Six Pixels of Separation - The Blog
October 7, 2014 9:31 PM

The True Omni-Channel Is Convergence

Convergence used to be a bad word.

In the early days of the Internet, we tossed around the word "convergence" much in the same way that we toss around the words "social media" these days. It was this "be all. End all" catchphrase to let the world know that soon, we would not have multiple media platforms. That soon, all media channels would converge via the Internet (TV would be the Internet, radio would be the Internet... you get the idea). Many massive media and telecommunications companies banked on this happening (remember that whole Time Warner AOL deal?). Some rushed in (and lost their shirts), while others sat on the sidelines and watched startups eat their lunch (slowly and over time). That word... "convergence"... died a rightful death in the nineties, and it was never to be heard from again. Convergence was akin to saying, "money pit."

The wake-up of retail.

Over the past several months, I have spent a serious (and significant) amount of time presenting to retailers throughout North America. Senior retailers from some of the world's biggest brands at events for Google and Twitter,  to local merchants with unique retail specialty at retail association events. Convergence is probably the best word to describe their current situation. Internally, retailers will say that becoming omni-channel is the true imperative. I believe that omni-channel is simply an industry buzzword to define the challenge of working in silos with disparate data sets that struggle to find connection points. Don't get me wrong, the ability for a retailer to truly understand their consumers - whether they shop in-store or online - is critical (and, it's even more critical to treat these types of shopping experiences as one in the same). The bigger challenge is in understanding this new convergence... the convergence between the digital world and the physical world.

Don't separate digital and physical... they are one.     

Amazon is about to open a physical store in New York City (right across from the Empire State Building). No one really knows if there will be actual products to buy, or if the store will simply be there to serve same-day delivery, pickups of online orders, returns and exchanges. It could also be a showroom for Amazon's growing line of products and services (like smartphones, Kindle devices, tablets, media players, etc...) or if it will act more like a pop-up shop for some of their more popular products. Amazon has been teasing at a physical retail operation for a long time, and it seems more real than ever before. Other online brands have gone this route as well. Warby Parker, Birchbox and more have opened up physical retail spaces to extend and expand their brand offerings. This is less about human beings feeling the need to touch and get up-close-and-personal with products, than a function of something more.

Our physical spaces have become very digital and our digital lives have very physical and real implications.

For Amazon's growth to continue, it must do a lot of extra work to understand their consumers (and, it's not just Amazon... it's all retailers). There is no doubt that functionality like consumer reviews and related items have created a treasure trove of analytics and data to help smart online retailers better understand inventory and push up the basket price (amongst many other awesome treats). Actually being able to see your consumers - in their protein forms - adds many more layers of depth to a company's data and research that can't be understated.

Is Amazon opening up a physical store just for the data?

It could well be. And, if this is part of the truth, it ushers in a very significant shift in the retail landscape. Imagine the power that this gives a brand? If the last mile for companies like Google and Twitter and Facebook to grow are to connect the billions of people who do not have connectivity, perhaps the real last mile for all retailers is to own both the physical and digital consumer in one closed-loop. It makes perfect sense. Brands like Apple and LEGO dove into the retail world to own the direct relationship with their consumers, so why would it be so crazy for brands like Amazon to do the same? It's fascinating to think that brands will now move to brick-and-mortar to maintain their digital dominance and, ultimately, for the analytics over the profits.

If this isn't a sign for true convergence - and a new perspective on winning the omni-channel - I don't know what is.

By Mitch Joel

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