The real power of omnichannel retailing

digital, shop, online, future, omni-channel, multi-channel, onlineThe term “omnichannel retailing” isn’t new and many have made the differentiation between it and “multi-channel” retailing, which as the name suggests, means more than one channel is available for the customer to interact with the retailer. Most people would take this to mean a combination of physical stores and an online store.

One definition from the web describes omnichannel “as a multichannel sales approach that provides the customer with an integrated shopping experience. The customer can be shopping online from a desktop or mobile device, or by telephone, or in a bricks and mortar store and the experience would be seamless.”

Search a little more and you’ll find that most of the definitions tend to revolve around integration of marketing (traditional advertising, social media, email campaigns etc) more than the integration of the actual shopping experience.

Despite the term being widely used, I suspect that most retailers in this day and age are probably at best multi-channel and furthermore perhaps don’t really understand the power of omnichannel.

I like to take a very simple view of the customers’ shopping experience. In traditional multi-channel retailing, they either enter the physical store or the online store and leave satisfied or dissatisfied.

omnichannel-graphThere are many reasons why customers might leave dissatisfied from either channel. The single reason that I want to focus on that perhaps illustrates the lack of genuine integration in most retailers, is when either the store or the online site is out of stock. There are countless times per day when the store doesn’t have the size and colour a customer is looking for and more often than not, nothing is said by the customer (the moment and the sale are lost for ever) and if they ask a sales assistant, the solution offered by many stores is limited to a phone call to a nearby store. Likewise if the online store has sold out of the size/colour, the only message the customer gets is “The computer says no!”

Omnichannel retailing on the other hand is much more powerful. From the customers’ perspective, the retailers’ operations should be so cleverly integrated that it is just a “black box”. In other words, the customer does not need to see what happens behind the scenes, but if they want a particular size and colour, the system goes into overdrive to find it. This should be true irrespective of whether the customer has entered the physical store or the online store.

In the early days of e-commerce, bricks and mortar retailers treated their online stores as “just another store”. Fortunately that’s no longer the case and they are run quite differently, but still in the vast majority of cases, they don’t integrate fully into the physical store network and vice versa, to solve that simple stock-out example. The challenge to integration is that most POS systems in use are not web-based. The paradigm needs to change from online being “just another store” to stores being “just another website”. That immediately opens up enormous possibilities.

Graham Lack has over 35 years retail experience in senior management roles at Luxottica and Suzanne Grae, in retail operations, finance, IT, marketing, merchandise planning and logistics. Contact him via [email protected]theretailconsultants.com.au.

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