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Omnichannel. That Old Chestnut!

Geoffrey Parsons

Director of Experience Consulting, EPAM Continuum

Victor Vishnyakov

European Head of Consumer and Retail BU, EPAM
Interview
  • Retail & Distribution

Determining what’s next for grocery retailers and why setting and pursuing an omnichannel strategy is more relevant than ever.

EPAM recently released its new Omnichannel Retail Playbook, offering insights for grocery retailers looking to provide seamless customer experiences. The playbook accounts for the recent impacts of the novel coronavirus, which has undoubtedly accelerated a longer-term shift towards integrated physical/digital experiences and forged cracks in incumbent retail business models.

However, omnichannel is nothing new. For more than a decade, the grocery industry has been discussing how traditional business models had become fragmented, and how they needed to deliver seamless experiences across stores and digital channels.

We spoke with Geoff Parsons, Director of Experience Consulting at EPAM Continuum, and Victor Vishnyakov, European Head of the Consumer and Retail Business Unit for EPAM, about the challenges of omnichannel and how to overcome them. 

Why is omnichannel still a hot topic, and what makes omnichannel so difficult to achieve?

Geoff Parsons (GP): First and foremost, show me a grocer that does this really well. Even the very best still aren’t delivering true omnichannel. Everyone understands the idea of making the customer experience seamless, but when they get down to it, they still get blocked by the traditional siloes. 

“Show me a grocer who does this really well. Even the very best still aren’t delivering true omnichannel.”

Businesses haven’t been in a position to execute true omnichannel because, for many clients, digital or eCommerce sits apart from the rest of the business. It’s managed differently with different incentives. With true omnichannel, brand, human, digital, physical and operations are all part of one integrated approach.

Victor Vishnyakov (VV): Organizational culture is often the biggest hurdle. Companies may have omnichannel as a vision and know how to reshuffle IT systems to enable most of the individual capabilities, but omnichannel is multi-dimensional and it all needs to move at the same time as part of a cultural shift. Culture change involves technology, customer vision, products and platforms—all integrated at the same time. Do it one-by-one and it won’t work.

Organizations are not typically structured to work in concert. Each part of the business has different goals and objectives, and every channel is still dealt with separately. It usually falls on the CEO level to make cross-department cooperation happen — and even then, it’s often lost the moment they receive their PnL report update.

GP: However, despite these obstacles, some organizations have been very successful in their omnichannel efforts. Disney resorts and brand ecosystem is a great example. Today, MagicBand is still one of the great physical-digital merges, creating a truly seamless customer experience.

Walmart is also interesting because, under fierce competition from Amazon, they looked at their core strengths—distribution and store network (nearly 80% of Americans live within driving distance of a Walmart)—and built upon them. In 2014, they designed the click and collect experience from the ground up, not just as a bolt-on to their core business. Look at Walmart today—they’ve added over 400 billion to their market capital and used the click and collect learnings to launch one of the most sophisticated digital businesses in the world. Currently, the CMO reports to the CXO at Walmart.

If organizational siloes have been a barrier to achieving omnichannel visions, has COVID-19 been an unwelcome catalyst in helping, in part, to remove these siloes?

GP: Traditionally, the grocery sector has underinvested in technology. The short-term focus has been on showing top line growth and bottom line savings. In some cases, they’ve spent hundreds of years optimizing their service model – and then COVID-19 came and changed the pace. It meant grocers had to quickly invest in digital capabilities.

“Whilst some of the change experienced during this pandemic may be temporary, much of the change is here to stay.”

VV: On top of enabling uncomfortable online channels fast and at scale, it’s clear that grocers now need to change the purpose of their physical spaces and the ways they interact with consumers in general.

The consumer has changed; they became more fluid. Competition has also changed; you can get delivery from everywhere. Venture capital-backed food delivery startups are popping up daily. Niche players with neglectable investments in retail presence are just as available to consumers as big chains who’ve invested fortunes in being near the consumer.

Whilst some of the change experienced during this pandemic may be temporary, much of the change is here to stay—and that means things that were tentatively on the transformation roadmap have taken on a new sense of urgency.

Speaking of roadmaps, grocers could be forgiven for thinking that they’ve too often ended up with a roadmap, but little change; or bits of change, but not aligned with a roadmap. So how do we get this right?

GP: An omnichannel approach requires a holistic vision that cuts across traditional retail siloes and aligns the organization around the direction of travel. Omnichannel challenges span customer, business, technology and organization, so any playbook must seek to address all four as a single system.

VV: This is a journey that takes a few years, but you can have that journey mapped in 12 weeks. Quick wins can then be found, but we’re talking about cultural change here. Digital transformation has often been a conversation purely about a new platform or eCommerce channel. But it hasn’t moved the needle itself because the only way to make real change is to take a holistic view based on the customer perspective—that’s how you unlock all the siloes; that’s how you see the whole organization. This takes time, but it doesn’t necessarily take long to start seeing benefits.

“There’s an urgency to this—grocers have to act.”

We know clients can’t afford to immediately modernize legacy ecosystems from a complexity, time and budget perspective. They need a model that enables them to innovate whilst maintaining control. You do that by developing an innovation platform that sits alongside the corporate tower where you can pilot small, niche projects in-region and in-brand without damaging legacy architecture. If it’s successful, you can migrate it quickly and easily because the complexity has been unblocked. You don’t need to replatform the entire stack to allow change to happen.

That’s how you deliver long-term omnichannel transformation without waiting forever to see the benefits.

GP: Omnichannel doesn’t mean investing in everything everywhere—it means meeting our customers in context. A customer-centric channel strategy maximizes channel strengths and keeps a focus on ROI. Platforms ensure the mix is not static, but adapts at speed according to market need.​ This means that we can come to market quicker, learn rapidly and be more adaptive than our digital native rivals.

We’ve helped grocers build integrated roadmaps. We’ve put teams in place. We’ve supported organizations in turning their hierarchies 90 degrees to focus on customer value.

“There are emerging pockets of best practice.”

Based on our omnichannel playbook, we’ve designed a vision for grocers called Olive, which brings all of these experiences into consumer hands. This includes personalized loyalty programs, concierge services, subscription models and new delivery models working together in one place. Real omnichannel personalization is happening, and EPAM’s Olive shows you how it might be done.

Download EPAM’s Playbook for the Athletic Omnichannel Retailer. It includes:

  1. Guidance on the four key components to set and achieve an omnichannel vision
  2. Commentary on key omnichannel retail challenges
  3. Advice on structuring your digital operating and capabilities model
  4. Tools to prioritize omnichannel investment

Find out how to make omnichannel a reality in your organization.

Whilst the example used is Grocery, this playbook is relevant to all retailers. 

Omnichannel
Vision

Setting a lighthouse for customer centered value creation

Outcome: Organizational aligment around the direction of travel

Product Strategy
& Portfolio

Identify critical investments weighted by impact/effort

Outcome: A fact-based, effort/impact portfolio and prioritization model for flexible investment around the direction of travel


Digital Business
& Operating Model

Enabling omnichannel value delivery with speed, efficiency and scale

Outcome: Adaptive retail organization at speed and scale

Omnichannel
Capabilities

Combining people, processes and MACH technology

Outcome: Future-ready capabilities and technology

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