Companies have no choice but to embrace omni-channel retailing
April 28, 2015
Omni-channel retailers demand the right strategy and infrastructure.
Retailers without a presence in every sales sector may lose ground to competitors focusing on brick-and-mortar, eCommerce and mobile audiences. Consumers want more options when buying goods, which is why brands cannot overlook omni-channel operations any longer, especially since some of the market's largest companies are already relying on these methods.
A ThinkWithGoogle report by Julie Krueger indicated today's retail industry involves reaching customers wherever they are located and whichever device they are using. The most savvy brands possess marketing campaigns that can convert consumers to any sales channel.
After businesses are able to understand their audiences in terms of their shopping preferences, the next step in achieving successful omni-channel capabilities is through establishing the proper infrastructure, Krueger suggested. Companies such as Macy's are approaching this need by unifying digital and store marketing teams.
Serena Potter, group vice president of digital media strategy at Macy's, said the retailer used to have siloed budgets for marketing purposes.
"We really have only one marketing budget. We look at the best way to spend that; whether it's digital or offline, we focus on how they work together to deliver the most sales and the best customer experience," Potter explained, as quoted by Krueger.
Digital channels becoming popular purchasing methods
Businesses still stuck in the past with just brick-and-mortar operations are selling themselves short when it comes to their potential growth prospects. Physical stores are still responsible for impressive sales, but they are not expanding as quickly as digital platforms, making omni-channel retailing crucial to the future success of companies.
A Vantiv infographic suggested global retail sales totaled $4.7 trillion in 2014. Physical stores accounted for 90 percent of this figure, with $304 billion coming from eCommerce websites or 6.4 percent of the total. By 2018, online shopping will jump to 9 percent, thanks to a compound annual growth rate of 15 percent, while brick-and-mortar shops will achieve a CAGR of less than half that.
The report indicated 60 percent of shoppers use mobile devices in some capacity for their purchasing experiences, whether to research or showroom items. The study said 86 percent of owners purchasing goods through these gadgets.
Unfortunately, retailers are struggling to achieve successful omni-channel systems. Vantiv suggested companies cite back-office integration as a detriment to these strategies, while shoppers reported inconsistencies between purchasing methods themselves, resulting in checkout problems as a result.
If audiences cannot purchase products easily, they will not hesitate to try another retailer that offers a better experience.
Inadequate experiences can be a brand's downfall
Once companies have an omni-channel foundation, businesses must posses the necessary tools to deliver efficiency across the entire organization. Outdated inventory management systems can negate any progress brands have made over the years. Customers who use eCommerce websites or mobile devices to purchase items sometimes prefer to pick up products at physical stores.
The reason why consumers tend to take this route is because of shipping issues. If orders arrive damaged, not on time or are the wrong products altogether, people have to go through return processes. With omni-channel capabilities, customers can drive right to the store where their goods are waiting if the company did not experience any issues stemming from inadequate order fulfillment systems.
Order fulfillment backups ensure that items are located at their necessary destination, which can be challenging during busy shopping periods that strain corporate websites and systems. Investment in these tools is ideal for minimizing any challenges that occur when so many purchasing channels are involved.
Brands that understand their audiences, unify marketing strategies and employ the necessary inventory management solutions will be in position to make omni-channel retailing valuable in an ever-changing marketplace.