The challenge of customer centricity in the omnichannel model

Piergiorgio Limena
Partner Business Performance Services @ KPMG Advisory

How would you transform your business? This is what KPMG asked 400 senior executives of multinational retail companies and 7.100 consumers from 19 countries for the research "Seeking for customer centricity - The omni business model", carried out in collaboration with The Consumer Goods Forum (CGF).

In a market where customer centricity is not simply a differentiating factor but a determining factor for the success of the brand, power is in the hands of customers who have found out that their true value for companies goes far beyond the spending style. Now, everything is played out on the dynamics of the relationship.

To adjust to this evolving landscape, brands must start using the consumer's point of view, i.e. transforming the customer and his/her expectations into the starting point of any business. Unlike a product centric approach, where the company focuses on a single product to sell it to as many people as possible, with a customer centric approach, the right product can be created for every type of customer.

This approach makes it easier to identify actions that affect the customer experience.

The research highlights the main strategies adopted by brands to adapt to this evolving landscape, reporting the consumer's point of view for each topic.

The five challenges for companies:

1. Customer hyper-centricity to detect needs in real time and at granular level.

2. Transversal and uninterrupted experience for a more and more important omnichannel customer experience

3. Use of digital technology to support all business processes, from production to in-store sales.

4. Smooth, demand-driven supply chains that can quickly realign as customer needs change.

5. Cross-company commitment to product safety and sustainability to earn consumer confidence.


1. Customer hyper-centricity

To compete in a global market with strong demographic changes, even the most advanced companies need a deeper and more multi-dimensional understanding of their customers.

The hyper customer centricity of the customer leads the company to have a clearer picture using advanced data analysis and smart technologies, in order to track and anticipate consumer behavior in near real time and provide customized products and experiences whenever, wherever and however the customer wants.

  • 49% of interviewed people would like to participate in the development of new products.
  • Two out of three would like to see a better customer experience in the store.

2. Development of a fully integrated Omnichannel model

Building a global omnichannel business requires a front-end that is fully integrated with the back-end, as well as being customer-centric and powered by advanced technology and analytics. To achieve that, a clear business strategy and the full support of the entire business and supply chain are needed.

  • 55% of customers expect an omnichannel experience without interruption, while only 42% of executives consider it significant.
  • The possibility of having more options for the withdrawal and return of purchased products is relevant for 71% of consumers, compared to 35% of managers.

3. Digitization to innovate, beyond automation

From web to smartphones and stores with innovative technologies, the digital feature is gradually replacing traditional stores as a core in the customer experience. Transformation in this direction will enable companies to rethink their strategies, supply chains and business models to generate new levels of growth, efficiency, productivity and competitiveness.

  • Less than half of the interviewed companies equipped their supply chain management with digital technologies.
  • Only a quarter of companies use digital technologies in research and development of new products.

4. Demand-driven supply chain

Operating in today's world requires an appropriate supply chain. The optimal structure is fully integrated with the front-end of the business and has the flexibility and agility to react to constant changes in customer needs and market dynamics.

  • The highest priority of the interviewed managers in the supply chain is to improve reaction times and distribution efficiency.
  • The main challenge for investment in this area is uncertainty about the level of investment required or the return on that investment.
  • The main strategy adopted to improve the quality of the supply chain is the setting up of collaborations with partners upstream and downstream.

5. Building confidence

In today's digital world, consumers have access to a wealth of information that helps them shape their opinions about the companies they choose to buy from. While price, quality and delivery options are the main drivers in purchasing decisions, information about business practices and social responsibility can play an important role in developing loyalty to the brand. From traditional companies to new digital operators, the challenge for everyone is to improve their strategies to build and maintain the confidence of their customers.

It is also thanks to this trend that companies are moving towards circular business models: unlike a traditional, linear approach, in which products are manufactured, sold, used and then discarded, in a circular economy, products and materials are recovered and reconditioned at the end of their life cycle.

According to the KPMG report, almost a third of the managers interviewed said that they are already using circular economy practices in their companies: this model increases customer loyalty because it leads to the creation of relationships throughout the product life cycle.

  • 51% of customers base their purchasing decisions on ethical and environmental aspects
  • 77% of customers require detailed and transparent product information, while only 42% of executives consider it critical

Download the paper:

Seeking customer centricity  
The omni business model