Omnichannel has become a buzz world across the commerce marketplace, and is on the key agenda/focus for top bosses for few years now.
Some are ruling it, some are working it, and are some are still contemplating it.
Beyond the buzzwords, the biggest challenge is the gap between growing customer expectations, and brands scrambling to meet those expectations.
Amazon has realized this long ago, and hence a lot of their innovations and strategy is to cover the gap what absence of store experience demands- drones, same day, 1-hour delivery, easy returns processing etc. More over they have partnered with Brick-and-Mortar companies including Staples, RadioShack, 7-Eleven, to place Amazon delivery lockers in stores.
Macys, Target, Walmart, Kohls have also been leading on this front, with efforts on implementing omni-channel use cases, paying attention to changing phenomenon. Of course they have the added advantage of huge stores real estate, and they are ensuring to get full juice out of it.
All of them have been busy!!! and will continue to be.
But, here is where things get interesting and equally challenging. As per eMarketer’s survey & Forester consulting:
71% of shoppers surveyed expected to view in-store inventory online.
50% expected to buy online and pick up in store.
If retailers website doesn’t provide physical store inventory, 39% of customers are unlikely to visit stores
This tells you why these top retailers are jumping on omni-channel.
This also tells a lot about how the customers are shopping today!
It is well known today, that without leveraging your online and store resources together, there is no way to get the best from your customer. In fact, you may be loosing a lot of them, if you were concentrating on either one of these channels.
Retailers are trying to combat Amazon on many areas. One of the strategy areas where they have an edge, is to bring down time to fulfill orders by leveraging stores. BestBuy, Target have shown +ve results on that front.
Without calling any more names, I want to share a framework which you should consider. See if you are truly moving towards an Omni-Channel strategy and what can be done about it?:
Does your prices vary across various channels, web vs. store vs. newsletters etc. These price conflicts confuse the customers, and are not considered a great way to approach the marketplace today. If you are one of them, then you are probably better off addressing those at the outset. Channels don’t exist for customers today. They are like god, omnipresent and cut across channels and segments.
If you have taken care of #1, then observe if you have a centralized view of stores and your warehouse inventory? If I am your customer and I am browsing your site, can I check the availability of the product I want to buy, at your stores location, which is, may be 3 miles from me? Are you letting your customers view a product online, reserve it in the store so that they can go pick it up instantly? This is a major hit with customers. For some specialist stores, this is also the only way to drive customers to stores. This is where even free 2-day delivery cannot compete with the feeling of getting a product right away.
Similarly, if a customer is shopping in your store, and they don’t find the exactly product they want, what happens next? Say the red t-shirt that I like is not available in my size, or that new LG ultra headphones not available in white colors etc., how do you drive me(the customer) further? Are you able to place an order right from the store, for delivery to my home or pick up at the store? Are you able to get exact availability at the other nearest store if I, the customer want to go pick it up? Some of the best implementations even help customers reserve and get those products from the other nearest stores.
While a lot of retailers offer free shipping under constraints (order above X$s), customers love the convenience of ordering an item online to be able to pick up from the store. This saves them money, and also a great driver of customers to store, taking benefit of brick and mortar format of the retailer.
Are you able to identify a customer, by aggregating their profile data from online and use that information in store to help find products which better match their preferences. This use case is however the evolving part of omnichannel commerce so only the most advanced implementations should be already implementing this. (offering wifi and associating promotions in store, abandoned basket online to offering discounts on that product in store, using profile info like color preferences, size, brand affinity to store etc.)
Being able to use your Stores as fulfillment centers alongside being a showroom. This has shown massive results. [BestBuy changed its approach to fulfillment in 2013. turned 50% stores into stores+ ecommerce fulfillement centres. BestBuy’s average delivery time went from 5.3 days in 2013 to 3.3 days in 2014. in 2015 this touched less than or equal to 2 days]
Viability of omni-channel Future
Viability of these Omni-channel features is not just dependent on technology implementation on the front end, but alsobeing able to structure
Back end systems to provide centralization of products-inventory management, fulfillment, warehouse managements systems, supply chain management.
Transformation of your internal & external business processes.
Pricing models which considering returns consolidation from different channels.
Incentives for store staff to honor online orders where their primary job would be to do the ‘picking’ instead of manage their categories, displays to drive revenues.
Repurposing store space to double up as Ecommerce fulfillment centres.
I am strong believer that some of these top use cases and their adopting can give you good idea of where the focus is.
Similarly, if you are a retailer in middle of a transformation, check to see if these features are on your agenda.
So, what do you think those other top use ? What flavors of these are working best for you? what are the biggest challenges you are seeing which adopting omni-channel strategies?
Happy to hear from you.
Director of Sales Commerce Solutions