shipt and pop-ups, like last summer\’s NYC Pint Shop opened in collaboration with the Museum of Ice Cream. That collaboration also led to a Museum of Ice Cream product line in the stores.
\”Target embraces the differences in its channels, and exploits them, rather than turning away from them,\” Campbell says. She points to how the differences in the customers\’ context impacts their journey in the Target baby department. For example, expecting couples anticipating their upcoming event are primarily in-store shoppers. But after birth, those shoppers largely abandon the store and shop online instead. \”Those two experiences are different and the products are different, but through it all, the customer knows it is Target,\” she says.
Campbell further notes that while many other retailers are pivoting toward the millennial customer with experiences and offerings geared to them, Target recognizes the need to serve all generations equally, even seniors. \”Boomers are still producing 50 percent of revenue for retailers; millennials are not the revenue drivers. Retailers have to support all of those age groups fully,\” she believes.
- Ulta Seamless Blends Online and In-Store Experiences
\”Ulta is really tuned into their customers,\” Campbell says. \”They are definitely full-on Harmonic Retail.\” By that, she means Ulta is letting customers take the lead in ways they want to engage, with the company logging each of those interactions to enhance the customer\’s experience.
She uses the example of a customer searching for mascara that doesn\’t clump, a search she has personally engaged in. \”You go online and look for recommendations and ideas there. Then you go to the Ulta site to see how products are reviewed and recommended. Ulta remembers that,\” she says. If the customer ventures into the store with her phone in hand, the system may give her a coupon for the brand she is looking for.
Ulta takes that digital engagement further, allowing online customers to interact via pop-up video chats with customer service representatives. And if the customer comes to the store, she can connect electronically with the same person she has already established a relationship with.
That personal touch is powerful for Ulta and also gives it staffing flexibility. \”Some 90 percent of retailers feel their staffing models don\’t work anymore,\” Campbell shares. \”Imagine if you had a group of your staff working at home and video chatting with customers. That improves the customer experience over an impersonal chatbot and it helps retailers attract and retain staff.\”
Checkout Counter Becomes Customer Welcome and Service Center
In closing our discussion, Campbell believes the traditional retail checkout counter is where retailers need to tune into the Harmonic Retail opportunity. \”Now there are so many other ways to pay, you are going to see the store evolve to recognize their primary function is customer service,\” she says. \”Instead of a checkout counter separate from a customer service desk, it becomes a welcome center where people can go to pick up products ordered online, try things on that may be waiting for them, return things and engage with people,\” she continues.
She foresees these new welcome/customer service centers as a crucial aspect of Harmonic Retail. \”You can eliminate huge checkout counters and center the store not around selling products so much as fulfilling customer needs and making them happy so they love your brand,\” she shares. \”Then customer service becomes the primary element in the store design.\”
Harmonic Retail Creates a Halo Effect
Under the new Harmonic Retail model, the role of the physical store has to evolve to play a supporting rather than a starring role in the customer relationship. It becomes the place for service when the customer needs it, while online becomes the primary vehicle to support the customer before, during and after the engagement.
\”When a store opens, there is an average 20 percent to 30 percent lift in online sales in that area,\” Campbell\’s research shows. \”The store is now generating a beautiful halo effect in the main store channel which is online.\”
Retailers that want to get that halo need to harmonize the entire customer journey, playing to the strengths in each touch point and compensating for each weakness as well. \”When we look at the data, companies that have a harmonic customer engagement retain their customers 80 to 90 percent more than companies that have a weak multi-channel, store-based experience,\” Campbell said.
\”You want that customer over the long haul to be loyal to your brand, to love your brand, to shop at your brand regardless of whether they are in the store or online,\” she concludes. Programming the customer experience harmonically may be the best way to make that happen.