The Rise of Omnichannel is a Mixed Bag for Retailers

Perspectives
Dec 19, 2017
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4 Min Read
The Rise of Omnichannel is a Mixed Bag for Retailers

The Rise of Omnichannel is a Mixed Bag for Retailers

 

How can organizations contending with a complex supply chain best leverage today’s preferred method to buy goods?

A new study by Dotcom Distribution, The Evolution of Commerce, surveyed more than 600 online shoppers to better understand attitudes about packaging, shipping and the online shopping experience.

Among the key insights: consumers still believe there can be more transparency in the shipping process, and want to be clued in to the location of their packages along each step of the fulfillment process. In addition to the need for transparency, customers also expect to have a seamless omnichannel experience that allows them to buy, ship, return, and exchange in the simplest, most direct way possible.

 

Mastering Omnichannel is Not Optional

For those not familiar with supply chain terminology, omnichannel refers to a type of retail that integrates the different methods of shopping available to consumers (e.g., online, in a physical store, or by phone).

According to the Dotcom report, positive omnichannel experiences make a big, lasting impression. Delivering a true omnichannel experience (removing the barriers between physical and digital shopping, creating a frictionless, immersive experience) for customers is one of the most important supply chain goals for retailers this year.

Sixty-four percent of Dotcom’s survey respondents indicated that they are already enjoying the benefits of effective omnichannel strategies and appreciate retailers that do a great job connecting the online and in-store experiences.

Positive omnichannel experiences are also a major factor in creating repeat customers. The survey showed that customers most value free shipping (91 percent), free returns/exchanges (77 percent) and easy online returns (55 percent). Offering some variation of these services apparently gives customers enough of a reason to stick around versus trying out a competitor.

Jason Trout at Multichannel Merchant provided several helpful examples of retailers doing omnichannel right, including the UK clothing store Oasis. “UK fashion retailer Oasis has an ecommerce site, a mobile app, and several brick-and-mortar locations and it does a pretty good job in fusing those channels to give people a great shopping experience,” Trout wrote.

“Oasis arms its in-store associates with iPads to give shoppers on-the-spot information on product availability. And if an item isn’t in-stock, the staff can use their iPads to place ecommerce orders for the customer. A similar service is made available for online shoppers. If an item is sold out online, customers can use Oasis’ Seek & Send service where the retailer searches its stores for the product and ships it to the shopper. Once the item is located, Oasis will send an email to notify the shopper and let them track their goods.”

 

Despite Increasing Successes, Adoption Barriers Remain

However, an article by Jennifer McKevitt at Supply Chain Dive explored why embracing omnichannel is easier said than done. “Outdated software, along with the struggle to track real-time inventory levels continues to hinder retailers from providing the best omnichannel experience possible,” McKevett wrote.

“High fulfillment costs make the challenge harder, with up to 70 percent of the value of an order absorbed by shipping and packaging costs alone. In order to better manage the many details, approximately 64 percent of managers are now relying on technology in some capacity, whether through RFID or other methods.”

Siloed organizations continue to be a thorn in omnichannel’s side. Even as they pursue this strategy, many retailers have processes and technology solutions that don’t work in concert with one another. Not only does this present an unclear picture of inventory and demand for product, but it also means that the customer experience is inconsistent and likely to result in drop off throughout the purchase process.

Just imagine capturing your retail customer data in a separate database from your online customer data, or setting up a promotion in your online channel that gets lost in translation for the stores. These are just a few of the problems organizations run into when experimenting with omnichannel strategies without the infrastructure to do so effectively. Unfortunately, if senior leaders don’t buy in to omnichannel’s promise, they may not want to devote the resources necessary to restructure the necessary operations.

 

Has your organization determined how to leverage technology to integrate both internal systems and data channels and realize the massive potential of omnichannel?

 

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