Coleman Chair Professor of Marketing and Director of Research, Center for Retailing Studies at the Mays Business School (Texas A & M University), Venky Shankar was the protagonist of the event “Ready for an Omnichannel World?” held in Bologna Business School.
Professor Shankar, how can companies integrate on-line and off-line business?
That’s a very challenging question for a lot of companies, but it is a necessity for them because customers today want the seamless 360° experience around your particular product, brand, experience or service.So companies will have to, sooner rather than later, integrate all the different channels that the customers engage both online and offline. One of the ways to think about this integration is to start from the question: if the customer has to actually use the different channels in different ways, how can you best invest in facilities for that? So starting from the customer point of view, you work backwards and then align your channels. Then you have to work at the backend operations and then try to integrate. For example: if you have a store, if you are a retailer, then you have a physical store, and an online store. You have to make the frontend seamless for the customer. If somebody sees your store online as a dotcom, the products there should be very similar to what they see in the store. Similarly, they should see the same products in the catalogue. In the omnichannel world, people order online, pick up offline (that is in the store), then they may return to the store, order something else through the catalogue, and talk to the phone operator. All of these have to be integrated in information and service. The organizations also have to be integrated. Typically companies have tried to manage the different channels as different businesses, but now they have to start bringing them together.
What are the effects that the marketing investments in one channel have on purchases in the other channels?
This is what we call cross-channel effects. First of all, in the omnichannel market, one has to understand which channel affects which other channels. So, for example, if the marketing efforts are through the web channel, how does this influence purchases in the store channel? Or, how do the marketing efforts in the catalogue channel bear returns in the other channels? How are they connected? What we need to find is which channels are complementary and whether the effects are symmetric or asymmetric. If putting marketing investments on the website and getting similar returns (profits) in the store channel is similar to putting efforts in the store channel and getting the same returns on the web, then the effects are symmetric and these channels are complementary. But you can also have competing or cannibalizing channels.For example, in one of my research studies on the insurance industry, we found that independent agencies and exclusive agencies are cannibalizing channels; if you increase the efforts in one channel (the independent agencies), then the exclusive agents start to sell less. On the other hand, call center and exclusive agents are complementary. If I invest more in call centers, this results in purchases from the exclusive agents by a slightly higher amount than what the investments in exclusive agents result on sales through the call center. It is very important to understand that this could be very different for different industries or different companies. You have to collect the data and analyze what the effect is.
What are the role and the prospects of big data & analytics in omnichannel marketing?
There is a tremendous amount of data that keeps coming from social media and mobile usage, web traffic, and online and offline transactions. We are really looking at huge volumes of data at high velocity, a big variety of data and we need recipes for big data applications.So, big data is going to play a huge role. Companies need models to analyze omnichannel data first, make sure that it works before they start extending and applying it to all big data.So the future is really bright for big data applications and the omnichannel market.
What are the skills needed to deal with omnichannel management in a company?
A lot of different skills. First of all, start with the mindset at the top level. The CEOs, the Chief Technology Officer, the Chief Marketing Officers, the Chief Financial Officers, all of them have to be customer-centric and align to the mindset that in the future, customers are going to access information, products and product returns, all through multiple channels. They have to be very analytically driven in terms of managing our business. And that is the top-level mindset.Then, in the middle level and the junior level, employees have to be aligned towards very data-oriented, information-oriented skill sets: analyzing data, ability to understand data, use this data and also take decisions based on this data. That will become a very important skill set. People entering an organization have to come up with superior statistics skills and quantitative skills. Data analytics is projected to be the next big science: by some estimates, 4.4 million data science-related jobs will be created worldwide. It is going to be very exciting.
What are the opportunities for our students willing to specialize in these topics? Which companies or organizations could be interested in such profiles?
The opportunities are tremendous. If they get a good education in analytics, mobile marketing, multichannel management, omnichannel management, all these things are going to be very useful for companies. Almost all companies should be following omnichannel marketing, so every company is a good candidate to recruit them. There are companies that are already ahead. Big retailers and maybe some online retailers trying to become omnichannel retailers. Then, there will lots of service providers: banks, financial institutions, travel companies and insurance companies. All of these services are becoming increasingly multichannel and omnichannel. So, all these could be great places for them. Moreover, lots of tech companies require all these skills to be able to offer technology to other companies that help them navigating the omnichannel world. Those will be good candidate recruiters as well.
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