In this episode of Enterprising Insights, host Keith Kirkpatrick discusses the state of omnichannel communications, delving into some statistics around the current utilization of omnichannel engagement strategies and channels, discusses a survey highlighting retailers’ use of the approach and discusses the challenges that are still facing the market.
Finally, he will close out the show with the “Rant or Rave” segment, where Kirkpatrick picks one item in the market, and he will either champion or criticize it.
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Listen to the audio below:
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Transcript:
Keith Kirkpatrick: Hello everyone. I’m Keith Kirkpatrick, Research Director with The Futurum Group, and I’d like to welcome you to Enterprising Insights. It’s our weekly podcast that explores the latest developments in the enterprise software market and the technologies that underpin these platforms, applications, and tools. This week, I’d like to talk about the state of omnichannel communications. Then, as always, I’ll move to my rant or rave segment, where I pick one item in the market and I either champion it or criticize it. So, without further delay, let’s get into the topic of the week, the state of omnichannel communications.
So, first of all, let’s define what are we talking about with omnichannel versus multichannel. When we’re talking about omnichannel, we’re talking about the ability for a customer to engage with the brand through a number of different channels but seamlessly switch between them and then have a very similar experience regardless of which channel they’re using. So, for example, if I’m a customer and I start an interaction with a customer support person or a bot through a chat function on my computer, I should be able to switch to another modality without losing any of my interaction history and really be able to continue on seamlessly. And really the value of this is, there’s a couple of things here. One is when a customer engages with a brand, whether it’s through a sales engagement or whether it’s for support, whatever it might be, they want to be able to accomplish whatever task that they were intending without having to, A, repeat themselves or really kind of move out of the era where they feel comfortable.
A great example is if you are, let’s say, trying to troubleshoot a technology issue in your home, and you are starting that interaction through text. Well, there’s a possibility that you may run into a problem with actually being able to describe the problem. And you might want to switch to a modality where there’s the ability to use something like a webcam or over the phone on the camera, and some cases it will not be supported through that native channel experience like a text chain. So what omnichannel will do is allow you to continue that interaction through a different channel to support other types of functionality or just to deal with the customer preference. A great example of that would be if I’ve started an interaction, let’s say, on my home telephone, and I need to go out, but I still need to stay on the phone with that company. I’d be able to switch to my mobile or be able to switch to an app or something like that and do that without having to repeat myself. Now the other thing, of course, when we’re talking about omnichannel, it’s also about connecting these different channels for different experiences, both online and offline.
So something like I go into a physical store, and I want to make sure that as a retailer, that I’m connecting with that customer both physically and also, let’s say, I walk into the store, I want to make sure that that customer can receive relevant offers through whether it’s their mobile phone or an email or something like that based on their activity in that store. Other great examples, particularly ones that we saw a lot of during the pandemic were things like buy online, pick up in-store, or buy online, ship to store, or buy online and basically return to store. And all of those types of activities are really… kind of fall under the umbrella of omnichannel. Now, what am I talking about today? Well, what are… where are we right now? I mean, that’s something that a few years ago everybody was talking about, “Oh, we’re going to be living in this omnichannel world and people are going to be able to interact again in a very seamless way.” Well, I actually went looking for some stats on where we are as of 2024, and I did find a McKinsey report that said that more than 60% of consumers do participate in omnichannel shopping. And another stat said that companies with omnichannel customer engagement strategies retain 89% of their customers. So yeah, that all sounds great.
There’s some other data out there that I found. Omnisend did a survey, and they found that omnichannel marketing can bring in nearly six times more sales than just single-channel marketing. And that, of course, makes sense. If you’re meeting customers where they are, the likelihood that you’re going to be able to engage with them and sell them is much higher. And I think one of the other things that we’d look at is, well, where are the customers? Well, Google Research found that 90% of multiple device owners, meaning you’ve got, let’s say, a cell phone and a tablet, 90% of those multiple device owners switch between their devices every day using an average of three devices to complete a task. So it’s pretty clear that customers are ready to engage in a multichannel… I’m sorry, in an omnichannel way, but are they really doing it? And this is where I think it’s really interesting to see where’s the breakdown. Is it consumers or is it retailers, or other companies that are trying to engage with our customers? Are they filing… falling down? And I found another survey that actually comes from NewStore. They did a 2024 omnichannel leadership report, and they surveyed nearly 700 retail brands and looked at their capabilities across three unified shopping channels, mobile apps, online and in stores.
And what the survey found is that the brands really need to do a lot more work kind of linking all of those offerings together to create a cohesive, customer-centric shopping experience. And really, after looking through the report, there are really a few different takeaways. The first one, and I think is pretty obvious to anyone who’s actually been out shopping, is that brands are not doing all they can to kind of maximize that omnichannel experience. The survey found that brands scored an average of 43 out of 100 when it came to actually taking advantage of all of the omnichannel solutions that are out there. And the challenge, of course, is that if you think of that from a consumer perspective, if you don’t know that a retailer has all of these options, you may not be even aware that you can switch. A great example, of course, is most people start their engagement perhaps on the web, on their mobile phone, but they don’t necessarily know that maybe there’s a more seamless way of doing things through an app through that particular retailer’s app if they don’t know about it.
So there’s definitely, I guess, a visibility problem in terms of really publicizing, “Okay, here are the channels where we have a presence, and here’s why, as a customer, it makes sense for you to use those.” So I think that’s a real challenge that a lot of companies are facing. Now, I think the other thing, of course, is that if you look at what most people do these days, they use their devices, they use their mobile phones or their tablets to interact with brands because it’s on them all the time. I don’t know anybody other than perhaps my teenage daughter who walks around without at least a 50% charge because they’re so reliant on their phones. And the interesting thing that I saw in this omnichannel leadership report is that about only one-third of these brands actually had a native mobile shopping app, and as I mentioned before, very few actually promoted it. That’s a real problem because if you think about the development time and resources if you’re investing in that, you need to go and promote it and make sure that everybody knows about it.
And not only do your customers need to know about it, they need to be enticed to use it. And it can’t just be about something like, “Hey, come use our mobile app because it’s convenient for the store.” There needs to be some incentive for those customers to actually use it and download it. So a lot of these apps actually didn’t include real interactive features. It didn’t include exclusive content or rewards programs that were built in or other kind of enticements to use that mobile app over another channel. So I think that’s a real lesson that can be learned by companies is, if you’re going to go out and build a mobile app, which you should, if you’re a retailer out there, you should actually absolutely have one of those. There needs to be enough functionality in there to get folks to use it, and it needs to be functionality that is a better experience than you can get through one of those other channels.
Now, that’s not to say that you don’t want to have the ability to interact through SMS or the ability to act through the web or the ability obviously to interact through voice, but if you want to actually leverage that app, which done right can actually make a huge difference in terms of sales conversion, customer support, all of that, because you can define that experience within the context of that application, make it as easy to use as possible and really stand out from the competition if it’s done right. I think the other thing, of course, is that because you’re developing that app, you can actually customize it so the experience truly meets the customer’s needs. If you know as a retailer that you have customers who have particular interests or they like to shop a certain way, whatever the data that you have that you’re able to uncover certain little insights there, you can actually customize the app to take advantage of that and really create an experience that will make customers really come back to that app, not only when they’re looking to buy, but just perhaps if they’re looking to browse, or they’re just looking to interact with the brand.
I mean, a lot of these apps often you provide the opportunity to provide feedback. The better you can make that application, the more likelihood that you’re going to see a real return on it and hopefully see a real increase in terms of your bottom line. Now, along with that mobile app, the other thing that the report really highlighted is that a lot of stores aren’t doing a great job in terms of incorporating digital features in their physical brick-and-mortar stores. Now, there’s been a shift over time. Obviously, the pandemic had a lot to do with it to incorporate digital features and technologies. In some stores, I can think of kiosks are a big… a great example of that, and you can think of a number of different use cases, everything from online ordering that you might see in, say, a fast food store or a way to look up products when you get to that store or access loyalty information. There are a number of different use cases just with kiosks alone, but there are other things that people can do in terms of making sure that when someone walks into that store that they have an ability to interact with that customer.
A few years ago, one of the really hot topics was the use of beacons, which would alert folks that, “Okay, I’m in the store right now,” and if there’s, let’s say, a sale on a particular item, we could draw them or link them to a map within the mobile application, taking them to that specific location within the store, making it much more easy so the customer didn’t have to run around endlessly looking for whatever they were trying to find. Another thing of course, is that if you think about digital technology, just making it easier for everything, including checkout. I mean, there are a number of different opportunities to do that within the retail segment where you link both online digital experiences with physical ones just to make things much more seamless. And that’s ultimately the goal here with omnichannel is making things more seamless making easier for the customer. If a customer has a particular path to purchase, aligning all of those experiences and touchpoints along the way to help support that journey, whether that means automatically sending them if someone is looking or evaluating a particular product.
If you know that, and you would know that if they’re looking at it in the app, you could send them other content that is related to it, whether it’s reviews or even comparison information with other types of products. Being able to really tap into that individual purchase process and then deliver that content through the channel that the customer typically uses is where the real value lies. So what is it, ultimately, that organizations need to do? Well, they need to really take a look at their current channels, audit them, and figure out where are their gaps in terms of that customer experience. What is the… Where are they falling down in terms of not making it easier for customers to interact or switch channels or accomplish what they need to do in as few steps as possible? Then, of course, what else do they need to do? They need to take a look at their entire retail ecosystem to make sure that all of this data and all of these experiences that are in the digital realm can be linked into anything happening in the physical store. The worst thing to do is make it so the two ecosystems are disconnected.
If I have a mobile app and I have my profile in there and I’ve been looking up products and so forth, and if I try to check out and I’m not easily able to either interact with an in-store ecosystem or when I’m checking out and if things are not smooth, that is going to really kind of break that chain and make it much more difficult to engender trust in the systems and really creates a system where the customer just doesn’t feel valued. So I think the other thing that is important to really consider is that all of these companies have a ton of data, and it’s really about making sure that you’re incorporating that into that omnichannel strategy. So, for example, if you can tell that a customer is always browsing on their phone or something like that, build their own experience around that device to make it easy for them. Conversely, if you have a customer that rarely goes onto the phone but is always… is more old school and is always going into the store and talking to an associate, well, that’s where the real value for them is going to be designing these experiences to help them get that assistance more quickly. That’s going to be ultimately the differentiator.
I think I’ve talked about this before on this podcast. For the most part, when we’re talking about items that could be bought at retail, yes, there’s always the competition on price. But ultimately, it’s about the service, and about the convenience, and about the overall customer experience, and being able to utilize all of these tools to make it as seamless as possible, whichever path they take. And I think that ultimately, as we move forward over the next couple of years, we’re going to see AI really help kind of surface a lot of these hidden trends that we might have known by digging into the data sort of on a individualized basis. We’re going to start to be able to really tease out many more insights in terms of how people are actually operating and walking down that path to purchase or that path, that support path, and hopefully design a better experience based on who they are, what they like to do, what they’ve done in the past, and even ultimately predicting what they might do in the future if certain other systems or other solutions are put into place based on all of this data that we’re collecting.
So it’ll be interesting to see. I think that just in our own… in my own personal experience, I feel that there’s just not enough being done to either publicize in this sort of omnichannel experience in a lot of the products and services I use, or they’re just not obviously not kind of jumping out or injecting themselves into my own experiences. When I have a support call, we all say the usual, “Hey, if you don’t want to wait on hold, you can jump into a chat or something like that.” That’s pretty obvious, but I think there are other opportunities out there to really uplift the overall experience in a much more intelligent way because the data’s out there, the systems are available to enable them. It just comes down to really taking an honest appraisal. What’s out there, looking at your customers and seeing where there are those sort of experience gaps?
So, with that, I want to move on to my rant or rave segment. This is where I take one item in the market and I will either champion it or criticize it. And this week I have a rant. I’m sure everyone has seen over the past couple of days that there is now a lawsuit that was filed by a consumer against Patagonia. They have been accused of breaking California Privacy Law by recording and analyzing customer’s communications without their permission. So Patagonia actually uses Talkdesk’s CCaaS offerings to handle all of their customer service communications. And basically the lawsuit really basically alleges that this vendor intercepts records and analyzes all customer communications and business communications. And what they’re saying is that this data is available to Patagonia and it’s also available and routed directly to Talkdesk servers in real time, where it’s then transcribed and analyzed by its AI models to provide an overview of the customer’s query and emotional state. And the big… here’s the kicker is that Patagonia and Talkdesk did not obtain customer consent before recording the communications, and that’s illegal under California law. And I think the other thing that’s interesting about the suit is it says that Talkdesk used these communications for its own purposes, basically to improve their own solutions.
Now, an interesting thing here is that in the lawsuit, Patagonia is the only one that is being named as the defendant. It is not Talkdesk. So that’s pretty interesting. But I think the thing I can’t believe is in this day and age that a company would record conversations and not have that disclaimer. Everyone is so used to hearing it. “This call may be monitored for training and whatever purposes.” It’s gotten to the point where that boilerplate is such that you almost never even hear it. In your head, it just kind of floats by, but you need to do it. And similarly, along these lines, if you think of all of the talk that’s going on about using customer information to train AI models where it’s clear that most customers are not real thrilled to that because, obviously, there’s a real invasion of their privacy. It’s a little bit surprising that there was not disclosure there or not the ability… or the ability to opt-out was not provided. I’m not sure what’s going to happen with this case. This is… This lawsuit was just filed. But I do think it serves as a warning to organizations that there will be customers out there who do take offense. Now, granted, probably, I don’t know a percentage, but a good percentage of people are almost… operating is almost a post-privacy mindset. They go, “Well, I do everything digitally. I pay for everything with a credit card. I’m on Facebook. I… whatever. All my stuff is out there. Whatever. Just serve me, and we’re fine.”
But there are people out there who do really make a big deal out of it, and those are the people who generally file lawsuits and tend to uncover or highlight practices that maybe aren’t above board. So again, no idea right now did this really happen. I’m just going off of what was reported in this lawsuit. But I do think it’s important for organizations to be very clear of what they’re doing and what they’re not doing and then being clear in terms of their disclosures. So I’m going to have to call this a rant because it’s not like we haven’t been talking about this stuff for the past however many number of years, but I would certainly say I will reserve judgment until this lawsuit actually is resolved. Okay, that’s all the time I have today. So I want to thank you for joining me here on Enterprising Insights. I’ll be back again next week with another episode focused on the happenings within the enterprise application market. Thanks for tuning in, and be sure to subscribe, rate, and review this podcast on your preferred platform. Thanks, and we’ll see you next time.
Author Information
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
