What's Preventing Retailers from Implementing Omnichannel?
Antiquated Identity Infrastructure, Lack of Visibility Across Channels Keeping Retailers from Creating Frictionless Omnichannel Experiences for Shoppers
These are challenging times for retailers. With so many shoppers preferring to make purchases online now, retailers with significant brick-and-mortar holdings struggle to understand their customers and tailor individual experiences across channels. We hear from a lot of retail organisations that are realising their fragmented, legacy identity and access management systems are a real barrier to omnichannel success, because they can’t support digital customer demands and business requirements. At the same time, there is growing awareness among retailers that they need to update their technologies to maintain customer loyalty and sustain growth.
Analyst research backs up these concerns: An Aberdeen report found that companies with omnichannel customer engagement strategies retain on average 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement. Meanwhile, an Accenture report found that 94% of retailers surveyed noted significant barriers to omnichannel integration. The retailers we work with here at ForgeRock all are seeking to provide customers with more engaging, more convenient customer experiences. “Frictionless” is a word we hear often. But we’re also hearing that these visions for transforming digital experiences are falling short in reality due to numerous challenges.
For one, the identity and access management technologies retailers have long relied upon to secure transactions are also known to create silos of customer data. With increasing customer privacy concerns and regulations regarding data protection and sharing emerging in Europe and the U.S, not surprisingly there’s a lot of uncertainty. There’s also a creeping consensus that the lack of continuous, intelligent security through the shopping journey is leading to greater risk of identity fraud and malicious attacks. Many retailers report that the inability to seamlessly connect users, devices, and things makes it difficult to onboard new customers, or enable returning customers to quickly access services or merchandise.
Even advanced retailers with loyalty programs and fully built-out online operations struggle to create a complete view of the customer and their relationship with the brand as they move from in-store to online interactions. The Retail Gazette, the UK’s daily retail news publication, reports that while over 90% of retailers now sell online in the UK, nearly two thirds claim a lack of visibility across channels is the biggest problem they face.
A lack of visibility across channels is what we’re hearing from our retail customers also. Many admit that their loyalty programs are great for capturing basic customer data, but that acting on that data to engage individual customers isn’t yet possible. Retailers see patterns, but can’t make connections -- there’s no way to tailor offers or suggest new products that might be of interest. Because retailers lack the ability to proactively engage and personalise, the online experience is static. These problems are often rooted in the fact that many retailers have redundant identity systems and often don’t recognise the same customer is buying from multiple brands or has multiple roles ( for instance, a teacher shopping for classroom supplies one day could be a mom shopping for household cleaners the next day). Antiquated identity infrastructure can also present roadblocks on the journey from prospect to active customer. It’s far easier to get new users to signup, subscribe or purchase when customer identity and access management processes are swift, agile and friction-free.
When you consider these challenges in the context of the fast-growing Internet of Things, you get a sense of just how daunting this all is for today’s retailers. One of the key concepts of the Connected Home is that connecting appliances, lighting, heating & cooling, etc., will enable homeowners to interact with retailers or services providers to, for instance, automatically deliver milk and groceries if your fridge is getting empty. Or send new lightbulbs when the old ones blow out. These kinds of scenarios are still in their early days (Amazon dash buttons are good example), and their success will depend very much on retailers solving their more immediate challenges – specifically, overcoming fragmented identity and access management infrastructure. In our next post, we’ll explore some of these solutions. How, when you can quickly connect new digital ecosystems, you can be positioned to maximise your revenue opportunities. And if you can deliver a customer experience that is seamless, personalised and secure, then you’ll be better equipped to grow a digital retail business and build lasting relationships with your users.
Stuart Hodkinson is Regional Vice President, UK & Ireland at ForgeRock.