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Myths and Realities of Omnichannel Retailing

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liz_ebert-large“Omnichannel” has held center stage as a trend and buzzword for retailers for the past year or so. Aided by the recovering economy and a more engaged consumer base, it’s important to understand what retailers have learned from their omnichannel efforts to move beyond mere “buzz” to truly effective execution across channels.

Many retailers have discovered that omnichannel retailing is like a magical and mythical place, one that doesn’t necessarily resonate with their own products and customers services. In the rush to embrace omnichannel, retailers are “experimenting” with changing business processes and deploying new technology. While some of these experiments may provide sustainable value, others may fall aside as new solutions and approaches prove more valuable.

With record-breaking online and mobile sales increasing each year, the first omnichannel strategy many retailers implemented included an e-commerce presence. However, some retailers, particularly those with opportunistic buying models, discovered that the unpredictability of their product buys makes it difficult to maintain accurate online inventory, thus hindering the overall shopping experience. Closeout retailer Tuesday Morning shut down its e-commerce site last yearOpens in a new window because it found it too difficult to translate its “treasure hunt” customer experience to a website. Retailers such as Tuesday Morning may choose to create online experiences for consumers which focus on providing shopping information (e.g., store locator, customer loyalty program accounts) or promotional information (e.g., product launches, sales) and still have a very successful approach to omnichannel.

Many retailers are touting their ability to use their brick-and-mortar locations as warehouses to fulfill customer orders. While this may seem convenient, retailers that are “picking from stores” find that they may incur unplanned shipping costs as online orders are fulfilled. In addition, each store location will need ample floor space for packing and materials as well as store associates who are trained on picking, packing and shipping customer packages — all activities that can place an additional burden on the core store activities. The reality and opportunity of “fulfill from stores” lies in using the strategy as a stopgap while customer distribution centers are built to support high-volume fulfillment at a lower cost and higher service level.

Some retailers believe that as they engage with customers across multiple channels, they’ll reduce payroll costs as technology delivers alternate selling tools. The reality of workforce management in an omnichannel environment is that there’s an expanding role for the sales associate. These individuals must be more proactive with in-store customer engagement, including employing inventory management tools to locate products for shoppers and assisting them as they use mobile applications for product comparisons. Retailers that recognize the evolving role of sales associates will invest in training and new compensation models to support the new associate performance expectations.

Retail Online Integration originally ran this article here: Myths and Realities of Omnichannel Retailing

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