What does the future retail landscape look like as the industry looks beyond an “omnichannel” world?  How will the changing balance of power towards consumers impact the way retailers have to operate and think? Retail marketing professor and highly rated speaker from this year’s Congress, Giuseppe Stigliano, together with Q&A Consulting’s founder, Frank Quix, set out their vision for the “optichannel” future.  

   

The retail landscape has undergone profound transformations over the last few decades, evolving from traditional transactional models to dynamic environments that emphasize engagement and experience. This shift, marked by the evolution of brick-and-mortar stores from Points of Sale (POS) to Points of Engagement (POE), reflects a broader change in consumer behaviour and market dynamics.[2] 

The balance of power has shifted significantly towards consumers, who now demand more from their retail interactions than mere transactions. This shift forces retailers to rethink their modus operandi and reconsider the very essence of their role to avoid the risk of losing relevance. Retailers now seek to create immersive experiences and offer deep expertise, prompting them to redefine their physical stores as more than just places of transaction. These developments have led to the concept of the Point of Engagement, where stores transform into spaces for education, exploration, and personalized engagement—truly a showroom rather than a salesroom.[2] 

The Shift Towards Touchpoint Management 

With the historical context in mind, the evolution of retail strategies from multichannel to omnichannel approaches marks a significant shift in the industry. Initially, e-commerce was introduced as an additional sales channel alongside traditional brick-and-mortar stores, giving rise to multichannel strategies.[1]   

However, multichannel strategies treated each channel as a separate silo, failing to provide a seamless and integrated experience for customers moving across channels. This siloed approach led to channel conflicts, brand confusion, and process inefficiencies for retailers. To address these issues, retailers began adopting omnichannel strategies, which aimed to create a unified and consistent experience for customers across all touchpoints and channels.[1] 

However, as consumer touchpoints increased in both number and complexity, spanning digital, physical, and virtual channels, executing a truly seamless omnichannel strategy became increasingly challenging. This often leads to inefficient budget allocation and resource wastage. So retailers must embrace an optichannel approach, prioritizing the most critical touchpoints along the customer journey.[1] This results in a "touchpoint influence" approach, recognizing that each interaction with a brand, product, service, or experience can impact a customer's perception, behaviour, or decision-making process. These Points of Influence (POI) are crucial because they shape the overall customer experience and can ultimately lead to a purchase decision. 

The Nature of Points of Influence (POI) 

POIs occur at various touchpoints along the customer journey, such as advertisements, social media interactions, in-store experiences, and interactions with customer service. At each POI, customers can be influenced by both emotional and rational triggers. Emotional triggers might include brand storytelling, visuals, or testimonials, while rational triggers could be product information, features, pricing, and comparisons. 

Effective POIs engage consumers by providing relevant and compelling content or experiences. This engagement can build trust, create a positive brand association, and encourage further interaction. While not all POIs directly result in a purchase decision, they cumulatively build towards the final decision. Positive influences can smooth the path to purchase, while negative influences or friction points can disrupt the journey. 

Recognizing the Disconnect 

Retailers must recognize the disconnection between the decision and the transaction itself. This disconnect is further exacerbated by the rise of virtual channels, such as augmented reality (AR) and virtual reality (VR) experiences or videogames, which decouple the decision moment from the transaction time and increase the number of potential touchpoints. POIs span across these physical, digital, and virtual channels. A consistent and seamless experience across this "Optichannel Symphony" enhances the overall influence on the customer. 

A Two-Layer Conversion Model 

Traditionally, in retail, the focus has been on conversion rates. This metric serves as a KPI for evaluating the effectiveness of transactional channels, whether online or offline. 

However, with the introduction of the POI concept, a two-layer conversion model becomes necessary. The first conversion rate, or influence conversion, measures the proportion of visitors who are positively influenced by the brand's touchpoints. Retailers need to define ways to measure this influence conversion, such as tracking engagement metrics, lead scoring, or explicit expressions of purchase intent from consumers. The second conversion rate remains the transactional POS conversion, whether through a virtual, online or offline channel.  

By using a second conversion metric, retailers can gain valuable insights into the effectiveness of their POI strategies in driving purchasing decisions, as well as the efficiency of their transactional channels.  

This two-layer conversion model allows retailers to optimize their strategies at both the influential and transaction stages, enabling them to enhance the overall customer experience and drive better business outcomes.  

The Optichannel Approach: Tailoring Touchpoints to Customer Journeys   

By focusing on these Points of Influence retailers can develop an 'optichannel' strategy. This approach concentrates on the most impactful touchpoints, tailored to the unique journeys of a brand's customer personas, rather than attempting to cover all touchpoints across all channels. 

Managing touchpoints and their influence, becomes the dominant strategy for retailers. This consumer-centric approach places the customer at the center, recognizing that their journey is non-linear and involves multiple POIs before reaching the transaction stage. Retailers must understand and optimize these critical POIs to influence purchasing decisions effectively.   

Such strategies are customized to suit each brand's specific needs, thus aligning with customer behavior and expectations. By embracing this touchpoint-focused mindset, retailers can better navigate the complexities of the modern retail landscape. 

Conclusion 

The retail industry's transformation from Points of Sale to Points of Engagement reflects a fundamental shift in consumer behavior and market dynamics.[2] As retailers grapple with the complexities of an ever-expanding array of touchpoints across all channels, the traditional omnichannel approach becomes increasingly challenging to execute effectively. 

Recognizing the disconnection between the decision and the transaction is crucial. Whereas the decision is based on the cumulative impact of Points of Influence (POI) along the full customer journey. By identifying and optimizing these critical POIs, retailers can develop tailored 'optichannel' strategies that concentrate on the most impactful touchpoints.  

To measure the effectiveness of these strategies, a two-layer conversion model becomes necessary. The first conversion rate, or influence conversion, measures the proportion of visitors who are positively influenced by the brand's touchpoints. The second conversion rate remains the traditional Point of Sale (POS) conversion, measuring the proportion of consumers who complete the transaction. 

This consumer-centric, touchpoint-focused approach places the customer at the center, recognizing the non-linear nature of their journeys and the need to optimize key POIs to influence purchasing decisions effectively. By embracing this mindset, retailers can better navigate the complexities of the modern retail landscape, foster deeper connections with their customers, and ultimately drive success in an increasingly competitive and dynamic market. 

[1] Kotler, P., & Stigliano, G. (2024). Redefining Retail. Wiley, London.  

[2] Quix, F., Stern, N., et al. (2017). Retail in Transition. EbeltoftGroup. 

 

IKEA's Inspirational and Technological POI best practice: 

IKEA has established itself as a pioneer in the retail, leveraging a combination of inspirational experiences and innovative technologies to create powerful Points of Influence (POIs) that guide customers along their customer journey. At the heart of IKEA's approach lies their iconic showrooms – immersive, showcases that allow customers to step into designed room sets, experiencing firsthand how IKEA's products can transform their living spaces. These showrooms serve as compelling POIs, helping customers' imaginations as they visualize how different furniture pieces and decorative elements could fit into their verry own homes. 

Next to the big boxes IKEA opened an array of new type off stores like the Plan & Order Points in cities ranging from Leeuwarden to Rome and the city format stores in cities like Paris, San Francisco and Tokyo Shibuya.  These stores, or so to call touchpoints, are an excellent addition as POI and help customers in their customer journey and bring IKEA even closer to their home.  

To further enhance the physical experience, IKEA has integrated interactive digital tools and augmented reality (AR) technology into their apps. Through the IKEA apps, customers can use their smartphones to virtually place furniture items in their own rooms, experimenting with different styles and configurations before making a purchase. This innovative use of AR technology serves as a powerful POI, empowering customers to make better decisions and reducing the uncertainty associated with big-ticket purchases. Beyond this, IKEA is using their website and social media channels. IKEA's digital touchpoints guide customers through the discovery and decision-making process, ultimately influencing their purchasing choices. 

Recognizing the importance of customization and personalization in today's retail landscape, IKEA has also introduced tailored POIs that cater to specific customer segments and needs. For example, their "IKEA Business" concept provides specialized services and products for companies and entrepreneurs looking to furnish their workspaces. By offering expert advice, bulk ordering options, and customized solutions, IKEA has created a targeted POI that influences the purchasing decisions of business customers. 

During the festival season in 2024 IKEA added another POI with Drömland at the famous Lowlands festival. In a massive dome IKEA created an escape for the festival visitors to relax and get eventually a powernap. Getting sleep is hard at festivals and IKEA created a giant sleeping room which is also a great way to get in touch with IKEA’s beds and soft pillows.  

In conclusion, IKEA's approach of inspirational and technological POIs has set a new standard in the retail industry. By seamlessly integrating physical showrooms, digital tools, and experiential marketing initiatives, IKEA has created a holistic customer journey that engages, inspires, and influences purchasing decisions at every touchpoint. Through their innovative approach to POIs, IKEA continues to shape the way consumers interact with and perceive their brand, solidifying their position as a global leader in the home furnishings market. 

“In all that we do, we put the customer at the centre. We continuously ask ourselves: What is needed to make the shopping experience always easy and convenient? What does it take for us to excite, delight and emotionally connect to our customers? How can we bring our company purpose, and our range offer even closer to consumers and to our customers? By adding Points of Influences (POIs), we are strengthening our omnichannel strategy. This increases the accessibility of our offer through existing and new shopping channels, allowing customers to shop wherever, however and whenever they want."  Alessandra Zini, CEO IKEA Netherlands