Optichannel Retail

Contents Introduction The Messi syndrome

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Part 1 The end of the beginning of e-commerce

25

1

The first wave of e-commerce

27

2

Omnichannel: the answer to e-commerce

45

3

The second wave of e-commerce

59

4

Optichannel retail

77

Part 2 Optichannel customer focus

95

5

Choose your target market

97

6

The ideal customer journey

115

7

A butler for everyone!

143

8

The new customer journey

161

9

The store of the future

187

part 3 Towards a new business model

217

10 The new reality

219

11

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Competitive strength

12 How to create value

265

Introduction

The Messi syndrome

‘An optimist takes the chance of losing; a pessimist loses the chance of gaining.’ Hazrat Inayat Khan (Indian musician, writer and philosopher)

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Optichannel Retail. Beyond the digital hysteria

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‘Footballer for FC Barcelona and the Red Devils. And if that’s not possible: policeman.’ Yes, my youngest son William knows exactly* what he wants to be when he grows up. He is only ten, but I already like his view on life. Dare to dream! Aim for the best you can be and don’t let practical objections get in your way! Because in life, you never know what might happen...

While waiting for FC Barcelona to come knocking, he currently plays for Ritterklub, our friendly local football team. But it is clear that several of his teammates also share the same dream. At training, the Barcelona shirt is easily the most popular among the boys – preferably with the name of star player Lionel Messi printed on the back – followed by the Red Devils, the Belgian national team.

As a parent, I try to view reality with a little more level-headedness. In Belgium, roughly 60,000 boys are born each year. From each generation, only five will be good enough to make it into the national team. In other words, one chance in 12,000! And William is lucky that he wasn’t born in a bigger and more populous country. With ten times as many births, the chances of a boy to ever play for the German Mannschaft are as low as one in 120,000. And for budding Brazilian Neymars, the situation is even worse...

So what about the likelihood of one day being selected for FC Barcelona?

To make this particular dream come true, William will be competing with thousands – in fact, tens of thousands – of young footballers from all over the world. With some 75 million boys being born somewhere around the planet each year, he has as much chance of winning the national lottery as he does of ever playing for his favorite team!

*

In a rapidly changing world, it is perhaps no surprise that my son has now adjusted his ambitions in the weeks between the first and final versions of this manuscript. His Plan B is not longer to be a policeman, but to become a scientist instead.

Chapter 1

The first wave of e-commerce

‘The winner takes it all, the loser’s standing small Beside the victory, that’s her destiny.’

ABBA (Swedish pop group)

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Part 1: The end of the beginning of e-commerce

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This year we set a new record in the Van Ossel household: I think at least 90% of all our Christmas presents were bought online. And I suspect we are not alone. Most of you will be familiar with what I mean. Our personal buying behavior merely reflects one of the fastest growing trends in consumer buying behavior in recent years, as described in dozens and dozens of market research reports.

HOMO ECONOMICUS One of the most characteristic features of the first wave of e-commerce is how rationally we manage the buying process. Once we know what we want to buy – whether it is a computer game, a laptop or a pedal bin – we quickly compare prices on the internet, to make sure we aren’t paying over the odds. After that, the rest is child’s play. We drop our chosen product into our online shopping basket and confirm the order.

In comparison, how we actually came to choose the product doesn’t seem to matter all that much.

Recently, my son Simon asked me to purchase the computer game Overwatch – the Origin Edition. His cousin had told him just how great it was and now he wanted it for himself. At the same time, my daughter Jasmine needed a new computer for her schoolwork. For school, a basic laptop was enough: she was more attached to her smartphone for her other social media ‘interests’ and had no intention of doing anything complex, like editing videos or processing photo montages. The online ‘laptop buying guide’ of PC World soon directed me to what I needed. While I was busy, my wife asked me to see if I could find that new pedal bin we wanted for the bathroom. We had seen a model we liked while shopping in town, but they didn’t have the right color. No problem! Another five minutes searching online and I had found the cheapest price for a Brabantia bin in matt steel, with a promise of nextday home delivery!

Chapter 6

The ideal customer journey

‘It’s really hard to design products by focus groups.

A lot of times, people don’t know what they want until you show it to them.’

Steve Jobs (co-founder and former CEO of Apple)

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part 2: Optichannel customer focus

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‘Imagine…’ sang John Lennon, and in three telling verses set out his vision for an ideal world: a world without religion, war and personal possessions.

A naive and utopian vision? History would suggest that it is. Perhaps even a hypocritical and scarcely believable message? It was bizarre to say the least that a pop star with millions in the bank should unleash on the world his own communist manifesto in the form of a song that was destined to earn him millions more...

Even so, Imagine is an excellent source of inspiration for what we want to do in this chapter. In the following pages we will need to use our imagination to devise our ideal customer journey. And to do this, we must ignore possible practical objections and take no account of our current business model, with one important exception: our target market.

But there is a crucial difference between this exercise and John Lennon’s worldwide hit. Our ideal customer journey is more than just a ‘no-obligation’ intellectual mind game. It is not a dream; it is an ambition. What’s more, it is an ambition that we intend to make good in the foreseeable (albeit long-term) future, by systematically removing all the practical objections that stand in the way of its realization.

THE CUSTOMER JOURNEY The concept of the customer journey is central to the current desire of the business world to achieve maximum customer focus. The aim is to obtain a holistic view of what the customer experiences at each point of contact with your company, your products and your services. This will allow you to gain insights into what your customer does, why he does it and how it makes him feel. In other words, you look at the customer experience through the eyes of the customer, with the ultimate objective of improving that experience and, as a result, customer satisfaction.

The customer journey typically consists of two parts. The path to purchase sketches the route the customer follows to arrive at his purchase. Every step

1. How well have you mapped out your ideal customer journey? Do you need to make a distinction between specific customer groups, buying occasions and product categories?

2. Ignoring practical objections at this stage, which aspects should be dealt with as priorities to make the biggest possible impact on customer satisfaction?

3. On the basis of the above analysis, do you now have a clear vision for your ideal customer journey?

4. What does your technology scan tell you about possibilities for the short, medium and long term? How can technology help you to transform your ideal customer journey into a reality?

5. What are the milestones on the way to your ideal customer journey?

6. Which initiatives will you need to take in the short term to move you in the direction of your ideal customer journey?

7. Are you being sufficiently flexible in your approach? Do you challenge your vision from time to time? Do you update your technology scan, action plans and milestones regularly enough?

The ideal customer journey

CHECKLIST THE IDEAL CUSTOMER JOURNEY

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part 2: Optichannel customer focus

Franck V./Unsplash

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Chapter 9

The store of the future

‘Our competition is not Netflix. It’s not the internet.

It is sporting events, it is bowling, it is nightclubs.’

Tim Richards (CEO of Venue Cinemas)

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part 2: Optichannel customer focus

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Why should you make the effort of going to the cinema if you can also watch a film at home? Digital TV in high resolution, ever bigger screens, 3D-glasses, surround sound in your own living room and (with Netflix) a whole film catalogue at your disposal. You must be barmy to fight your way through the wind and the rain to pay 10 euros for the privilege of watching the same film in someone else’s building! Mustn’t you?

Even so, the cinema is holding its own,125 but only because it has been able to reinvent itself. The level of comfort is greater than ever, we are buying more popcorn and drinks than ever, and the legendary ‘back row of the movies’ is now specially designed without arm rests to make things cozier – and easier – for budding lovebirds. You can even watch live relays of opera, concerts or football instead of a film.

But that’s only the start! There are now some cinemas where you can watch films from under the comfort of a duvet in a double bed. The serving of alcohol and gastronomic finger food in auditoria is also becoming more common.126 Inevitably, technological innovation – for example, the use of ceiling speakers – also plays a role. The result is a totally different cinema experience in comparison with just a decade ago.

This shows that physical channels and touchpoints also have their place in the customer journey of tomorrow. In this chapter we will focus on the future role of the shop and the showroom.

THE BATTLE FOR TIME We are all busy. Very busy. Too busy. For kids and teenagers, it’s because they have to do their homework but still want to spend hours gaming, chatting or just chilling on the sofa. For young couples, it’s because they want to have time for each other but also for their ‘old’ friends. For parents, it’s because they need to combine care of their children with a career. For pensioners, it’s because they’re off for a month in Benidorm next week but still need to get the garden ready for the winter before they go.

Part 3: Towards a new business model

262

CHECKLIST COMPETITIVE STRENGTH AND THE VALUE PROPOSITION 1. Consider each of the six dimensions of the value proposition (convenience, experience, service, trust, inexpensive and choice) and ask yourself the following questions: a. What are the competitive conditions for your target market and to what extent do you satisfy them? b. What competitive advantages currently exist in the market? How important are they for your target market? c. What are your competitive advantages?

2. Look at the six dimensions again, but this time from a more dynamic perspective: a. By which date do you expect which competitive advantage to be downgraded to a condition to compete? What is the situation with your current competitive advantages? b. What new competitive advantages will be created in the future? How important will these be for your target market? c. What competitive advantages will you have in three and five years’ time?

263 Competitive strength

3. Depending on your answers to the above questions: a. Which new initiatives are relevant for your target group? b. What will this cost? c. Based on a cost-benefit analysis, what priorities should you set, bearing in mind the ideal customer journey you want to develop in the long term?