Value Creation and Driving Growth Are the Hallmarks of Omnichannel Excellence
Offering a compelling omnichannel experience used to be the cutting edge of retail. Now it’s key to survival. More than one-third of Americans have made omnichannel features, such as buying online for in-store pickup, part of their regular shopping routine, and nearly two-thirds of those individuals plan to continue doing so. McKinsey research also shows that most Gen Z consumers don’t even think in terms of traditional channel boundaries — they evaluate brands and retailers on the seamlessness of their experience.
Attaining omnichannel excellence means placing a laser-like focus on value creation. Leaders in the field take a hard look at their strategic and customer priorities and decide what they want to be from an omnichannel perspective. Furthermore, they develop an equally clear-eyed understanding of what it will take to achieve that ambition.
Charting Your Ambition
The most successful retailers let their strategic ambition and aspirational customer experience determine what omnichannel strategy to pursue. However, when the underlying ambition and capabilities are misaligned, retailers tend to stumble. While omnichannel has many variants, three primary strategies sit on a continuum where “ecosystem” is the most advanced:
- Commerce: Retailers that take this approach — both physical-first and digital-first brands — often prioritize one channel and invest in targeted cross-channel connections to support the buying experience, such as the ability to order online and return in-store.
- Personalization: While most retailers personalize engagement and outreach to some degree, those that pursue omnichannel personalization go far beyond rudimentary retargeting and lookalike segmentation. They shape consistently tailored interactions across channels, and do so continuously and at scale.
- Ecosystem: This model extends the brand experience, providing consumers with an ever-growing platform of content, offers and community-based interactions. Instead of turning to a retailer for occasional interactions, consumers make omnichannel ecosystems part of their lifestyles.
Where Do We Go From Here?
Companies should assess their existing resources, market position, and customer relationships, then align on a starting point and an ambition that's both realistic and a value driver for the business. Mastering the basics can allow leaders to apply their insights in more ways — with the learning and value compounding over time.
Retailers already understand that they should become experts at anticipating from one season to the next what products and services will excite consumers. Now they have to bring that same sensibility to omnichannel. A good place to start is to think through the following questions:
- Where are the greatest value pools for omnichannel within our business, and what's the fact base to help us inform and clarify choices? How can we size the value at stake?
- Whom do we need to convene within our organization to align on defining our starting point and “North Star” ambition? Where do we agree and/or dissent?
- Which initiatives and corresponding capabilities should we prioritize or deprioritize over the next 12 months?
- In three years, what do we want to say that we've achieved within our omnichannel offerings? How would that position our company internally and relative to our competitors?
The retailers that set a strategic ambition with a clear path to value will de-risk their current position and fuel long-term success. Leaders should get on that path quickly if they're to move with the times and navigate the next wave of value creation opportunities that drive growth.
Holly Briedis is a partner at McKinsey & Company, a management consulting firm.
Related story: Modern Mobile Shopping Journeys: The Retail Keys to Success