Retail Wars: From SoLoMo to Omnichannel

Just like all disruptive technologies, mobile invaded our daily lives and changed the game in many industries, including retail. While businesses try to make the most out of this trend by opting for custom software that power their operations across platforms, the technology develops in its own unique way. SoLoMo (Social+Local+Mobile) evolved in 2010 as a popular marketing approach to how mobile should integrate into the customer experience. The concept is still valid, but has mostly evolved into the omnichannel approach to commerce.

SoLoMo: Its Origin and Development

By early 2010s, social networks such as YouTube, Facebook, and Twitter had already emerged. With mobile devices continuously spreading all over the world, everything became social. Being able to explore what’s on offer in a couple of clicks, consumers became more fastidious, expecting brands to adjust to their needs and preferences in an instant. All this gave rise to a particular approach to marketing, which is SoLoMo:

• Social: Regardless of the business type, it should be available via the internet and social networks such as Facebook, Instagram, or Twitter.
• Local: A consumer's location is essential for businesses, especially in retail, to make products and marketing messages more personalized and engaging.
• Mobile: Smartphones, tablets and laptops permeate our daily routine, so the importance of making a business available online shouldn’t be underestimated.

This new buzzword, which is attributed to John Doerr, became a hot topic during the next few years. However, it's not used much today — not because the principles have changed, but because the approach to consumers has become much more inclusive. Thus, mobile apps are no longer treated as a standalone channel that doesn't integrate with the rest of a retailer’s digital presence. As companies realized they needed to present a more uniform and device-agnostic face to the world, SoLoMo has matured into multichannel marketing.

Nevertheless, there are some campaigns that became successful with the help of SoLoMo principles, and many retailers continue using them today.

• Until the “mayorship” feature of Foursquare was discontinued in 2014, Starbucks had a loyalty app that rewarded its most frequent visitors with a discount. Today, the company is active on social networks and has an app for ordering on the go, paying online, and finding the music tracks playing in the brand’s cafes.
• Nike has the Nike Run Club and Nike Training Club apps that combine the mobile component (connecting a wristband), the local component (finding routes and places to train), and the social component (letting users share their results and get motivated within the community).
• adidas also has sport-oriented apps, such as Adidas Training and Adidas Running, which contributes to its heated competition with Nike. These apps are aimed at both helping people stay fit and inspiring them to buy the company’s products.

Although initially the cost of developing a mobile app might have been prohibitive, nowadays even small businesses can bring a mobile product to market. Some even managed to build entire business models focused on apps — companies like Uber and Airbnb exemplify SoLoMo at its finest:

• They're essentially social networks.
• They're location-centric — i.e., users are looking for accommodation or a ride in a particular location.
• They were created to be accessed via mobile devices.

SoLoMo: Threats and Opportunities

Retaining the Customer

As said before, it's now relatively easy to develop an app and promote it to potential customers, but retention is a real challenge. About 25 percent of apps are only used once after users install them. While this can be partially attributed to overwhelming choice on app stores, it also indicates the need to develop a retention strategy along with an app.

Showrooming

Most brick-and-mortar stores fear showrooming, which is basically customers’ practice of visiting a store to experience the physical product they wish to purchase, and then buying it online. Some use this tendency to their advantage, some try to combat it — this would require a whole new article to cover.

Webrooming

Webrooming is the reverse of showrooming — a customer does all their research online and then purchases products offline. Alvin Toffler described this type of a customer as a prosumer — someone who is so knowledgeable about the product that they can even be involved in the product design. Some industries, such as photography, are shaped by their prosumer customers. Brick-and-mortar stores have many opportunities to capitalize on webrooming.

SoLoMo From its Teenage Years to Multichannel

While the terms "multichannel" and "omnichannel" co-exist with SoLoMo, actually putting them into practice is quite a different matter. Initially, retailers would engage the customer via several channels, each having disparate business rules and user interfaces. For example, in banking a customer would encounter different procedures for the same activity at the branch (over the counter), via the call center, at an ATM, using the online banking app, or accessing mobile banking.

Therefore, multiple options don't necessarily provide the same experience, and are focused on the product rather than the customer. Many companies still support their multichannel platforms, because the move to omnichannel requires a fundamental change to a truly customer-centric view. This can mean a total revamp of all the underlying business processes; it’s not just a technological face lift.

Furthermore, many large companies, such as banks, maintain a variety of legacy systems for checking accounts, credit cards, mortgages and asset finance. The problem they face is that each of these sits in their own silo, so companies cannot move to true omnichannel commerce until they solve this problem. That is, they frequently need to restructure their whole businesses in order to unify different channels and make customers’ interaction with them seamless.

Today's SoLoMo Has to Be Omnichannel

Consumers today want to have multiple touchpoints with brands and expect them to be closely connected, so that their experience is as effortless and convenient as possible. Thus, offline and online channels should converge within one unified environment.

While it might seem complex to build an omnichannel or channel-agnostic architecture, the complexity is indeed created with disparate systems and processes. Siloed components that are maintained by several support teams using different approaches, languages and platforms never truly work as a tied system. A small change to accommodate a new product or feature might require code changes in each of the environments and months of testing, and therefore pose a high risk of defects.

Kate Prohorchik is a technology observer at Iflexion, part of Itransition, a trusted global software development company.