Are you where your customers are?
“Think like the customer” is good advice to any retailer. I was struck by the ways this guidance from Accenture on adapting to a multichannel world played out in what U.K. supermarket chain Morrisons has to say about what they call their “fit for the future” strategy.
"Any business needs to go where their customers are.”
~ Dalton Philips, CEO Morrisons
As the quote implies, one big piece of their Morrisons' strategy is going online Morrisons largest competitors, Sainsbury’s and Tesco, developed online ordering and delivery first, and as another executive says, it’s “a really clear signal that we need to be there” that “our customers spend half a billion pounds online with other retailers” every year.
The first thing that most people think when they hear “multichannel” or “omnichannel” retailing is brick-and-mortar retailers adding ecommerce capabilities. And for good reason: empirically it has become clear that consumers who interact with a brand in more than one way become better customers: Walgreens for example, found that those who interact in-person, online, and on a mobile app spend six times more than those who only visit stores.
Building a digital transformation strategy that strengthens a company’s overall competitive position
But as the Morrisons story illustrates, “thinking like the customer” in order to build a strategy for digital transformation that strengthens a company’s overall competitive position is richer and more interesting than simply imitating what others have done.
In a recent Apigee Institute report, KPIs, Conviction, and Competitive Advantage, we wrote about efficiency and customer satisfaction as enterprise KPIs that digital leaders identify as areas where they expect big impact—with subsequent growth in revenue and margin. Here’s how I see this chain being built by Morrisons:
Morrisons asserts as its strategy (and has been recognized for) standing out as a place where customers can get the freshest local food and assistance from skilled staff (such as butchers and cheese mongers). Further, they emphasize the traceability of their produce all the way to the source.
But in the past, they managed their inventory through pen and paper and walking around: their employees would literally walk through the store with paper forms, take stock of what was on the shelves, and walk back to an administrative office to type it into a PC. By moving to digital—including tablet-based inventory systems—they can continue to satisfy customers with guaranteed freshness and traceability while improving efficiency allowing them to shift more staff to face-to-face customer support on the floor (not to mention eliminating errors and reducing the cost).
Another lever Morrisons has pulled to increase satisfaction is their expansion into convenience stores that leverage their supply chain capabilities and brand. This is entirely complementary to offering online ordering and delivery. One customer is quoted as saying she shops at convenience stores because “they are open outside normal hours.” Sometimes you want an app that enables you to order something for delivery; sometimes, you want an app that will tell you where you can get something right now at nine or ten at night or six in the morning.
Better customer satisfaction from the weaving together of digital and physical experiences
The most striking example of what it means to weave together digital and physical experiences to drive satisfaction boils down to two quotes from the "Morrisons Fit for the Future" video– the first from a Morrisons' manager, the second from a customer.
Entirely consistent with their focus on fresh local items, a Morrison’s manager notes that they have “thousands of customers who come to us every single week.”
Morrisons also showcases a customer who shops online because of “the fact that you don’t have to remember all the things you need to get every month…they’re just there.”
The light bulb went off for me when I put this in a personal context. My wife is an enthusiastic and accomplished cook. She goes out of her way to go to supermarkets and shops that have fresh meat, produce and baked goods. She not only enjoys the experience, but she’s often making real-time decisions about a dish she’ll make based on the combination of what’s fresh and local and complementary. Smell and touch and serendipitous discovery by walking around are essential to this experience.
It's all about the experience
But when she’s made the trip to her favorite supermarket, there is no additional value to her experience in making the trip to aisle 10 to pick up the 2 tissue boxes and roll of paper towels she buys every week.. These are things for which she can easily create a standing order or, for that matter, have handed to her in a “routine” basket that's waiting for her at checkout because her location aware-mobile app let the staff at the store know when she arrived.
This is the real magic of weaving together channels, and why Morrisons may indeed be “fit for the future.”
Use digital to create efficiencies so your employees aren’t in a back room doing data entry, and instead could be “picking” items for customers while they focus on the differentiated experiences you offer like talking with a trained butcher. Then put the tools for customers to get what they want, when they need it, through whatever channel makes sense right in the palm of their hand.
“Thinking like a customer” will lead you to get excited about the ways that digital does not necessarily replace physical experiences - rather it wraps and enhances the physical experience in smart ways making both better.