Channels Are For Televisions, Not For Customer Experiences

The title of this post is a direct reference to a few reports from Forrester on the Omnichannel Playbook for 2018 written by Brendan Witcher. Since when I read this the first time, I thought that this provocative sentence really summarises in the best possible way one of the biggest organisational mistakes many companies are still doing: organise themselves by channels. Reality is that this truly “inside-out” perspective misses the real value driver in the new experience economy: customers.

While prior economic offerings—commodities, goods, and services—are external to the buyer, experiences are inherently personal, existing only in the mind of an individual who has been engaged on an emotional, physical, intellectual, or even spiritual level.

They don’t understand the different business models that companies put together. As a customer, I want to be able to buy a product in one point of sale and return it online. I want to be able to have assistance wherever there is a signage of that brand. I want to be able to exchange and be reimbursed if there is a fault at any touch point with the brand. I want to be able to buy through from Instagram but also from the store nearby with the same level of experience.

The above is not just a weird dream that some people have. It is what will “make or break” the destiny of many retailers and brands in the near future, if they’re not able to cope with what is needed.

Channel Obsession

The problem is that this “channel obsession” is not just an organisational issue. It is deeply routed into a lot of processes, procedures, mechanisms, that create rigidity within organisations. Starting from corporate structures, which often make it difficult to cross-charge returns because physical and digital simply because these belong to different legal entities. Or legal tools, because contracts with franchisees and partners don’t allow to do some processes. Or financial processes, as P&Ls consistently focus on channels, and thus underestimate the impact of the value of true omnichannel experiences. This is particularly true for companies that still have a solid Wholesale / B2B footprint. Because in this case you also have to add the different time horizons in which the “channels” act, which creates additional complexities.

There’s not an easy fix, if not challenging this status quo consistency and continuously, working to overcome this artificial separation for the benefit of the customer. Several tools exist to achieve this, and are all around the redesign of processes and organisations around the Customer.

Bridging the Gap

These tools are clearly linked to Design Thinking to ensure not just the products, but the entire “Experience” is designed around the customer. Agile is the way forward to implement, creating  true “test & learn culture”. And Lean becomes the path to avoid staggering too many layers of organization.

The above image captures this concept very well, and the article that Jonny Schneider wrote on the topic is really eye-opening.

Design Thinking is how we explore and solve problems; Lean is our framework for testing our beliefs and learning our way to the right outcomes; and Agile is how we adapt to changing conditions with software.

The principles however can go a lot beyond pure software design, because building the right thing can definitely be expanded to building the right experience for the customer. Which means linking multiple elements together, from strategy to organisation, from internal processes to external branding. All of it around one single purpose.

The author goes further into analysing how the three mindset overlap. Just by looking at the various elements, it’s really easy to notice how they all easily relate to the one goal of building experiences, cross-linking the organisational vision, to the organisational solution, to the service delivery.

Measure what Matters

All mindsets have consolidated tools and methodologies behind, that can help organisation accelerate their transformation. Wether you call it Digital Transformation or Customer Centric or Retailisation it doesn’t matter: all will have success only if they put the customer at the core of the decision making process.

The biggest obstacle to this, however, is linked to how we measure success. I mentioned it earlier, if our P&Ls are still limited to the 4 walls of a brick and mortar store, failing to capture the added value of a digital sale done in store for example, we will navigate against negative headwinds.

A transformation of the business control mechanisms and of the communication to shareholders and the markets is needed.

Focusing on customer value generation more than on pure revenues if what has made Amazon have tremendous results, despite its ability to deliver profits for many years. The challenge is how we can set us ourselves on a course where we can measure the value of the experience we deliver across all channels. Because this will ultimately shape the only path to survive the risk of being another victim of the retail apocalypse.