Why this fuss about omnichannel retailing?
In recent years, the concept of "multi-channel" in retail has morphed into "omni-channel," these buzzwords often used interchangeably – but they're not exactly the same concept. In conversations that I have had, people easily get confused between the two. This article should help resolve some of that confusion.
Multichannel retailing is about selling through a variety of sales channels, but these sales channels are generally independent of one another so they are not integrated; as a result, this rarely provides a consistent customer experience across the various channels. Integrating all the sales channels is widely viewed as the next stage in the evolution of retailing, this involves seamlessly connecting these digital touch points to share information and provide a consistent brand experience and is being as coined as Omnichannel.
Why omnichannel is getting a prominence in the retail world is not a surprise. If you come to think of it, much of this is required to keep up with the shopping habits of the "Millennial Shopper". These young shoppers were born into the world which had Internet, are extremely tech-savvy with smartphones and practically live in virtual world of social media. The US alone sports a millennial population with over $200 Billion in purchasing power and they want their digital experiences to be consistent no matter which channel they use to communicate with your store front. 33% of millennials consult blogs before making a purchase and they rely on their peers on social media to provide opinion on products and over 62% reported that they would like to engage with brands on social media, according to Forbes. This is visible in the strategy of companies like Pinterest and Instagram who have amassed over 80 Mil subscriber base and are extensively promoting "Buy It" ecommerce capabilities.
Organizations like Google are quick to realize the impact that mobile search and apps are having on e-retail and have reorganized themselves to avoid the fragmentation of search on Mobile apps or websites like Amazon and Pinterest. Search is still the preferred way to navigate to the e-tailers web property where over 60% of traffic comes from search alone. Mobile sales currently account for 30% of U.S. e-commerce sales, and they are growing at more than twice the clip of online sales as a whole. Facebook's M, Google Now, Apple's Siri and Microsoft's Cortana are enhancing the interfaces to search and there are newer ideas to integrate these virtual assistants directly into the checkout process on websites to provide a complete in-store sales person experience online.
A true omnichannel system can sync the customer, product, pricing and promotional information across these channels. Customers become frustrated and switch brands if they cannot quickly find what they want, at the price they want, and when they want it. In order to boost sales and brand loyalty, more than half (55%) of retailers are syncing information across channels. It is important for digital and social marketers to understand the reason why, the context, the when, where and how their customers are using what screen to connect with and buy from the business.
Even in the B2B (business to business) space, business leaders are doing the same thing. They are researching products, services and people behind the brands using multiple channels. They jump from iPhone to iPad to laptop within minutes. Both B2B and B2C (business to consumers) customers expect brands to design a user experience that is personal, relevant and seamless across devices. If you already have an in-store cum online model, then it's never been a better time to go the omnichannel way. Following are some ways e-retailers are leveraging this technology
Consumers who visited a brick-and-mortar store left with 107 percent of their original basket size, after exchanges or initial purchases, a behavior rarely seen online where many shopping carts are often abandoned. As a result, investments in in-store pick-up have increased year over year.
A number of department stores offer click-and-collect services where consumers can order items online and pick them up in-person in-store and, in most cases, with no delivery fee. By doing this, stores are able to merge the ease of online shopping with speedier return, getting consumers to visit their stores in-person for convenience
With mobile technology in hand, store associates can access real-time information on products and promotions, hence boosting conversion by providing the consumer the same discounts available online.
So given that we have a captive market and the strategy is clear what is holding many retailers from jumping into the bandwagon?
Cross Platform Attribution → from a channel marketing perspective, though it may sound simple to attach credit to a channel where it is due this is the most difficult problem especially for traffic coming from offline sources like print and online from social and mobile, where it is difficult to establish the identity of the customer viewership.
Complexity in retooling → we have seen that to orchestrate similar experiences across channel all the channels need to sync information. This requires the retailer to select and implement tools that will work well together. Often times there has already been a significant investments in existing systems and the retailers are wedded to these systems.
Data quality and consistency challenge → Developing a one view of the customer is not easy with integration challenges with disparate systems, inconsistent data rules and data transformations that might be needed.
Legacy business model → Some businesses like Luxury retail, have been slow to adopt digital because it's historically been a transactional channel. This is shifting as more and more luxury consumers head online to research and browse. Many of the large brands like Gucci, Dior, etc. have made this a priority for their business.
While the above mentioned problems do exist, many e-retailers have found ways to connect their disparate systems seamlessly either by investing in retooling or working with experts in integrating their existing systems to achieve a true omnichannel experience for their customers.