Ask a CEO what their number one priority is, chances are they will say omnichannel. Ask them what this means, and they may not be able to answer you!
Why? Because the meaning of omnichannel retail – and its repercussions – are continually changing. The things that worried our sector two years ago are no longer seen as major threats.
Showrooming is a great example of this; now, business are focussed not on the threat of online commerce to bricks-and-mortar, but on building brand and pricing consistency between the two platforms.
At iVend Retail’s partner conference in Dublin last month, Martec’s Managing Director, Brian Hume, spoke eloquently on the evolving challenges of omnichannel retail.
The collaborative relationship between what is happening offline and in the digital sphere is a major focus for businesses right now, especially in markets with high levels of ecommerce maturity, such as the US and UK. This is because the widespread adoption of online shopping is pushing consumers to demand more connected experiences.
Click and collect is a prudent example of these rising standards. For the UK in particular, cross-channel pick-up is soaring in popularity. This is not only creating new demands on store space and workforce time, it is turning visibility of inventory across the retailer’s network from a bonus to a necessity.
Suddenly, omnichannel fulfilment has become the number one competitive area for the retail industry, and the store and online must work together to serve customer demands.
This, in turn, is having an impact on the role of bricks-and-mortar. As I mentioned earlier, fears that the store will be reduced to a showroom have been unfounded. If anything, stores are becoming a pivotal marketing tool for omnichannel success.
In fact, Brian Hume noted an interesting correlation between ecommerce revenue and store footprint. Fashion retailer, N Brown Group, has recorded a 7% increase in online sales in postcodes within 45 minutes’ drive of its Simply Be stores, and a 3% rise within the same radius of its Jacomo outlets.
Supermarket chain, Tesco, is seeing a similar pattern emerging. If warm weather leads to a lift in BBQ product sales online on a Tuesday and Wednesday, for example, it will see a swell in demand for the same items in the store on Friday and Saturday.
Examples such as this clearly demonstrate the value of understanding, and being able to react to, changes in omnichannel behaviour. The hard part for retailers is implementing the technology to analyse those trends and the operational network to make responsive decisions.
This is against the background of the CEO continuing their ongoing balancing act: improving customer service at the same time as minimising operating costs. The difference today is the number of channels to balance, and the repercussions of disgruntled consumers if they are not sufficiently optimised.
The word omnichannel might mean nothing to shoppers, but a seamless omnichannel service means everything.